Ugi Utilities Inc – ‘DEF 14A’ for 2/25/97

As of:  Thursday, 12/26/96   ·   For:  2/25/97   ·   Accession #:  950109-96-8649   ·   File #:  1-01398   ·   Correction:  This Filing was Deleted by the SEC on 1/10/97. ®

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Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Notice & Proxy                                        52    239K 

Document Table of Contents

DEF 14A
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SCHEDULE 14A INFORMATION  

Proxy Statement Pursuant to Section 14(a) 
of the Securities Exchange Act of 1934

Filed by the Registrant [x]                                                     
Filed by a Party other than the Registrant [_]                                  

Check the appropriate box:                                                      

[_] Preliminary Proxy Statement                                                 
[_] Confidential, for Use of the Commission Only (as permitted by Rule          
14a-6(e)(2))                                                            
[x] Definitive Proxy Statement                                                  
[_] Definitive Additional Materials                                             
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12         

UGI CORPORATION 
(Name of Registrant as Specified in Its Charter)

____________________________________
(Name of Person(s) Filing Proxy Statement 
if Other Than Registrant) 

Payment of Filing Fee (Check the appropriate box):                              

[x] No fee required.                                                            
[_] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or     
Item 22(a)(2) of Schedule 14A.                                          
[_] $500 per each party to the controversy pursuant to Exchange Act Rule        
14a-6(i)(3)                                                             
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11     

(1) Title of each class of securities to which transaction applies:   

(2) Aggregate number of securities to which transaction applies:      

(3) Per unit price or other underlying value of transaction computed  
       pursuant to Exchange Act Rule O-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):    

(4) Proposed maximum aggregate value of transaction:                  

(5) Total fee Paid                                                    

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule 
O-11(a)(2) and identify the filing for which the offsetting fee was paid
  previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                     

(1) Amount Previously Paid:                                           
(2) Form Schedule or Registration Statement No.:                      
(3) Filing Party:                                                     
(4) Date Filed:                                                       

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LOGO                                                                            

460 North Gulph Road                                                            
King of Prussia, PA 19406                                                       
610-337-1000                                                                    

                                     December 27, 1996

Dear Shareholder,                                                               

On behalf of our entire Board of Directors, I cordially invite you to attend
our Annual Meeting of Shareholders on Tuesday, February 25, 1997. Information   
about the formal matters to be acted on at the meeting is contained in the      
accompanying Notice of Meeting and Proxy Statement. We are also enclosing the   
1996 Annual Report describing our businesses along with this Proxy Statement.   
At the meeting, we plan to discuss the results of our operations during fiscal  
year 1996 and our expectations for the Company in fiscal year 1997.             

We look forward to greeting personally as many of our shareholders as will  
be able to attend the meeting. Whether or not you expect to attend the          
meeting, please take a moment now to complete, sign and date the enclosed       
proxy and return it in the postage-paid envelope we have provided. If you       
attend the meeting, you may vote in person if you wish, even though you have    
previously returned your proxy, provided you give written notice of the         
revocation of your proxy to the Corporate Secretary.                            

                                  Sincerely,

                                            /s/ Lon R. Greenberg

                                        Lon R. Greenberg
                                             Chairman of the Board

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UGI CORPORATION 
NOTICE OF 
ANNUAL MEETING OF SHAREHOLDERS  

------------------------------------------------------------------------------- 
DATE AND TIME:  

Tuesday, February 25, 1997, 10:00 A.M. (Local Time) 

------------------------------------------------------------------------------- 
PLACE:  

Sheraton Valley Forge Hotel 
Grand Ballroom  
North Gulph Road and First Avenue 
King of Prussia, Pennsylvania 19406 

------------------------------------------------------------------------------- 
AGENDA: 

1. Election of nine directors to serve until the next annual meeting of         
shareholders.                                                             

2. Approval of the Company's Directors' Equity Compensation Plan.               

3. Approval of the Company's 1997 Stock Option and Dividend Equivalent Plan.    

4. Ratification of the appointment of Coopers & Lybrand L.L.P. as independent   
certified public accountants for fiscal year 1997.                        

