UGI CORP /PA/
1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>7
<FILENAME>w86171exv10w4.txt
<DESCRIPTION>1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.4

                                 UGI CORPORATION

                 1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN
                    AMENDED AND RESTATED AS OF APRIL 29, 2003


1.   PURPOSE AND DESIGN

     The purpose of this Plan is to assist the Company in securing and retaining
key corporate executives of outstanding ability, who are in a position to
significantly participate in the development and implementation of the Company's
strategic plans and thereby contribute materially to the long-term growth,
development and profitability of the Company, by affording them an opportunity
to purchase its Stock under options. The Plan is designed to align directly
long-term executive compensation with tangible, direct and identifiable benefits
realized by the Company's shareholders.

2.   DEFINITIONS

     Whenever used in this Plan, the following terms will have the respective
meanings set forth below:

     2.01 "Board" means UGI's Board of Directors as constituted from time to
time, provided that whenever in this Plan Board approval is required, such
approval shall require the affirmative vote of a majority of members of the
Board who are not participants in the Plan.

     2.02 "Committee" means the Compensation and Management Development
Committee of the Board or its successor.

     2.03 "Company" means UGI Corporation, a Pennsylvania corporation, any
successor thereto and any Subsidiary which adopts this plan, with the approval
of the Committee, by executing a participation and joinder agreement.

     2.04 "Comparison Group" means the group determined by the Committee (no
later than ninety (90) days after the commencement of the Performance Period)
consisting of the Company and such other companies deemed by the Committee (in
its sole discretion) to be reasonably comparable to the Company and set forth in
Exhibit 1.

     2.05 "Date of Grant" means the date the Committee makes an Option grant.

     2.06 "Dividend Equivalent" means an amount determined by multiplying the
number of shares of Stock subject to an Option on the Date of Grant (whether or
not the Option is ever exercised with respect to any or all shares of Stock
subject thereto) by the per-share cash dividend, or the per-share fair market
value (as determined by the Committee) of any dividend in consideration other
than cash, paid by the Company on its Stock on a dividend payment date.

<PAGE>

     2.07 "Employee" means a regular full-time salaried employee (including
officers and directors who are also employees) of the Company.

     2.08 "Fair Market Value" of Stock means the average, rounded to the next
highest one-eighth of a point (.125), of the highest and lowest sales prices
thereof on the New York Stock Exchange on the day on which Fair Market Value is
being determined, as reported on the Composite Tape for transactions on the New
York Stock Exchange; provided, however, in the case of a cashless exercise
pursuant to Section 7.4(iv), the Fair Market Value shall be the actual sale
price of the shares issued upon exercise of the Option. In the event that there
are no Stock transactions on the New York Stock Exchange on such day, the Fair
Market Value will be determined as of the immediately preceding day on which
there were Stock transactions on that exchange.

     2.09 "Option" means the right to purchase Stock pursuant to the relevant
provisions of this Plan at the Option Price for a specified period of time, not
to exceed ten years from the Date of Grant, which period of time shall be
subject to earlier termination prior to exercise in accordance with Sections 11,
12 and 13 of this Plan.

     2.10 "Option Price" means an amount per share of Stock purchasable under an
Option designated by the Committee on the Date of Grant of an Option to be
payable upon exercise of such Option. The Option Price shall not be less than
100% of the Fair Market Value of the Stock determined on the Date of Grant.

     2.11 "Participant" means an Employee designated by the Committee to
participate in the Plan; provided, however, that no Employee who is not then a
Participant in the Plan may be designated by the Committee to participate in the
Plan at any time during the last full year of a Performance Period.

     2.12 "Performance Period" means a period selected by the Committee over
which the total return realizable by a shareholder of the Company on a share of
Stock is compared to that realizable by shareholders of companies in the
Comparison Group in accordance with Section 8.2 of the Plan in order to
determine whether Dividend Equivalents associated with an Option will be payable
to a Participant.

     2.13 "Stock" means the Common Stock of UGI or such other securities of UGI
as may be substituted for Stock or such other securities pursuant to Section 14.

     2.14 "Subsidiary" means any corporation or partnership, at least 20% of the
outstanding voting stock, voting power or partnership interest of which is owned
respectively, directly or indirectly, by the Company.

     2.15 "Termination without Cause" means termination for the convenience of
the Company for any reason other than (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.


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<PAGE>

     2.16 "UGI" means UGI Corporation, a Pennsylvania corporation or any
successor thereto.

