UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities
Exchange Act of 1934
(Amendment (Amendment No.)
Filed by the Registrantxþ
Filed by a Party other than the Registranto¨
Filed by a Party other than the Registranto
Check the appropriate box:
| Preliminary Proxy Statement |
| Confidential, for Use of the Commission Only (as permitted by Rule |
| Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material Pursuant to §240.14a-12 |
UGI CORPORATION
Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| No fee required. |
| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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| Fee paid previously with preliminary materials. |
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Notice of January 20, 2011
Annual Meeting and
Proxy Statement
Annual Meeting and
Proxy Statement
BOX 858 VALLEY FORGE, PA 19482 — 610-337-1000
LON R. GREENBERG
Chairman and
Chief Executive Officer
December 19, 2007
9, 2010
Dear Shareholder,
On behalf of our entire Board of Directors, I cordially invite you to attend our Annual Meeting of Shareholders on Tuesday,Thursday, January 29, 2008.20, 2011. At the meeting, we will review UGI’s performance for Fiscal 20072010 and our expectations for the future.
A notice of the meeting and Proxy Statement follow. You will also find enclosed your proxy voting card and our 2007 Annual Report.
I would like to take this opportunity to remind you that your vote is important. On December 9, 2010, we mailed our shareholders a notice containing instructions on how to access our 2010 proxy statement and annual report and vote online. Please read the proxy materials and take a moment now to vote via the Internet,online or by telephone oras described in the proxy voting instructions. Of course, if you received these proxy materials by usingmail, you may also vote by completing the enclosed proxy voting card and returning it in the postage-paid envelope we have provided.
by mail.
I look forward to seeing you on January 29th20th and addressing your questions and comments.
Sincerely,
Lon R. Greenberg
460 NORTH GULPH ROAD, KING OF PRUSSIA, PA 19406
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BOX 858 VALLEY FORGE, PA 19482 — 610-337-1000
December 19, 2007
9, 2010
ANNUALMEETINGOF SHAREHOLDERSannual meeting of Shareholders
The Annual Meeting of Shareholders of UGI Corporation will be held on Tuesday,Thursday, January 29, 2008,20, 2011, at 10:00 a.m., at the Sheraton Park RidgeThe Desmond Hotel and Conference Center, at Valley Forge, Washington Room, 480 North Gulph Road, King of Prussia,Ballrooms A and B, One Liberty Boulevard, Malvern, Pennsylvania. Shareholders will consider and take action on the following matters:
1. Electionelection of nine directors to serve until the next annual meeting of Shareholders;
2. Ratificationratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accountantsaccounting firm for Fiscal 2008;2011; and
3. Transactiontransaction of any other business that is properly raised at the meeting.
Margaret M. Calabrese
Corporate Secretary
Corporate Secretary
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on January 20, 2011:
This Proxy Statement and the Company’s 2010 Annual Report are available atwww.ugicorp.com.
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DIRECTIONSTOTHE SHERATON PARK RIDGE HOTELAND CONFERENCECENTER
UGI CORPORATION
460 North Gulph Road
King of Prussia, Pennsylvania 19406
PROXY STATEMENT
This proxy statement contains information related to the Annual Meeting of Shareholders of UGI Corporation to be held on Tuesday,Thursday, January 29, 2008,20, 2011, beginning at 10:00 a.m., at the Sheraton Park RidgeThe Desmond Hotel and Conference Center, at Valley Forge, Washington Room, 480 North Gulph Road, King of Prussia,Ballrooms A and B, One Liberty Boulevard, Malvern, Pennsylvania and at any postponements or adjournments thereof. Directions to the Sheraton Park RidgeThe Desmond Hotel and Conference Center appear at the back of this booklet.on page 65. This proxy statement was prepared under the direction of the Company’s Board of Directors to solicit your proxy for use at the Annual Meeting. It will be mailedwas made available to Shareholders on or about December 19, 2007.
9, 2010.
Why did I receive a notice in the mail this year regarding the Internet availability of proxy materials instead of printed proxy materials?
The Company has elected to provide access to the proxy materials over the Internet. We believe that this initiative will enable the Company to provide proxy materials to shareholders more quickly, reduce the impact of our Annual Meeting on the environment, and reduce costs.
Who is entitled to vote?
Shareholders of record of our common stock at the close of business on November 23, 200715, 2010 are entitled to vote at the Annual Meeting, or any postponement or adjournment of the meeting scheduled in accordance with Pennsylvania law. Each shareholder has one vote per share on all matters to be voted on. On November 23, 2007,15, 2010, there were 106,684,035110,466,049 shares of common stock outstanding.
What am I voting on?
You will be asked to elect nine nominees to serve on the Company’s Board of Directors and to ratify the appointment of our independent registered public accountantsaccounting firm for Fiscal 2008.2011. The Board of Directors is not aware of any other matters to be presented for action at the meeting.
How does the Board of Directors recommend I vote on the proposals?
The Board of Directors recommends a voteFORthe election of each of the nominees for Director andFORthe ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accountantsaccounting firm for Fiscal 2008.
What does it mean if I get more than one proxy card?
If your shares are registered differently and are in more than one account, you will receive more than one card. Please follow the directions for voting on each of the proxy cards you receive to ensure that all of your shares are voted.
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How do I vote?
You may vote in one of three ways:
Vote
Over the Internet
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If your shares are registered in your name:Vote your shares over the Internet by accessing the Computershare proxy online voting website at: www.investorvote.comwww.envisionreports.com/UGI
and following the on-screen instructions. You will need the control number that appears on your proxy cardNotice of Availability of Proxy Materials when you access the web page.
If your shares are held in the name of a broker, bank or other nominee:Vote your shares over the Internet by following the voting instructions that you receive from such broker, bank or other nominee.
By Telephone (Touch-Tone Phone Only)
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Internet and telephone voting system toll-free at 1-800-652-8683 and following the telephone voting instructions. The telephone instructions will providelead you through the voting process. You will need the control number that appears on your Notice of Availability of Proxy Materials when you call.
If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the telephone by following the voting instructions you receive from such broker, bank or other nominee.
By Mail
If you received these annual meeting materials by mail: Vote by signing and dating the proxy holderscard(s) and returning the same authoritycard(s) in the prepaid envelope. Also, you can vote online or by using a toll-free telephone number. Instructions about these ways to vote appear on the proxy card. If you vote by telephone, please have your proxy card and control number available.
How can I vote my shares held in the Company’s Employee Savings Plans?
You can instruct the trustee for the Company’s Employee Savings Plans to vote the shares of stock that are allocated to your account in the UGI Stock Fund. If you do not vote your shares, as if you returned your proxy card by mail. In addition, Internet and telephone voting will reduce the Company’s proxy-related first-class postage expenses.
Vote by Returning Your Proxy Card
You may vote by signing and returning your proxy card. The proxy holderstrustee will vote yourthem in proportion to those shares according to your directions. If you sign and return your proxy card without specifying choices, yourfor which the trustee has received voting instructions from participants. Likewise, the trustee will vote shares will be voted as recommendedheld by the Board of Directors.trust that have not been allocated to any account in the same manner.
If You Change Your Mind After Voting-2-
How can I change my vote?
You can revoke your proxy at any time before it is voted. Proxies are voted at the Annual Meeting. If you are a shareholder of record and you returned a paper proxy card, you can write to the Company’s Corporate
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Secretary at our principal offices, 460 North Gulph Road, King of Prussia, Pennsylvania 19406, stating that you wish to revoke your proxy and that you need another proxy card. Alternatively, you can vote again, either over the Internet or by telephone. If you hold your shares through a broker, bank or other nominee, you can revoke your proxy by contacting the broker, bank or other nominee and askingfollowing their procedure for revocation. If you are a new proxy card. Alternatively, you can vote again, either over the Internet or by telephone. Ifshareholder of record and you attend the meeting, you may vote by ballot, which will cancel your previous proxy vote. If your shares are held through a broker, bank or other nominee, and you wish to vote by ballot at the meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must bring with you to the meeting to exchange for a ballot. Your last vote is the vote that will be counted.
What is a quorum?
A quorum of the holders of the outstanding shares must be present for the Annual Meeting to be held. A “quorum” is the presence at the meeting, in person or represented by proxy, of the holders of a majority of the outstanding shares entitled to vote.
How are votes, abstentions and broker non-votes counted?
Abstentions are counted for purposes of determining the presence or absence of a quorum, but are not considered a vote cast under Pennsylvania law.
A broker non-vote may occuroccurs when a broker, bank or other nominee holding shares on your behalf does not receive voting instructions from you. If that happens, the broker, bank or other nominee may vote those shares only on matters deemed “routine” by the New York Stock Exchange, such as the election of directors and the ratification of the appointment of the Company’s independent accountants.registered public accounting firm. A “broker non-vote” occurs when a broker has not received voting instructions and either declines to exercise its discretionary authority to vote on routine matters or is barred from doing so because the matter is non-routine. Broker non-votes are counted to determine if a quorum is present, but are not considered a vote cast under Pennsylvania law.
As a result, abstentions and broker non-votes are not included in the tabulation of the voting results on issues requiring approval of a majority of the votes cast and, therefore, do not have the effect of votes in opposition in such tabulation.
What vote is required to approve each item?
The Director nominees will be elected by a plurality of the votes cast at the Annual Meeting. The other matter to be considered at the meeting requires the affirmative vote of a majority of the votes cast at the meeting on the item to be approved.
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Who will count the vote?
Computershare Inc., our Transfer Agent, will tabulate the votes cast by proxy or in person at the Annual Meeting.
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What are the deadlines for Shareholder’sShareholders’ proposals for next year’s Annual Meeting?
Shareholders may submit proposals on matters appropriate for shareholder action at future annual meetings by followingas follows:
Shareholders who wish to include a proposal in the rules of the Securities and Exchange Commission (“SEC”). Proposals intended for inclusion in next year’sCompany’s proxy statement and proxy cardfor its 2012 annual meeting must be received bycomply in all respects with SEC rules relating to such inclusion and must submit the Company notproposals no later than August 21, 2008. 10, 2011.
With respect to shareholder proposals that are not intended for inclusion in the Company’s proxy materials for next year’sthe 2012 annual meeting, if the Company does not receive notice of such a proposal by November 4, 2008 and the matter is raised at thatthe meeting, the proxy holders will have discretionary authority to vote on the matter. matter if the Company does not receive notice of the proposal by October 25, 2011 or, if the proposal is so received by October 25, 2011, either the Company does not include advice on the nature of the matter and how the proxy holders intend to vote on the proposal or the proposal is made in connection with certain proxy contests.
All proposals and notifications should be addressed to the Corporate Secretary.
How much did this proxy solicitation cost?
The Company has engaged Georgeson Inc. to solicit proxies for the Company for a fee of $7,000$7,500 plus reasonable expenses for additional services. We also reimburse banks, brokerage firms and other institutions, nominees, custodians and fiduciaries for their reasonable expenses for sending proxy materials to beneficial owners and obtaining their voting instructions. Certain Directors, officers and regular employees of the Company and its subsidiaries may solicit proxies personally or by telephone or facsimile without additional compensation.
The following table shows the number of shares beneficially owned by each Director, andNominee, by each of the executive officers named in the Summary Compensation Table on page 37,Table-Fiscal 2010, and by all Directors and executive officers as a group. The table shows their beneficial ownership as of October 1, 2007.
2010.
Our subsidiary AmeriGas Propane, Inc. is the General Partner of AmeriGas Partners, L.P. (“AmeriGas Partners”), one of our consolidated subsidiaries and a publicly-traded limited partnership. The table also shows, as of October 1, 2007,2010, the number of common units of AmeriGas Partners, L.P.and phantom units representing common units, beneficially owned by each Director and named executive officer, and by all Directors and executive officers as a group.
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Mr. Greenberg beneficially owns approximately 1.6 percent of the outstanding common stock. Each other person named in the table beneficially owns less than 1 percent of the outstanding common stock and less than 1 percent of the outstanding common units of AmeriGas Partners. Directors nominees and named executive officers as a group own approximately 2.83 percent of the outstanding common stock and less than 1 percent of the outstanding common units of AmeriGas Partners. For purposes of reporting total beneficial ownership, shares that may be acquired within 60 days of October 1, 20072010 through UGI Corporation stock option exercises are included.
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Beneficial Ownership of Directors, Nominees and Named Executive Officers
Name | Aggregate Number of Shares of UGI | Stock Units Held Under 2004 Plan (2) | Exercisable Options For UGI Common Stock | Aggregate Number of AmeriGas Partners, L.P. Common Units | ||||||
James W. Stratton | 21,608 | (3) | 59,749 | 84,400 | 1,000 | (3) | ||||
Richard C. Gozon | 32,608 | 79,301 | 84,400 | 5,000 | ||||||
Stephen D. Ban | 16,496 | 46,831 | 58,000 | 0 | ||||||
Lon R. Greenberg | 613,006 | (4) | 0 | 1,071,666 | 2,000 | |||||
Marvin O. Schlanger | 9,724 | (5) | 37,791 | 84,400 | 1,000 | (5) | ||||
Anne Pol | 5,894 | 48,103 | 52,000 | 0 | ||||||
Ernest E. Jones | 3,618 | 16,570 | 58,000 | 0 | ||||||
Roger B. Vincent | 10,000 | 5,165 | 17,000 | 6,000 | ||||||
John L. Walsh | 65,030 | (6) | 0 | 215,000 | 0 | |||||
Peter Kelly | 0 | 0 | 0 | 0 | ||||||
Anthony J. Mendicino | 208,273 | (7) | 0 | 294,666 | 10,000 | (7) | ||||
Eugene V. N. Bissell | 66,380 | (8) | 0 | 120,333 | 30,746 | (8) | ||||
François Varagne | 31,000 | 0 | 0 | 0 | ||||||
Directors and executive officers as a group (17 persons) | 1,268,182 | 293,510 | 2,462,697 | 68,854 |
| Beneficial Ownership of Directors, Nominees and Named Executive Officers | ||||||||||||||||||||
| Number of UGI | Exercisable | Number of | Number of | |||||||||||||||||
| Number | Stock Units | Options | AmeriGas | AmeriGas | ||||||||||||||||
| of Shares of UGI | Held Under | For UGI | Partners, L.P. | Partners, L.P. | ||||||||||||||||
| Name | Common Stock(1) | 2004 Plan(2) | Common Stock | Common Units | Phantom Units(3) | |||||||||||||||
| Stephen D. Ban | 16,496 | 59,110 | 71,500 | 0 | 500 | |||||||||||||||
| Eugene V. N. Bissell | 68,197 | (4) | 0 | 160,000 | 64,600 | (4) | 0 | |||||||||||||
| Richard W. Gochnauer | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| Richard C. Gozon | 32,608 | 94,602 | 71,500 | 5,000 | 500 | |||||||||||||||
| Lon R. Greenberg | 406,305 | (5) | 0 | 1,315,000 | 11,000 | 0 | ||||||||||||||
| Ernest E. Jones | 3,618 | 26,018 | 83,500 | 0 | 0 | |||||||||||||||
| Peter Kelly | 46,042 | (6) | 0 | 110,000 | 0 | 0 | ||||||||||||||
| Anne Pol | 2,950 | 60,492 | 65,500 | 0 | 0 | |||||||||||||||
| M. Shawn Puccio | 2,350 | 5,183 | 17,000 | 0 | 0 | |||||||||||||||
| Marvin O. Schlanger | 9,724 | (7) | 49,218 | 83,500 | 1,000 | (7) | 500 | |||||||||||||
| Francois Varagne | 24,488 | 0 | 112,000 | 0 | 0 | |||||||||||||||
| Roger B. Vincent | 10,000 | 13,547 | 42,500 | 6,000 | 0 | |||||||||||||||
| John L. Walsh | 110,249 | (8) | 0 | 511,666 | 7,000 | (8) | 0 | |||||||||||||
| Directors and executive officers as a group (15 persons) | 812,150 | 308,170 | 2,881,331 | 108,708 | 1,500 | |||||||||||||||
| (1) | Sole voting and investment power unless otherwise specified. |
| (2) | The |
| (3) | The AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan on behalf of AmeriGas Partners, L.P. provides that phantom units will be converted to common units and paid out to Directors upon their retirement or termination of service. | |
| (4) | Mr. |
| (5) | Mr. Greenberg holds |
| (6) | Mr. Kelly holds 44,472 shares jointly with his spouse. | |
| (7) | Mr. Schlanger’s spouse holds 2,000 shares and all common units shown. Mr. Schlanger disclaims beneficial ownership of the shares and common units owned by his |
| (8) | Mr. Walsh’s |
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Section 16(a) –— Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors, certain officers and 10 percent beneficial owners to report their ownership of shares and changes in such ownership to the SEC. Based on our records, we believe that during Fiscal 2007,2010 all of such reporting persons complied with all Section 16(a) reporting requirements applicable to them.
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The following table shows information regarding each person known by the Company to be the beneficial owner of more than 5five percent of the Company’s common stock. The ownership information below is based on information reported on a Form 13F as filed with the SEC in November 20072010 for the quarter ended September 30, 2007.
Securities Ownership of Certain Beneficial Owners
| Securities Ownership of Certain Beneficial Owners | ||||||||||
| Title of | Name and Address of | Amount and Nature of | Percent of | |||||||
| Class | Beneficial Owner | Beneficial Ownership | Class(1) | |||||||
| Common Stock | Wellington Management Company, LLP 75 State Street Boston, MA 02109 | 10,941,651 | (2) | 10 | % | |||||
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| (2) | The reporting person, and certain related entities, has sole voting power |
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Item 1 — Election of Directors
Nine Directors will be elected at the Annual Meeting. Directors will serve until the next annual meeting or until their earlier resignation or removal. If any nominee is not available for election, proxies will be voted for another person nominated by the Board of Directors or the size of the Board will be reduced. NineEight members of the Board of Directors elected at last year’s annual meeting are standing for re-election this year.
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Mr. Richard C. Gozon is not eligible for re-election under the Company’s bylaws because he has reached retirement age. Mr. Gochnauer is a nominee for the first time.
The nominees are as follows:
Director since 1979
Age 71
Mr. Stratton is the Chairman, Chief Executive Officer, and a Director of Stratton Holding Company (an investment advisory and financial consulting firm) (since 1972). Mr. Stratton serves as a Director of UGI Utilities, Inc.; AmeriGas Propane, Inc.; Stratton Multi Cap Value Fund, Inc.; Stratton Monthly Dividend REIT Shares, Inc.; and Stratton Small-Cap Value Fund.
RICHARD C. GOZON
Director since 1989
Age 69
Mr. Gozon retired in April of 2002 as Executive Vice President of Weyerhaeuser Company (an integrated forest products company) and Chairman of Norpac (North Pacific Paper Company, a joint venture with Nippon Paper Industries headquarters in Tokyo, Japan), positions he had held since 1994. Mr. Gozon was formerly a Director (1984 to 1993), President and Chief Operating Officer of Alco Standard Corporation (a provider of paper and office products) (1988 to 1993); Executive Vice President and Chief Operating Officer (1988), President (1985 to 1987) of Paper Corporation of America. He also serves as a Director of UGI Utilities, Inc.; AmeriGas Propane, Inc.; AmeriSource Bergen Corp.; and Triumph Group, Inc.
STEPHENStephen D. BANBan
Director since 1991
Age 6769
Dr. Ban is currently servingworking as thea consultant to private industry. Dr. Ban recently retired as Director of the Technology Transfer Division of the Argonne National Laboratory (science-based Department of Energy laboratory dedicated to advancing the frontiers of science in energy, environment, biosciences and materials) (March 2002(2001 to present)2010). He previously served as President and Chief Executive Officer of the Gas Research Institute (gas industry research and development funded by distributors, transporters, and producers of natural gas) (1987 throughto 1999). He also served as Executive Vice President. Prior to joining GRIGas Research Institute in 1981, he was Vice President, Research and Development and Quality Control of Bituminous Materials, Inc. Dr. Ban also serves as a Director of UGI Utilities, Inc.; AmeriGas Propane, Inc., the general partner of AmeriGas Partners, L.P.; and Energen Corporation.
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Director since 1994
Age 5760
Mr. Greenberg has been Chairman of the Board of Directors of UGI since August 1996 and Chief Executive Officer since August 1995. He was formerly President (1994 to April 2005), Vice Chairman of the Board (1995 to 1996), and Senior Vice President –— Legal and Corporate Development (1989 to 1994). Mr. Greenberg also serves as a Director of UGI Utilities, Inc.; AmeriGas Propane, Inc., the general partner of AmeriGas Partners, L.P.; and Aqua America, Inc.
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Director since 1998
Age 5962
Mr. Schlanger is a Principal in the firm of Cherry Hill Chemical Investments, L.L.C. (management services and capital for chemical and allied industries) (October 1998 to(since 1998). Mr. Schlanger also serves as Chairman of the present)Board of LyondellBasell Industries N.V. (since 2010), Chairman of the Board of CEVA Group, Plc (since 2009), and Vice Chairman of Hexion Specialty Chemicals, Inc. (June 2005 to present)(since 2005). He was previously Chairman and Chief Executive Officer of Resolution Performance Products, Inc. (a manufacturer of specialty and intermediate chemicals) (November 2000(2000 to May 2005), Chairman of Covalence Specialty Materials Corp. (February 2006(2006 to April 2007), and Chairman of Resolution Specialty Materials, LLC (August 2004(2004 to May 2005). Mr. Schlanger also serves as a Director of UGI Utilities, Inc.; AmeriGas Propane, Inc., the general partner of AmeriGas Partners, L.P.; and Momentive Performance Materials Holdings Inc.; and Hexion Specialty Chemicals.
Director 1993 through 1997 and
since December 1999
Age 6063
Mrs. Pol retired in June of 2005 as President and Chief Operating Officer of Trex Enterprises Corporation (a high technology research and development company), a position she had held since October 15, 2001. She previously served as Senior Vice President of Thermo Electron Corporation (environmental monitoring, analytical instruments and a major producer of recycling equipment, biomedical products and alternative energy systems) (1998 to 2001), and Vice President (1996 to 1998). Mrs. Pol also served as President of Pitney Bowes Shipping and Weighing Systems Division, a business unit of Pitney Bowes Inc. (mailing and related business equipment) (1993 to 1996); Vice President of New Product Programs in the Mailing Systems Division of Pitney Bowes Inc. (1991 to 1993) and Vice President of Manufacturing Operations in the Mailing Systems Division of Pitney Bowes Inc. (1990 to 1991). Mrs. Pol also serves as a Director of UGI Utilities, Inc.
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Director since 2002
Age 6366
Mr. Jones is President and Chief Executive Officer of EJonesConsulting, LLC (management consulting to non-profit entities) (since December 1, 2010). He retired in 2010 as President and Chief Executive Officer of Philadelphia Workforce Development Corporation (an agency which funds, coordinates and implements employment and training activities in Philadelphia, Pennsylvania), a position he has held since 1998. He formerly served as President and Executive Director of the Greater Philadelphia Urban Affairs Coalition (1983 to 1998). Mr. Jones also served and as Executive Director of Community Legal Services, Inc. (1977 to 1983). Mr. Jones also serves as a Director of the African American Museum in Philadelphia; Thomas Jefferson University; the Philadelphia Contributionship; Vector Security, Inc.; and UGI Utilities, Inc., and the Paradigm Funds.
He previously served as a Director of PARADIGM Global Advisors LLC, ending in 2009.
Director since April 2005
Age 5255
Mr. Walsh is a Director (since April 2005) and President and Chief Operating Officer of UGI Corporation (since April 2005). He is also President and Chief Executive Officer of UGI Utilities, Inc. (since July 2009). In addition, Mr. Walsh serves as Vice Chairman of AmeriGas Propane, Inc. and UGI Utilities, Inc. (since April 2005). Previously, Mr. Walsh was the Chief Executive of the Industrial and Special Products Division of the BOC Group plc (industrial gases), a position he assumed in 2001. He was also an Executive Director of BOC (2001 to 2005). He joined BOC in 1986 as Vice President-Special Gases and held various senior management positions in BOC, including President of Process Gas Solutions, North America (2000 to 2001) and President of BOC Process Plants (1996 to 2000). Mr. Walsh also serves as a Director of UGI Utilities, Inc. and AmeriGas Propane, Inc.
, the general partner of AmeriGas Partners, L.P.
Director since February 2006
Age 6265
Mr. Vincent is President of Springwell Corporation, a corporate finance advisory firm located in New York (since 1989). Mr. Vincent also serves as a Director and Chairman of the Board of Directors of the ING Mutual Funds, ING Asia Pacific High Dividend Equity Income Fund, ING Global Advantage and Premium Opportunity Fund, ING Global Equity Dividend and Premium Opportunity Fund, ING Prime Rate Trust and ING Risk Managed Natural Resources Fund. Mr. Vincent is also a Director of UGI Utilities, Inc. He previously served as a Director of AmeriGas Propane, Inc., the general partner of AmeriGas Partners, L.P., ending in 2006.
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M. Shawn Puccio
Director since January 2009
Age 48
Director since January 2009
Age 48
Ms. Puccio is Senior Vice President, Finance of Saint-Gobain Corporation, the North American business of Compagnie de Saint-Gobain, a global manufacturer and distributor of flat glass, building products, glass containers and high performance materials (since 2006). Ms. Puccio was formerly Vice President, Finance (2005 to 2006) and Vice President, Internal Control Services (2002 to 2005) of Saint-Gobain. Prior to joining Saint-Gobain, she was a partner with PricewaterhouseCoopers LLP, a public accounting firm (1997 to 2002), having joined Price Waterhouse in 1984. Ms. Puccio also serves as a Director of UGI Utilities, Inc.
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and of the Girl Scouts of Eastern Pennsylvania.
Richard W. Gochnauer
Nominee
Age 61
Nominee
Age 61
Mr. Gochnauer is Director and Chief Executive Officer of United Stationers Inc. (a wholesale distributor of business products) (since December 2002); he joined United Stationers Inc. in July 2002 as Chief Operating Officer and Director. He previously served as President and Chief Operating Officer and Vice Chairman and President, International, of Golden State Foods Corporation (a food service industry supplier) (1994 to 2002). Prior to that, Mr. Gochnauer served as Executive Vice President of the Dial Corporation, with responsibility for its household and laundry consumer products businesses. Mr. Gochnauer also serves as a Director of AmerisourceBergen Corporation.