5. Transaction of such other business as may properly come before the meeting.  

------------------------------------------------------------------------------- 

                     BARTON D. WHITMAN
                       Corporate Secretary

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UGI CORPORATION 
460 North Gulph Road  
King of Prussia, PA 19406 

--------------------------------------------------------------------------------

PROXY STATEMENT 

--------------------------------------------------------------------------------

                                                             December 27, 1996

ANNUAL MEETING INFORMATION                                                      

The Annual Meeting of Shareholders of UGI Corporation ("UGI" or the         
"Company") will be held on February 25, 1997. At the meeting, you will be       
asked to consider the election of directors, the approval of the Directors'     
Equity Compensation Plan, the approval of the 1997 Stock Option and Dividend    
Equivalent Plan, and the appointment of independent certified public            
accountants for the Company. This proxy statement, prepared under the           
direction of the Company's Board of Directors as a basis for soliciting your    
proxy for use at the meeting, is being mailed to shareholders on or about       
December 27, 1996.                                                              

VOTING RIGHTS                                                                   

Only holders of the Company's Common Stock, without par value ("Common      
Stock"), at the close of business on December 13, 1996 will be entitled to      
vote at the meeting. As of December 13, 1996, there were outstanding            
33,128,109 shares of the Company's Common Stock. Each holder of shares of the   
Company's Common Stock is entitled to one vote per share on all matters to be   
voted on at the meeting. Votes cast by proxy or in person at the meeting will   
be counted by the transfer agent for the Company, ChaseMellon Shareholder       
Services, Inc. (acting through its representatives).                            

The director nominees are to be elected by a plurality of the votes cast at 
the meeting. All other matters to be considered at the meeting require the      
affirmative vote of a majority of the votes cast at the meeting to be           
approved. Abstentions are counted for purposes of determining the presence or   
absence of a quorum, but are not considered a vote cast under Pennsylvania      
law. Shares held by brokers in street name and for which the beneficial         
owners' discretion has been withheld ("broker non-votes") are counted for       
purposes of determining the presence or absence of a quorum, but are not        
considered a vote cast under Pennsylvania law and will not affect the outcome   
of a matter to be voted upon.                                                   

USE AND REVOCATION OF PROXIES                                                   

Each properly executed proxy received in time for the meeting will be voted 
in accordance with the choices marked on it. If you sign your proxy but do not  
mark your choices, your proxy will be voted for the persons nominated for       
election as directors, in favor of approval of the Directors' Equity            
Compensation Plan, in favor of approval of the 1997 Stock Option and Dividend   
Equivalent Plan, and in favor of ratification of the appointment of Coopers &   
Lybrand L.L.P. as independent certified public accountants for fiscal year      
1997. If you wish to revoke your proxy, you may do so by giving written notice  
of revocation to Mr. Barton D. Whitman, Corporate Secretary, UGI Corporation,   
460 North Gulph Road, King of Prussia, Pennsylvania 19406, before your proxy    
is voted.                                                                       

SOLICITATION OF PROXIES                                                         

Proxies are being solicited by mail from all holders of record of the       
Company's Common Stock. In addition to the solicitation by mail, certain        
directors, officers and regular employees of the Company and its subsidiaries,  
without additional compensation, may solicit proxies personally or by           
telephone                                                                       

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or facsimile. The Company has also engaged Corporate Investor Communications,   
Inc. to solicit proxies for the Company for a fee of $8,000 plus expenses.      
Banks, brokerage firms and other institutions, nominees, custodians and         
fiduciaries will, upon request, be reimbursed by the Company for reasonable     
expenses incurred in sending proxy materials to beneficial owners of the        
Company's Common Stock.                                                         

