1
EXHIBIT 10.13
AMENDED AGREEMENT
Amended Agreement made as of the 29th day of July, 1997, between UGI
Corporation, a Pennsylvania corporation (the "Company"), and Xxx X.
Xxxxxxxxx (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 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
attention and dedication of key members of the Company's management to their
assigned duties without
2
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
the Company, the Company agrees that the Employee shall receive the compensation
set forth in this Agreement in the event his employment with the Company 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 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
-2-
3
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 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
-3-
4
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 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
-4-
5
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 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
-5-
6
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.
(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
-6-
7
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 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.
-7-
8
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, 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 2.5 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 30 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 913 days.
-8-
9
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 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.
-9-
10
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.
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 (the "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
-10-
11
Section 4999 of the Code, and any federal, state and local income and employment
tax and excise tax imposed upon the Gross-Up 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.
-11-
12
(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 wilful 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 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
-12-
13
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.
-13-
14
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 Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, 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 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
-14-
15
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.
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
-15-
16
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 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).
-16-
17
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 Xxxxx X. Xxxxxxxx
Chair of the Executive/Nominating Committee
of the Board of Directors
----------------------- ------------------------------
Witness Xxx X. Xxxxxxxxx
-17-