The business of UGI Corporation is managed under the direction of the Board of Directors. As part of its duties, the Board oversees the corporate governance of the Company for the purpose of creating long-term value for its shareholders and safeguarding its commitment to its other stakeholders: our employees, our customers, our suppliers and creditors, and the communities in which we do business. To accomplish this purpose, the Board considers the interests of the Company’s stakeholders when, together with management, it sets the strategies and objectives of the Company. The Board also evaluates management’s performance in pursuing those strategies and achieving those objectives.
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In carrying out its responsibilities under the guidelines set forth by the Principles of Corporate Governance, the Board will:
Approve the Company’s strategies and objectives;
| • | Approve the Company’s strategies and objectives and monitor the execution of strategies and the achievement of objectives; | ||
| • | Evaluate the performance, and approve the compensation of, the Chief Executive Officer and senior management; | ||
| • | Review plans for management succession; | ||
| • | Advise and counsel management; | ||
| • | Monitor codes of conduct and policies on corporate governance; | ||
| • | Establish and monitor Board and Committee structure; | ||
| • | Designate a Presiding Director; and | ||
| • | Assess Board and Board Committee performance. |
Evaluate the performance and compensation of the Chief Executive Officer and senior management;
Review succession planning;
Advise and counsel management;
Monitor policies on corporate governance and conduct;
Establish and monitor Board and Committee structure;
Designate a Presiding Director; and
Assess Board performance.
The full text of the Company’s Principles of Corporate Governance can be found on the Company’s website,www.ugicorp.com, under Investor Relations and Corporate Governance. The Company has also adopted (i) a Code of Ethics for the Chief Executive Officer and Senior Financial Officers that applies to the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, and (ii) a Code of Business Conduct and Ethics for Directors, Officers and Employees. Both Codes and the Charters of the Corporate Governance, Audit, and Compensation and Management Development Committees of the Board of Directors are posted on the Company’s website,www.ugicorp.com, under Investor Relations and Corporate Governance. All of these documents are also available free of charge by writing to Robert W. Krick, Vice PresidentHugh J. Gallagher, Director, Treasury Services and Treasurer,Investor Relations, UGI Corporation, P.O. Box 858, Valley Forge, PA 19482.
19482, or by calling 1-800-844-9453.
You may contact
Our Board of Directors determines which leadership structure best serves its needs and those of our shareholders. Currently, Mr. Greenberg serves as both Chairman of the Board of Directors orand Chief Executive Officer of the non-management Directors asCompany. The Board believes that having Mr. Greenberg serve in both capacities has the following advantages for the Company: there is a groupsingle source of leadership and authority for the Board; the preparation for Board meetings, in particular the format and content of Board presentations, is very efficient; there is no need to incur additional costs by writing to them c/o UGI Corporation, P. O. Box 858, Valley Forge, PA 19482.
Any communications directed toproviding a separate chairman with administrative support and increased compensation; and Mr. Greenberg’s unique, in-depth knowledge of the Company’s corporate strategy and operating history enhances effective communication between the Board and management. The Board may separate the roles of Directors orChairman and Chief Executive Officer in the non-management Directorsfuture if circumstances change, such as in connection with a group from employees or others that concern complaints regarding accounting, internal controls or auditing matters will be handledtransition in accordance with procedures adopted byleadership.
Mr. Gozon, the Audit Committee of the Board.
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All other communications directed to the Board of Directors or the non-management Directors as a group are initially reviewed by the General Counsel. The Chairman of the Corporate Governance Committee, is advised promptly of any such communication that alleges misconduct oncurrently serves as the part of Company management or raises legal, ethical or compliance concerns about Company policies or practices.
On aBoard’s Presiding Director. Each year, the Board designates an independent, Presiding Director who chairs periodic basis, the Chairpersonmeetings of the Corporate Governance Committee receives updatesindependent Directors and serves as principal liaison between the Chairman and the other Directors on other communications that raise issues related tosensitive issues. The Board will select a new Presiding Director immediately following the affairs2011 Annual Meeting.
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Assessing and managing risk is the responsibility of senior management of the Company but do not fall into the two prior categories. The Chairperson of the Corporate Governance Committee determines whichCompany. Our Board plays an important role in overseeing management’s performance of these communications he would like to see.functions. The Corporate Secretary maintains a logBoard has approved the charter of all such communications that is available for review for one year upon request of any member ofits Audit Committee, and the Board.
Typically, we do not forward to our Board of Directors communications from our shareholders or other parties which are of a personal nature or are not related tocharter sets out the duties andprimary responsibilities of the Audit Committee. Those responsibilities require the Audit Committee to discuss with management, the general auditor and the independent auditors the Company’s enterprise risk management policies and risk management processes, including major risk exposures, risk mitigation, and the design and effectiveness of the Company’s processes and controls to prevent and detect fraudulent activity.
Our businesses are subject to a number of risks and uncertainties, which are described in detail in our Annual Report on Form 10-K for the year ended September 30, 2010. Throughout the year, in conjunction with its regular business presentations to the Board including customer complaints, job inquiries, surveys, polls and its committees, management highlights significant related risks and risk mitigation plans. Management also reports to the Audit Committee and the Board on steps being taken to enhance management processes and controls in light of evolving market, business, solicitations.
These procedures have been postedregulatory and other conditions. The Chairman of the Audit Committee reports to the entire Board on the Audit Committee’s activities and decisions. In addition, on an annual basis, an extended meeting of the Board is dedicated to reviewing the Company’s website atwww.ugicorp.com under Investor Relationsshort and Corporate Governance.
long-term strategies and objectives, including consideration of significant risks to the execution of those strategies and the achievement of the Company’s objectives.
Our Chairman and Chief Executive Officer is ultimately responsible for the effectiveness of the Company’s risk management processes and he is an integral part of our day-to-day execution of those processes. As a result of his dual role, Mr. Greenberg’s ability to lead management’s risk management program and to assist in the Board’s oversight of that program improves the effectiveness of both the Board’s leadership structure and its oversight of risk.
Board Independence
The Board of Directors has determined that, other than Messrs. Greenberg and Walsh, no Director has a material relationship with the Company and each isDirector satisfies the criteria for an “independent director” as defined under the rules of the New York Stock Exchange. The Board of Directors has established the following guidelines to assist it in determining director independence: (i) if a Director serves as an officer, director or trustee of a non-profit organization, charitable contributions to that organization by the Company and its affiliates in an amount up to $250,000 per year will not be considered to result in a material relationship between such Director and the Company, and (ii) service by a Director or his immediate family member as an executive officer or employee of a company that makes payments to, or receives payments from, the Company or its affiliates for property or services in an amount which, in any of the last three fiscal years, did not exceed the greater of $1 million or 2 percent of such other company’s consolidated gross revenues, will not be considered to result in a material relationship between such Director and the Company.
In making its determination of independence, the Board of Directors considered ordinary business transactions between Ms. Puccio’s employer and subsidiaries of the Company which were in compliance with the categorical standards set by the Board of Directors for determining director independence.
The Board of Directors held nine8 meetings in Fiscal 2007.2010. All Directors attended at least 75 percent of the meetings of the Board of Directors and Committees of the Board of which they were members. Generally, all Directors attend the Company’s Annual Meetings of Shareholders, and each of the Company’s Directors attended the 20072010 Annual Meeting of Shareholders, held on February 27, 2007.Shareholders. Independent Directors of the Board also meet in regularly scheduled sessions without management. These sessions are led by Mr. Stratton, who currently holds the position ofour Presiding Director.
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Board Committees
The Board of Directors has established the Audit Committee, the Compensation and Management Development Committee, the Executive Committee, and the Corporate Governance Committee, and the Planning and Finance Committee. All of these Committees are responsible to the full Board of Directors. The functions of and other information about these Committees are summarized below.
Audit Committee
Oversees the accounting and financial reporting processes of the Company and independent audits of the financial statements of the Company.
Appoints and approves the compensation of the Company’s independent accountants.
Monitors the independence of the Company’s independent accountants and the performance of the independent accountants and the internal audit function.
Oversees the adequacy of the Company’s controls relative to financial and business risk.
Monitors compliance with the Company’s enterprise risk management policies.
Appoints and approves the compensation of the Company’s independent accountants.
Monitors the independence of the Company’s independent registered public accounting firm and the performance of the independent accountants and the internal audit function.
Discusses with management, the general auditor and the independent auditor the Company’s policies with respect to risk assessment and risk management.
Provides a means for open communication among the Company’s independent accountants, management, internal audit staff and the Board.
Oversees compliance with applicable legal and regulatory requirements.
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M.S. Puccio.
The Board of Directors has determined that all of the Audit Committee members –— Mr. Vincent, Mr. SchlangerMrs. Pol and Mrs. Pol,Ms. Puccio, qualify as “audit committee financial experts” in accordance with the applicable rules and regulations of the SEC. Each of the members of the Audit Committee is “independent” as defined by the New York Stock Exchange listing standards.
Compensation and Management
Development Committee
Development Committee
Establishes executive compensation policies and programs.
Confirms that executive compensation plans do not encourage unnecessary risk-taking.
Recommends to the Board base salaries and target bonus levels for senior executive personnel.
Assists the Board in establishing a succession plan for the positions of Chairman of the Board and Chief Executive Officer.
Reviews the Company’s plans for management development and succession planning policies.senior management succession.
Reviews and approves corporate goals and objectives relevant to the Chief Executive OfficerOfficer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives, and together with the other independent Directors on the Board, determines and approves the Chief Executive Officer’s compensation based upon this evaluation.
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|
Reviews with management the Company’s “CompensationCompensation Discussion and Analysis.”Analysisincluded in the Company’s proxy statement.
Approves the awards and payments to be made to senior executive personnel of the Company under its long-term compensation plans.
Each of the members of the Committee is “independent” as defined by the New York Stock Exchange listing standards.
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Compensation Committee Interlocks and Insider ParticipationManagement
The members
Development Committee
Establishes executive compensation policies and programs.
Confirms that executive compensation plans do not encourage unnecessary risk-taking.
Recommends to the Board base salaries and target bonus levels for senior executive personnel.
Assists the Board in establishing a succession plan for the positions of Chairman of the Board and Chief Executive Officer.
Reviews the Company’s plans for management development and senior management succession.
Reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives, and together with the other independent Directors on the Board, determines and approves the Chief Executive Officer’s compensation based upon this evaluation.
Reviews with management theCompensation Discussion and Analysisincluded in the Company’s proxy statement.
Approves the awards and payments to be made to senior executive personnel of the Company under its long-term compensation plans.
Compensation and Management Development Committee are Messrs. GozonMembers: M.O. Schlanger (Chairman), E.E. Jones, and Schlanger and Mrs.A. Pol. None of the members is a former or current officer or employee of the Company or any of its subsidiaries. None of the members has any relationship required to be disclosed under this caption under the rules of the Securities and Exchange Commission.
Executive Committee
Has the full power of the Board between meetings of the Board, with specified limitations relating to major corporate matters.
EXECUTIVE COMMITTEE MEMBERS: J. W. Stratton (Chairperson), R. C. Gozon, and L. R. Greenberg.
MEETINGS HELDLASTYEAR: 2
Corporate Governance Committee
Identifies nominees and reviews the qualifications of persons eligible to stand for election as Directors and makes recommendations to the Board on this matter.
Reviews and recommends candidates for committee membership and chairs.
Advises the Board with respect to significant developments in corporate governance matters.
Reviews and assesses the performance of the Board and each Committee.
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Reviews and recommends Director compensation.
Reviews Directors’ and officers’ indemnification and insurance coverage.
Selection and Evaluation of Board Candidates
The Corporate Governance Committee seeks director candidates based upon a number of qualifications, including their independence, knowledge, judgment, character, leadership skills, education, experience, financial literacy, standing in the community, and ability to foster a diversity of backgrounds and views and to complement the Board’s existing strengths. As part of the process of selecting Board candidates, the Committee obtains an opinion of the Company’s General Counsel that there is no reason to believe that the Board candidate is not “independent” as defined by the New York Stock Exchange listing standards. The Committee conducts an annual assessment of the composition of the Board and Committees and reviews with the Board the appropriate skills and characteristics required of Board members. The Committee generally relies upon recommendations from a wide variety of its business contacts, including current executive officers, Directors, community leaders, and shareholders as a source for potential Board candidates. The Committee sometimes uses the services of a third-party executive search firm to assist it in identifying and evaluating possible nominees for director.
Written recommendations for director nominees should be delivered to the Corporate Secretary, UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406. The Company’s bylaws do not permit shareholders to nominate candidates from the floor at an annual meeting without notifying the Corporate Secretary 45 days prior to the anniversary of the mailing date of the Company’s proxy statement for the previous year’s annual meeting. Notification must include certain information detailed in the Company’s bylaws. If you intend to nominate a candidate from the floor at an annual meeting, please contact the Corporate Secretary.
CORPORATE GOVERNANCE COMMITTEE MEMBERS: J. W. Stratton (Chairperson), R. C. Gozon, and E. E. Jones.
Each of the members of the Committee is “independent” as defined by the New York Stock Exchange listing standards.
MEETINGS HELD LAST YEAR: 4
Planning and Finance Committee
Reviews the Company’s planning and budgeting processes and its Annual Budget and Three Year Plan.
Reviews the financial prospects of the Company and its capital structure and risk profile.
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MEETINGS HELD LAST YEAR: 1
3
The table below shows the components of director compensation for Fiscal 2007. A Director who is an officer or employee of the Company or its subsidiaries is not compensated for service on the Board of Directors or on any Committee of the Board.
Director Compensation Table – Fiscal 2007
Name (a) | Fees or Paid in Cash ($)(1) | Stock ($)(2) (c) | Option ($)(3) (d) | Non-Equity Plan (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other ($) (g) | Total ($) (h) | |||||||
S. D. Ban | 62,000 | 118,725 | 48,620 | 0 | 0 | 0 | 229,345 | |||||||
R. C. Gozon | 72,000 | 154,902 | 48,620 | 0 | 0 | 0 | 275,522 | |||||||
E. E. Jones | 62,000 | 84,994 | 48,620 | 0 | 0 | 0 | 195,614 | |||||||
A. Pol | 67,000 | 120,132 | 48,620 | 0 | 0 | 0 | 235,752 | |||||||
M. O. Schlanger | 72,000 | 108,641 | 48,620 | 0 | 0 | 0 | 229,261 | |||||||
J. W. Stratton | 67,000 | 133,129 | 48,620 | 0 | 0 | 0 | 248,749 | |||||||
R. B. Vincent | 72,000 | 72,283 | 48,620 | 0 | 0 | 0 | 192,903 |
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Notwithstanding anything to the contrary, the following reports of the Audit Committee and the Compensation and Management Development Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
n REPORTOFTHE COMPENSATIONAND MANAGEMENT DEVELOPMENT COMMITTEEOFTHE BOARDOF DIRECTORS
The Committee has reviewed and discussed the Compensation Discussion and Analysis on pages 20 through 36 with management. Based on this review and discussion, the Committee recommended to the Company’s Board of Directors, and the Board of Directors approved, the
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inclusion of the Compensation Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended September 30, 2007 and the Company’s proxy statement for the 2008 Annual Meeting of Shareholders.
Compensation and Management
Development Committee
Establishes executive compensation policies and programs.
Confirms that executive compensation plans do not encourage unnecessary risk-taking.
Recommends to the Board base salaries and target bonus levels for senior executive personnel.
Assists the Board in establishing a succession plan for the positions of Chairman of the Board and Chief Executive Officer.
Reviews the Company’s plans for management development and senior management succession.
Reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives, and together with the other independent Directors on the Board, determines and approves the Chief Executive Officer’s compensation based upon this evaluation.
Reviews with management theCompensation Discussion and Analysisincluded in the Company’s proxy statement.
Approves the awards and payments to be made to senior executive personnel of the Company under its long-term compensation plans.
Compensation and Management Development Committee Members: M.O. Schlanger (Chairman), E.E. Jones, and A. Pol.
Each of the members of the Committee is “independent” as defined by the New York Stock Exchange listing standards.
Richard C.-14-
Meetings held last year: 3
Compensation Committee Interlocks and Insider Participation
The members of the Compensation and Management Development Committee are Mr. Schlanger, Mr. Jones and Mrs. Pol. None of the members is a former or current officer or employee of the Company or any of its subsidiaries, or is an executive officer of another company where an executive officer of UGI Corporation is a director.
Executive Committee
Has the full power of the Board between meetings of the Board, with specified limitations relating to major corporate matters.
Executive Committee Members: R.C. Gozon Chairperson(Chairman), L.R. Greenberg, and M.O. Schlanger.
Meetings Held last year: 2
Corporate Governance Committee
Identifies nominees and reviews the qualifications of persons eligible to stand for election as Directors and makes recommendations to the Board on this matter.
Reviews and recommends candidates for committee membership and chairs.
Advises the Board with respect to significant developments in corporate governance matters.
Reviews and assesses the performance of the Board and each Committee.
Reviews and recommends Director compensation.
Reviews Directors’ and officers’ indemnification and insurance coverage.
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Selection and Evaluation of Board Candidates
The Corporate Governance Committee seeks director candidates based upon a number of qualifications, including their independence, knowledge, judgment, character, leadership skills, education, experience, financial literacy, standing in the community, and ability to foster a diversity of backgrounds and views and to complement the Board’s existing strengths. The Committee seeks individuals who have a broad range of demonstrated abilities and accomplishments in areas of importance to the Company, such as general management, finance, energy distribution, international business, law and public sector activities. Directors should also possess a willingness to challenge and stimulate management and the ability to work as part of a team in a collegial atmosphere. The Committee also seeks individuals who are capable of devoting the required amount of time to serve effectively on the Board and its Committees. With respect to incumbent Directors, the Committee also considers past performance of the Director on the Board. As part of the process of selecting independent Board candidates, the Committee obtains an opinion of the Company’s General Counsel that there is no reason to believe that the Board candidate is not “independent” as defined by the New York Stock Exchange listing standards. The Committee generally relies upon recommendations from a wide variety of its business contacts, including current non-management Directors, executive officers, community leaders, and shareholders as a source for potential Board candidates. The Committee may also use the services of a third-party executive search firm to assist it in identifying and evaluating possible nominees for director. Mr. Gochnauer was recommended to the Committee as a possible nominee by a third-party executive search firm.
The Committee conducts an annual assessment of the composition of the Board and Committees and reviews with the Board the appropriate skills and characteristics required of Board members. When considering whether the Board’s Directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to satisfy the oversight responsibilities of the Board, the Committee and the Board considered primarily the information about the backgrounds and experiences of the nominees contained under the caption “Nominees” on pages 7 to 10. In particular, with regard to Dr. Ban, the Board considered his extensive energy industry and emerging energy technologies knowledge and experience, including his experience as Chief Executive Officer of the Gas Research Institute, and his public company directorship and committee experience. With regard to Mr. Greenberg, the Board considered his executive leadership and vision demonstrated in leading the Company’s successful growth for more than 15 years, and his extensive industry knowledge and experience. With regard to Mr. Schlanger, the Board considered his senior management experience as Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer of Arco Chemical Company, a large public company, and his experience serving as chairman, director and committee member of the boards of directors of large public and private international companies, including his experience representing a major private equity firm’s shareholder interest. With regard to Mrs. Pol, the Board considered her significant experience as a senior executive managing high technology, traditional manufacturing and services businesses, including experience in human resource management, and her insight into government regulatory issues. With regard to Mr. Jones, the Board considered his extensive experience managing government and non-profit organizations as Chief Executive Officer, his public and private company directorship experience and his insight into workforce, regulatory, banking and legal issues. With regard to Mr. Walsh, the Board considered his experience managing the Company as Chief Operating Officer, his prior senior management experience with a global public company, and his broad industry knowledge and insight. With regard to Mr. Vincent, the Board considered his senior executive experience in banking and finance, and his extensive public and private company directorship and committee experience, including his experience as Chairman of the Board of a major mutual fund organization. With regard to Ms. Puccio, the Board considered her senior financial management experience with a global company and her extensive public accounting knowledge and experience. With regard to Mr. Gochnauer, the Board considered his experience as Chief Executive Officer of a large public company, his international business senior management experience, and his public and private company directorship experience.
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Written recommendations by shareholders for director nominees should be delivered to the Corporate Secretary, UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406. The Company’s bylaws do not permit shareholders to nominate candidates from the floor at an annual meeting without notifying the Corporate Secretary 45 days prior to the anniversary of the mailing date of the Company’s proxy statement for the previous year’s annual meeting. Notification must include certain information detailed in the Company’s bylaws. If you intend to nominate a candidate from the floor at an annual meeting, please contact the Corporate Secretary.
Corporate Governance Committee Members: R.C. Gozon (Chairman), E.E. Jones, and M.O. Schlanger.
Each of the members of the Committee is “independent” as defined by the New York Stock Exchange listing standards.
meetings held last year: 2
Communications with the Board
You may contact the Board of Directors or the non-management Directors as a group by writing to them c/o UGI Corporation, P.O. Box 858, Valley Forge, PA 19482. These contact instructions have been posted on the Company’s website at www.ugicorp.com under Investor Relations and Corporate Governance.
Any communications directed to the Board of Directors or the non-management Directors as a group from employees or others that concern complaints regarding accounting, internal controls or auditing matters will be handled in accordance with procedures adopted by the Audit Committee of the Board.
All other communications directed to the Board of Directors or the non-management Directors as a group are initially reviewed by the General Counsel. The Chairman of the Corporate Governance Committee is advised promptly of any such communication that alleges misconduct on the part of Company management or raises legal, ethical or compliance concerns about Company policies or practices.
On a periodic basis, the Chairman of the Corporate Governance Committee receives updates on other communications that raise issues related to the affairs of the Company but do not fall into the two prior categories. The Chairman of the Corporate Governance Committee determines which of these communications he would like to see. The Corporate Secretary maintains a log of all such communications that is available for review for one year upon request of any member of the Board.
Typically, we do not forward to our Board of Directors communications from our shareholders or other parties which are of a personal nature or are not related to the duties and responsibilities of the Board, including customer complaints, job inquiries, surveys, polls and business solicitations.
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Compensation of Directors
The table below shows the components of director compensation for Fiscal 2010. A Director who is an officer or employee of the Company or its subsidiaries is not compensated for service on the Board of Directors or on any Committee of the Board.
Director Compensation Table — Fiscal 2010
| Change in | ||||||||||||||||||||||||||||
| Pension Value | ||||||||||||||||||||||||||||
| Fees | Non-Equity | and | ||||||||||||||||||||||||||
| Earned | Incentive | Nonqualified | All | |||||||||||||||||||||||||
| or Paid | Stock | Option | Plan | Deferred | Other | |||||||||||||||||||||||
| in Cash | Awards | Awards | Compen- | Compensation | Compensation | Total | ||||||||||||||||||||||
| Name | ($)(1) | ($)(2) | ($)(3) | sation ($) | Earnings ($)(4) | ($) | ($) | |||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
| S. D. Ban | 67,000 | 104,623 | 38,165 | 0 | 0 | 0 | 209,788 | |||||||||||||||||||||
| R. C. Gozon | 67,000 | 131,861 | 38,165 | 0 | 0 | 0 | 237,026 | |||||||||||||||||||||
| E. E. Jones | 62,000 | 79,223 | 38,165 | 0 | 771 | 0 | 180,159 | |||||||||||||||||||||
| A. Pol | 67,000 | 105,687 | 38,165 | 0 | 501 | 0 | 211,353 | |||||||||||||||||||||
| M.S. Puccio | 67,000 | 63,258 | 38,165 | 0 | 0 | 0 | 168,423 | |||||||||||||||||||||
| M. O. Schlanger | 72,000 | 97,027 | 38,165 | 0 | 0 | 0 | 207,192 | |||||||||||||||||||||
| R. B. Vincent | 72,000 | 69,668 | 38,165 | 0 | 0 | 0 | 179,883 | |||||||||||||||||||||
| (1) | Annual Retainers. The Company pays its non-management Directors an annual retainer of $62,000 for Board service and pays an additional annual retainer of $5,000 to members of the Audit Committee, other than the chairperson. The Company also pays an annual retainer to the chairperson of each of the Committees, other than the Executive Committee, as follows: Audit, $10,000; Compensation and Management Development, $10,000; and Corporate Governance, $5,000. The Company pays no meeting attendance fees. |
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| (2) | Stock Awards. All Directors named above received 2,550 stock units in Fiscal 2010 as part of their annual compensation. The stock units were awarded under the Company’s 2004 Plan. Each stock unit represents the right to receive a share of stock and dividend equivalents when the Director ends his or her service on the Board. Stock units earn dividend equivalents on each record date for the payment of a dividend by the Company on its shares. Accrued dividend equivalents are converted to additional stock units annually, on the last date of the calendar year, based on the closing stock price for the Company’s shares on the last trading day of the year. All stock units and dividend equivalents are fully vested when credited to the Director’s account. Account balances become payable 65 percent in shares and 35 percent in cash, based on the value of a share, upon retirement or termination of service. In the case of a change in control of the Company, the stock units and dividend equivalents will be paid in cash based on the fair market value of the Company’s common stock on the date of the change in control. The amounts shown in column (c) above represent the fair value of the awards of stock units recognized for financial statement reporting purposes. The assumptions used in the calculation of the amounts shown are included in Note 2 and Note 13 to our audited consolidated financial statements for Fiscal 2010, which are included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2010. The dollar value shown in column (c) above reflects each Director’s annual award, as well as the accumulation of stock units credited upon the conversion of dividend equivalents. The grant date fair value of each Director’s annual award of 2,550 stock units was $61,226. The grant date fair value of the stock units credited upon the conversion of dividend equivalents to stock units in Fiscal 2010 was as follows: Dr. Ban, $43,397; Mr. Gozon, $70,635; Mr. Jones, $17,997; Mrs. Pol, $44,461; Ms. Puccio, $2,032; Mr. Schlanger, $35,801; and Mr. Vincent, $8,442. For the number of stock units credited to each Director’s account as of September 30, 2010, seeSecurities Ownership of Management — Beneficial Ownership of Directors, Nominees and Named Executive Officers — Stock Units Held Under 2004 Plan. | |
| (3) | Stock Options. All Directors named above received 8,500 stock options in Fiscal 2010 as part of their annual compensation. The options were granted under the Company’s 2004 Plan. The option exercise price is not less than 100 percent of the fair market value of the Company’s common stock on the effective date of the grant, which is either the date of the grant or a future date. The term of each option is generally 10 years, which is the maximum allowable term. The options are fully vested on the effective date of the grant. All options are nontransferable and generally exercisable only while the Director is serving on the Board, with exceptions for exercise following retirement, disability or death. If termination of service occurs due to retirement or disability, the option term is shortened to the earlier of the third anniversary of the date of such termination of service, or the original expiration date. In the event of death, the option term will be shortened to the earlier of the expiration of the 12-month period following the Director’s death, or the original expiration date. The amounts shown in column (d) above represent the fair value of stock option awards recognized for financial statement reporting purposes. The grant date fair value of each Director’s annual award of 8,500 stock options was $38,165. For the number of stock options held by each Director as of September 30, 2010, seeSecurities Ownership of Management — Beneficial Ownership of Directors, Nominees and Named Executive Officers — Exercisable Options for UGI Common Stock. | |
| (4) | The amounts shown represent above-market earnings on deferred compensation. Earnings on deferred compensation are considered above-market to the extent that the rate of interest exceeds 120 percent of the applicable federal long-term rate. For purposes of the Director Compensation Table — Fiscal 2010, the market rate on deferred compensation most analogous to the rate at the time the interest rate is set under the deferred compensation plan for Fiscal 2010 was 5.02 percent, which is 120 percent of the federal long-term rate for December 2009. |
Notwithstanding anything to the contrary, the following reports of the Audit Committee and the Compensation and Management Development Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
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Report of the Compensation and Management DevelopmentCommittee of the Board of Directors
The Committee has reviewed and discussed with management theCompensation Discussion and Analysis included in this proxy statement. Based on this review and discussion, the Committee recommended to the Company’s Board of Directors, and the Board of Directors approved, the inclusion of theCompensation Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended September 30, 2010 and the Company’s proxy statement for the 2011 Annual Meeting of Shareholders.