SHAREHOLDER PROPOSALS                                                           

Shareholders may submit proposals on matters appropriate for shareholder    
action at future annual meetings in accordance with regulations adopted by the  
United States Securities and Exchange Commission ("SEC"). For such proposals    
to be considered for inclusion in the Company's proxy statement and form of     
proxy for next year's annual meeting, they must be received by the Company not  
later than August 28, 1997. Proposals should be directed to the attention of    
the Corporate Secretary.                                                        

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SECURITY OWNERSHIP OF MANAGEMENT  

The table below sets forth as of November 1, 1996, the beneficial ownership 
of UGI Common Stock by each director and each of the Named Executives (as       
defined under the heading "Executive Compensation"), as well as by the          
directors and all of the Company's executive officers as a group.               

AmeriGas Propane, Inc. ("AmeriGas Propane"), a subsidiary of the Company, is
the General Partner of AmeriGas Partners, L.P. The table below also sets forth  
as of November 1, 1996, the beneficial ownership of AmeriGas Partners, L.P.     
Common Units by each director and each of the Named Executives, as well as by   
the directors and all of the Company's executive officers as a group.           

TABLE OF EQUITY OWNERSHIP 
OF DIRECTORS AND EXECUTIVE OFFICERS 

                                                        [Enlarge/Download Table]
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          TITLE OF              NAME OF BENEFICIAL          AMOUNT AND NATURE OF    PERCENT 
           CLASS                       OWNER             BENEFICIAL OWNERSHIP(1)(2) OF CLASS
--------------------------------------------------------------------------------------------
                                                                                            
  UGI Corporation          James W. Stratton                        6,275              *    
                           Robert C. Forney                         8,675              *    
                           David I. J. Wang                        19,275              *    
                           Richard C. Gozon                        11,275              *    
                           Cyrus H. Holley                          6,275              *    
                           Quentin I. Smith, Jr.                    7,275              *    
                           Stephen D. Ban                           8,311(3)           *    
                           Anne Pol                                 3,324              *    
                           Lon R. Greenberg                       147,677(4)           *    
                           Richard L. Bunn                        137,100(5)           *    
                           Robert C. Mauch                        120,714              *    
                           George W. Westerman                    129,862(6)           *    
                           Charles L. Ladner                      124,086(7)           *    
                           Michael J. Cuzzolina                    39,324              *    
                           Directors and executive                                          
                           officers as a group (16                                          
                           persons including those                                          
                           listed above)                          789,498            2.38%  
  AmeriGas Partners, L.P.  James W. Stratton                        1,000              *    
   Common Units            Robert C. Forney                         1,600              *    
                           David I. J. Wang                         5,000              *    
                           Cyrus H. Holley                          1,000              *    
                           Lon R. Greenberg                         1,500(8)           *    
                           Robert C. Mauch                          1,500              *    
                           George W. Westerman                      1,000              *    
                           Charles L. Ladner                        1,000              *    
                           Directors and executive                                          
                           officers as a group (16                                          
                           persons including those                                          
                           listed above)                           13,600              *    

* Less than 1 percent.                                                        

(1) The number of shares of UGI Common Stock subject to stock options           
exercisable through January 2, 1997, which number is included in the    
  number of shares shown as beneficially owned, is as follows: Mr. Stratton,
  5,000 shares; Dr. Forney, 4,000 shares; Mr. Wang, 5,000 shares; Mr. Gozon,
5,000 shares;                                                           