3.   NUMBER AND SOURCE OF SHARES AVAILABLE FOR OPTIONS--MAXIMUM ALLOTMENT

     The number of shares of Stock which may be made the subject of Options
under this Plan at any one time may not exceed 2,250,000 in the aggregate (after
giving retroactive effect to the 3-for-2 Stock split distributed April 1, 2003),
including shares acquired by Participants through exercise of Options under this
Plan, subject, however, to the adjustment provisions of Section 14 below. The
maximum number of shares of Stock which may be the subject of grants to any one
individual in any calendar year shall be 450,000. If any Option expires or
terminates for any reason without having been exercised in full, the unpurchased
shares subject to the Option will again be available for the purposes of the
Plan. Shares which are the subject of Options may be previously issued and
outstanding shares of the Stock reacquired by the Company and held in its
treasury, or may be authorized but unissued shares of Stock, or may be partly of
each.

4.   DURATION OF THE PLAN

     The Plan will remain in effect until all Stock subject to it has been
purchased pursuant to the exercise of Options or all such Options have
terminated without exercise. Notwithstanding the foregoing, no Option may be
granted after December 31, 2006.

5.   ADMINISTRATION

     The Plan will be administered by the Committee. Subject to the express
provisions of the Plan, the Committee will have authority, in its complete
discretion, to determine the Employees to whom, and the time or times at which,
Options will be granted, the number of shares to be subject to each Option, the
Option Price to be paid for the shares upon the exercise of each Option, and the
period within which each Option may be exercised. In making such determinations,
the Committee may take into account the nature of the services rendered by an
Employee, the present and potential contributions of the Employee to the
Company's success and such other factors as the Committee in its discretion
deems relevant. Subject to the express provisions of the Plan, the Committee
will also have authority to construe and interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to determine the terms and
provisions of the respective stock option agreements required by Section 7.2 of
the Plan (which need not be identical), and to make all other determinations
(including factual determinations) necessary or advisable for the orderly
administration of the Plan. A Stock option agreement as discussed below shall be
executed by each Participant receiving a grant under the Plan and shall
constitute that Participant's acknowledgement and acceptance of the terms of the
Plan and the Committee's authority and discretion. It is the intent of the
Company that the Plan should comply in all applicable respects with Rule 16b-3
under the Exchange Act so that transactions relating to any Option and Dividend
Equivalents granted to a Participant who is subject to Section 16 of the
Exchange Act shall be exempt under Rule 16b-3. Accordingly, if any provision


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<PAGE>

of the Plan or any agreement relating to an Option does not comply with the
requirements of Rule 16b-3 as then applicable to any such Participant, such
provision shall be construed or deemed amended to the extent necessary to
conform to such requirements with respect to such Participant. Any other
provision of the Plan notwithstanding, the Board may perform any function of the
Committee under the Plan, including without limitation for the purpose of
ensuring that transactions under the Plan by Participants who are subject to
Section 16 of the Exchange Act in respect of the Company are exempt under Rule
16b-3. In any case in which the Board is performing a function of the Committee
under the Plan, each reference to the Committee herein shall be deemed to refer
to the Board (unless the context shall otherwise require).

6.   ELIGIBILITY

     Options may be granted only to Employees (including directors who are also
Employees of the Company) who, in the sole judgment of the Committee, are
designated by the Committee as individuals who are in a position to
significantly participate in the development and implementation of the Company's
strategic plans and thereby contribute materially to the continued growth and
development of the Company and to its future financial success.

7.   OPTIONS

     7.1 Grant of Options. Subject to the provisions of Sections 2.11 and 3,
Options may be granted to Participants at any time and from time to time as may
be determined by the Committee. The Committee will have complete discretion in
determining the number of Options granted to each Participant and the number of
shares of Stock subject to such Options.

     7.2 Option Agreement. As determined by the Committee on the Date of Grant,
each Option will be evidenced by a stock option agreement (substantially in the
form included in Exhibit 2 attached hereto) that shall, among other things,
specify the Date of Grant, the Option Price, the duration of the Option and the
number of shares of Stock to which the Option pertains.

     7.3 Exercise and Vesting.

         (a) Except as otherwise specified by the Committee, an Option shall be
fully and immediately exercisable on the Date of Grant. Notwithstanding the
foregoing, in the event that any such Options are not by their terms immediately
exercisable, the Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason. No Option shall be exercisable
on or after the tenth anniversary of the Date of Grant.