Compensation and Management
Development Committee
Development Committee
Marvin O. Schlanger,
Chairman
Ernest E. Jones
Anne Pol
The Audit Committee is composed of independent Directors as defined by the rules of the New York Stock Exchange and acts under a written charter adopted by the Board of Directors. As described more fully in its charter, the role of the Committee is to assist the Board of Directors in its oversight of the quality and integrity of the Company’s financial reporting process. The Committee also has the sole authority to appoint, retain, fix the compensation of and oversee the work of the Company’s independent auditors.
In this context, the Committee has met and held discussions with management and the independent auditors to review and discuss the Company’s internal control over financial reporting, the interim unaudited financial statements, and the audited financial statements for Fiscal 2007.2010. The Committee also reviewed management’s report on internal control over financial reporting, required under Section 404 of the Sarbanes-Oxley Act of 2002. As part of this review, the Committee reviewed the bases for management’s conclusions in that report and the report of the independent registered public accountants on the effectiveness of the Company’s internal control over financial reporting. Throughout Fiscal 2007, the Committee reviewed management’s plan for documenting and testing controls, the results of their documentation and testing, any deficiencies discovered and the resulting remediation of deficiencies. The Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61,CommunicationsCommunication with Audit Committees,as amended, as adopted by the Public Company Accounting Oversight Board and the independent auditors’ independence. In addition, the Committee has received the written disclosures and the letter from the independent auditors required by Independence Standardsapplicable requirements of the Public Company Accounting Oversight Board Standard No. 1,Independent Discussionsregarding the independent accountant’s communications with the Audit Committees.Committee concerning independence.
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Management has the primary responsibility for the financial reporting process, including the system of internal controls, and for preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company’s independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America. The Committee’s responsibility is to monitor and review these processes.
The members of the Committee are not professionally engaged in the practice of auditing or accounting. The members of the Committee rely, without independent verification, on the
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information provided to them and on the representations made by management and the independent auditors. Accordingly, the Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with auditing standards generally accepted in the United States of America, that the financial statements are presented in accordance with accounting principles generally accepted in the United States of America or that our auditors are, in fact, “independent.”
Based upon the reviews and discussions described in this report, the Committee has recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 20072010 for filing with the Securities and Exchange Commission.
SEC.
Audit Committee
Roger B. Vincent, Chairperson
Chairman
Anne Pol
Marvin O. Schlanger
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M. Shawn Puccio
In the course of its meetings, the Audit Committee considered whether the provision by PricewaterhouseCoopers LLP of the professional services described in this section isbelow was compatible with PricewaterhouseCoopers’PricewaterhouseCoopers LLP’s independence. The Committee concluded that theour independent registered public accountants areaccounting firm is independent from the Company and its management.
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the Company’s independent accountants. In recognition of this responsibility, the Audit Committee has a policy of pre-approving all audit and permissible non-audit services provided by the independent accountants.
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Prior to engagement of the Company’s independent accountantsregistered public accounting firm for the next year’s audit, management submits to the Audit Committee for approval a list of services and related fees expected to be rendered during that year, within each of the four categories of services noted below to the Audit Committee for approval.and fees related thereto. The aggregate fees billed by PricewaterhouseCoopers LLP, the Company’s independent registered public accountants,accounting firm, in Fiscal 20072010 and 20062009 were as follows:
| 2007 | 2006 | |||||
Audit Fees1 | $ | 3,378,825 | $ | 4,153,543 | ||
Audit-Related Fees | 0 | 0 | ||||
Tax Fees2 | 650,771 | 522,211 | ||||
All Other Fees3 | 19,300 | 13,100 | ||||
Total Fees for Services Provided | $ | 4,048,896 | $ | 4,688,854 | ||
| 2010 | 2009 | |||||||
Audit Fees(1) | $ | 3,146,650 | $ | 3,460,718 | ||||
| Audit-Related Fees | 0 | 0 | ||||||
Tax Fees(2) | 600,000 | 636,345 | ||||||
All Other Fees(3) | 212,000 | 164,363 | ||||||
| Total Fees for Services Provided | $ | 3,958,650 | $ | 4,261,426 | ||||
| (1) | Audit Fees were for audit services, including (i) the annual audit of the consolidated financial statements and internal control over financial reporting of the Company, (ii) |
| (2) | Tax Fees were for |
| (3) | All other fees |
not require disclosure under SEC regulations. The Audit Committee of the Board of Directors, with assistance from the Company’s General Counsel, is responsible for reviewing, approving and ratifying related person transactions. The Audit Committee intends to approve or ratify only those related person transactions that are in, or not inconsistent with, the best interests of the Company and its shareholders. -22-nPolicy for Approval of Related Person Transactions POLICYFOR APPROVALOF RELATED PERSON TRANSACTIONSIn July 2007, theThe Company’s Board of Directors adoptedhas a written policy with respect tofor the review and approval of Related Person Transactions to document procedures pursuant to which such transactions are reviewed, approved or ratified.Transactions. The policy applies to any transaction in which (i) the Company or any of its subsidiaries is a participant, (ii) any related person has a direct or indirect material interest, and (iii) the amount involved exceeds $120,000, but excludesexcept for any such transaction that does-19-
Introduction
In this Compensation Discussion and Analysis, we address the compensation paid or awarded to Messrs.the following executive officers: Lon R. Greenberg, our Chairman and Chief Executive Officer; John L. Walsh, our President and Chief Operating Officer; Peter Kelly, Mendicino,our Vice President — Finance and Chief Financial Officer; Eugene V.N. Bissell, the President and Varagne.Chief Executive Officer of our subsidiary, AmeriGas Propane, Inc.; and François Varagne, the Chairman and Chief Executive Officer of our subsidiary, Antargaz. We refer to these executive officers as our “named executive officers.”
officers” for Fiscal 2010.
Compensation decisions for Messrs. Greenberg, Walsh and Kelly and, prior to his retirement, Mr. Mendicino, were made by the independent members of our Board of Directors, after receiving the recommendations of its Compensation and Management Development Committee. Compensation decisions for Mr. Bissell were made by the independent members of the Board of Directors of AmeriGas Propane, Inc. (“AmeriGas Propane”), the general partnerGeneral Partner of AmeriGas Partners, L.P., after receiving the recommendation of its Compensation/Pension Committee. Compensation decisions for Mr. Varagne were approved by the independent members of our Board of Directors as well as the Board of Directors of AGZ Holding, after receiving the recommendation of our Compensation and Management Development Committee.Committee, as well as by the Board of Directors of Antargaz’ parent company, AGZ Holding. For ease of understanding, we will use the term “we” to refer to one UGI Corporation, AmeriGas Propane, Inc. and/or more ofAGZ Holding and the entities involvedterm “Committee” or “Committees” to refer to the UGI Corporation Compensation and Management Development Committee and/or the AmeriGas Propane, Inc. Compensation/Pension Committee as appropriate in the relevant compensation decisions, unless the context indicates otherwise. We refer to our 20072010 and 2009 fiscal yearyears as “Fiscal 2007.2010” and “Fiscal 2009,”
respectively.
Compensation Philosophy and Objectives
We believe that our compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for theirleadership excellence and performance that promotes sustainable growth in shareholder and leadership excellence.
common unitholder value.
In Fiscal 2007,2010, the components of our compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards and UGI Corporation stock option grants), perquisites, retirement benefits, and other benefits, all as described in greater detail in this Compensation Discussion and Analysis. We also consider granting discretionary special equity awards from time to time, although no such awards were made to the named executive officers during Fiscal 2010. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program.program to support our annual and long-term goals.
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Determination of Competitive Compensation
The Compensation and Management Development Committee engages
In determining Fiscal 2010 compensation, the Committees engaged Towers Perrin as itstheir compensation consultant. In early 2010, Towers Perrin supportsmerged with Watson Wyatt, another human resources consulting firm, and is now called Towers Watson. Towers Watson supported the Compensation and Management Development CommitteeCommittees in performing itstheir responsibilities with respect to our executive compensation program. The primary duties of Towers Perrin areWatson were to:
provide
Provide the Compensation and Management Development CommitteeCommittees with independent and objective market data;
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conduct
Conduct compensation analysis; and
review
Review and advise on pay programs and salary, target bonus and long-term incentive levels applicable to our executives.executives; and
These duties are performed annually. In addition, Towers Perrin recommends plan design changes
Review components of our compensation program as requested from time to time by the CompensationCommittees and Management Development Committee.
recommend plan design changes as appropriate.
Towers PerrinWatson also performs other services for us and our affiliates under separate agreements. These services include providing (i) actuarial services for our qualified pension plan,plans, (ii) consulting services with respect to our benefits programs, and (iii) non-discrimination testing for our qualified benefit plans.plans, and (iv) assistance in determining the accounting fair value of our equity awards. Towers Watson was selected by the Committees as their compensation consultant independent of any consideration of the services that Towers Watson provides for the Company and its subsidiaries. None of the Towers Watson consultants that provided services to the Committees and none of the Towers Watson executive compensation consultants were involved in any of the actuarial and benefits consulting services provided to the Company and its subsidiaries. Towers Watson has served as the actuary for the Company’s qualified pension plans for many years, and its knowledge and experience with our retirement and benefit plans are considered valuable. In Fiscal 2010, we and our affiliates paid Towers Watson $736,605 for these services. In addition, we paid Towers Watson $83,234 in Fiscal 2010 for executive compensation-related services, and the Committees approved Towers Watson’s fee structure for those services. Management engaged Towers Watson for all other services provided by that firm, and management reviewed and approved all Towers Watson fees.
In July of Fiscal 2010, based on their review of the Towers Watson relationship, and to avoid any appearance of a conflict of interest, the Committees decided to retain Pay Governance LLC as their compensation consultant for Fiscal 2011. Because Pay Governance LLC currently employs the consultant who formerly served the Committees as our lead compensation consultant when he was employed by Towers Perrin, the Committees did not lose the benefit of their lead consultant’s knowledge of the Company’s compensation policies and programs. We will not engage Pay Governance LLC to provide any additional consulting services.
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In assessing competitive compensation, we relied onreferenced market data provided to us in Fiscal 20062009 by Towers Perrin and applied this data as described herein.Watson. For Messrs. Greenberg, Walsh and Mendicino,Kelly, Towers PerrinWatson provided us with two reports: the “2006“2009 Executive Cash Compensation Review” and the “Executive Compensation Analysis 2006“2009 Executive Long-Term Incentive Review.” Each of these reports includes an executive compensation analysis. We utilize similar but separate Towers PerrinWatson market data for AmeriGas Propane, including an executive compensation analysis, in determining compensation for Mr. Bissell.
For Mr. Varagne, we referenced Towers Watson’s database for Top Executive Remuneration in France when assessing his salary and annual bonus awards. We do not benchmark against specific companies in the namedTowers Watson reports. Our Committees do benchmark, however, by using (through Towers Watson) compensation databases that include numerous companies as a reference point to provide a framework for compensation decisions. Our Committees exercise discretion and also review other factors, such as internal equity (both within and among our business units) and sustained individual and company performance, when setting our executives’ compensation.
In order to provide the Committee with market data reflecting the relative sizes of UGI’s nonutility and utility businesses, Towers Watson first calculated the market rate for comparable executive officers, other than Messrs. Bissell and Varagne,positions in each of the executive compensation analysis is weighted 75 percent based on general industry data in Towers Perrin’sWatson General Industry Executive Compensation Database (the “Executive Compensation(“General Industry Database”), which includes approximately 800 companies, and 25 percent based onthe Towers Perrin’sWatson Energy Services Executive Compensation Database which includes approximately 90 utility companies. This weighting is designed to approximate the relative sizes of our non-utility and utility businesses.(“Energy Services Database”). Towers Perrin’s Executive CompensationWatson’s General Industry Database is comprised of approximately 430 companies from a broad range of industries, including oil and gas, aerospace, automotive and transportation, chemicals, computer, consumer products, electronics, food and beverages, metals and mining, pharmaceutical and telecommunications. The energy servicesTowers Watson Energy Services Database is comprised of approximately 100 companies, primarily utilities. For the named executive officers, other than Messrs. Bissell and financial services industries are excluded from this database because compensation in these industries typically differs from general industry compensation practices.
Varagne, Towers Watson weighted the General Industry Database data point 75% and the Energy Services Database data point 25% and added the two. For comparison purposes, due toexample, if the variance in size among the companiesrelevant market rate for a particular executive position was $100,000 in the Executive CompensationGeneral Industry Database regression analysis, whichand $90,000 in the Energy Services Database, Towers Watson would provide us with a market rate of $97,500 for that position ($100,000 x 75% = $75,000) plus ($90,000 x 25% = $22,500). The impact of weighting the two databases is to obtain a market rate designed to approximate the relative sizes of our nonutility and utility businesses. The different weightings do not have an objective analytical tool used to determineimpact on the relationship among data, was used to adjust the data for differences in company revenues.Committee’s decision-making. For Mr. Bissell, we utilizedreferenced Towers Perrin’s Executive CompensationWatson’s General Industry Database exclusively. For Mr. Varagne, we referenced Towers Perrin’sWatson’s database for Top Executive Remuneration infor France. That database is comprised of approximately 85 companies from a broad range of industries, including chemicals, media, aerospace, telecommunications, healthcare, automotive, oil and gas, real estate, financial services, energy services, industrial materials, consumer products, food and beverage, retail, and pharmaceuticals. The identities of the companies that comprise the Towers Watson databases have not been disclosed to us by Towers Perrin or Towers Watson.
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We generally seek to position a named executive officer’s salary grade so that the midpoint of the salary range in thefor his salary grade approximates the 50th percentile of salaries for comparable executives included in the executive compensation database material referenced by Towers Perrin.
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Watson. By comparable executive, we mean an executive having a similar range of responsibilities and the experience to fully perform those responsibilities. Towers Watson uses regression analysis on compensation data for the applicable positions in its databases to provide us with information on market rates of compensation. Regression analysis is an objective calculation that identifies a relationship between one variable (in this case, compensation) and another variable that is closely related to it. For utilities and broader general industry companies, revenue provides the firmest relationship to compensation. In determiningother words, a larger company would be more likely to pay a higher amount of compensation for the compensationsame position than a smaller company. Using this relationship, market rates are developed for positions comparable to those of Mr. Kelly, we referenced existing salary dataour executives, as if the companies in structuring our initial offer; however, the final terms of the offer reflect changes resulting from our negotiations. Mr. Kelly’s compensation was based largelyExecutive Compensation, Energy Services and Top Executive Remuneration for France databases had revenues similar to ours. We believe that Towers Watson’s regression analysis on the termsapplicable positions in these databases is an appropriate method for establishing market rates. After consultation with Towers Watson, we considered salaries that were within 15 percent of an offer letter we negotiated with him in June 2007 in connection with the commencement of his employment in September 2007.
market median salary levels developed by Towers Watson to be competitive.
Elements of Compensation
Salary is designed to compensate executives for their level of responsibility and sustained individual performance. We pay our executive officers a salary that is competitive with that of other executive officers providing comparable services, taking into account the size and nature of the business of UGI Corporation, AmeriGas Partners or Antargaz, as the case may be.
As noted above, we seek to positionestablish the midpoint of the applicable salary grade for the positions held by our named executive officers to approximateat approximately the 50th percentile of salaries for executives in comparable executivespositions as determined in the applicable Towers PerrinWatson executive compensation databases. Other than Mr. Varagne, who is discussed below, for Fiscal 2007, all named executive officers received a salary that was approximately equivalent to the midpoint of his applicable salary grade. Based on the data provided by Towers Perrin,Watson, we increased the range of salary in each salary grade for each named executive officer, other than Mr. Greenberg, by 2.51.5 percent. We also adjustedThe Committee established Mr. Greenberg’s Fiscal 2010 salary grade midpoint at the market median of comparable executives as identified by Towers Watson’s executive compensation databases. For Mr. Greenberg, this resulted in a slight reduction of the midpoint from the prior year.
Historically, individual salaries have been adjusted to reflect merit increases. Except for Mr. Varagne, the merit increases were targeted at 3.5 percent, but individual increases varied based on subjective performance evaluations and the individual’s position within the salary range. Criteria reviewedrange for his salary grade. For Fiscal 2010, however, in such performance evaluations included: overall leadership, accomplishment of annual goals and objectives, development of an effective management team, and commitmentresponse to the jobchallenging global and company.
domestic economic conditions and period of evolving market dynamics, our named executive officers did not receive base salary increases. Other than Mr. Varagne, all named executive officers received a salary in Fiscal 2010 that was within 86 percent to 106 percent of the midpoint for his salary range. While there is no established salary range for Mr. Varagne, Mr. Varagne’s salary is positioned to approximate the 50th percentile of salaries for comparable executives as determined in Towers Perrin’sWatson’s database for Top Executive Remuneration in France. When determining Mr. Varagne’s salary, we also take into account competitive pay practices in France, internal pay equity, Mr. Varagne’s individual performance and the performance of Antargaz.
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The following table sets forth each named executive officer’s Fiscal 20072010 salary. As previously discussed, our named executive officers did not receive a base salary and his percentage increase overin Fiscal 2006.
2010.
Name1 | Salary | Percentage Increase over Fiscal 2006 Salary | |||
Lon R. Greenberg | $ | 966,000 | 5.0 | ||
John L. Walsh | $ | 588,016 | 5.0 | ||
Anthony J. Mendicino | $ | 439,920 | 6.0 | ||
Eugene V. N. Bissell | $ | 426,400 | 4.0 | ||
François Varagne2 | $ | 435,500 | 1.6 | ||
2010.
| Percentage Increase | ||||||||
| over Fiscal 2009 | ||||||||
| Name | Salary | Salary | ||||||
| Lon R. Greenberg | $ | 1,067,500 | 0 | % | ||||
| John L. Walsh | $ | 648,440 | 0 | % | ||||
| Peter Kelly | $ | 426,400 | 0 | % | ||||
| Eugene V. N. Bissell | $ | 490,000 | 0 | % | ||||
| François Varagne | $ | 455,600 | (1) | < 1 | %(2) | |||
| Mr. Varagne’s salary is paid in euros, and the amount shown reflects conversion based on a monthly average exchange rate in Fiscal | ||
| (2) | Mr. Varagne’s increase is due solely to the difference in the monthly average exchange rate between Fiscal 2009 ($1.35) and Fiscal 2010 ($1.36). His salary in both Fiscal 2009 and Fiscal 2010 was€335,000. |
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Name Lon R. Greenberg John L. Walsh Anthony J. Mendicino Eugene V. N. Bissell François Varagne1 -27-Ø• Annual Bonus AwardsOur annual bonus plans provide our named executive officers with the opportunity to earn annual cash incentives provided that certain performance goals are satisfied. Our annual cash incentives are intended to motivate our executives to focus on the achievement of our annual business objectives by providing competitive incentive opportunities to those executives who have the ability to significantly impact our financial performance. We believe that basing a meaningful portion of an executive’s compensation on financial performance emphasizes our pay for performance philosophy and will result in the enhancement of shareholder or common unitholder value.In determining theeach executive position’s target award levelslevel under our annual bonus plan,plans, we considered information in the Towers PerrinWatson executive compensation databases regarding the percentage of salary payable upon achievement of target goals relative tofor executives in similar positions at other companies as described above. In establishing the target award level, we position the amount within the 50th to 75th percentiles for comparable executives.positions. We determined that the 50th to 75th percentile range was appropriate because we believe that the annual bonus opportunities should have a significant reward potential to recognize the difficulty of achieving the annual goals and the significant corporatebeneficial impact to the Company of such achievement. For Fiscal 2007, each executive’s target award2010, Mr. Greenberg’s opportunity was set forth in the table below falls withinat the 50th to 75 percentile and the other named executive officers’ opportunities were set between the 50th percentile ranges provided in Towers Perrin’s executive compensation databases. and 57th percentiles. Target Award
Opportunity as a
Percentage of
Salary Target
Award
Opportunity Approximate Location
of Target Award in 50th
to 75th Percentile Range 100 % $ 966,000 50th Percentile 85 % $ 499,814 56th Percentile 75 % $ 329,940 63rd Percentile 75 % $ 319,800 67th Percentile 70 % $ 304,850 67th Percentile
|
|
Messrs. Greenberg, Walsh and Kelly and, prior to his retirement, Mr. Mendicino, participate in the UGI Corporation Executive Annual Bonus Plan, while Mr. Bissell participates in the AmeriGas Propane, Inc. Executive Annual Bonus Plan. Mr. Kelly did not participate in the annual bonus program in Fiscal 2007. His $25,002 bonus for Fiscal 2007 was determined under the terms of his offer letter, and was designed to equal 1/12 of his $300,027 target bonus opportunity for Fiscal 2007.
For Messrs. Greenberg, Walsh and Mendicino,Kelly, the entire target award opportunity was based on the Company’s earnings per share (“EPS”). We believe that enhancingannual bonus payments to our most senior executives should reflect our overall financial performance isresults for the most important goal of a principal executive, operating or financial officer,fiscal year and earnings
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per shareEPS provides a straightforward, “bottom line” measure of the performance of an executive in a large, well-established corporation. For similar reasons, Mr. Bissell’s target award opportunity was principally was based on earnings per common unit (“EPU”) of AmeriGas Partners, althoughwith the bonus achieved based on EPU is subject to adjustment based on achievement of our customer growth goal, as described below. We believe that customer growth for AmeriGas Partners is an important corollary to EPU. BecauseEPU because we foresee only modestno growth in total demand for propane in the next several years, and, therefore, customer growth is an important factor in our ability to improve the long-term financial performance of AmeriGas Partners. Additionally, the customer growth adjustment serves to balance the risk of achieving our short-term annual financial goals at the expense of our long-term goal to grow our customer base. For Mr. Varagne, who has principal responsibility over Antargaz, which is a wholly-owned subsidiary of the Company, we determined to base his target award entirely on achievement of Antargaz’ budgeted earnings before interest, taxes, depreciation and amortization (“EBITDA”).
The bonus award opportunity for each of Messrs. Greenberg, Walsh and MendicinoKelly was structured so that no amounts would be paid unless the Company’s EPS was at least 80 percent of the target amount, with the target bonus award being paid out if the Company’s EPS was 100 percent of the targeted EPS. The maximum award, equal to 200 percent of the target award, would be payable if EPS equaled or exceeded 120 percent of the EPS target (the percentage of target bonus payable based on various levels of EPS is referred to as the “EPS Leverage Factor”).target. The targeted EPS for bonus purposes for Fiscal 20072010 was set at a level between $1.75 and $1.85established to be in the range of $2.20 to $2.30 per share. EPS may be adjusted inEach Committee has discretion to adjust performance results for extraordinary items or other events, as the discretion of the Compensation and Management Development Committee to take into consideration unusual circumstances that occurred during the fiscal year.deems appropriate. For Fiscal 2007,2010, the Compensation and Management Development Committee used its discretion to excludeexcluded from the calculation of the EPS Leverage Factor 75 percentall of the gain associated with the divestiture of AmeriGas Partners’ 3.5 million barrel liquefied petroleum gas storage facility in Arizona,the Company’s indirect subsidiary, Atlantic Energy, due to its unusual nature. This exclusionThe Committee also excluded the loss associated with discontinuance of interest rate hedges by AmeriGas Partners. During Fiscal 2010, AmeriGas Partner’s management decided not to issue $150 million of long-term debt as previously planned due to AmeriGas Partner’s strong cash flows and the adequate level of funds available under its revolving loan agreements. Accordingly, AmeriGas Partners discontinued cash flow accounting treatment for interest rate protection agreements associated with the anticipated debt issuance which resulted in a 5loss. The exclusion of the gain associated with the divestiture of Atlantic Energy resulted in a 27.3 percentage point reduction to the EPS Leverage Factor. The exclusion of the loss associated with the discontinuance of the AmeriGas Partner’s interest rate hedges resulted in a 5.5 percentage point increase to the EPS Leverage Factor. Accordingly, for Fiscal 2007,2010, Messrs. Greenberg, Walsh and WalshKelly each received a bonus payout equal to 97.8107.3 percent of thehis target bonus.
award.