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 Mr. Holley, 5,000 shares; Mr. Smith, 5,000 shares; Dr. Ban, 3,800 shares;
Mrs. Pol, 2,124 shares; Mr. Greenberg, 122,778 shares; Mr. Bunn, 87,500 
   shares; Mr. Mauch, 87,500 shares; Mr. Westerman, 87,500 shares; Mr. Ladner,
    87,500 shares; Mr. Cuzzolina, 30,000 shares; and all directors and executive
officers as a group, 553,368 shares.                                    
(2) The nature of beneficial ownership, other than the number of shares         
  subject to options exercisable through January 2, 1997, is sole voting and
dispositive power, except as noted below.                               
(3) Shares are held jointly with Dr. Ban's spouse.                              
(4) Includes 22,759 shares held jointly with Mr. Greenberg's spouse.            
(5) Includes 45,902 shares held jointly with Mr. Bunn's spouse and 2,000        
shares held directly by his spouse.                                     
(6) Includes 25,804 shares held jointly with Mr. Westerman's spouse, 4,000      
 shares held jointly with his children and 306 shares held directly by his
spouse.                                                                 
(7) Shares are held jointly with Mr. Ladner's spouse.                           
(8) Units are held in Mr. Greenberg's name as custodian for his children.       

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 

The following table sets forth certain information regarding each person    
known by the Company to have been the beneficial owner of more than 5% of the   
Company's Common Stock. The ownership information shown below is based on       
information received from Technimetrics, Inc. reporting a Form 13F filed with   
the U. S. Securities and Exchange Commission in September, 1996 by Sasco        
Capital, Inc.                                                                   

TABLE OF EQUITY OWNERSHIP 
OF CERTAIN BENEFICIAL OWNERS  

                                                        [Enlarge/Download Table]
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        TITLE OF              NAME AND ADDRESS OF      AMOUNT AND NATURE OF PERCENT OF
         CLASS                 BENEFICIAL OWNER        BENEFICIAL OWNERSHIP  CLASS(1) 
--------------------------------------------------------------------------------------
                                                                                      
      Common Stock       Sasco Capital, Inc.                2,635,000         7.95%   
                         Ten Sasco Hill Road                                          
                         Fairfield, CT 06430                                          

(1) Based on 33,136,225 shares of the Company's Common Stock issued and         
outstanding at September 30, 1996.                                      

--------------------------------------------------------------------------------
ITEM 1 -- ELECTION OF DIRECTORS 
--------------------------------------------------------------------------------

You will be asked at the meeting to elect a nine-member Board of Directors  
to serve until the next annual meeting of shareholders and until their          
successors are duly elected and qualified. Should any nominee be unavailable    
for election, proxies will be voted for another person nominated by the Board   
of Directors or the size of the Board will be reduced.                          

Nine of the ten members of the Board of Directors elected at last year's    
annual meeting are standing for election this year. As previously announced,    
James A. Sutton retired as a Director and Chairman of the Board on July 31,     
1996.                                                                           

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The following table names each nominee and gives information concerning his 
or her principal occupation for the past five years and the year of his or her  
election to the Board of Directors.                                             

NOMINEES  

                                                        [Enlarge/Download Table]
---------------------------------------------------------------------------------------

                                                                                 UGI   
                                         PRINCIPAL OCCUPATION                  DIRECTOR
        NAME AND AGE                  AND OTHER DIRECTORSHIPS(1)                SINCE  
---------------------------------------------------------------------------------------
                                                                                       