         (b) Except as otherwise specified by the Committee, in the event that a
Participant holding an Option ceases to be an Employee, the Option held by such
Participant shall be exercisable only with respect to that number of shares of
Stock with respect to which it is already exercisable on the date such
Participant ceases to be an Employee. However, if a Participant holding an
Option ceases to be an Employee by reason of (i) a retirement under the
Company's retirement plan, (ii) Termination without Cause, (iii) disability, or
(iv) death, the Option held by any such Participant shall thereafter become
immediately exercisable with


                                       4
<PAGE>

respect to the total number of shares of Stock available under such Option and
shall remain exercisable until the earlier of the expiration date of the Option
or the expiration of the thirteen (13) month period following the date of such
cessation of employment.

         (c) Notwithstanding the foregoing, in the event of any merger or
consolidation of any other corporation with or into UGI, or the sale of all or
substantially all of the assets of UGI or an offer to purchase made by a party
other than UGI to all shareholders of UGI for all or any substantial portion of
the outstanding Stock, a participant shall be permitted to exercise all
outstanding Options (to the extent not otherwise exercisable by their terms)
prior to the effective date of any such merger, consolidation or sale or the
expiration of any such offer to purchase, unless otherwise determined by the
Committee, no later than thirty (30) days prior to the effective date of such
transaction or the expiration of such offer.

         (d) Notwithstanding anything contained in this Section 7.3 with respect
to the number of shares of Stock subject to an Option with respect to which such
Option is or is to become exercisable, no Option, to the extent that it has not
previously been exercised, shall be exercisable after it has terminated,
including without limitation, after any termination of such Option pursuant to
Sections 11, 12 and 13 hereof.

     7.4 Payment. The Option Price upon exercise of any Option shall be payable
to the Company in full (i) in cash or its equivalent, (ii) by tendering shares
of previously acquired Stock already beneficially owned by the Participant for
more than one year and having a Fair Market Value at the time of exercise equal
to the total Option Price, (iii) by applying Dividend Equivalents payable to the
Participant in accordance with Section 8 of the Plan in an amount equal to the
total Option Price, (iv) by payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board, (v) by such
other method as the Committee may approve, or (vi) by a combination of (i),
(ii), (iii), (iv) and/or (v). The cash proceeds from such payment will be added
to the general funds of the Company and shall be used for its general corporate
purposes. Any shares of Stock tendered to UGI in payment of the Option Price
will be added by UGI to its Treasury Stock to be used for its general corporate
purposes.

8.   DIVIDEND EQUIVALENTS

     8.1 Amount of Dividend Equivalents Credited. From the Date of Grant of an
Option to a Participant (or, in the case of an Option granted after the date of
commencement of a Performance Period to a new Participant or to a Participant
with changed responsibilities, in which event, from such date not earlier than
the date of commencement of the Performance Period as is designated by the
Committee) until the earlier of (i) the end of the applicable Performance Period
or (ii) the date of disability, death or termination of employment for any
reason (including retirement), of a participant, the Company shall keep records
for such Participant ("Account") and shall credit on each payment date for the
payment of a dividend made by UGI on its Stock an amount equal to the Dividend
Equivalent associated with such Option. Notwithstanding the foregoing, a
Participant may not accrue during any calendar year Dividend Equivalents in
excess of $1,000,000. Except as set forth in Section 8.5 below, no interest
shall be credited to any such Account.

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<PAGE>

     8.2 Payment of Credited Dividend Equivalents. The Committee will determine
(no later than ninety (90) days after the commencement of the Performance
Period) and set forth on Exhibit 1 measurable criteria pursuant to which the
total return realizable by a shareholder of the Company on a share of Stock over
the applicable Performance Period can be compared to that realizable over the
same Performance Period by shareholders of the Comparison Group. The extent to
which a Participant receives payment of the Dividend Equivalents associated with
an Option and recorded in his Account during any particular Performance Period
shall be determined by comparing (through use of the selected measurable
criteria) the aforementioned total return realizable by a shareholder of the
Company to that realizable by shareholders of the Comparison Group. Payments
shall be made after the end of the applicable Performance Period according to
the following table (with results falling between table values being
interpolated):

<TABLE>
<CAPTION>
PERCENT OF COMPANIES IN COMPARISON GROUP HAVING TOTAL RETURN            PERCENT OF DIVIDEND
TO SHAREHOLDERS LESS THAN THAT TO COMPANY'S SHAREHOLDERS                EQUIVALENTS PAYABLE
------------------------------------------------------------            --------------------
<S>                                                                             <C>
100                                                                             200
75                                                                              150
50                                                                               75
less than 50                                                                      0
</TABLE>