We adopted the Antargaz EBITDA target for Mr. Varagne to more closely align his compensation with United States’ pay practices by providing a bonus opportunity based on Antargaz financial performance. Mr. Varagne’s bonus award opportunity was structured so that no amounts would be payable unless Antargaz’ EBITDA was at least 75 percent of the target amount. The maximum award, equal to 200 percent of the target award, would be payable if Antargaz’ EBITDA exceeded 130 percent of the EBITDA target. The targeted Antargaz EBITDA for bonus purposes for Fiscal 2010 was between €110€110.75 million and €120€124 million. For Fiscal 2007,2010, the Committee deemed it appropriate to exclude from Antargaz’ EBITDA the gain resulting from foreign currency hedges and the beneficial effect of a change in the nature of the French business tax. These adjustments resulted in a 10.5 percentage point reduction in the leverage factor for Mr. Varagne. Accordingly, Mr. Varagne received a bonus payout equal to €187,233 (or $250,892),€238,721 or 82.3$324,661, or 101.8 percent of his target bonus.
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As noted above, Mr. Bissell’s target award opportunity was based on EPU of AmeriGas Partners, subject to modification based on customer growth. The targeted EPU target amount was derived based on a targeted EBITDA range for AmeriGas Partners of approximately $265 million to $275 millionbonus purposes for Fiscal 2007.2010 was established to be in the range of $2.97 to $3.14 per common unit. Under the target bonus criteria applicable to Mr. Bissell, no awardsbonus would be paid if the EPU amount was less than 82approximately 80 percent of the EPU target, award, while 200 percent of the target awardbonus might be payable if the EPU amount was at least 133approximately 120 percent or more of the target award (thetarget. The percentage of target bonus payable based on various levels of EPU is referred to as the “EPU Leverage Factor”). Additionally, no awards would be paidFactor.” The amount of the award determined by applying the EPU Leverage Factor is then adjusted to Mr. Bissell ifreflect the degree of achievement of a predetermined customer growth achieved in Fiscal 2007 was less than 1 percent, while 200 percent of the
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target award might be payable if the customer growth achieved was 3 percent or more (the percentage of target bonus payable based on various levels of customer growth is referred to as the “Customerobjective (“Customer Growth Leverage Factor”). EPU may be adjusted inFor Fiscal 2010, the discretionadjustment ranged from 90 percent if the growth objective was not achieved, to 110 percent if the growth objective exceeded approximately 150 percent of the AmeriGas Propane Compensation/Pension Committeegrowth target. The customer growth adjustment for Fiscal 2010 was modified to take into consideration unusual circumstances that occurred duringreflect our assessment of growth prospects after considering current and projected economic and housing market conditions. We believe the fiscal year. Based on the past practice of eliminating the effect of unusual gains and losses, the AmeriGas Propane Compensation/Pension Committee decided to exclude from the calculation of the EPUCustomer Growth Leverage Factor the gain associated with the divestiture of AmeriGas Partners’ 3.5 million barrel liquefied petroleum gas storage facility in Arizona. This exclusion resulted in a 70 percentage point reduction to the EPU Leverage Factor.
for Fiscal 2010 represented an aggressive but achievable growth target. Once the EPU Leverage Factor and Customer Growth Leverage Factor are determined, as explained above, the EPU Leverage Factor is multiplied by the Customer Growth Leverage Factor to obtain an adjusted leverage factor. The target award opportunityThis adjusted leverage factor is then multiplied by this adjusted leverage factorthe target bonus opportunity to arrive at Mr. Bissell’s actualthe bonus paymentaward payable for the fiscal year.
For Fiscal 2007,2010, the Committee deemed it appropriate to adjust EPU to exclude the loss associated with the discontinuance of AmeriGas Propane Compensation/Pension Committee adjustedPartner’s interest rate hedges for the resulting bonus for Mr. Bissell downward approximately 5 percent to reflect the partial achievementreasons previously discussed. The discretionary exclusion of strategic initiatives relatingthis loss from EPU resulted in a 13.8 percentage point increase to the introduction of new technologies and operating model efficiencies.EPU Leverage Factor, which was then modified because the customer growth target was not achieved. Accordingly, Mr. Bissell received a bonus payout for Fiscal 2007 equal to 13089.2 percent of his target bonus.
Based on the achievement relating to the modified EPS, EBITDA and modified EPU targets, including the discretionary adjustments described above, theaward.
The following annual bonus payments were made for Fiscal 2007:
Name1 | Percent of Target Bonus Paid | Amount of Bonus | ||||
Lon R. Greenberg | 97.8 | % | $ | 944,748 | ||
John L. Walsh | 97.8 | % | $ | 488,818 | ||
Eugene V. N. Bissell | 130.0 | % | $ | 415,740 | ||
François Varagne2 | 82.3 | % | $ | 250,892 | ||
|
|
|
|
2010:
| Percent of | ||||||||
| Target Bonus | Amount of | |||||||
| Name | Paid | Bonus | ||||||
| Lon R. Greenberg | 107.3 | % | $ | 1,145,428 | ||||
| John L. Walsh | 107.3 | % | $ | 591,410 | ||||
| Peter Kelly | 107.3 | % | $ | 343,145 | ||||
| Eugene V. N. Bissell | 89.2 | % | $ | 349,664 | ||||
| François Varagne | 101.8 | % | $ | 324,661 | ||||
For Fiscal 2007, the Compensation and Management Development Committee awarded a discretionary bonus of €15,000 (equivalent to $20,100) to Mr. Varagne for outstanding achievement. The bonus award reflects his leadership in positioning Antargaz to compete effectively under increasingly competitive conditions in France.
Ø• Long-Term Compensation –— Fiscal 20072010 Equity Awards
Our long-term incentive compensation is intended to create a strong financial incentive for achieving or exceeding long-term performance goals and to encourage executives to hold a significant equity stake in our company.company in order to align the executives’ interests with shareholder interests. Additionally, we believe our long-term incentives provide us the ability to attract and retain talented executives in a competitive market.
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We awarded our long-term compensation effective January 1, 20072010 for all our named executive officersMessrs. Greenberg, Walsh, Kelly and Bissell under the Company’s Amended and Restated 2004 Plan.Omnibus Equity Compensation Plan (the “2004 Plan”). In addition, Mr. Varagne’sBissell received long-term incentive compensation awards were made under the Sub-Plan for French Employees under the Company’s 2004 Plan. Our long-term compensation included UGI Corporation stock option grants and either UGI Corporation performance unit awards tied to the three-year performance of the Company’s common stock or, in the case of Mr. Bissell, AmeriGas Partners performance unit awards tied to the three-year performance of AmeriGas Partners common units representing limited partnership interests. These performance units were awardedeffective December 31, 2009 under the 2000 AmeriGas Propane, Inc. Long-Term Incentive Plan (“AmeriGas 2000 Plan”). Mr. Varagne’s long-term compensation awards were made effective January 1, 2010 under the 2008 Sub-Plan for French Employees and Corporate Officers under the Company’s 2004 Plan.
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Our long-term compensation for Fiscal 2010 included UGI Corporation stock option grants and either UGI Corporation or AmeriGas Partners performance unit awards. Messrs. Greenberg, Walsh, Kelly and Varagne were each awarded UGI Corporation performance units tied to the three-year total return performance of the Company’s common stock relative to that of the companies in the S&P Utilities Index. Mr. Bissell was awarded AmeriGas Partners performance unit awards tied to the three-year total return performance of AmeriGas Partners common units relative to that of the limited partnerships in the Alerian MLP Index. Each performance unit represents the right of the recipient to receive a share of common stock (oror a common unit in the case of Mr. Bissell) if specified performance goals and other conditions are met.
As is the case with cash compensation and annual bonus awards, we relied onreferenced Towers Perrin’sWatson’s executive compensation databases as the basis forin establishing equity compensation. This did not apply tocompensation for the named executive officers, except for Mr. Varagne, for whom such data was not available. Mr. Varagne’s stock option awards and performance unit awards were recommended by management, based on management’s consideration of internal pay equity and recognition that these types of long-term awards are utilized less frequently overseas than in the United States.
In determining the total dollar value of the long-term compensation opportunity to be provided in Fiscal 2007,2010, we initially referenced (i) market median salary information provided by Towers Perrin regardingand (ii) the percentage of the market median base salary for each position to be delivered as a long-term compensation opportunity. Thisopportunity, both as calculated by Towers Watson. The aforementioned percentage was developed using the applicable executive compensation databases and was targeted to produce long-term compensation opportunity at the 50th percentile level. The market median base salaries did not vary significantly from the actual salaries paid to our named executive officers in Fiscal 2007.
In accordance with our practice over the past several years, we
We initially applied approximately 50 percent of the amount of the long-term incentive opportunity to stock options and approximately 50 percent to performance units. We have bifurcated long-term compensation in this manner since 2000 and believe it provides a good balance between two related, but discrete goals. Stock options are designed to align the executive’s interests with shareholder interests, because the value of stock options is a function of the appreciation or depreciation of our stock price. As explained in more detail below, the performance units are designed to encourage performance that not only increasestotal shareholder value, but increases it to an extentreturn that compares favorably relative to a competitive peer group.
In providing award calculations, Towers PerrinWatson valued our stock options by applying a binomial model. The stock price used in the model for January 1, 20072010 awards was $24.46$25.11 which was the three-month average UGI Corporation stock price from June 26, 2006May 10, 2009 through September 26, 2006.August 10, 2009. The model also assumes a 5 percent turnover annually over the vesting period to account for options forfeited by terminating participants. As a result of this analysis, Towers PerrinWatson valued the stock options at $4.07$2.27 per underlying share. Based on its valuation, Towers PerrinWatson calculated the number of options to be granted to the named executive officers covering a specified number of underlying shares.
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The remaining approximately 50 percent of the long-term compensation opportunity is applied toawarded as performance units. In calculating the number of UGI Corporation performance units to be awarded to each named executive officer, other than Mr. Bissell, who received AmeriGas Partners performance units, and Mr. Varagne, Towers Perrin placedWatson established a per performance unit value of $18.64 per share underlying a UGI Corporation performance unit.$19.45. This value was computed by taking an average price for the Company’s common stock over the three-month period from June 26, 2006May 10, 2009 through September 26, 2006, subject toAugust 10, 2009, and adjusting the price based on Towers Watson’s standard assumptions, including the same 5 percent turnover assumption used in valuing stock options. The number of AmeriGas Partners performance unit awards was computed in a similar fashion, subject to the same 5 percent turnover assumption. The unit price used in the model for January 1, 2007December 31, 2009 awards was $29.91$33.46 which was the three-month average AmeriGas Partners common unit price from June 26, 2006May 10, 2009 through September 26, 2006.August 10, 2009. As a result of this analysis, Towers PerrinWatson valued the performance unit awards at $22.80$25.92 per underlying unit.
Management
While management used the Towers Watson calculations as a starting point, in accordance with past practice, management recommended reductionsadjustments to the aggregate number of the Company’s stock options and the Company’s and AmeriGas Partners’ performance units calculated by Towers Perrin.Watson. The reductionsadjustments were designed to address historic grant practices, internal pay equity (both within and among our business units) and the policy of the Compensation and Management Development CommitteeCompany that the three-year average of the annual number of equity awards made under the Company’s 2004 Plan for the fiscal years 2008 through 2010, expressed as a percentage of common shares outstanding at fiscal year-end, made under the Company’s 2004 Plan for the fiscal years 2007 through 2009 will not exceed 2 percent. Mr. Varagne’s stock option awards and performance unit awards were recommended by management, based on management’s consideration of internal pay equity and recognition that these types of long-term awards are utilized less frequently overseas than in the United States. Despite the significant decrease in the UGI Corporation stock option value between Fiscal 2009 and Fiscal 2010 as calculated by Towers Watson for the purpose of valuing our stock options, management, in response to challenging global and domestic economic conditions, did not recommend increasing the number of stock options granted to Messrs. Greenberg, Varagne and Walsh in Fiscal 2010. In addition, management recommended only modestly increasing the number of stock options granted to the other named executive officers in Fiscal 2010. For purposes of calculating the annual number of equity awards:awards used in this calculation: (i) each stock option granted is deemed to equal one share, and (ii) each performance unit earned and paid in shares of stock and each stock unit granted and expected to be paid in shares of stock is deemed to equal four shares.
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As a result of the Compensation and Management Development Committee’s acceptance of management’s recommendations, the numbernamed executives, other than Mr. Varagne, received between approximately 82 percent and 93 percent of shares underlying stock options calculatedthe total dollar value of long-term compensation opportunity recommended by Towers PerrinWatson. The total dollar value of the long-term compensation received by the named executive officers in Fiscal 2010 was reduced by approximately 1429 percent to 2239 percent andless than the numberdollar value of performance units calculated by Towers Perrin was reduced by approximately 10 percent to 20 percent.long-term compensation awarded in Fiscal 2009. The actual grant amounts are set forth below:
Name1 | Shares Underlying Stock Options # Granted | Performance Units # Granted | |||
Lon R. Greenberg | 280,000 | 60,000 | |||
John L. Walsh | 120,000 | 26,000 | |||
Anthony J. Mendicino | 70,000 | 15,000 | |||
Eugene V. N. Bissell | 70,000 | 14,000 | 2 |
| Shares Underlying | ||||||||
| Stock Options | Performance Units | |||||||
| Name | # Granted | # Granted | ||||||
| Lon R. Greenberg | 300,000 | 70,000 | ||||||
| John L. Walsh | 125,000 | 28,000 | ||||||
| Peter Kelly | 77,000 | 17,000 | ||||||
| Eugene V. N. Bissell | 80,000 | 17,000 | (2) | |||||
François Varagne(1) | 57,000 | 18,500 | ||||||
| ||
| (1) | Towers |
| ||
| (2) | Constitutes AmeriGas Partners performance units. |
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Mr. Kelly was not employed by the Company at the time Towers Perrin made its recommendations. Under the terms of his offer letter, we granted to Mr. Kelly, on July 31, 2007, effective September 4, 2007, a stock option award of 50,000 shares of the Company’s common stock. We also awarded 15,000 performance units to Mr. Kelly, of which 10,000 relate to the 2007-2009 period described below, and 5,000 relate to the 2006-2008 period. The payout criteria for the 2006-2008 awards are fashioned in a similar manner to the 2007-2009 awards, other than the difference in the time periods covered. We also granted 20,000 stock units to Mr. Kelly, which will vest on the second anniversary of his commencement of employment.
While the number of performance units awarded to the named executive officers, other than Mr. Varagne, was determined as described above, the actual number of shares or units underlying performance units that are paid out at the expiration of the three-year performance period will be based upon the Company’s comparative total shareholder return (“TSR”) or AmeriGas Partners’ total unitholder return (“TUR”) over the period from January 1, 20072010 to December 31, 2009.2012. Specifically, with respect to the Company’s performance units, we will compare the TSR of the Company’s common stock relative to the TSR performance of those companies comprising the Standard and PoorsS&P 500 Utilities Index (“S&P Utilities Index”) as of the beginning of the performance period. In computing TSR, the Company uses the average of the daily closing prices for its common stock and the common stock of each company in the S&P Utilities Index for the 90 calendar days prior to January 1 of the beginning and end of a given three-year performance period. In addition, TSR gives effect to all dividends throughout the three-year performance period as if they had been reinvested. If a company is added to the S&P Utilities Index during a three-year performance period, we do not include that company in our TSR analysis. We will only remove a company from our TSR analysis that was included in the S&P Utilities Index at the beginning of a performance period if such company ceases to exist during the applicable performance period. Those companies in the S&P Utilities Index as of December 31, 20062009 were as follows:
| Allegheny Energy, Inc. | PPL Corporation | |||
| Ameren Corporation | Progress Energy, Inc. | |||
| American Electric Power Company, Inc. | Public Service Enterprise Group Inc. | |||
| Centerpoint Energy, Inc. | Questar Corporation | |||
| CMS Energy Corporation | ||||
| Consolidated Edison, Inc. | ||||
| Constellation Energy Group, Inc. | TECO Energy, Inc. | |||
| Dominion Resources, Inc. | Northeast Utilities | The AES Corporation | ||
| The Southern Company | ||||
| Duke Energy Corporation | ||||
| Pinnacle West Capital Corp. | Xcel Energy Inc. | |||
| Entergy Corporation |
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In computing TUR, we use the average of the daily closing prices for AmeriGas Partners’ common units and those of each entityof the limited partnerships in the peer group belowAlerian MLP Index for the 90 calendar days prior to January 1 of the beginning and end of a given three-year performance period. In addition, TUR gives effect to all distributions throughout the three-year performance period as if they had been reinvested. For the AmeriGas Partners performance units awarded to Mr. Bissell, we compare the TUR of AmeriGas Partners’ common units to the TUR performance of each memberof the 50 limited partnerships in the Alerian MLP Index. If a partnership is added to the Alerian MLP Index during a three-year performance period, we do not include that partnership in our TUR analysis. We will only remove a partnership that was included in the Alerian MLP Index at the beginning of a performance period if such partnership ceases to exist during the applicable performance period. Prior to Fiscal 2010, we compared the TUR performance of AmeriGas Partners common units to the TUR performance of a peer group comprisedconsisting of the followingselected publicly-traded limited partnerships engaged in the propane, pipeline and coal industries:
industries. We believe using a published index maintained by an independent third party is preferable to using a selected group of partnerships because it lends greater impartiality to the AmeriGas Propane long-term incentive compensation program. The limited partnerships comprising the Alerian MLP Index as of December 31, 2009 were as follows:
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industries. We believe using a published index maintained by an independent third party is preferable to using a selected group of partnerships because it lends greater impartiality to the AmeriGas Propane long-term incentive compensation program. The limited partnerships comprising the Alerian MLP Index as of December 31, 2009 were as follows:
| Alliance Holdings GP, L.P. | Enterprise GP Holdings LP | Penn Virginia GP Holdings, L.P. | ||
| Alliance Resource Partners, L.P. | Penn Virginia Resource Partners, L.P. | |||
| Boardwalk Pipeline Partners, LP | Ferrellgas Partners, L.P. | Pioneer Southwest Energy Partners L.P. | ||
| Buckeye GP Holdings L.P. | Genesis Energy, L.P. | Plains All American Pipeline, L.P. | ||
| Buckeye Partners, L.P. | Holly Energy Partners, L.P. | Regency Energy Partners LP | ||
| Calumet Specialty Products Partners, L.P. | Inergy, L.P. | Spectra Energy Partners, LP | ||
| Copano Energy, L.L.C. | Kinder Morgan Energy Partners, L.P. | Star Gas Partners, L.P. | ||
| DCP Midstream Partners, LP | Kinder Morgan Management, LLC | Suburban Propane Partners, L.P. | ||
| Dorchester Minerals, L.P. | Legacy Reserves LP | Sunoco Logistics Partners L.P. | ||
| Duncan Energy Partners L.P. | Linn Energy, LLC | TC PipeLines, LP | ||
| El Paso Pipeline Partners, L.P. | Magellan Midstream Partners, L.P. | |||
| Enbridge Energy Management, L.L.C. | Markwest Energy Partners, L.P. | Teekay LNG Partners L.P. | ||
| Enbridge Energy Partners, L.P. | Natural | |||
| Encore Energy Partners LP | Navios Maritime Partners L.P. | Western Gas Partners, LP | ||
| Energy Transfer Equity, L.P. | NuStar Energy L.P. | Williams Partners L.P. | ||
| Energy Transfer Partners, L.P. | Nustar GP Holdings, LLC | Williams Pipeline Partners L.P. | ||
| Enterprise Products Partners L.P. | ||||
| ONEOK Partners, L.P. | ||||
Each award payable to the named executive officers, other than Mr. Varagne, provides a number of the Company’s shares or AmeriGas Partners’ common units equal to the number of performance units earned. ManagementAfter the Committee has determined that the conditions for payment have been satisfied, management of the Company or AmeriGas Propane, as the case may be, has the authority to provide for a cash payment to the named executives, other than Mr. Varagne, in lieu of up to 35 percent of the shares or common units payable, except for awards earned in excess of the target award, which are paid entirely in cash.payable. The cash payment is based on the value of the securities at the payment dateend of the performance period and is designed to meet minimum statutory tax withholding requirements. In the event that UGI executives earn shares in excess of the target award, the value of the above target shares is paid entirely in cash.
For the Company’s performance units, the minimum award, equivalent to 50 percent of the number of performance units, will be payable if the Company’s TSR rank is at the 40th percentile of the indexedS&P Utilities Index companies. The target award, equivalent to 100 percent of the number of performance units, will be payable if the TSR rank is at the 50th percentile. The maximum award, equivalent to 200 percent of the number of performance units, will be payable if the Company’s TSR rank is the highest of all S&P Utilities Index companies. The number of AmeriGas Partners common units underlying performance units that will be paid out to Mr. Bissell will be based upon AmeriGas Partners’ TUR rank relative to the Alerian MLP Index partnerships and is computed using an analogous methodology as described above with regard to the Company’s TSR ranking.
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All performance units, other than those held by Mr. Varagne, have dividend or distribution equivalent rights, (or, in the case of AmeriGas Partners performance units, distribution equivalent rights).as applicable. A dividend equivalent is an amount determined by multiplying the number of performance units credited to a recipient’s account by the per-share cash dividend, or the per-share fair market value of any non-cash dividend, paid by the Company during the performance period on its shares on a dividend payment date. Accrued dividend and distribution equivalents are payable on the number of common shares or AmeriGas Partner’s common units payable, if any, at the end of the performance period and are paid in cash.
Mr. Varagne’s target award is set differently from that of the other named executive officers to realize advantagespreserve favorable treatment under French tax law, which limits our ability to pay awards in excess of the target amount. Therefore, Mr. Varagne’s target award is payable if the Company’s TSR rank is the highest of all of the indexed companies, and is reduced below the target award if a lower ranking is achieved. Mr. Varagne’s minimum award, equivalent to 25 percent of the number of performance units, will be payable if the Company’s TSR rank is at the 40th percentile of the indexed companies; the target award, equivalent to 50 percent of the number of performance units, will be payable if the TSR rank is at the 50th percentile; and the maximum award, equivalent to 100 percent of the number of performance units, will be payable if the Company’s TSR rank is the highest of all companies.
The number of AmeriGas Partners common units underlying performance units that will be paid out to Mr. Bissell will be based upon AmeriGas Partners’ TUR rank relative to the 19 peer group partnerships and is computed in substantially the same manner as indicated above with regard to the Company’s performance units.
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The number of shares underlying options that we awarded to the named executive officers are set forth below in the Grants of Plan Based Awards Table under the column heading, “All Other Option Awards: Number of Securities Underlying Options.” Our options generally vest in annual increments over a three-year period, except that Mr. Varagne’s options vest in their entirety at the end of a four-year period. We believe that these vesting terms provide to our executives (other than those executives who are retirement eligible) a meaningful incentive for continued employment. The variation in the option vesting period for Mr. Varagne and other variations regarding terms of Mr. Varagne’s long-term awards are designed to preserve favorable tax treatment under French law.
During 2007,Fiscal 2010, we paid out awards to those executives who received performance units in fiscal year 2007 for the period from January 1, 20042007 to December 31, 2006.2009. For that period, the Company’s TSR ranked 13th relative to the 29 companies in the S&P Utilities Index, placing the Company just above the 58th percentile ranking, resulting in a 121.6 percent payout of the target award. AmeriGas Partners’ TUR ranked 6th relative to its peer group of 18 other partnerships, placing AmeriGas Partners just above 72nd percentile ranking, resulting in a 145.4 percent payout of the target award. The awardperformance criteria for the Company’s common stock and AmeriGas Partners’ common unitsperformance unit awards during that period was the same as those for the performance units granted for 2007-2009,2009-2011, described above. Forabove, except that the 2004-2006 period, the Company’s TSR ranked 17th relativePartnership’s TUR was compared to the S&P 500 Utilities Index companies, placing the Companythat of each member of a peer group of publicly-traded limited partnerships in the 54th percentile ranking resulting in a 111 percent payoutpropane, pipeline and coal industries as of the target award. AmeriGas Partners’ TUR ranked 11th relative to its peer group placing AmeriGas Partners in the 47th percentile resulting in an 87 percent payout of the target award.January 1, 2007 award date. As a result of the foregoing, the payouts on performance unit awards were as follows:
Name | Performance Unit Payout (Number of Shares or Units) | Performance Unit Payout Value1 ($) | ||
Lon R. Greenberg | 77,490 | 2,266,679 | ||
John L. Walsh | 16,605 | 472,973 | ||
Anthony J. Mendicino | 19,926 | 582,860 | ||
Eugene V. N. Bissell | 13,035 | 513,709 | ||
François Varagne | 13,284 | 386,680 |
| Performance Unit Payout | ||||||||
| Name | Performance Unit Payout (#) | Value (1) ($) | ||||||
| Lon R. Greenberg | 72,960 | 1,931,707 | ||||||
| John L. Walsh | 31,616 | 837,073 | ||||||
| Peter Kelly | 12,160 | 317,558 | ||||||
| Eugene V. N. Bissell | 20,356 | 969,149 | ||||||
| François Varagne | 11,248 | 272,089 | ||||||
| ||
| (1) | Includes distribution equivalent or dividend equivalent payout. |
Ø Long-Term Compensation—Lapse of Restriction Period on UGI Corporation Stock Units
In December 2004, we awarded 16,000 stock units to Mr. Mendicino. The restrictions on these shares were to lapse on December 31, 2007. In light of Mr. Mendicino’s planned retirement and his service to the Company, we modified his award so that the restricted period ended on March 31, 2007, prior to his retirement. In connection with the lapse of restrictions on these stock units, as well as the lapse of restrictions on 40,000 stock units held by Mr. Walsh, the Company’s Compensation and Management Development Committee authorized the conversion and payout in cash of up to 35 percent of these shares. The cash payout in lieu of shares was designed to assist the executives with payment of their tax obligations.-34-
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We provide limited perquisite opportunities to our executive officers, and in several instances, our executives have not utilized the opportunities. Among the perquisites is a company car provided to each of Mr. Greenberg and Mr. Varagne. In addition, weofficers. We provide reimbursement for tax preparation services, club memberships, certain health maintenance services and limited spousal travel. In addition, Mr. Varagne has a company car. The aggregate cost of perquisites for all named executive officers in Fiscal 20072010 was less than $100,000.$50,000.