  James W. Stratton      President of Stratton Management Company (investment    1979  
        (60)             advisory and financial consulting firm); Chairman             
                         and Chief Executive Officer of FinDaTex (financial            
                         services firm). Director: AmeriGas Propane, Inc.;             
                         Stratton Growth Fund; Stratton Monthly Dividend               
                         Shares, Inc.; Stratton Small-Cap Yield Fund; Alco             
                         Standard Corporation; Teleflex, Inc.                          
  Robert C. Forney       Retired; formerly Executive Vice President (1981 to     1988  
        (69)             1989) and Director (1979 to 1989) of E. I. duPont de          
                         Nemours & Co., Inc. (chemicals and petroleum                  
                         products). Director: AmeriGas Propane, Inc.;                  
                         Wilmington Trust Corporation; Wilmington Trust                
                         Company; Wilmington Trust of Pennsylvania.                    
  David I. J. Wang       Retired; formerly Executive Vice President--Timber      1988  
        (64)             and Specialty Products and a Director of Interna-             
                         tional Paper Company (1987 to 1991). Director:                
                         AmeriGas Propane, Inc.; Weirton Steel Corp.                   
  Richard C. Gozon       Executive Vice President of Weyerhaeuser Company        1989  
        (58)             (pulp, paper and packaging) (since 1994); formerly            
                         Director (1984 to 1993), President and Chief Operat-          
                         ing Officer of Alco Standard Corporation (provider            
                         of paper and office products) (1988 to 1993); Execu-          
                         tive Vice President and Chief Operating Officer               
                         (1987); Vice President (1982 to 1988); President              
                         (1979 to 1987) of Paper Corporation of America. Di-           
                         rector: AmeriSource Health Corporation; Triumph               
                         Group, Inc.                                                   
  Cyrus H. Holley        President and sole owner of Management Consulting       1990  
        (60)             Services (business and educational resource and man-          
                         agement consulting firm) (1992 to present); Chief             
                         Executive and Owner of Oakmont Enterprises, Inc.              
                         (business investment and venture capital firm) (1994          
                         to present); formerly Executive Vice President and            
                         Director (1985 to 1992) and Chief Operating Officer           
                         (1985 to 1990) of Engelhard Corporation (maker of             
                         mineral, chemical and metal performance products).            
                         Director: Atlantic Energy, Inc.; Kerns Oil & Gas,             
                         Inc.                                                          
  Quentin I. Smith, Jr.  Retired; formerly Chairman and Chief Executive Offi-    1990  
        (69)             cer of Towers Perrin (management consulting servic-           
                         es). Director: Omnicom Group Inc.; The Guardian Life          
                         Insurance Company of America.                                 

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NOMINEES  

                                                                [Download Table]
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                                                                              UGI   
                                      PRINCIPAL OCCUPATION                  DIRECTOR
        NAME AND AGE               AND OTHER DIRECTORSHIPS(1)                SINCE  
------------------------------------------------------------------------------------
                                                                                    
  Stephen D. Ban      President and Chief Executive Officer of Gas Re-        1991  
        (56)          search Institute (gas industry research and develop-          
                      ment) (since 1987); formerly Executive Vice Presi-            
                      dent of Gas Research Institute (1986); formerly Vice          
                      President, Research and Development, Bituminous Ma-           
                      terials, Inc. (1981). Director: Energen Corporation.          
  Anne Pol            Vice President, Thermo Electron Corporation (envi-      1993  
        (49)          ronmental technology products and services) (since            
                      April 1996); formerly President, Pitney Bowes Ship-           
                      ping and Weighing Systems Division, a business unit           
                      of Pitney Bowes Inc. (mailing and related business            
                      equipment) (1993 to 1996); formerly Vice President,           
                      New Product Programs in the Mailing Systems Division          
                      of Pitney Bowes Inc. (1991 to 1993); Vice President,          
                      Manufacturing Operations in the Mailing Systems Di-           
                      vision of Pitney Bowes Inc. (1990 to 1991).                   
  Lon R. Greenberg    Chairman of the Board of Directors (since August        1994  
        (46)          1996); Chief Executive Officer (since August 1995)            
                      and President of the Company (since 1994); formerly           
                      Vice Chairman of the Board (1995 to 1996), Senior             
                      Vice President--Legal and Corporate Development               
                      (1989 to 1994). Director: AmeriGas Propane, Inc.;             
                      Mellon PSFS Advisory Board.                                   

(1) All of the nominees also serve as directors of UGI Utilities, Inc., a       
wholly owned subsidiary of the Company.                                 