     8.3 Timing of Payment of Dividend Equivalents.

         (a) Except as otherwise determined by the Committee, in the event of
the (i) termination of an Option prior to exercise pursuant to Sections 11, 12
or 13 hereof, or (ii) acceleration of the exercise date of an Option pursuant to
Section 7.3 hereof, in either case prior to the end of the applicable
Performance Period, no payments of Dividend Equivalents associated with any
Option shall be made (A) prior to the end of the applicable Performance Period
and (B) to any Participant whose employment by the Company terminates prior to
the end of the applicable Performance Period for any reason other than
retirement under the Company's retirement plan, death, disability or Termination
without Cause. As soon as practicable after the end of such Performance Period,
the Committee will certify and announce the results for each Performance Period
prior to any payment of Dividend Equivalents and unless a Participant shall have
made an election under Section 8.6 to defer receipt of any portion of such
amount, a Participant shall receive the aggregate amount of Dividend Equivalents
payable to him.

         (b) Notwithstanding anything to the contrary in this Section 8.3,
unless a payment of Dividend Equivalents associated with an Option is being made
upon full exercise or termination of such Option, no Dividend Equivalents shall
be paid (either at the end of the applicable Performance Period or on a date
such Dividend Equivalents are scheduled to be paid pursuant to a deferral
election) if the average Fair Market Value of Stock for a period of thirty (30)
consecutive business days immediately preceding the end of the applicable
Performance Period or the date such deferred payment is scheduled to be made (as
the case may be) is less than the exercise price of the Option to which such
Dividend Equivalents were associated, and such payment shall instead be made at
the earlier of (i) such time as the average Fair Market Value of Stock over a
period of ninety (90) consecutive business days thereafter exceeds the exercise
price of such Option, or (ii) the termination or expiration date of such Option.


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<PAGE>

     8.4 Form of Payment for Dividend Equivalents. The Committee shall have the
sole discretion to determine whether the Company's obligation in respect of
payment of Dividend Equivalents shall be paid solely in credits to be applied
toward payment of the Option Price, solely in cash or partly in such credits and
partly in cash.

     8.5 Interest on Dividend Equivalents. From a date which is thirty (30) days
after the end of the applicable Performance Period until the date that all
Dividend Equivalents associated with such Option and payable to a Participant
are paid to such Participant, the Account maintained by the Company in its books
and records with respect to such Dividend Equivalents shall be credited with
interest at a market rate determined by the Committee.

     8.6 Deferral of Dividend Equivalents. A Participant shall have the right to
defer receipt of any Dividend Equivalent payments associated with an Option if
he shall elect to do so on or prior to December 31 of the year preceding the
beginning of the last full year of the applicable Performance Period (or such
other time as the Committee shall determine is appropriate to make such deferral
effective under the applicable requirements of federal tax laws). The terms and
conditions of any such deferral (including the period of time thereof) shall be
subject to approval by the Committee and all deferrals shall be made on a form
provided a Participant for this purpose.

9.   WRITTEN NOTICE, ISSUANCE OF STOCK, SHAREHOLDER PRIVILEGES AND PARTIAL
     EXERCISE

     9.1 Written Notice. A Participant wishing to exercise an Option must give
irrevocable written notice to the Company in the form and manner prescribed by
the Committee, indicating the date of award, the number of shares as to which
the Option is being exercised, and such other information as may be required by
the Committee. Full payment for the shares pursuant to the Option must be
received by the time specified by the Committee depending on the type of payment
being made, but in all cases, prior to the issuance of the Shares. Except as
provided in Sections 11, 12 and 13, no Option may be exercised at any time
unless the Participant is then an Employee of the Company.

     9.2 Issuance of Stock. As soon as practicable after the receipt of
irrevocable written notice and payment, the Company will, without stock transfer
taxes to the Participant or to any other person entitled to exercise an Option
pursuant to this Plan, deliver to, or credit electronically on behalf of, the
Participant, the Participant's designee or such other person the requisite
number of shares of Stock.

     9.3 Privileges of a Shareholder. A Participant or any other person entitled
to exercise an Option under this Plan will have no rights as a shareholder with
respect to any Stock covered by the Option until the due exercise of the Option
and issuance of such Stock.