• Other than for Mr. Varagne, management discontinued offering company cars and reimbursement for club memberships, in lieu of which the executives who used these perquisites in prior years received a nominal salary adjustment effective for Fiscal 2008.
ØBenefits Other Benefits
Our named executive officers participate in various retirement, pension, deferred compensation and severance plans which are described in greater detail in the “Ongoing Plans and Post-Employment Agreements” section of this Compensation Discussion and Analysis. We also provide employees, including the named executive officers, with a variety of other benefits, including medical and dental benefits, disability benefits, life insurance, and paid holidays and vacations. These benefits generally are available to all of our full-time employees.
We have several plans and agreements (described below) that enable our named executive officers to accrue retirement benefits as the executives continue to work for us, provide severance benefits upon certain types of termination of employment events or provide other forms of deferred compensation. Except where specifically stated, Mr. Varagne does not participate in the plans described below.
Retirement Income Plan for Employees of UGI Utilities, Inc. (the “UGI Pension Plan”)
This plan is a tax-qualified defined benefit plan available to, among others, employees of the Company and certain of its subsidiaries. The UGI Pension Plan was closed to new participants as of January 1, 2009. The UGI Pension Plan provides an annual retirement benefit based on an employee’s earnings and years of service, subject to maximum benefit limitations. Messrs. Greenberg, Kelly and Walsh participate in the UGI Pension Plan; Mr. Bissell has a vested benefit, but he no longer participates. SeeCompensation of Executive Officers — Pension Benefits Table — Fiscal 2010 and accompanying narrative for additional information.
UGI Utilities, Inc. Savings Plan (the “UGI Savings Plan”)
This plan is a tax-qualified defined contribution plan available to, among others, employees of the Company. Under the plan, an employee may contribute, subject to Internal Revenue Code (the “Code”) limitations (which, among other things, limited annual contributions in 20072010 to $15,500)$16,500), up to a maximum of 50 percent of his or her eligible compensation on a pre-tax basis and up to 620 percent of his or her eligible compensation on an after-tax basis. The combined maximum of pre-tax and after-tax contributions is 50 percent of his or her eligible compensation. The Company provides matching contributions targeted at 50 percent of the first 3 percent of eligible compensation contributed by the employee in any pay period, and 25 percent of the next 3 percent. For participants entering the UGI Savings Plan on or after January 1, 2009, who are not eligible to participate in the UGI Pension Plan, the Company provides matching contributions targeted at 100 percent of the first 5 percent of eligible compensation contributed by the employee in any pay period. Amounts credited to an employee’s account in the plan may be invested among a number of funds, including the Company’s stock fund. Messrs. Greenberg, Kelly and Walsh are eligible to participate in the UGI Savings Plan.
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AmeriGas Propane, Inc. Savings Plan (the “AmeriGas Savings Plan”)
This plan is a tax-qualified defined contribution plan for AmeriGas Propane employees. Subject to Internal Revenue Code limits, which are the same as described above with respect to
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the UGI Savings Plan, an employee may contribute, on a pre-tax basis, up to 50 percent of his or her eligible compensation, and AmeriGas Propane provides a matching contribution equal to 100 percent of the first 5 percent of eligible compensation contributed in any pay period. Like the UGI Savings Plan, participants in the AmeriGas Savings Plan may invest amounts credited to their account among a number of funds, including the Company’s stock fund.
Retirement Income Plan for Employees of UGI Utilities, Inc. (the “UGI Pension Plan”)
This plan Mr. Bissell is a tax-qualified defined benefit plan availableeligible to among others, employees ofparticipate in the Company and certain of its subsidiaries. The UGI Pension Plan provides an annual retirement benefit based on an employee’s earnings and years of service, subject to maximum benefit limitations. See the “Pension Benefits” table and accompanying narrative for additional information.
AmeriGas Savings Plan.
UGI Corporation Supplemental Executive Retirement Plan
and Supplemental Savings Plan
UGI Corporation Supplemental Executive Retirement Plan
This plan is a nonqualified deferred compensationdefined benefit plan that provides benefits for executives in excess of the maximumretirement benefits that maywould otherwise be provided under the UGI Pension Plan, as a result of limits imposed by the Internal Revenue Code on benefits payable under the plan and on the amount of compensation that may be subject to the plan. We refer to compensation that exceeds these limits as “excess compensation.” For 2007, compensation in excess of $225,000 constitutes excess compensation. Under the plan, each employee who satisfies vesting requirements will accrue a lump sum benefit that has the actuarial equivalent present value of (i) the benefit that would have been produced underbut are restricted from being paid from the UGI Pension Plan absent Internal Revenueby Code limits minus (ii) the benefit that the participant is entitled to receive under the UGI Pension Plan.limits. The plan also provides additional benefits in the event of certain terminations of employment covered by a change in control agreement. Messrs. Greenberg, Walsh Kelly and MendicinoKelly participate in the UGI Corporation Supplemental Executive Retirement Plan. See the “Pension Benefits” tableCompensation of Executive Officers — Pension Benefits Table — Fiscal 2010 and accompanying narrative for additional information.
UGI Corporation Supplemental Savings Plan
This plan is a nonqualified deferred compensation plan that provides benefits for executives in excess of the benefits that maywould be provided under the qualified UGI Savings Plan as a resultin the absence of limits imposed by the Internal Revenue Code. We refer to compensation in excess of these limits as “excess compensation.” Generally, under theCode limitations. The Supplemental Savings Plan ifis intended to pay an amount substantially equal to the participant contributeddifference between the Company matching contribution to the qualified UGI Savings Plan the lesser of 6 percent of his or her eligible compensation or the maximum annual contribution permissible under the Internal Revenue Code, we will credit to the participant’s account an amount equal toand the matching contribution that would have been made forunder the participant under thequalified UGI Savings Plan with respect to the participant’s excess compensation if the excess compensation had been taken into account under the UGI Savings Plan.Code limitations were not in effect. At the end of each plan year, a participant’s account is credited with earnings equal to the weighted average return basedon two indices: 60 percent on the total return of the Standard &and Poor’s 500 Index and 40 percent on the Lehman Brotherstotal return of the Barclays Capital U.S. Aggregate Bond Index. The plan also provides additional benefits in the
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event of certain terminations of employment covered by a change in control agreement. Messrs. Greenberg, Walsh and Kelly and Mendicino are each eligible to participate in the UGI Corporation Supplemental Savings Plan and each will receive a benefit if his contribution to the UGI Savings Plan satisfies the requirements under the UGI Corporation Supplemental Savings Plan. See the “NonqualifiedCompensation of Executive Officers — Nonqualified Deferred Compensation” tableCompensation Table - Fiscal 2010 and accompanying narrative for additional information.
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AmeriGas Propane, Inc. Supplemental Executive Retirement Plan
AmeriGas Propane maintains a supplemental executive retirement plan, which is a nonqualified deferred compensation plan for highly compensated employees of AmeriGas Propane. Under the plan, AmeriGas Propane credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation up to the Internal Revenue Code compensation limits and 10 percent of excess compensation. In addition, if any portion of AmeriGas Propane’s matching contribution under the AmeriGas Savings Plan is forfeited due to nondiscrimination requirements under the Internal Revenue Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to a participant’s account. Through Fiscal 2007, participants’ accounts were credited with interest at a rate generally equal to the actual return on the trust portfolio of the UGI Pension Plan subject to certain limitations as set forth in the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan. Beginning in Fiscal 2008, participants mayParticipants direct the investment of deferredthe amounts to be investedin their accounts among a number of mutual funds. Mr. Bissell participates in the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan. See the “NonqualifiedCompensation of Executive Officers — Nonqualified Deferred Compensation” tableCompensation Table — Fiscal 2010 and accompanying narrative for additional information.
Antargaz Supplemental Retirement Plans
Defined Contribution Plan
This plan provides supplemental retirement income to certain management-level individuals of Antargaz, including Mr. Varagne, who have at least one year of service with Antargaz. Under the plan, Antargaz is obligated to contribute to Mr. Varagne’s account 5 percent of his total remuneration that is subject to social security contributions; provided that Antargaz’ 5 percent contribution will only apply to Mr. Varagne’s remuneration that is less than or equal to six times the Social Security ceiling in France. The ceiling in 2010 was€34,620. Investment of contributions to the plan is managed by an insurance company. Upon Mr. Varagne’s retirement, payment will be made by the insurance company to Mr. Varagne in the form of a life annuity based on the contributions to Mr. Varagne’s account. Mr. Varagne is entitled to receive benefits under the plan upon retirement regardless of whether he is a corporate officer of Antargaz at the time of his retirement.
Defined Benefit Plan
This plan provides supplemental retirement income to certain management-level individuals of Antargaz, including Mr. Varagne, who have at least five years of service with Antargaz. Mr. Varagne has satisfied the five-year service requirement. For purposes of accumulating benefits under the plan, benefits began accruing September 1, 2009 and Antargaz is obligated to purchase an annuity annually on behalf of Mr. Varagne. The amount of the annuity is based on Mr. Varagne’s length of service with Antargaz (up to a maximum of ten years) and Mr. Varagne’s average annual remuneration for the prior three-year period in excess of six times the Social Security annual ceiling in France. The annuity paid may not exceed 15 percent of Mr. Varagne’s final average remuneration for the thirty-six month period immediately preceding retirement. The annuity amount is also reduced by any other supplemental retirement income, other than statutory retirement schemes, payable to Mr. Varagne. Mr. Varagne is entitled to receive benefits under the plan upon retirement only if he is a corporate officer of Antargaz at the time of his retirement, is at least 62 years of age, and immediately after retirement begins receiving benefits from the compulsory Social Security retirement system in France.
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AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan
AmeriGas Propane maintains a nonqualified deferred compensation plan under which participants may defer certain amountsup to $10,000 of their annual compensation. Deferral elections are made annually by eligible participants in respect of compensation to be earned for the following year. Participants may direct the investment of deferred amounts into a number of mutual funds. The funds available are the same funds available under the AmeriGas Propane Savings Plan, other than the Company’s stock fund. Payment of amounts accrued for the account of a participant generally is made following the participant’s termination of employment. Mr. Bissell is eligible to participate in the AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan. See the “Deferred Compensation” tableCompensation of Executive Officers — Nonqualified Deferred Compensation Table — Fiscal 2010 and accompanying narrative for additional information.
UGI Corporation 2009 Deferral Plan, As Amended and Restated Effective June 1, 2010
This plan provides deferral options that comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, related to (i) all stock units and phantom units granted to the Company’s and AmeriGas Propane’s non-employee Directors, (ii) benefits payable under the UGI Corporation Supplemental Executive Retirement Plan, and (iii) benefits payable under the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan. If an eligible participant elects to defer payment under the plan, the participant may receive future benefits after separation from service as (i) a lump sum payment, (ii) annual installment payments over a period between two and ten years or (iii) one to five retirement distribution accounts to be paid in a lump sum in the year specified by the individual. Deferred benefits, other than stock units and phantom units, will be deemed to be invested in investment funds selected by the participant from among a list of available funds. Messrs. Greenberg, Walsh, Kelly and Bissell elected to defer benefits under this plan. The plan also provides newly eligible participants with a deferral election that must be acted upon promptly.
Severance Pay Plans for Senior Executive Employees (Other than Mr. Varagne)
The Company and AmeriGas Propane each maintain a severance pay plan that provides severance compensation to certain senior level employees. The plans are designed to alleviate the financial hardships that may be experienced by executive employee participants whose employment is terminated without just cause, other than in the event of death or disability. The Company’s plan covers Messrs. Greenberg, Walsh and Kelly, and prior to his retirement, Mr. Mendicino, and the AmeriGas Propane plan covers Mr. Bissell. See “PotentialCompensation of Executive Officers — Potential Payments Upon Termination or Change in Control” belowControl for further information regarding the severance plans.
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Severance Arrangement with Mr. Varagne
Mr. Varagne has an agreement with our French subsidiary, AGZ Holding, which provides severance benefits in the event that his employmenthe is terminated without fault on his part. The agreement provides for a cash payment equal to one year of compensation, based on compensation received in the 12 months prior to the effective date of termination. Mr. Varagne’s agreement requires that he execute a release discharging the Company and its subsidiaries from liability in connection with thehis termination of his employment prior to receipt of severance payments. See “Potential Payments Upon Termination or Change in Control” below for further information regarding Mr. Varagne’s severance agreement.
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Change in Control Agreements
The Company has change in control agreements with Messrs. Greenberg, Walsh and Kelly, and, prior to his retirement, Mr. Mendicino, and AmeriGas Propane has a change in control agreement with Mr. Bissell. Mr. Varagne is entitled to severance compensation under a separatethe severance agreement described above. The change in control agreements are designed to reinforce and encourage the continued attention and dedication of the executives without distraction in the face of potentially disturbing circumstances arising from the possibility of the change in control and to serve as an incentive to their continued employment with us. The agreements provide for payments and other benefits if we terminate an executive’s employment without cause or if the executive terminates employment for good reason within two years following a change in control of the Company (and, in the case of Mr. Bissell, AmeriGas Propane or AmeriGas Partners). The agreements also provide that if change in control payments exceed certain threshold amounts, we will make additional payments to reimburse the executives for excise and related taxes imposed under the Internal Revenue Code. See “PotentialCompensation of Executive Officers — Potential Payments Upon Termination or Change in Control”Control for further information regarding the change in control agreements. See “Tax Considerations” below for further information regarding the excise tax reimbursement.
•Stock Ownership Guidelines
We seek to underscore stakeholder incentivesalign executives’ interests with shareholder and unitholder interests through our stockequity ownership guidelines. We believe that by encouraging our executives to maintain a meaningful equity interest in the Company or, if applicable, AmeriGas Partners, we will enhance the link between our executives and stockholders or unitholders. Under our guidelines, except for Mr. Varagne, an executive must meet 10 percent of the ownership requirement within one year from the date of employment or promotion and must use 10 percent of his gross annual bonus award to purchase stock (or, in the case of Mr. Bissell, partnership common units or stock) until his share ownership requirement is met. In addition, the guidelines require that 50 percent of the net proceeds from a “cashless exercise” of stock options be used to purchase stock until the ownership requirement is met. Up to 20 percent of the ownership requirement may be satisfied through holdings of UGI Corporation common stock forin the executive’s account in the relevant 401(k) savings plan. Mr. Varagne has a ten percent equity retention requirement included in the terms of certain of his outstanding performance unit and stock option awards. None of these equity awards had vested at September 30, 2010.
-39-
Mr. Bissell is permitted to satisfy his requirements through ownership of UGI common stock, AmeriGas Partners common units, or a combination of UGI common stock and AmeriGas Partners common units, with each AmeriGas Partners common unit equivalent to 1.5 shares of UGI common stock. The stock ownership guidelines further permit any Company executive who was formerly employed by AmeriGas Propane to satisfy up to 50 percent of his or her stock ownership requirement with AmeriGas Partners common units. The following table provides information regarding our stockequity ownership guidelines for, and the number of shares and common units held at September 30, 20072010 by our named executive officers:
-34-
Name1 | Required Ownership of UGI Corporation Common Stock | Number of Shares of UGI Corporation Stock Held at 9/30/2007 | ||
Lon R. Greenberg | 300,000 | 613,006 | ||
John L. Walsh | 150,000 | 65,030 | ||
Peter Kelly | 90,000 | 0 | ||
Eugene V. N. Bissell | 90,0002 | see footnote 2 |
| Required | Number of Shares of | Number of | ||||||||||
| Ownership of UGI | UGI Corporation | AmeriGas Partners | ||||||||||
| Corporation | Stock Held at | Common Units Held | ||||||||||
| Name | Common Stock | 9/30/2010(1) | at 9/30/2010(1) | |||||||||
| Lon R. Greenberg | 250,000 | 406,305 | 11,000 | |||||||||
| John L. Walsh | 100,000 | 110,249 | 7,000 | |||||||||
| Peter Kelly | 60,000 | 46,042 | 0 | |||||||||
| Eugene V.N. Bissell | 60,000 | 68,197 | 64,600 | |||||||||
| François Varagne | (2) | 24,488 | 0 | |||||||||
|
|
|
| All officers are in compliance with the stock ownership guidelines, |
| (2) | Mr. Varagne has a |
In November 2007, the Compensation and Management Development Committee and the AmeriGas Propane Compensation/Pension Committee each reviewed the equity ownership requirements applicable to our executives, as each Committee does from time to time. As a result of the review, each Committee decided to decrease the executive equity ownership requirements by one-third. The reason for the reduction was to adjust the ownership requirements to reflect the appreciation of the Company’s common stock and AmeriGas Partners’ common units since 2004 when the stock ownership guidelines were last revised.
-40-•Stock Option Grant PracticesThe Company’s Compensation and Management Development Committee and the AmeriGas Propane Compensation/Pension CommitteeCommittees approve annual stock option grants to executive officers in the last calendar quarter of each year, effective the following January 1. The exercise price per share of the options is equal to or greater than the closing share price of the Company’s common stock on the last trading day of December. A grant to a new employee is generally effective on the later of the date the employee commences employment with us or the date the Committee authorizes the grant. In either case the exercise price is equal to or greater than the closing price per share of the Company’s common stock on the effective date of grant. From time to time, management recommends stock option grants for non-executive employees, and the grants, if approved by the Committee, are effective on or after the date of Committee action and have an exercise price equal to or greater than the closing price per share of the Company’s common stock on the date of grant. We believe that our stock option grant practices are appropriate and effectively eliminate any question regarding “timing” of grants in anticipation of material events.-35-•Role of Executive Officers in Determining Executive CompensationIn connection with Fiscal 20072010 compensation, Mr. Greenberg, aided by our human resources personnel, provided statistical data and recommendations to the appropriate Committee to assist it in determining compensation levels. Mr. Greenberg did not make recommendations as to his own compensation and was excused from the Committee meeting when his compensation was discussed by the Committee. While the Committees utilized this information, and valued Mr. Greenberg’s observations with regard to other executive officers, the ultimate decisions regarding executive compensation were made by the independent members of the appropriate boardBoard of directorsDirectors following Committee recommendations.
•Tax Considerations
Under
In Fiscal 2010, we paid salary and annual bonus compensation to named executive officers that was not fully deductible under U.S. federal tax law because it did not meet the statutory performance criteria. Section 162(m) of the Internal Revenue Code a publicly held corporation may not deduct more than $1 million in a taxable year forprecludes us from deducting certain forms of compensation in excess of $1,000,000 paid to the chiefnamed executive officer and other officers named in the Summary Compensation Table.any one year. Our policy generally is to preserve the federal income tax deductibility of equity compensation paid to our executives by making it performance-based. We will continue to consider and certainevaluate all of our equity awards have been structuredcompensation programs in light of federal tax law and regulations. However, we may continue to preserve deductibility under Section 162(m). Nevertheless, we retain the flexibility to authorizepay compensation that mayis not be deductible if we believe it is appropriate.
In the eventwhere sound business judgment so requires.
Risks Related to Compensation Policies and Practices
Management conducted a risk assessment of a change in control, payments to an executive may be subject to an excise tax,our compensation policies and maypractices for Fiscal 2010. Based on its evaluation, management does not be deductible by us, under Sections 280G and 4999 of the Internal Revenue Code. If change in control payments exceed certain threshold amounts, the change in control agreements require that we may make additional payments to the executives to reimburse them for excise tax imposed by Section 4999 of the Internal Revenue Code, as well as other taxes in respect of the additional payment. We believe that the purposes of the change in control agreements, as described above, would be diminished by the possible imposition of significant excise taxesany such policies or practices create risks that are reasonably likely to have a material adverse effect on the executives, and we did not wish to have the provisions of the executives’ agreements serve as a disincentive to their pursuit of a change in control that might otherwise be in the best interests of our company and its stockholders. Accordingly, we determined to provide a payment under certain circumstances to reimburse the executives for excise taxes payable in connection with change in control payments, as well as any taxes that accrue as a result of our reimbursement.Partnership.
-36--41-
SummaryCompensation of CompensationExecutive Officers
The following tables, narrative and footnotes provide information regarding the compensation of our Chief Executive Officer, former and current Chief Financial Officers,Officer, and our three other most highly compensated executive officers in Fiscal 2007.
2010.
Summary Compensation Table –— Fiscal 2007
2010
Name and Principal Position (a) | Fiscal Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock ($) (1) (e) | Option Awards ($) (1) (f) | Non-Equity Incentive Plan (g) | Change in Pension (3) (h) | All Other ($) (4) (i) | Total ($) (j) | ||||||||||
Lon R. Greenberg Chairman and Chief Executive Officer | 2007 | 966,885 | 0 | 870,627 | 1,601,600 | 944,748 | 1,988,689 | 95,560 | 6,468,109 | ||||||||||
John L. Walsh President and Chief Operating Officer | 2007 | 588,016 | 0 | 857,590 | 588,650 | 488,818 | 159,195 | 19,625 | 2,701,894 | ||||||||||
Anthony J. Mendicino Senior Vice President-Finance and Chief Financial Officer (retired July 1, 2007) | 2007 | 329,940 | 0 | 432,695 | (1) | 400,400 | 247,455 | 609,018 | 15,415 | 2,034,924 | |||||||||
Peter Kelly Vice President-Finance and Chief Financial Officer (since September 4, 2007) (5) | 2007 | 30,772 | 25,002 | 35,982 | 7,417 | 0 | 0 | 0 | 99,173 | ||||||||||
Eugene V. N. Bissell President and Chief Executive Officer of AmeriGas Propane, Inc. | 2007 | 425,770 | 0 | 409,923 | 395,188 | 415,740 | 16,856 | 84,401 | 1,747,878 | ||||||||||
François Varagne Chairman and Chief Executive Officer Antargaz (6) | 2007 | 435,500 | 20,100 | 648,933 | 188,712 | 250,892 | 0 | 34,773 | 1,578,910 |
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2010
| Change in Pension | ||||||||||||||||||||||||||||||||||||
| Value and | ||||||||||||||||||||||||||||||||||||
| Non-Equity | Nonqualified | |||||||||||||||||||||||||||||||||||
| Incentive | Deferred | |||||||||||||||||||||||||||||||||||
| Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
| Name and Principal | Fiscal | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||||||||
| Position | Year | ($) | ($) | ($)(1) | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($) | |||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
| Lon R. Greenberg | 2010 | 1,067,500 | 0 | 1,590,400 | 1,347,000 | 1,145,428 | 1,971,422 | 69,853 | 7,191,603 | |||||||||||||||||||||||||||
| Chairman and Chief | 2009 | 1,067,975 | 0 | 1,957,200 | 1,218,000 | 1,591,643 | 2,640,022 | 65,416 | 8,540,256 | |||||||||||||||||||||||||||
| Executive Officer | 2008 | 1,026,300 | 0 | 2,123,800 | 1,524,000 | 964,722 | 945,498 | 81,405 | 6,665,725 | |||||||||||||||||||||||||||
| John L. Walsh | 2010 | 648,440 | 0 | 636,160 | 561,250 | 591,410 | 377,873 | 33,081 | 2,848,214 | |||||||||||||||||||||||||||
| President and | 2009 | 648,202 | 0 | 782,880 | 507,500 | 821,800 | 330,768 | 25,979 | 3,117,129 | |||||||||||||||||||||||||||
| Chief Operating Officer | 2008 | 616,933 | 0 | 819,180 | 609,600 | 493,383 | 147,550 | 24,494 | 2,711,140 | |||||||||||||||||||||||||||
| Peter Kelly | 2010 | 426,400 | 0 | 386,240 | 345,730 | 343,145 | 190,697 | 20,323 | 1,712,535 | |||||||||||||||||||||||||||
| Vice President-Finance and | 2009 | 426,240 | 0 | 475,320 | 284,200 | 476,822 | 134,986 | 5,989 | 1,803,557 | |||||||||||||||||||||||||||
| Chief Financial Officer | 2008 | 406,036 | 0 | 455,100 | 279,400 | 286,255 | 87,402 | 0 | 1,514,193 | |||||||||||||||||||||||||||
| Eugene V. N. Bissell | 2010 | 490,006 | 0 | 715,700 | 359,200 | 349,664 | 3,778 | 85,475 | 2,003,823 | |||||||||||||||||||||||||||
| President and Chief Executive | 2009 | 487,820 | 0 | 643,400 | 304,500 | 450,800 | 5,943 | 97,151 | 1,989,614 | |||||||||||||||||||||||||||
| Officer of AmeriGas Propane, Inc. | 2008 | 442,000 | 0 | 467,520 | 330,200 | 252,960 | 376 | 70,200 | 1,563,256 | |||||||||||||||||||||||||||
| François Varagne | 2010 | 455,600 | 0 | 189,440 | 255,930 | 324,661 | 159,952 | 48,936 | 1,434,519 | |||||||||||||||||||||||||||
| Chairman and | 2009 | 452,250 | 0 | 234,210 | 268,470 | 252,493 | 62,170 | 34,185 | 1,303,778 | |||||||||||||||||||||||||||
| Chief Executive Officer | 2008 | 490,750 | 0 | 254,560 | 289,560 | 282,418 | 0 | 38,236 | 1,355,524 | |||||||||||||||||||||||||||
| Antargaz (5) | ||||||||||||||||||||||||||||||||||||
| (1) | The amounts shown in |
Because Mr. Mendicino retired during Fiscal 2007, he forfeited a portion of performance units granted in Fiscal 2006 and Fiscal 2007. Under the terms of the 2004 Plan, a retiree is eligible for a pro-rated payout of performance units based on the number of years served during each three-year performance period.
| (2) | The amounts shown in this column represent payments made under the applicable performance-based annual bonus |
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| (3) | Except for Mr. |
Name | Change in Pension Value ($) | Above-Market Earnings on Deferred Compensation ($) | ||
L. R. Greenberg | 1,988,689 | 0 | ||
J. L. Walsh | 159,195 | 0 | ||
A. J. Mendicino | 609,018 | 0 | ||
P. Kelly | 0 | 0 | ||
E. V. N. Bissell | 0 | 16,856 | ||
F. Varagne | 0 | 0 |
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| Change in | Above-Market | |||||||
| Pension | Earnings on | |||||||
| Value | Deferred Compensation | |||||||
| Name | ($) | ($) | ||||||
| L.R. Greenberg | 1,903,027 | 68,395 | ||||||
| J.L. Walsh | 369,494 | 8,379 | ||||||
| P. Kelly | 190,697 | 0 | ||||||
| E.V.N. Bissell | 3,778 | 0 | ||||||
| F. Varagne | 159,952 | 0 | ||||||
| (4) | The table below shows the components of the amounts included for each named executive officer under column (i), All Other Compensation, in the Summary Compensation |
Name | Employer Contribution 401(k) ($) | Employer Contribution To UGI Savings Plan/AmeriGas ($) | Tax Reimbursement ($) | Perquisites ($) | Total ($) | |||||
L. R. Greenberg | 10,012 | 22,523 | 22,982 | 40,043 | 95,560 | |||||
J. L. Walsh | 10,021 | 9,604 | 0 | 0 | 19,625 | |||||
A. J. Mendicino | 7,044 | 8,371 | 0 | 0 | 15,415 | |||||
P. Kelly | 0 | 0 | 0 | 0 | 0 | |||||
E. V. N. Bissell | 11,250 | 73,151 | 0 | 0 | 84,401 | |||||
F.Varagne | 0 | 0 | 0 | 34,773 | 34,773 |
The perquisites shown for Mr. Greenberg include the use of a company vehicle, club membership dues, spousal travel expenses when attending Company or industry-related events where it is customary that officers attend with their spouses, tax preparation fees and occasional use of the Company’s tickets for sporting events for personal rather than business purposes. The perquisites shown for Mr. Varagne are for the use of a company vehicle. The incremental cost to the Company for these benefits are based on the actual costs or charges incurred by the Company for the benefits and are included in the totals above.
| Employer | ||||||||||||||||||||
| Contribution | ||||||||||||||||||||
| To UGI | ||||||||||||||||||||
| Supplemental | ||||||||||||||||||||
| Savings Plan; | ||||||||||||||||||||
| AmeriGas Propane, | ||||||||||||||||||||
| Employer | Inc. Supplemental | |||||||||||||||||||
| Contribution | Executive | |||||||||||||||||||
| to | Retirement Plan; | Tax | ||||||||||||||||||
| 401(k) | Antargaz Defined | Reimburse- | ||||||||||||||||||
| Savings Plan | Contribution Plan | ment | Perquisites | Total | ||||||||||||||||
| Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
| L.R. Greenberg | 5,513 | 54,318 | 0 | 10,022 | 69,853 | |||||||||||||||
| J.L. Walsh | 5,513 | 27,568 | 0 | 0 | 33,081 | |||||||||||||||
| P. Kelly | 5,513 | 14,810 | 0 | 0 | 20,323 | |||||||||||||||
| E.V.N. Bissell | 13,758 | 71,717 | 0 | 0 | 85,475 | |||||||||||||||
| F. Varagne | N/A | 14,498 | 0 | 34,438 | 48,936 | |||||||||||||||
| The perquisites shown for Mr. Greenberg include spousal travel expenses when attending Company or industry-related events where it is customary that officers attend with their spouses, tax preparation fees and occasional use of the Company’s tickets for sporting events for personal rather than business purposes. The perquisites for Mr. Varagne are for the use of a company vehicle. The incremental cost to the Company for these benefits is based on the actual costs or charges incurred by the Company for the benefits. | ||
| (5) |
| Mr. Varagne, the Chief Executive Officer of our French subsidiary Antargaz, is paid in euros. In calculating the dollar equivalent for disclosure purposes, the Company converts each payment into dollars based on the monthly average exchange rate of |
-39--43-
Grants of Plan-Based Awards In Fiscal 20072010
The following table and footnotes provide information regarding equity and non-equity awards grantedplan grants to the named executive officers in Fiscal 2007.
2010.
Grants of Plan-Based Awards Table—Table — Fiscal 2007
2010
Name (a) | Grant (b) | Board (c) | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Under-lying Options (#) (4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | ||||||||||||||||
Threshold (d) | Target ($) (e) | Maximum ($) (f) | Threshold (g) | Target (#) (h) | Maximum (i) | |||||||||||||||||||
| (j) | (k) | (l) | (m) | |||||||||||||||||||||
L. R. Greenberg | 10/01/06 | 12/05/06 | 579,600 | 966,000 | 1,932,000 | |||||||||||||||||||
| 01/01/07 | 12/05/06 | 280,000 | 27.28 | 1,601,600 | ||||||||||||||||||||
| 01/01/07 | 12/05/06 | 30,000 | 60,000 | 120,000 | 1,662,600 | |||||||||||||||||||
J. L. Walsh | 10/01/06 | 12/05/06 | 299,888 | 499,814 | 999,627 | |||||||||||||||||||
| 01/01/07 | 12/05/06 | 120,000 | 27.28 | 686,400 | ||||||||||||||||||||
| 01/01/07 | 12/05/06 | 13,000 | 26,000 | 52,000 | 720,460 | |||||||||||||||||||
A. J. Mendicino | 10/01/06 | 12/05/06 | 197,964 | 329,940 | 659,880 | |||||||||||||||||||
| 01/01/07 | 12/05/06 | 70,000 | 27.28 | 400,400 | ||||||||||||||||||||
| 01/01/07 | 12/05/06 | 7,500 | 15,000 | 30,000 | 415,650 | |||||||||||||||||||
P. Kelly | 09/04/07 | 07/31/07 | 50,000 | 25.74 | 267,000 | |||||||||||||||||||
| 09/04/07 | 07/31/07 | 20,000 | 514,800 | |||||||||||||||||||||
| 09/04/07 | 07/31/07 | 2,500 | 5,000 | 10,000 | 94,600 | |||||||||||||||||||
| 09/04/07 | 07/31/07 | 5,000 | 10,000 | 20,000 | 196,100 | |||||||||||||||||||
E. V. N. Bissell | 10/01/06 | 12/04/06 | 76,752 | 319,800 | 639,600 | |||||||||||||||||||
| 01/01/07 | 12/05/06 | 70,000 | 27.28 | 400,400 | ||||||||||||||||||||
| 01/01/07 | 12/05/06 | 7,000 | 14,000 | 28,000 | 227,710 | |||||||||||||||||||
F. Varagne | 10/01/06 | 12/05/06 | 213,395 | 304,850 | 609,700 | |||||||||||||||||||
| 01/01/07 | 12/05/06 | 57,000 | 27.28 | 340,290 | ||||||||||||||||||||
| 01/01/07 | 12/05/06 | 4,625 | 18,500 | 18,500 | 236,430 | |||||||||||||||||||
2010
| All | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | All Other | |||||||||||||||||||||||||||||||||||||||||||||||
| Estimated Possible Payouts | Stock | Option | ||||||||||||||||||||||||||||||||||||||||||||||
| Under | Estimated Future Payouts | Awards: | Awards: | Exercise | Grant Date | |||||||||||||||||||||||||||||||||||||||||||
| Non-Equity Incentive Plan | Under Equity Incentive Plan | Number | Number of | or Base | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
| Awards (1)(4) | Awards (2) | of Shares | Securities | Price of | of Stock and | |||||||||||||||||||||||||||||||||||||||||||
| Board | Thres- | Thres- | of Stock | Underlying | Option | Option | ||||||||||||||||||||||||||||||||||||||||||
| Grant | Action | hold | Target | Maximum | hold | Target | Maximum | or Units | Options | Awards | Awards | |||||||||||||||||||||||||||||||||||||
| Name | Date | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) (3) | ($/Sh) | ($) | ||||||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | ||||||||||||||||||||||||||||||||||||
| L.R. Greenberg | 10/01/09 | 11/20/09 | 640,500 | 1,067,500 | 2,135,000 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 0 | 300,000 | 24.19 | 1,347,000 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 35,000 | 70,000 | 140,000 | 1,590,400 | |||||||||||||||||||||||||||||||||||||||||||
| J.L. Walsh | 10/01/09 | 11/20/09 | 330,704 | 551,174 | 1,102,348 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 0 | 125,000 | 24.19 | 561,250 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 14,000 | 28,000 | 56,000 | 636,160 | |||||||||||||||||||||||||||||||||||||||||||
| P. Kelly | 10/01/09 | 11/20/09 | 191,880 | 319,800 | 639,600 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 0 | 77,000 | 24.19 | 345,730 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 8,500 | 17,000 | 34,000 | 386,240 | |||||||||||||||||||||||||||||||||||||||||||
| E.V.N. Bissell | 10/01/09 | 11/19/09 | 211,680 | 392,000 | 784,000 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/19/09 | 0 | 80,000 | 24.19 | 359,200 | |||||||||||||||||||||||||||||||||||||||||||
| 12/31/09 | 11/19/09 | 8,500 | 17,000 | 34,000 | 715,700 | |||||||||||||||||||||||||||||||||||||||||||
| F. Varagne | 10/01/09 | 11/20/09 | 223,244 | 318,920 | 637,840 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 0 | 57,000 | 24.19 | 255,930 | |||||||||||||||||||||||||||||||||||||||||||
| 01/01/10 | 11/20/09 | 4,625 | 9,250 | 18,500 | 189,440 | |||||||||||||||||||||||||||||||||||||||||||
| (1) | The amounts shown |
-40--44-
| (2) | The awards shown for all officers except Mr. Bissell are performance units under the Company’s 2004 Plan, as described in “Compensation Discussion and Analysis.” Performance units are forfeitable until the end of the performance |
For Mr. Varagne, in the case of a change of control, outstanding performance units will be paid in cash in an amount equal to the greater of (i) 50% of the maximum award, or (ii) the award amount that would be paid as if the performance period ended on the date of the change in control, based on the Company’s achievement of the performance goal as of the date of the change in control, as determined by the Compensation and Management Development Committee. In the case of Mr. Varagne’s death, his estate is entitled to receive shares of common stock equal to the number of outstanding performance units without regard to the performance criteria.
| (3) | Options are granted under the Company’s 2004 Plan. Under this Plan, the option exercise price is not less than 100 percent of the fair market value of the Company’s common stock on the effective date of the grant, which is either the date of the grant or a specified future date. The term of each option is generally ten years, which is the maximum allowable term. For Mr. Varagne’s options, the maximum term is 91/2 years from the date of grant. The options become exercisable in three equal annual installments beginning on the first anniversary of the grant date, except for Mr. Varagne’s options, which vest in full on the fourth anniversary of the grant date. All options are nontransferable and generally exercisable only while the optionee is employed by the Company or an affiliate, with exceptions for exercise following termination without cause, retirement, disability or death. For purposes of the 2004 Plan, “employee” includes a chief executive officer or other officer or person who performs management and policymaking functions with respect to a subsidiary of the Company located outside the United States, but who is not an employee of the subsidiary, such as Mr. Varagne. In the case of termination without cause, the option will be exercisable only to the extent that it has vested as of the date of termination of employment and the option will terminate upon the earlier of the expiration date of the option or the expiration of the 13-month period commencing on the date of termination of employment. If termination of employment occurs due to retirement or disability, the option term is shortened to the earlier of the third anniversary of the date of such termination of employment, or the original expiration date, and vesting continues in accordance with the original vesting schedule. In the event of death of the optionee while an employee, the option will become fully vested and the option term will be shortened to the earlier of the expiration of the 12-month period following the optionee’s death, or the original expiration date. For Mr. Varagne, termination | |
| (4) | Mr. Varagne is paid in euros. In calculating the dollar equivalent for disclosure purposes, we converted amounts in euros into dollars based on the monthly average exchange rate of |
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Outstanding Equity Awards at Year-End
The following table shows the outstanding stock option stock unit and performance unit awards held by the named executive officers at September 30, 2007.2010.
Outstanding Equity Awards at Year-End Table—Table — Fiscal 2007
| Option Awards | Stock Awards | |||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Options (#) Unexercisable (c) | Option Exercise Price ($) (e) | Option Date (f) | Number (g) | Market Value of Shares of Units of Stock That Have Not Vested ($) (h) | Equity (#) (i) | Equity Incentive (j) | ||||||||||||
L. R. Greenberg | 35,000 | (1) | 10.20 | 12/31/2011 | 0 | 0 | 60,000 | (15) | 1,558,800 | |||||||||||
| 360,000 | (2) | 12.57 | 12/31/2012 | 50,000 | (16) | 1,299,000 | ||||||||||||||
| 360,000 | (3) | 16.99 | 12/31/2013 | 60,000 | (17) | 1,558,800 | ||||||||||||||
| 233,333 | (4) | 116,667 | (4) | 20.47 | 12/31/2014 | |||||||||||||||
| 83,333 | (5) | 166,667 | (5) | 20.48 | 12/31/2015 | |||||||||||||||
| 280,000 | (6) | 27.28 | 12/31/2016 | |||||||||||||||||
J. L. Walsh | 180,000 | (7) | 90,000 | (7) | 22.92 | 03/31/2015 | 0 | 0 | 30,000 | (18) | 779,400 | |||||||||
| 35,000 | (5) | 70,000 | (5) | 20.48 | 12/31/2015 | 25,000 | (16) | 649,500 | ||||||||||||
| 120,000 | (6) | 27.28 | 12/31/2016 | 26,000 | (17) | 675,480 | ||||||||||||||
P. Kelly | 0 | 50,000 | (8) | 25.74 | 09/03/2017 | 20,000 | (13) | 519,600 | 5,000 | (19) | 129,900 | |||||||||
| 10,000 | (20) | 259,800 | ||||||||||||||||||
A. J. Mendicino | 105,000 | (2) | 12.57 | 07/01/2010 | 0 | 0 | 15,000 | (15) | 389,700 | |||||||||||
| 104,000 | (3) | 16.99 | 07/01/2010 | 9,000 | (16) | 233,820 | ||||||||||||||
| 64,000 | (4) | 32,000 | (4) | 20.47 | 07/01/2010 | 5,000 | (17) | 129,900 | ||||||||||||
| 21,666 | (5) | 43,334 | (5) | 20.48 | 07/01/2010 | |||||||||||||||
| 70,000 | (6) | 27.28 | 07/01/2010 | |||||||||||||||||
E. V. N. Bissell | 34,667 | (3) | 16.99 | 12/31/2013 | 0 | 0 | 10,000 | (21) | 357,000 | |||||||||||
| 64,000 | (4) | 32,000 | (4) | 20.47 | 12/31/2014 | 12,000 | (22) | 428,400 | ||||||||||||
| 21,666 | (5) | 43,334 | (5) | 20.48 | 12/31/2015 | 14,000 | (23) | 499,800 | ||||||||||||
| 70,000 | (6) | 27.28 | 12/31/2016 | |||||||||||||||||
F. Varagne | 0 | 70,000 | (9) | 15.65 | 12/08/2013 | 40,000 | (14) | 1,039,200 | 10,000 | (15) | 259,800 | |||||||||
| 60,000 | (10) | 20.47 | 06/30/2014 | 17,000 | (16) | 441,660 | ||||||||||||||
| 52,000 | (11) | 20.48 | 06/30/2015 | 18,500 | (17) | 480,630 | ||||||||||||||
| 57,000 | (12) | 27.28 | 06/30/2016 | |||||||||||||||||
Note:2010 Column (d) was intentionally omitted.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||
| Incentive | ||||||||||||||||||||||||||||||||
| Plan Awards: | ||||||||||||||||||||||||||||||||
| Number | Market | Number of | Equity Incentive | |||||||||||||||||||||||||||||
| Number of | of Shares | Value of | Unearned | Plan Awards: | ||||||||||||||||||||||||||||
| Securities | Number of | or Units | Shares or | Shares, Units | Market or Payout | |||||||||||||||||||||||||||
| Underlying | Securities | of Stock | Units of | or Other | Value of Unearned | |||||||||||||||||||||||||||
| Unexercised | Underlying | Option | That Have | Stock That | Rights That | Shares, Units or | ||||||||||||||||||||||||||
| Options | Options | Exercise | Option | Not | Have Not | Have Not | Other Rights That | |||||||||||||||||||||||||
| Exercisable | Unexercisable | Price | Expiration | Vested | Vested | Vested | Have Not Vested | |||||||||||||||||||||||||
| Name | (#) | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||
| (a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||
| L.R. Greenberg | 135,000 | (1) | 16.99 | 12/31/2013 | 0 | 0 | 123,060 | (16) | 3,520,747 | |||||||||||||||||||||||
| 350,000 | (2) | 20.47 | 12/31/2014 | 70,000 | (17) | 2,002,700 | ||||||||||||||||||||||||||
| 250,000 | (3) | 20.48 | 12/31/2015 | 70,000 | (18) | 2,002,700 | ||||||||||||||||||||||||||
| 280,000 | (4) | 27.28 | 12/31/2016 | |||||||||||||||||||||||||||||
| 200,000 | (5) | 100,000 | (5) | 27.25 | 12/31/2017 | |||||||||||||||||||||||||||
| 100,000 | (6) | 200,000 | (6) | 24.42 | 12/31/2018 | |||||||||||||||||||||||||||
| 300,000 | (7) | 24.19 | 12/31/2019 | |||||||||||||||||||||||||||||
| J.L. Walsh | 270,000 | (8) | 22.92 | 03/31/2015 | 0 | 0 | 47,466 | (16) | 1,358,002 | |||||||||||||||||||||||
| 120,000 | (4) | 27.28 | 12/31/2016 | 28,000 | (17) | 801,080 | ||||||||||||||||||||||||||
| 80,000 | (5) | 40,000 | (5) | 27.25 | 12/31/2017 | 28,000 | (18) | 801,080 | ||||||||||||||||||||||||
| 41,666 | (6) | 83,334 | (6) | 24.42 | 12/31/2018 | |||||||||||||||||||||||||||
| 125,000 | (7) | 24.19 | 12/31/2019 | |||||||||||||||||||||||||||||
| P. Kelly | 50,000 | (9) | 25.74 | 09/03/2017 | 0 | 0 | 26,370 | (16) | 754,446 | |||||||||||||||||||||||
| 36,666 | (5) | 18,334 | (5) | 27.25 | 12/31/2017 | 17,000 | (17) | 486,370 | ||||||||||||||||||||||||
| 23,333 | (6) | 46,667 | (6) | 24.42 | 12/31/2018 | 17,000 | (18) | 486,370 | ||||||||||||||||||||||||
| 77,000 | (7) | 24.19 | 12/31/2019 | |||||||||||||||||||||||||||||
| E.V.N. Bissell | 21,667 | (3) | 20.48 | 12/31/2015 | 0 | 0 | 15,636 | (19) | 700,649 | |||||||||||||||||||||||
| 70,000 | (4) | 27.28 | 12/31/2016 | 20,000 | (20) | 896,200 | ||||||||||||||||||||||||||
| 43,333 | (5) | 21,667 | (5) | 27.25 | 12/31/2017 | 17,000 | (21) | 761,770 | ||||||||||||||||||||||||
| 25,000 | (6) | 50,000 | (6) | 24.42 | 12/31/2018 | |||||||||||||||||||||||||||
| 80,000 | (7) | 24.19 | 12/31/2019 | |||||||||||||||||||||||||||||
| F. Varagne | 60,000 | (10) | 20.47 | 06/30/2014 | 0 | 0 | ||||||||||||||||||||||||||
| 52,000 | (11) | 20.48 | 06/30/2015 | 18,500 | (16) | 529,285 | ||||||||||||||||||||||||||
| 57,000 | (12) | 27.28 | 06/30/2016 | 18,500 | (17) | 529,285 | ||||||||||||||||||||||||||
| 57,000 | (13) | 28.02 | 12/16/2017 | 18,500 | (18) | 529,285 | ||||||||||||||||||||||||||
| 57,000 | (14) | 26.51 | 02/12/2019 | |||||||||||||||||||||||||||||
| 57,000 | (15) | 24.19 | 06/30/2019 | |||||||||||||||||||||||||||||
| Note: | Column (d) was intentionally omitted. | |
| (1) | These options were granted |
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| ||
| (2) | These options were granted effective January 1, 2005 and were fully vested on January 1, | |
| (3) | These options were granted effective January 1, 2006 and were fully vested on January 1, 2009. | |
| (4) | These options were granted effective January 1, 2007 and were fully vested on January 1, 2010. | |
| (5) | These options were granted effective January 1, 2008. These options vest 33 |
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| ||
| (6) | These options were granted |
| ||
| (7) | These options were granted |
| ||
| (8) | These options were granted |
| ||
| (9) | These options were granted |
| (10) | These options were granted |
| (11) | These options were granted |
| (12) | These options were granted |
| (13) | These |
| (14) | These | |
| (15) | These options were granted effective January 1, 2010 and |
| (16) | The amount shown is an estimate based on a target award of performance units effective January 1, 2008. The performance measurement period for these performance units is January 1, 2008 through December 31, 2010. The estimated number of performance units which may be earned at the end of the performance period is based on the Company’s TSR for the period January 1, 2008 through September 30, 2010, relative to that of each of the companies in the S&P Utilities Index as of December 31, 2007, except for Mr. Varagne. For Mr. Varagne, the actual number of performance units earned may not exceed the number shown, but may be lower, or even zero. As of September 30, 2010, the Company’s TSR ranking qualified for 175.8 % leverage of the target number of performance units originally granted. The actual number of performance units and accompanying dividend equivalents earned may be higher (up to 200% of the target award, except for Mr. Varagne) or lower than the amount shown, based on TSR performance through the end of the performance period. SeeCompensation Discussion and Analysis - - Long-Term Compensation — Fiscal 2010 Equity Awards for more information on the TSR performance goal measurements. | |
| (17) | These performance units were awarded |
| (18) | These performance units were awarded |
| (19) | The amount shown is an estimate based on a target award of restricted units effective January 1, 2008. The performance measurement period for these restricted units is January 1, 2008 through December 31, 2010. The estimated number of restricted units which may be earned at the end of the performance period is based on the AmeriGas Partners’ TUR for the period January 1, 2008 through September 30, 2010, relative to that of each member of a peer group of publicly-traded master limited partnerships in the propane, pipeline and coal industries as of the award date. As of September 30, 2010, the AmeriGas Partners’ TUR ranking qualified for 130.3% leverage of the target number of restricted units originally granted. The actual number of restricted units and accompanying distribution equivalents earned may be higher (up to 200% of the target award) or lower than the amount shown, based on TUR performance through the end of the performance period. SeeCompensation Discussion and Analysis - Long-Term Compensation — Fiscal 2010 Equity Awards for more information on the TUR performance goal measurements. | |
| (20) | These | |
| (21) | These restricted units were awarded December 31, 2009. The measurement period for the performance goal is January 1, 2010 through December 31, 2012. The performance goal is the same as described in footnote 19, but it is measured for a different three-year period and AmeriGas Partners TUR is measured relative to that of each of the master limited partnerships in the Alerian MLP Index as of December 31, 2009. The performance units will be payable, if at all, on January 1, |
-43--47-
Option Exercises and Stock Vested in Fiscal 20072010
The following table sets forth (i) the number of shares of UGI Corporation common stock acquired by the named executive officers in Fiscal 20072010 from the exercise of stock options, (ii) the value realized by those officers upon the exercise of those stock options based on the difference between the market price for our common stock on the date of exercise and the exercise price for the options, (iii) the number of performance units and stock units previously granted to the named executive officers that vested in Fiscal 2007,2010, and (iv) the value realized by those officers upon the vesting of such units based on the closing market price for shares of our common stock, or for Mr. Bissell, common units of AmeriGas Partners, on the vesting date.
Option Exercises and Stock Vested Table—Table — Fiscal 2007
| Option Awards | Stock Awards | |||||||
Name (a) | Number of (#) (b) | Value Realized on ($) (c) | Number of (#) (d) | Value Realized ($) (e) | ||||
L. R. Greenberg | 225,000 | 3,973,025 | 77,490 | 2,113,927 | ||||
J. L. Walsh | 0 | 0 | 56,605 | 1,521,384 | ||||
P. Kelly | 0 | 0 | 0 | 0 | ||||
A. J. Mendicino | 0 | 0 | 35,926 | 970,941 | ||||
E. V. N. Bissell | 104,333 | 1,217,540 | 13,035 | 424,029 | ||||
F. Varagne | 0 | 0 | 43,284 | 1,180,788 | ||||
| Option Awards | Stock Awards | |||||||||||||||
| Number of | ||||||||||||||||
| Shares | Number of | |||||||||||||||
| Acquired on | Value Realized on | Shares Acquired | Value Realized | |||||||||||||
| Exercise | Exercise | on Vesting | on Vesting | |||||||||||||
| Name | (#) | ($) | (#) | ($) | ||||||||||||
| (a) | (b) | (c) | (d) | (e) | ||||||||||||
| L.R. Greenberg | 150,000 | 1,522,500 | 72,960 | 1,764,902 | ||||||||||||
| J.L. Walsh | 65,000 | 428,724 | 31,616 | 764,791 | ||||||||||||
| P. Kelly | 0 | 0 | 12,160 | 294,150 | ||||||||||||
| E.V.N. Bissell | 0 | 0 | 20,356 | 806,098 | ||||||||||||
| F. Varagne | 70,000 | 798,700 | 11,248 | 272,089 | ||||||||||||
-44--48-
Pension Benefits
The following table shows (i) the number of years of credited service for the named executive officers under the Company’s defined benefit retirement plan (which we refer to below as the “UGI Utilities, Inc. Retirement Plan”) and, its supplemental executive retirement plan (which we refer to below as the “UGI SERP”), and the Antargaz Supplemental Executive Retirement Plan, (ii) the actuarial present value of accumulated benefits under those plans as of September 30, 2007,2010, and (iii) any payments made to the named executive officers in Fiscal 20072010 under those plans.