     9.4 Partial Exercise. An Option granted under this Plan may be exercised as
to any lesser number of shares than the full amount for which it could be
exercised. Such a partial


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<PAGE>

exercise of an Option will not affect the right to exercise the Option from time
to time in accordance with this Plan as to the remaining shares subject to the
Option.

10.  NON-TRANSFERABILITY OF OPTIONS

     No Option, rights to Dividend Equivalents or other rights granted under the
Plan shall be transferable otherwise than by will or the laws of descent and
distribution, and an Option may be exercised, during the lifetime of the
Participant, only by the Participant. Notwithstanding the foregoing, the
Committee may provide that a Participant may transfer Options to family members
or other persons or entities according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject to
the same terms and conditions as were applicable to the Option immediately
before the transfer.

11.  TERMINATION OF EMPLOYMENT (OTHER THAN BY REASON OF DEATH OR DISABILITY)

     Each Option, to the extent that it has not previously been exercised, will
terminate when the Participant holding such Option (while living) ceases to be
an Employee of the Company, unless such cessation of employment is (i) on
account of a Termination without Cause, or (ii) a retirement under the Company's
retirement plan, in either of which events the Option shall be fully and
immediately exercisable (to the extent not otherwise exercisable by its terms)
and will terminate upon the earlier of the expiration date of the Option or the
expiration of the thirteen (13) month period following the date of such
cessation of employment. The Committee will have authority to determine whether
an authorized leave of absence or absence on military or governmental service
will constitute a termination of employment for the purposes of this Plan. The
Committee shall have sole discretion to determine the effect of any change in
the duties and responsibilities of a Participant while that Participant
continues to be an Employee of the Company on Options granted under this Plan
which are not then exercisable and on Dividend Equivalents not then payable
under Section 8.3 of the Plan.

12.  DISABILITY

     If a Participant is determined to be "disabled" (as defined under the
Company's long-term disability plan), the Option theretofore granted to such
Participant shall be fully and immediately exercisable (to the extent not
otherwise exercisable by its terms) at any time prior to the earlier of the
expiration date of the Option or the expiration of the thirteen (13) month
period following the date of such determination.

13.  DEATH OF PARTICIPANT

     In the event of the death of a Participant while employed by the Company,
the Option theretofore granted to such Participant shall be fully and
immediately exercisable (to the extent not otherwise exercisable by its terms)
at any time prior to the earlier of the expiration date of the Option or the
expiration of the thirteen (13) month period following the Participant's death.
Death of a Participant after such Participant has ceased to be employed by the
Company will not


                                       8
<PAGE>

affect the otherwise applicable period for exercise of the Option determined
pursuant to Section 11 or 12. Such Option may be exercised by the estate of the
Participant or by any person to whom the Participant may have bequeathed the
Option or whom the Participant may have designated to exercise the same under
the Participant's last will, or by the Participant's personal representatives if
the Participant has died intestate.

14.  ADJUSTMENT OF NUMBER AND PRICE OF SHARES, ETC.

     Notwithstanding anything to the contrary in this Plan, in the event any
recapitalization, reorganization, merger, consolidation, spin-off, combination,
repurchase, exchange of shares or other securities of UGI, stock split or
reverse split, extraordinary dividend, liquidation, dissolution, significant
corporate transaction (whether relating to assets or stock) involving UGI, or
other extraordinary transaction or event affects Stock such that an adjustment
is determined by the Committee to be appropriate in order to prevent dilution or
enlargement of Participants' rights under the Plan, then the Committee may, in a
manner that is equitable, adjust (i) any or all of the number or kind of shares
of Stock reserved for issuance under the Plan, (ii) the maximum number of shares
of Stock which may be the subject of grants to any one individual in any
calendar year, (iii) the number or kind of shares of Stock to be subject to
Options thereafter granted under the Plan, (iv) the number and kind of shares of
Stock issuable upon exercise of outstanding Options, (v) the Option Price per
share thereof, and/or (vi) the terms and conditions applicable to Dividend
Equivalents, provided that the number of shares subject to any Option will
always be a whole number. Any such determination of adjustments by the Committee
will be conclusive for all purposes of the Plan and of each Option, whether a
stock option agreement with respect to a particular Option has been theretofore
or is thereafter executed.

15.  LIMITATION OF RIGHTS

     Nothing contained in this Plan shall be construed to give an Employee any
right to be granted an Option except as may be authorized in the discretion of
the Committee. The granting of an Option under this Plan shall not constitute or
be evidence of any agreement or understanding, expressed or implied, that the
Company will employ a Participant for any specified period of time, in any
specific position or at any particular rate of remuneration.