Pension Benefits—Benefits Table — Fiscal 2007
2010
Name (a) | Plan Name (b) | Number of (#) (c) | Present Value of ($) (d) | Payments During (e) | |||||
L. R. Greenberg | UGI SERP | 27 | 9,471,853 | 0 | |||||
| UGI Utilities, Inc. Retirement Plan | 27 | 856,191 | 0 | ||||||
A. J. Mendicino | UGI SERP | 15 | 2,009,169 | (1 | ) | ||||
| UGI Utilities, Inc. Retirement Plan | 15 | 548,804 | 10,271 | ||||||
J. L. Walsh | UGI SERP | 3 | 304,376 | 0 | |||||
| UGI Utilities, Inc. Retirement Plan | 3 | 54,987 | 0 | ||||||
P. Kelly | UGI SERP | 0 | 0 | 0 | |||||
| UGI Utilities, Inc. Retirement Plan | 0 | 0 | 0 | ||||||
E. V. N. Bissell | UGI Utilities, Inc. Retirement Plan | 6 | 22,738 | 0 | |||||
F. Varagne | N/A | N/A | N/A | N/A |
2010
| Number of | Present Value of | |||||||||||||
| Years Credited | Accumulated | Payments During | ||||||||||||
| Service | Benefit | Last Fiscal Year | ||||||||||||
| Name | Plan Name | (#) | ($) | ($) | ||||||||||
| (a) | (b) | (c) | (d) | (e) | ||||||||||
| L.R. Greenberg | UGI SERP | 30 | 14,360,305 | 0 | ||||||||||
| UGI Utilities, Inc. Retirement Plan | 30 | 1,453,430 | 0 | |||||||||||
| J.L. Walsh | UGI SERP | 5 | 1,011,343 | 0 | ||||||||||
| UGI Utilities, Inc. Retirement Plan | 5 | 195,653 | 0 | |||||||||||
| P. Kelly | UGI SERP | 3 | 305,448 | 0 | ||||||||||
| UGI Utilities, Inc. Retirement Plan | 3 | 107,637 | 0 | |||||||||||
E.V.N. Bissell(1) | UGI Utilities, Inc. Retirement Plan | 6 | 32,835 | 0 | ||||||||||
| F. Varagne | Antargaz Supplemental Executive Retirement Plan | 1 | 222,122 | 0 | ||||||||||
| (1) | Mr. |
The Company participates in the UGI Utilities, Inc. Retirement Plan, a qualified defined benefit retirement plan (“Pension Plan”) to provide retirement income to its employees. The Pension Plan pays benefits based upon final average earnings, consisting of base salary or wages and annual bonuses, and years of credited service. Benefits vest after the participant completes five years of vesting service.
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The Pension Plan provides normal annual retirement benefits at age 65, unreduced early retirement benefits at age 62 with ten years of service and reduced, but subsidized, early retirement benefits at age 55 with ten years of service. Employees terminating employment prior to early retirement eligibility are eligible to receive a benefit under the plan formula commencing at age 65 or an unsubsidized benefit as early as age 55, provided they had ten10 years of service at termination. Employees who have attained age 50 with 15 years of service and are involuntarily terminated by the Company prior to age 55 are also eligible for subsidized early retirement benefits, beginning at age 55.
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The Pension Plan’s normal retirement benefit formula is (A) –— (B) and is shown below:
| ||||
| A. | = The minimum of (1) and (2), where | |||
| (1) | = | |||
| (2) | = | |||
| B. | = |
The amount of the benefit produced by the formula will be reduced by an early retirement factor based on the employee’s actual age in years and months as of his early retirement date. The reduction factors range from 65 percent at age 55 to 100 percent (no reduction) at age 62.
The normal form of benefit under the Pension Plan for a married employee is a 50 percent joint and survivor lifetime annuity. Regardless of marital status, a participant may choose from a number of lifetime annuity payments. Lump sum payments are not permitted unless the present value of the lump sum benefit is $5,000 or less.
The Pension Plan is subject to qualified-plan Code limits on the amount of annual benefit that may be paid, and on the amount of compensation that may be taken into account in calculating retirement benefits under the plan. For 2007,2010, the limit on the compensation that may be used is $225,000$245,000 and the limit on annual benefits payable for an employee retiring at age 65 in 20072010 is $180,000.$195,000. Benefits in excess of those permitted under the statutory limits are paid from the Company’s Supplemental Executive Retirement Plan, described below.
Mr. Greenberg isand Mr. Bissell are currently eligible for early retirement benefits under the Pension Plan. Mr. Mendicino retired and commenced benefits in the form of a 100 percent joint and survivor annuity on July 1, 2007.
UGI Corporation Supplemental Executive Retirement Plan
The Company’s Supplemental Executive Retirement Plan (“SERP”) is a non-qualified defined benefit plan that provides retirement benefits that would otherwise be provided under the Pension Plan, but are prohibited from being paid from the Pension Plan by Code limits. The benefit paid by the SERP is approximately equal to the difference between the benefits provided under the Pension Plan and benefits that would have been provided by the Pension Plan if not for
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the limitations of the Employee Retirement Income Security Act of 1974, as amended, and the Code. Benefits vest after the participant completes 5 years of vesting service. The benefits earned under the SERP are payable in the form of a lump sum payment. For participants who attained age 50 prior to January 1, 2004, the lump sum payment is calculated using two interest rates. One rate is for the service prior to January 1, 2004 and the other is for service after January 1, 2004. The rate for pre-January 1, 2004 service is the daily average of Moody’s Aaa bond yields for the month in which the participant’s termination date occurs, plus 50 basis points, and tax-adjusted using the highest marginal federal tax rate (35.0% for 2007).rate. The interest rate for post Januarypost-January 1, 2004 service is the daily average of ten-year Treasury Bond yields in effect for the month in which the participant’s termination date occurs. The latter rate is used for calculating the lump sum payment for participants attaining age 50 on or after January 1, 2004. Payment is due within 60 days after the termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code. Amounts payable under the SERP may be deferred in accordance with the Company’s 2009 Deferral Plan. SeeCompensation Discussion and Analysis — UGI Corporation 2009 Deferral Plan.
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Actuarial Assumptions Used to Determine Values in the Pension Benefits Table
— Fiscal 2010
The amounts shown in the Pension Benefits tableTable above are actuarial present values of the benefits accumulated through September 30, 2007.2010. An actuarial present value is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value represents an estimate of the amount which, if invested today at the discount rate, would be sufficient on an average basis to provide estimated future payments based on the current accumulated benefit. The assumed retirement age for each named executive officer, other than Mr. Mendicino who retired at age 59, is age 62, which is the earliest age at which the executive could retire without any benefit reduction due to age. Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age. The key assumptions included in the calculations are as follows:
September 30, 2007 | September 30, 2006 | |||
| Discount rate for Pension Plan for all purposes and for SERP, for pre-commencement calculations | 6.40 percent | 6.00 percent | ||
| SERP lump sum rate | 4.07 percent | 3.69 percent | ||
| Retirement age | 62 | 62 | ||
| Post-retirement mortality for Pension Plan | RP-2000, combined, healthy table projected to 2010 using Scale AA without collar adjustments | RP-2000, combined, healthy table projected to 2010 using Scale AA without collar adjustments | ||
| Post-retirement mortality for SERP | 1994 GAR unisex | 1994 GAR unisex | ||
| Pre-retirement mortality | None | None | ||
| Termination and disability rates | None | None | ||
| Form of payment for Pension Plan | Single life annuity | Single life annuity | ||
| Form of payment for SERP | Lump sum | Lump sum | ||
| September 30, 2010 | September 30, 2009 | |||
| Discount rate for Pension Plan for all purposes and for SERP, for pre-commencement calculations | 5.00 percent | 5.50 percent | ||
| SERP lump sum rate | 3.30 percent | 3.60 percent | ||
| Discount rate for Antargaz SERP | 4.00 percent | 5.00 percent | ||
| Retirement age | 62 (65 for Antargaz SERP) | 62 (65 for Antargaz SERP) | ||
| Post-retirement mortality for Pension Plan | RP-2000, combined, healthy table projected to 2017 using Scale AA without collar adjustments | RP-2000, combined, healthy table projected to 2015 using Scale AA without collar adjustments | ||
| Post-retirement mortality for SERP | 1994 GAR Unisex | 1994 GAR Unisex | ||
| Pre-retirement mortality | None | None | ||
| Termination and disability rates | None | None | ||
| Form of payment for Pension Plan | Single life annuity | Single life annuity | ||
| Form of payment for SERP | Lump sum | Lump sum | ||
| Form of payment for Antargaz SERP | Single life annuity | Single life annuity |
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Antargaz Supplemental Executive Retirement Plan
This plan provides supplemental retirement income to certain management-level individuals of Antargaz, including Mr. Varagne, who have at least five years of service with Antargaz. Mr. Varagne has satisfied the five-year service requirement. For purposes of accumulating benefits under the plan, benefits began accruing September 1, 2009 and Antargaz is obligated to purchase an annuity annually on behalf of Mr. Varagne. The amount of the annuity is based on Mr. Varagne’s length of service with Antargaz (up to a maximum of ten years) and Mr. Varagne’s average annual remuneration for the prior three-year period in excess of six times the Social Security annual ceiling in France. The annuity paid may not exceed 15 percent of Mr. Varagne’s final average remuneration for the thirty-six month period immediately preceding retirement. The annuity amount is also reduced by any other supplemental retirement income, other than statutory retirement schemes, payable to Mr. Varagne. Mr. Varagne is entitled to receive benefits under the plan upon retirement only if he is a corporate officer of Antargaz at the time of his retirement, is at least 62 years of age and immediately after retirement begins receiving benefits from the compulsory Social Security retirement system in France.
Nonqualified Deferred Compensation
The following table shows the contributions, earnings, withdrawals and account balances for each of the named executive officers who participate in the Company’s Supplemental Savings Plan, the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan (“AmeriGas SERP”) and, the AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan and the Antargaz Defined Contribution Plan.
Nonqualified Deferred Compensation Table—Table — Fiscal 2007
2010
Name | Plan Name (a) | Executive in Last Fiscal Year ($) (b) | Employer Contributions in Last Fiscal Year ($) (c) | Aggregate in Last Fiscal | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate (f) | |||||||||
L. R. Greenberg | UGI Supplemental Savings Plan | 0 | 22,523 | (1) | 21,810 | 0 | 526,848 | ||||||||
J. L. Walsh | UGI Supplemental Savings Plan | 0 | 9,604 | (1) | 1,009 | 0 | 32,941 | ||||||||
P. Kelly | UGI Supplemental Savings Plan | 0 | 0 | 0 | 0 | 0 | |||||||||
A. J. Mendicino | UGI Supplemental Savings Plan | 0 | 8,371 | (1) | 8,660 | 0 | 95,414 | ||||||||
E. V. N. Bissell | AmeriGas SERP | 0 | 73,151 | (2) | 47,518 | (3) | 0 | 620,857 | |||||||
| AmeriGas Nonqualified Deferred Compensation Plan | 4,592 | (4) | 0 | 135 | 0 | 4,727 | |||||||||
F. Varagne | N/A | 0 | 0 | 0 | 0 | 0 |
2010
| Aggregate | Aggregate | |||||||||||||||||||||
| Executive | Employer | Earnings | Aggregate | Balance at | ||||||||||||||||||
| Contributions | Contributions | in Last | Withdrawals/ | Last Fiscal | ||||||||||||||||||
| in Last | in Last | Fiscal | Distributions | Year-End | ||||||||||||||||||
| Name | Plan Name | Fiscal Year ($) | Fiscal Year ($) | Year ($) | ($) | ($)(4) | ||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||||
| L.R. Greenberg | UGI Supplemental Savings Plan | 0 | 54,318 | (1) | 0 | 0 | 665,635 | |||||||||||||||
| J.L. Walsh | UGI Supplemental Savings Plan | 0 | 27,568 | (1) | 0 | 0 | 102,457 | |||||||||||||||
| P. Kelly | UGI Supplemental Savings Plan | 0 | 14,810 | (1) | 0 | 0 | 14,810 | |||||||||||||||
| E.V.N. Bissell | AmeriGas SERP | 0 | 71,717 | (2) | 66,265 | 0 | 836,115 | |||||||||||||||
| AmeriGas Nonqualified Deferred Compensation Plan | 0 | 0 | 2,607 | 0 | 33,107 | |||||||||||||||||
| F. Varagne | Antargaz Defined Contribution Plan | 0 | 14,498 | (3) | 0 | 0 | 14,498 | |||||||||||||||
| (1) | This amount represents the employer contribution to the Company’s Supplemental Savings Plan, which is also reported in the Summary Compensation Table — Fiscal 2010 in the “All Other Compensation” column. |
| (2) | This amount represents the |
| (3) | This amount |
| (4) |
| The aggregate balances include the following aggregate amounts previously reported in the Summary Compensation Table in prior years: Mr. Greenberg, |
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The UGI Corporation Supplemental Savings Plan (“SSP”) is a nonqualified deferred compensation plan that provides benefits to certain named executive officersemployees that would be provided under the Company’s qualified 401(k) Savings Plan in the absence of Code limitations. Benefits vest after the participant completes five years of service. The SSP is intended to pay an amount substantially equal to the difference between the Company matching contribution that would have been made under the 401(k) Savings Plan if the Code limitations were not in effect, and the Company match actually made under the 401(k) Savings Plan. The Code compensation limitlimits for 2006 was $220,0002008, 2009 and the limit for 2007 is $225,000.2010 were $230,000, $245,000 and $245,000, respectively. The Code contribution limitlimits for 2006 was $44,0002008, 2009 and the limit for 2007 is $45,000.2010 were $46,000, $49,000 and $49,000, respectively. Under the SSP, the participant is credited with a Company match on compensation in excess of Code limits using the same formula applicable to contributions to the Company’s 401(k) Savings Plan, which is a match of 50
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percent ofon the first 3 percent of eligible compensation, and a match of 25 percent on the next 3 percent, assuming that the employee contributed to the 401(k) Savings Plan the lesser of 6 percent of eligible compensation or the maximum amount permissible under the Code. Amounts credited to the participant’s account are credited with interest. The rate of interest currently in effect is the rate produced by blending the annual return on the S&PStandard and Poor’s 500 Index (60 percent weighting) and the annual return on the Lehman BrothersBarclays Capital U.S. Aggregate Bond Index (40 percent weighting). Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code.
The AmeriGas SERP is a nonqualified deferred compensation plan that is intended to provide retirement benefits to certain AmeriGas Propane executive officers.employees. Under the plan, AmeriGas Propane credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limitslimit ($245,000 in 2010) and 10 percent of compensation in excess of such limit. In addition, if any portion of AmeriGas Propane’s matching contribution under the AmeriGas Propane, Inc. qualified 401(k) Savings Plan (“AmeriGas 401(k) Savings Plan”) is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to a participant’s account. Benefits vest on the fifth anniversary of a participant’s employment commencement date. Through Fiscal 2007, participants’ accounts were credited annually with interest at a rate generally equal to the actual return on the trust portfolio of the UGI Utilities, Inc. Retirement Income Plan, subject to certain limitations as set forth in the AmeriGas SERP. Beginning in Fiscal 2008, in lieu of receiving interest on account balances, participants willParticipants direct the investment of their account balances among a number of funds, which are generally the same funds available to participants in the AmeriGas 401(k) Savings Plan, other than the Company’s stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code. Amounts payable under the AmeriGas SERP may be deferred in accordance with the Company’s 2009 Deferral Plan. SeeCompensation Discussion and Analysis — UGI Corporation 2009 Deferral Plan.
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The AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan is a nonqualified deferred compensation plan that provides benefits to certain named executive officersemployees that would otherwise be provided under the AmeriGas 401(k) Savings Plan. The plan is intended to permit participants to defer up to $10,000 of annual compensation that would generally not be eligible for contribution to the AmeriGas 401(k) Savings Plan due to Code limitations and nondiscrimination requirements. Participants may direct the investment of deferred amounts into a number of funds. The funds available are the same funds available under the AmeriGas 401(k) Savings Plan, other than the Company’sUGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of a six-month postponement period following “separation from service” as defined in the Code.
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Antargaz Supplemental Retirement Plan
Defined Contribution Plan
This plan provides supplemental retirement income to certain management-level individuals of Antargaz, including Mr. Varagne, who have at least one year of service with Antargaz. Under the plan, Antargaz is obligated to contribute to Mr. Varagne’s account 5 percent of his total remuneration that is subject to social security contributions; provided that Antargaz’ 5 percent contribution will only apply to Mr. Varagne’s remuneration that is less than or equal to six times the Social Security ceiling in France. The ceiling in 2010 was€34,620. Investment of contributions to the plan is managed by an insurance company. Upon Mr. Varagne’s retirement, payment will be made by the insurance company to Mr. Varagne in the form of a life annuity based on the contributions to Mr. Varagne’s account. Mr. Varagne is entitled to receive benefits under the plan upon retirement regardless of whether he is a corporate officer of Antargaz at the time of his retirement.
Potential Payments Upon Termination or Change in Control
Severance Pay Plan for Senior Executive Employees
Named Executive Officers Employed by UGI Corporation.The UGI Corporation Senior Executive Employee Severance Pay Plan (the “UGI Severance Plan”) provides for payment to certain senior level employees of UGI, including Messrs. Greenberg, Walsh, and Kelly, in the event their employment is terminated without fault on their part. Benefits are payable to a senior executive covered by the UGI Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just cause or as a result of the senior executive’s death or disability. Under the UGI Severance Plan, “just cause” generally means (i) dismissal of an executive due to misappropriation of funds, (ii) substance abuse or habitual insobriety that adversely affects the executive’s ability to perform his or her job, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of duties.
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Except as provided herein, the UGI Severance Plan provides for cash payments equal to a participant’s compensation for a period of time ranging from six months to 18 months, depending on length of service.service (the “Continuation Period”). In the case of Mr. Greenberg, the time periodContinuation Period is 30 months; for Mr. Walsh, the time period isContinuation Period ranges from 12 months to 24 months.months, depending on length of service. In addition, a participant receives the cash equivalent of his or her target bonus under the Annual Bonus Plan, pro-rated for the number of months served in the fiscal year prior to termination. However, if the termination occurs in the last two months of the fiscal year, we have the discretion to determine whether the participant will receive a pro-rated target bonus, or the actual annual bonus which would have been paid after the end of the fiscal year, assuming that the participant’s entire bonus was contingent on meeting the applicable financial performance goal.goal, pro-rated for the number of months served. The levels of severance paymentpayments were established by the Committee based on competitive practice and are reviewed by management and the Compensation and Management and Development Committee from time to time.
Under the UGI Severance Plan, a participant also receives a payment equal to the cost the participant would have incurred to continue medical and dental benefits are grossed upcoverage under the Company’s plans for the Continuation Period (less the amount the participant would be required to contribute for such coverage if the participant were an active employee). This amount includes a tax gross-up payment equal to 75 percent of the payment relating to the medical and paid as a lump sum upon termination of employment.dental coverage. The maximum period for calculating the payment of such benefits is 18 months (30 months in the case of Mr. Greenberg and 24 months in the case of Mr. Walsh). The UGI Severance Plan also provides for outplacement services for a period of 12 months following a participant’s termination of employment. Participants are entitled to receiveemployment, and reimbursement for tax preparation services for theirthe final year of employment under the UGI Severance Plan. UGI has the option to pay a participant the cash equivalent of those employee benefits.employment. Provided that the participant is eligible to retire, all payments under the UGI Severance Plan may be reduced by an amount equal to the fair market value of certain equity-based awards, other than stock options, payable to the participant after the termination of employment.
In order to receive benefits under the UGI Severance Plan, a participant is required to execute a release which discharges UGI and its subsidiaries from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with UGI or its subsidiaries. EachThe UGI Severance Plan also requires a senior executive is also required to ratify aany existing post-employment activities agreement (which restricts the senior executive from competing with UGI and its affiliates following termination of his or her employment) and to cooperate in attending to matters pending at the time of his or her termination of employment.
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Named Executive Officers Employed by AmeriGas Propane.The AmeriGas Propane, Inc. Senior Executive Employee Severance Pay Plan (the “AmeriGas Severance Plan”) provides for payment to certain senior level employees of AmeriGas Propane, including Mr. Bissell, in the event their employment is terminated without fault on their part. Specified benefits are payable to a senior executive covered by the AmeriGas Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just cause or as a result of the senior executive’s death or disability. Under the AmeriGas Severance Plan, “just cause” generally means (i) dismissal of an executive due to misappropriation of funds, (ii) substance abuse or habitual insobriety that adversely affects the executive’s ability to perform his job, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of duties.
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Except as provided herein, the AmeriGas Severance Plan provides for cash payments equal to a participant’s compensation for a period of time ranging from six months to 18 months, depending on length of service.service (the “Continuation Period”). In the case of Mr. Bissell, the time period isContinuation Period ranges from 12 months to 24 months.months, depending on length of service. In addition, a participant receives the cash equivalent of his target bonus under the Annual Bonus Plan, pro-rated for the number of months served in the fiscal year. However, if the termination occurs in the last two months of the fiscal year, AmeriGas Propane has the discretion to determine whether the participant will receive a pro-rated target bonus, or the actual annual bonus which would have been paid after the end of the fiscal year, provided that the weighting to be applied to the participant’s business/financial goals under the AmeriGas Propane Annual Bonus Plan will be deemed to be 100 percent.percent, pro-rated for the number of months served. The levels of severance paymentpayments were established by the Committee based on competitive practice and are reviewed by management and the AmeriGas Propane Compensation/Pension Committee from time to time.
Under the AmeriGas Severance Plan, a participant also receives a payment equal to the cost the participant would have incurred to continue medical and dental benefits are grossed up and paid ascoverage under AmeriGas Propane’s plans for the Continuation Period (less the amount the participant would be required to contribute for such coverage if the participant were an active employee). This amount includes a lump sum upon terminationtax gross-up payment equal to 75 percent of employment. The maximum period for calculating the payment of such benefits is 18 months (24 months inrelating to the case of Mr. Bissell).medical and dental coverage. The AmeriGas Severance Plan also provides for outplacement services for a period of 12 months following a participant’s termination of employment. Participants are entitled to receiveemployment, and reimbursement for tax preparation services for theirthe final year of employment. AmeriGas Propane has the option to pay a participant the cash equivalent of those employee benefits. Provided that the participant is eligible to retire, all payments under the AmeriGas Severance Plan may be reduced by an amount equal to the fair market value of certain equity-based awards, other than stock options, payable to the participant after the termination of employment.
In order to receive benefits under the AmeriGas Severance Plan, a participant is required to execute a release which discharges AmeriGas Propane and its affiliates from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with AmeriGas Propane or its affiliates. Each senior executive is also required to ratify aany existing post-employment activities agreement (which restricts the senior executive from competing with AmeriGas PropanePartners and its affiliates following termination of employment) and to cooperate in attending to matters pending at the time of his termination.
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termination of employment.
Severance Arrangement for Mr. Varagne.Varagne
Mr. Varagne has an agreement with our French subsidiary, AGZ Holding, which provides severance benefits in the event that his employment is terminated without cause on his part. “Cause” in this context is severe or gross negligence in the performance of his duties as Chairman of the Board and General Director of Antargaz. The agreement provides for a cash payment equal to one year of compensation, based on compensation received in the twelve months prior to the effective date of termination. Like the UGI Corporation and AmeriGas Propane, Inc. Executive Severance Plans, Mr. Varagne’s agreement requires that he execute a release discharging the Company and its subsidiaries from liability in connection with the termination of his employment prior to receipt of severance payments.
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Change in Control Arrangements
Named Executive Officers Employed by UGI Corporation.Messrs. Greenberg, Walsh, and Kelly each have an agreement with the Company which provides benefits in the event of a change in control. For Messrs. Greenberg and Walsh, theThe agreements are automatically extended for one-year terms, beginning in 2008, and for Mr. Kelly, the initialhave a term of his agreement is three years from September 4, 2007 with automatic one-year extensions thereafter,beginning May 2011, unless in each case, prior to a change in control, UGIthe Company terminates an agreement. In the absence of a change in control or termination by the Company, each agreement will terminate when, for any reason, the executive terminates his employment with the Company. A change in control is generally deemed to occur in the following instances:
any
Any person (other than certain persons or entities affiliated with the Company), together with all affiliates and associates of such person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities;
individuals,
Individuals, who at the beginning of any 24-month period constitute the Board of Directors (the “Incumbent Board”) and any new Director whose election by the Board of Directors, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
the
The Company is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation in a transaction in which former shareholders of the Company do not own more than 50 percent of, respectively, the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation; or
the
The Company is liquidated or dissolved.
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The Company will provide Messrs. Greenberg, Walsh, and Kelly with cash benefits (“Benefits”) if we terminate the executive’s employment without “cause” or if the executive terminates employment for “good reason” at any time within two years following a change in control of the Company. “Cause” generally includes (i) misappropriation of funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a crime involving moral turpitude, or (iv) 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. “Good reason” generally includes termination of officer status; a significant adverse changematerial diminution in authority, duties, responsibilities or base compensation; the failure ofa material breach by the Company to comply withof the terms of the agreement; and substantial relocation or excessive travel requirements. If the events trigger a payment following a change in control, the Benefits payable to each of Messrs. Greenberg, Walsh, and Kelly will be as specified under his change in control agreement unless payments under the UGI Severance Plan described above would be greater, in which case Benefits would be provided under the UGI Severance Plan.
Following a change in control, each of Messrs. Greenberg, Walsh and Kelly may elect to terminate his employment without loss of Benefits in certain situations, including termination of officer status; a significant adverse change in authority, duties, responsibilities or compensation; or excessive travel requirements. -57-
Benefits under this arrangement would be equal to three times the executive officer’s base salary and annual bonus. Each named executive officer would also receive the cash equivalent of his target bonus, prorated for the number of months served in the fiscal year. In addition, Messrs. Greenberg, Walsh, and Kelly are each entitled to receive healtha payment equal to the cost he would incur if he enrolled in the Company’s medical and welfare benefits (or cash in lieu of benefits)dental plans for three years (less the amount he would be required to contribute for such coverage if he were an active employee). This payment would include a tax gross-up payment equal to 75 percent of the total amount payable. Messrs. Greenberg, Walsh, and each of theirKelly would also have benefits under the Company’s Supplemental Executive Retirement Plan would be calculated as if heeach of them had continued in employment for three years. In addition, outstanding performance units, stock units and dividend equivalents will be paid in cash based on the fair market value of the Company’s common stock in an amount equal to the greater of (i) the target award, or (ii) the award amount that would have been paid if the performance unit measurement period ended on the date of the change in control, as determined by the Compensation and Management Development Committee. For treatment of stock options, see the Grants of Plan - Based Awards Table — Fiscal 2010.
The Benefits are subject to a “conditional gross up”gross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code. The Company will provide the tax gross-up if the aggregate parachute value of Benefits is greater than 110 percent of the maximum amount that may be paid under Section 280G of the Code without imposition of an excise tax. If the parachute value does not exceed the 110 percent threshold, the Benefits for each of Messrs. Greenberg, Walsh, and Kelly will be reduced to the extent necessary to avoid imposition of the excise tax on “excise“excess parachute payments.” In addition, outstanding performance units and dividend equivalents will be paid in cash based on the fair market value of the Company’s common stock in an amount equal to the greater of (i) the target award, or (ii) the award amount that would have been paid if the measurement period ended on the date of the change in control, as determined by the Compensation and Management Development Committee. For treatment of stock options, see the “Grants of Plan-Based Awards” table.
In order to receive benefits under his change in control agreement, each named executive officerof Messrs. Greenberg, Walsh, and Kelly is required to execute a release which discharges the Company and its subsidiaries from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with UGIthe Company or its subsidiaries.
Named Executive Officers Employed by AmeriGas Propane, Inc.Mr. Bissell has an agreement with AmeriGas Propane that provides benefits in the event of a change ofin control.
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His agreement has a term of three years and is automatically extended for one-year terms beginning in 2008May 2011 unless, prior to a change ofin control, AmeriGas Propane terminates his agreement. In the absence of a change ofin control or termination by AmeriGas Propane, his agreement will terminate when, for any reason, the executivehe terminates his employment with AmeriGas Propane. A change in control is generally deemed to occur in the following instances:
any
Any person (other than certain persons or entities affiliated with the Company), together with all affiliates and associates of such person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities;
individuals,
Individuals, who at the beginning of any 24-month period constitute the Company’s Board of Directors (the “Incumbent Board”) and any new Director whose election by the Board of Directors, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
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The Company is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation in a transaction in which former shareholders of the Company do not own more than 50 percent of, respectively, the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation;
AmeriGas Propane, AmeriGas Partners or AmeriGas Propane, L.P. is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another entity in a transaction with respect to which all of the individuals and entities who were owners of the General Partner’s voting securities or of the outstanding units of the Partnership immediately prior to such transaction do not, following such transaction, own more than 50 percent of, respectively, the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation, or if the resulting entity is a partnership, the former unitholders do not own more than 50 percent of the outstanding common units in substantially the same proportion as their ownership immediately prior to the transaction;
The Company, AmeriGas Propane, AmeriGas Partners L.P. (the “Partnership”) or AmeriGas Propane, L.P. (the “Operating Partnership”) is liquidated or dissolved;
the
The Company fails to own more than 50 percent of the general partnership interestinterests of the PartnershipAmeriGas Partners or the Operating Partnership;
the
The Company fails to own more than 50 percent of the outstanding shares of common stock of AmeriGas Propane; or
AmeriGas Propane is removed as the general partner of the PartnershipAmeriGas Partners or the Operating Partnership.
AmeriGas Propane will provide Mr. Bissell with cash benefits (“Benefits”) if there is a termination of his employment without “cause” or if he terminates employment for “good reason” at any time within two years following a change in control. “Cause” generally includes (i) misappropriation of funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a crime involving moral turpitude, or (iv) 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 AmeriGas Propane. “Good reason” generally includes termination of officer status; a significant adverse changematerial diminution in authority, duties, responsibilities or base compensation; the failure ofa material breach by AmeriGas Propane to comply withof the terms of the agreement; and substantial relocation or excessive travel requirements. If the events trigger a payment following a change in control, the benefits payable to Mr. Bissell will be as specified under his change in control agreement unless payments under the AmeriGas Severance Plan described above would be greater, in which case Benefits would be provided under the AmeriGas Severance Plan.
Following a change of control, Mr. Bissell may elect to terminate his employment without loss of Benefits in certain situations, including termination of officer status; a significant adverse
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change in authority, duties, responsibilities or compensation; or excessive travel requirements.
Benefits under this arrangement would be equal to three times Mr. Bissell’s base salary and annual bonus. Mr. Bissell would also receive the cash equivalent of his target bonus, prorated for the number of months served in the fiscal year. In addition, he is entitled to receive healtha payment equal to the cost he would incur if he enrolled in AmeriGas Propane’s medical and welfare benefits (or cash in lieu of benefits)dental plans for three years and(less the amount he would be required to contribute for such coverage if he were an active employee). This payment would include a tax gross-up payment equal to 75 percent of the total amount payable. Mr. Bissell would also receive his benefits under the AmeriGas SERP would be calculated as if he had continued in employment for three years. In addition, outstanding performance units and distribution equivalents will be paid in cash based on the fair market value of AmeriGas Partners common units in an amount equal to the greater of (i) the target award, or (ii) the award amount that would have been paid if the measurement period ended on the date of the change in control, as determined by the AmeriGas Propane Compensation/Pension Committee. For treatment of stock options, see the Grants of Plan — Based Awards Table — Fiscal 2010.
The Benefits are subject to a “conditional gross up”gross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code. AmeriGas Propane will provide the tax gross-up if the aggregate parachute value of Benefits is greater than 110 percent of the maximum amount that may be paid under Section 280G of the Code without imposition of an excise tax. If the parachute value does not exceed the 110 percent threshold, the Benefits for Mr. Bissell will be reduced to the extent necessary to avoid imposition of the excise tax on “excise“excess parachute payments.” In addition, outstanding performance units and distribution equivalents will be paid in cash based on the fair market value of AmeriGas Partners common units in an amount equal to the greater of (i) the target award, or (ii) the award amount that would have been paid if the measurement period ended on the date of the change in control, as determined by the AmeriGas Propane Compensation/Pension Committee. For treatment of stock options, see the “Grants of Plan-Based Awards” table.
In order to receive benefits under his change in control agreement, Mr. Bissell is required to execute a release which discharges AmeriGas Propane and its affiliates from liability for any claims he may have against any of them, other than claims for amounts or benefits due under any plan, program or contract provided by or entered into with AmeriGas Propane or its affiliates.
Mr. Varagne.Mr. Varagne is not covered by a change in control agreement. If a change in control of the Company occurs, Mr. Varagne’s performance units will be paid in cash in an amount equal to the greater of (i) the values of the shares that would be issued if 50 percent of the maximum award was earned, and (ii) the value that would be issued if the measurement period ended on the date of the change in control, as determined by the Company’s Compensation and Management Development Committee. For treatment of stock options, see the “Grants of Plan-Based Awards” table.
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Potential Payments Upon Termination or Change in Control
The amounts shown in the table below assume that each named executive officer’s termination was effective as of September 30, 2007 and are merely estimates of the incremental amounts that would be paid out to the named executive officers uponif their termination.termination had occurred on the last day of Fiscal 2010. The actual amounts to be paid out can only be determined at the time of such named executive officer’s termination of employment. The amounts set forth in the table below do not include compensation to which each named executive officer would be entitled without regard to his termination of employment, including (i) base salary and short-term incentives that have been earned but not yet paid, orand (ii) amounts that have been earned, but not yet paid, under the terms of the plans listed underreflected in the “Pension Benefits”Pension Benefits Table — Fiscal 2010 and “Nonqualifiedthe Nonqualified Deferred Compensation” tables.Compensation Table — Fiscal 2010. There are no incremental payments in the event of voluntary resignation, termination for cause, or disability or upon retirement.
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Potential Payments Upon Termination or Change in Control Table—Table — Fiscal 2007
2010
Name & Triggering Event | Severance Pay | Equity Awards with Accelerated Vesting(3) | Nonqualified Retirement Benefits(4) | Welfare & Other Benefits(5) | Total | |||||||||||
L. R. Greenberg | ||||||||||||||||
Death | $ | 0 | $ | 1,559,500 | $ | 0 | $ | 0 | $ | 1,559,500 | ||||||
Involuntary Termination Without Cause | $ | 5,796,000 | (1) | $ | 0 | $ | 0 | $ | 58,626 | $ | 5,854,626 | |||||
Termination Following Change in Control | $ | 7,675,090 | (2) | $ | 5,976,100 | $ | 5,104,967 | $ | 34,445 | $ | 18,790,602 | |||||
J. L. Walsh | ||||||||||||||||
Death | $ | 0 | $ | 660,400 | $ | 0 | $ | 0 | $ | 660,400 | ||||||
Involuntary Termination Without Cause | $ | 1,708,979 | (1) | $ | 0 | $ | 0 | $ | 51,501 | $ | 1,760,480 | |||||
Termination Following Change in Control | $ | 3,763,304 | (2) | $ | 2,764,780 | $ | 775,767 | $ | 2,716,187 | $ | 10,020,038 | |||||
P. Kelly | ||||||||||||||||
Death | $ | 0 | $ | 531,600 | $ | 0 | $ | 0 | $ | 531,600 | ||||||
Involuntary Termination Without Cause | $ | 239,156 | (1) | $ | 0 | $ | 0 | $ | 30,125 | $ | 269,281 | |||||
Termination Following Change in Control | $ | 2,100,189 | (2) | $ | 921,300 | $ | 28,689 | $ | 1,107,034 | $ | 4,157,212 | |||||
E. V.N. Bissell | ||||||||||||||||
Death | $ | 0 | $ | 414,653 | $ | 0 | $ | 0 | $ | 414,653 | ||||||
Involuntary Termination Without Cause | $ | 1,470,670 | (1) | $ | 0 | $ | 0 | $ | 51,501 | $ | 1,522,171 | |||||
Termination Following Change in Control | $ | 2,574,408 | (2) | $ | 1,349,933 | $ | 187,328 | $ | 28,298 | $ | 4,139,967 | |||||
F. Varagne | ||||||||||||||||
Death | $ | 0 | $ | 2,054,517 | $ | 0 | $ | 0 | $ | 2,054,517 | ||||||
Involuntary Termination Without Cause | $ | 740,350 | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 740,350 | |||||
Termination Following Change in Control | $ | 740,350 | (2) | $ | 2,522,157 | $ | 0 | $ | 0 | $ | 3,262,507 | |||||
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2010
| Equity Awards | ||||||||||||||||||||
| with | Nonqualified | Welfare & | ||||||||||||||||||
| Severance | Accelerated | Retirement | Other | |||||||||||||||||
| Name & Triggering Event | Pay | Vesting(3) | Benefits(4) | Benefits(5) | Total | |||||||||||||||
L. R. Greenberg Death | $ | 0 | $ | 8,206,630 | $ | 0 | $ | 0 | $ | 8,206,630 | ||||||||||
| Involuntary Termination Without Cause | $ | 6,405,000 | (1) | $ | 0 | $ | 0 | $ | 57,285 | $ | 6,462,285 | |||||||||
| Termination Following Change in Control | $ | 7,771,113 | (2) | $ | 10,827,497 | $ | 6,423,775 | $ | 41,142 | $ | 25,063,527 | |||||||||
J. L. Walsh Death | $ | 0 | $ | 3,268,423 | $ | 0 | $ | 0 | $ | 3,268,423 | ||||||||||
| Involuntary Termination Without Cause | $ | 2,055,305 | (1) | $ | 0 | $ | 0 | $ | 39,571 | $ | 2,094,876 | |||||||||
| Termination Following Change in Control | $ | 4,300,495 | (2) | $ | 4,316,769 | $ | 1,422,597 | $ | 3,678,869 | $ | 13,718,730 | |||||||||
P. Kelly Death | $ | 0 | $ | 1,894,681 | $ | 0 | $ | 0 | $ | 1,894,681 | ||||||||||
| Involuntary Termination Without Cause | $ | 799,090 | (1) | $ | 0 | $ | 0 | $ | 31,669 | $ | 830,759 | |||||||||
| Termination Following Change in Control | $ | 2,733,834 | (2) | $ | 2,531,178 | $ | 1,065,823 | $ | 2,347,787 | $ | 8,678,622 | |||||||||
E. V.N. Bissell Death | $ | 0 | $ | 2,144,606 | $ | 0 | $ | 0 | $ | 2,144,606 | ||||||||||
| Involuntary Termination Without Cause | $ | 1,874,438 | (1) | $ | 0 | $ | 0 | $ | 45,996 | $ | 1,920,434 | |||||||||
| Termination Following Change in Control | $ | 3,038,000 | (2) | $ | 2,951,186 | $ | 227,850 | $ | 2,151,443 | $ | 8,368,479 | |||||||||
F. Varagne(6) Death | $ | 0 | $ | 2,042,118 | $ | 0 | $ | 0 | $ | 2,042,118 | ||||||||||
| Involuntary Termination Without Cause | $ | 774,520 | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 774,520 | |||||||||
| Termination Following Change in Control | $ | 774,520 | (2) | $ | 2,734,776 | $ | 0 | $ | 0 | $ | 3,509,296 | |||||||||
| (1) | Amounts shown under “Severance Pay” in the case of involuntary termination without cause are calculated under the terms of the UGI Severance Plan for Messrs. Greenberg, Walsh, and Kelly; the AmeriGas Severance Plan for Mr. Bissell; and the severance agreement with AGZ Holding for Mr. Varagne. We assumed that 100 percent of the target annual bonus was paid. |
| (2) | Amounts |
| (3) | In calculating the amounts shown |
| (4) | Amounts shown under “Nonqualified Retirement Benefits” are in addition to amounts shown in the |
| (5) | Amounts shown under “Welfare and Other Benefits” include | |
| (6) | Mr. Varagne, Chief Executive Officer for our French subsidiary Antargaz, is paid in Euros. In calculating the dollar equivalent for disclosure purposes, the Company converts each payment into dollars based on the monthly average exchange rate of $1.36 per Euro for Fiscal 2010. |
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Director and Officer Stock Ownership Policies
The following policies are designed to encourage growth in Shareholder value by closely linking Directors’ and executives’ risks and rewards with the Company’s total Shareholder return:
In 2006, thereturn.
The Board of Directors approvedhas a policy requiring Directors to own Company Common Stock, together with stock units, in an aggregate amount equal to three times the Director’s annual cash retainer, and to achieve the target level of Common Stock ownership within five years after joining the Board.
The Company has a policy, approved by the Board of Directors, established a policy in 1997 that requires individuals in key management positions with the Company and its subsidiaries to own significant amounts of Common Stock. See “CompensationCompensation Discussion and Analysis –- Stock Ownership Guidelines” on page 34.
Guidelines.
Market Price of Shares
The closing price of our Stock, as reported on the New York Stock Exchange Composite Tape on November 23, 200715, 2010, was $25.00.$29.80.
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Item 2 — Ratification of Appointment of
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSIndependent Registered Public Accounting firm
The Audit Committee of the Board of Directors appointed PricewaterhouseCoopers LLP as our independent registered public accountantsaccounting firm to examine and report on the consolidated financial statements of the Company for Fiscal 20082011 and recommends that the Shareholders ratify the appointment. If the Shareholders do not ratify the appointment of PricewaterhouseCoopers LLP, the
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Audit Committee will consider the appointment of otheranother independent registered public accountants.accounting firm. One or more representatives of PricewaterhouseCoopers LLP will be present at the Annual Meeting. They will have the opportunity to respond to appropriate questions and to make a statement if they wish to do so.
The Board of Directors of UGI Corporation unanimously recommends a vote FOR this proposal.
Item 3 — Other Matters
The Board of Directors is not aware of any other matter to be presented for action at the meeting. If any other matter requiring a vote of the Shareholders should arise, the Proxies (or their substitutes) will vote in accordance with their best judgment.
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DIRECTIONS TO THE SHERATON PARK RIDGE HOTEL AND CONFERENCE CENTER
Directions to The Desmond Hoteland Conference Center
Directions from Philadelphia. Take the Schuylkill Expressway (I-76) West. Follow signs forI-76 West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from South Jersey.Take I-95 South and follow to Exit 7 (476N. Plymouth Meeting)Route 322 West. Take 322 West to Route 1 South to Route 202 North. Take Route 202 North to Great Valley/Route 29 North Exit. Turn right onto Route 29 North. Turn right at second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from Philadelphia Airport. Take I-95 South to 476 North. Follow 476 North to Exit 16B (76the Schuylkill Expressway (I-76) West to Valley Forge). Follow 76 West to Exit 327 (Mall Blvd). Go down rampRoute 202 South. Take Route 202 South to the trafficGreat Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Wilmington and turnPoints South (Delaware and Maryland).Take I-95 North to Route 202 North to the Great Valley/Route 29 North Exit. Turn right onto Mall Blvd. Go to the next light and turn right onto North Gulph Road. Hotel is one mile on the right.
Follow Turnpike to Exit 326 (Valley Forge). Go through the tollbooth and take Exit 327 (North Gulph Road) which is immediately on your right. Once you take Exit 327, keep to your right and Hotel will be the 2nd building on the right.
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Take I-76 West to Exit 327 (Mall Blvd).Route 29 North. Turn right at the trafficsecond light onto Mall Blvd. Go to the next light and turn right onto North Gulph Road. Hotel is one mileLiberty Boulevard. The Desmond will be on the right.
Fromleft.
Directions from New York followand Points North. Take the New Jersey Turnpike South to Exit 6, (PAthe Pennsylvania Turnpike West).extension. Follow PAthe Turnpike West to Exit 326, (Valley Forge). GoValley Forge. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the tollbooth and take Exit 327, (North Gulph Road), which is immediately on the right. Once you take Exit 327, keep to the right and the hotel will be the 2nd building on the right.
Take I-95 North to Pennsylvania. Once you get to the Chester area, take exit 7 (I 476 North Plymouth Meeting). Follow 476 North to Exit 16B (I-76 West to Valley Forge). Follow I-76 to Exit 327 (Mall Blvd.). Go down the ramp to the traffic light and turn right onto Mall Blvd. Follow to next light and turn right onto North Gulph Road. Hotel is one mile on the right.
Follow Route 422 East to the First Ave. exit. Turn right at the traffic light onto North Gulph Road. After the third light, hotelLiberty Boulevard. The Desmond will be on the left.
Followright.
Directions from Harrisburg and Points West.Take the Pennsylvania Turnpike East to Exit 326, Valley Forge. Take Route 202 South to Great Valley/Route 29 North toExit. At the intersectionend of North Gulph Road. Turn Left onto North Gulph Road andthe ramp, proceed through 5 traffic lights and past the entrance to the Pennsylvania Turnpike.light onto Liberty Boulevard. The hotelDesmond will be on yourthe right.
480 North Gulph Road, King of Prussia, PA 19406 Phone: (610) 337-1800 Fax: (610) 337-4624
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 Electronic Voting Instructions | ||||||||||||||
You can vote by Internet or | ||||||||||||||
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 | proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. | |||||||||||||
| Proxies submitted by the Internet or telephone must be received by | ||||||||||||||
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Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas. | x | • Follow the instructions provided by the recorded message. | ||||||||||||
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▼IF YOU HAVE NOT VOTED OVER THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.▼
| AProposals — The Board of Directors recommends that you voteFOR Numbers 1 and 2. | |
1. | Election of Directors: | 01 - | 02 - | 03 | ||||||
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| 04 - A. Pol | ||||||||||
| 05 - E.E. Jones |
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¨ | Mark here to voteFOR all nominees | |||||||||||||||||||
¨ | Mark here toWITHHOLD vote from all nominees | 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | ||||||||||
¨ | For AllEXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ | ¨ |
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| 07 - R.B. Vincent | 08 - M.S. Puccio | 09 - R.W. Gochnauer | ||||||||
| o | Mark here to voteFOR all nominees | |||||||||||||||||||||||||||||||||||||||||
| o | Mark here toWITHHOLD vote from all nominees | |||||||||||||||||||||||||||||||||||||||||
| 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | ||||||||||||||||||||||||||||||||||
| o | For AllEXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. | o | o | o | o | o | o | o | o | o | ||||||||||||||||||||||||||||||||
| For | Against | Abstain | ||||||||||||||||||
| 2. | Ratification of Appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. | o | o | o |
B | Non-Voting Items | |
Change of Address —Please print new address below. | Comments — Please print your comments below. | |||
C | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below | ||
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
| Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | ||||||
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▼ IF YOU HAVE NOT VOTED OVER THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.▼ Proxy — UGI CORPORATION |
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UGI CORPORATION
The undersigned hereby appoints James W. Stratton,Marvin O. Schlanger, Lon R. Greenberg and Stephen D. Ban, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of UGI Corporation Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Shareholders of the Company to be held January 29, 200820, 2011 or at any adjournment thereof, with all powers which the undersigned would possess itif present at the Meeting.
For the participants in the UGI Utilities, IncInc. Savings Plan, AmeriGas Propane, IncInc. Savings Plan, and the UGI HVAC Enterprises, Inc. Savings Plan (together, the “Plans”), this Proxy Card will constitute voting instructions to the Trustee under the Plans. As indicated by me on the reverse side, but, if I make no indication as to a particular matter, then as recommended by the Board of Directors on such matter, and in their discretion, upon such other matters as may properly come before the meeting. The Trustee will keep my vote completely confidential. If the Trustee does not receive my executed Proxy by January 24, 2008,17, 2011, I understand the Trustee will vote the shares represented by this Proxy in the same proportion as it votes those shares for which it does receive a properly executed Proxy.
(Continued, and to be marked, dated and signed, on the other side)
  |  |
Notice of Annual Meeting of Shareholders |  | ||
Important Notice Regarding the Availability of Proxy Materials for the
UGI Corporation Shareholder Meeting to be Held on January 20, 2011
UGI Corporation Shareholder Meeting to be Held on January 20, 2011
Under new Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual meeting of shareholders are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important!
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The proxy statement and annual report to shareholders are available at:
www.envisionreports.com/UGI
 | Easy Online Access — A Convenient Way to View Proxy Materials and Vote When you go online to view materials, you can also vote your shares. Step 1:Go towww.envisionreports.com/UGIto view the materials. Step 2:Click onCast Your Vote or Request Materials. Step 3:Follow the instructions on the screen to log in. Step 4:Make your selection as instructed on each screen to select delivery preferences and vote. |
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
 | Obtaining a Copy of the Proxy Materials – If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side on or before January 10, 2011 to facilitate timely delivery. |
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| Shareholder Meeting Notice | |||
UGI Corporation’s Annual Meeting of Shareholders will be held on January 20, 2011 at
The Desmond Hotel and Conference Center, Ballrooms A and B, One Liberty Boulevard,
Malvern, Pennsylvania 19355, at 10:00 a.m. Eastern Standard Time.
The Desmond Hotel and Conference Center, Ballrooms A and B, One Liberty Boulevard,
Malvern, Pennsylvania 19355, at 10:00 a.m. Eastern Standard Time.
Proposals to be voted on at the meeting are listed below along with the Board of Directors’ recommendations.
The Board of Directors recommends that you voteFOR Numbers 1 and 2.
| 1. Election of Directors: | 01 - S.D. Ban | 02 - L.R. Greenberg | 03 - M.O. Schlanger | |||||
| 04 - A. Pol | 05 - E.E. Jones | 06 - J.L. Walsh | ||||||
| 07 - R.B. Vincent | 08 - M.S. Puccio | 09 - R.W. Gochnauer |
| 2. | Ratification of Appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. |
PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you.
DIRECTIONS TO THE DESMOND HOTEL AND CONFERENCE CENTER
Directions from Philadelphia.Take the Schuylkill Expressway (I-76) West. Follow I-76 West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from South Jersey.Take I-95 South to Route 322 West. Take 322 West to Route 1 South to Route 202 North. Take Route 202 North to Great Valley/Route 29 North Exit. Turn right onto Route 29 North. Turn right at second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from Philadelphia Airport.Take I-95 South to 476 North. Follow 476 North to the Schuylkill Expressway (I-76) West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Wilmington and Points South (Delaware and Maryland).Take I-95 North to Route 202 North to the Great Valley/Route 29 North Exit. Turn right onto Route 29 North. Turn right at second light onto Liberty Boulevard. The Desmond will be on the left.
Directions from New York and Points North.Take the New Jersey Turnpike South to Exit 6, the Pennsylvania Turnpike extension. Follow the Turnpike West to Exit 326, Valley Forge. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
Directions from Harrisburg and Points West.Take the Pennsylvania Turnpike East to Exit 326, Valley Forge. Take Route 202 South to Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be on the right.
| Here’s how to order a copy of the proxy materials and select a future delivery preference: Paper copies:Current and future paper delivery requests can be submitted using the telephone, Internet or email options below. Email copies:Current and future email delivery requests must be submitted over the Internet following the instructions below. If you request an email copy of current materials you will receive an email with a link to the materials. PLEASE NOTE:You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials. → Internet– Go towww.envisionreports.com/UGI. Click Cast Your Vote or Request Materials. Follow the instructions to log in and order a paper or email copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials. → Telephone– Call us free of charge at 1-866-641-4276 using a touch-tone phone and follow the instructions to log in and order a paper copy of the materials by mail for the current meeting. You can also submit a preference to receive a paper copy for future meetings. → Email– Send an email to investorvote@computershare.com with “Proxy Materials UGI Corporation” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings. To facilitate timely delivery, all requests for a paper copy of the proxy materials should be made by January 10, 2011. |
0192WE