16.  AMENDMENT OR TERMINATION OF PLAN

     Subject to Board approval, the Committee may at any time, and from time to
time, alter, amend, suspend or terminate this Plan without the consent of the
Company's shareholders or Participants, except that any such alteration,
amendment, suspension or termination shall be subject to the approval of the
Company's shareholders within one year after such Committee and Board action if
such shareholder approval is required by any federal or state law or regulation
or the rules of any stock exchange or automated quotation system on which the
Stock is then listed or quoted, or if the Committee in its discretion determines
that obtaining such shareholder approval is for any reason advisable. No
termination or amendment of this Plan may, without the consent of the
Participant to whom any Option has previously been granted, adversely affect the
rights of such Participant under such Option, including the Dividend Equivalents
associated with such Option. Notwithstanding the foregoing, the Committee may
make minor amendments to


                                       9
<PAGE>
this Plan which do not materially affect the rights of Participants or
significantly increase the cost to the Company.

17.  TAX WITHHOLDING

     Upon exercise of any Option under this Plan, the Company will require the
recipient of the Stock to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements. However, to the extent
authorized by rules and regulations of the Committee, the Company may withhold
or receive Stock and make cash payments in respect thereof in satisfaction of a
recipient's tax obligations, including tax obligations in excess of mandatory
withholding requirements.

18.  GOVERNMENTAL APPROVAL

     Each Option will be subject to the requirement that if at any time the
listing, registration or qualification of the shares covered thereby upon any
securities exchange, or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with the granting of such Option or the purchase
of shares thereunder, no such Option may be exercised in whole or in part unless
and until such listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable to the Board.

19.  EFFECTIVE DATE OF PLAN

     This Plan will become effective as of December 10, 1996, subject to
ratification by the Company's shareholders prior to December 10, 1997.

20.  SUCCESSORS

     This Plan shall be binding upon and inure to the benefit of the Company,
its successors and assigns and the Participant and his heirs, executors,
administrators and legal representatives.

21.  GOVERNING LAW

     The validity, construction, interpretation and effect of the Plan and
option agreements issued under the Plan shall be governed exclusively by and
determined in accordance with the law of the Commonwealth of Pennsylvania.

                                       10
<PAGE>
EXHIBIT 1

1.   PERFORMANCE PERIOD

January 1, 1997 to December 31, 1999.

2.   COMPARISON GROUP
<TABLE>
<S>                                              <C>
American Electric Power Company, Inc.            NICOR, Inc.
Baltimore Gas & Electric Company                 Noram Energy Corporation
Carolina Power & Light Company                   Northern States Power Company
Central & South West Corporation                 Ohio Edison Company
Cinergy Corporation                              ONEOK, Inc.
Coastal Corporation                              Pacific Enterprises
Columbia Gas System, Inc.                        Pacific Gas & Electric Company
Consolidated Edison Co. of N.Y., Inc.            Pacificorp
Consolidated Natural Gas Company                 PanEnergy Corp.
Dominion Resources, Inc.                         PECO Energy Company
DTE Energy Company                               Peoples Energy Corporation
Duke Power Company                               PP&L Resources, Inc.
Eastern Enterprises                              Public Service Enterprise Group, Inc.
Edison International                             Sonat, Inc.
Enron Corporation                                Southern Company
Entergy Corporation                              Texas Utilities Company
FPL Group, Inc.                                  Unicom Corporation
GPU, Inc.                                        Union Electric Company
Houston Industries, Inc.                         The Williams Companies, Inc.
Niagara Mohawk Power Corporation
</TABLE>

3.   COMPARISON CRITERIA

     For purposes of the Plan, "Total Return" is the change in the market value
of one share of common stock of each company in the Comparison Group over the
Performance Period, plus the amount of dividends paid or the value of other
distributions made with respect to such stock, reinvested in the stock, over the
same period.

     The initial market value of each share of common stock to be measured
during the Performance Period (January 1, 1997 through December 31, 1999) will
be the average of the closing prices of each such stock on the New York Stock
Exchange Composite Tape for all trading days during the three calendar months
prior to the commencement of the Performance Period.

     The final market value of each share of common stock to be measured will be
the average of the closing prices for such stock on the New York Stock Exchange
Composite Tape for all trading days during the final three months of the
Performance Period.


                                       11

</TEXT>
</DOCUMENT>