BOARD COMMITTEES AND MEETING ATTENDANCE 

The Board of Directors has six standing committees: the Audit Committee, the
Compensation and Management Development Committee, the Executive/Nominating     
Committee, the Pension Committee, the Planning and Finance Committee, and the   
Public Affairs Committee. Membership of each Committee as of the record date    
of December 13, 1996, is shown in the following table:                          

COMMITTEES OF THE BOARD AND COMMITTEE MEMBERSHIP  

                                                        [Enlarge/Download Table]
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                  COMPENSATION                                                                     
                      AND                                                                          
                   MANAGEMENT      EXECUTIVE/                       PLANNING AND                   
     AUDIT        DEVELOPMENT      NOMINATING         PENSION          FINANCE      PUBLIC AFFAIRS 
---------------------------------------------------------------------------------------------------
                                                                                                   
  R. C. Gozon,  R. C. Forney,    J. W. Stratton, Q. I. Smith, Jr., D. I. J. Wang,  C. H. Holley,   
  Chairman      Chairman         Chairman        Chairman          Chairman        Chairman        
  S. D. Ban     R. C. Gozon      R. C. Forney    R. C. Forney      L. R. Greenberg S. D. Ban       
  C. H. Holley  Q. I. Smith, Jr. L. R. Greenberg R. C. Gozon       C. H. Holley    A. Pol          
  A. Pol        D. I. J. Wang    D. I. J. Wang          --         J. W. Stratton  Q. I. Smith, Jr.

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Set forth below is a description of the duties of each of the Committees:   

The Audit Committee examines the activities of the Company's independent    
auditors and internal audit department to determine whether these activities    
are reasonably designed to assure the soundness of accounting and financial     
procedures. The Committee reviews the Company's accounting policies and the     
objectivity of its financial reporting. The Committee annually considers the    
qualifications of the Company's independent auditors and the scope of their     
audit and makes recommendations to the Board as to their selection. The         
Committee receives reports from the internal auditors and reviews the scope of  
the internal audit program. During fiscal year 1996, the Committee met twice.   

The Compensation and Management Development Committee establishes executive 
compensation policy and approves and recommends to the Board compensation       
plans for executive officers of the Company and the salaries to be paid to      
certain of those officers. The Committee also reviews the Company's management  
development and succession planning policies. The Committee approves the        
awards and payments to be made to employees of the Company and its              
subsidiaries under its long-term compensation plans. It also makes              
recommendations to the Board of Directors concerning outside director           
compensation. During fiscal year 1996, the Committee met three times.           

The Executive/Nominating Committee has the full power of the Board between  
meetings of the Board, with specified limitations relating to major corporate   
matters. The Committee also reviews the qualifications of persons eligible to   
stand for election as directors and makes recommendations to the Board on this  
matter. The Committee considers as nominees qualified persons recommended by    
directors, management and shareholders. Written recommendations should be       
delivered to the Corporate Secretary, UGI Corporation, P.O. Box 858, Valley     
Forge, Pennsylvania 19482. The Company's bylaws do not permit shareholders to   
nominate candidates from the floor at the annual meeting without 45 days'       
prior notification to the Corporate Secretary. Any such notification would      
have to include certain information detailed in the Company's bylaws.           
Shareholders who wish to nominate a candidate from the floor at an annual       
meeting should contact the Corporate Secretary. During fiscal year 1996, the    
Committee met once.                                                             

The Pension Committee reviews pension and certain other employee benefit    
plans for the Company and its subsidiaries. During fiscal year 1996, the        
Committee met twice.                                                            

The Planning and Finance Committee reviews the overall business and         
financial planning of the Company and its capital expenditures and operating    
budgets. The Committee met once in fiscal year 1996.                            

The Public Affairs Committee monitors significant public issues affecting   
the Company and reviews the Company's charitable contributions, community       
affairs programs and its policies and practices which are responsive to         
governmental and regulatory requirements. The Committee met once during fiscal  
year 1996.                                                                      

Actions taken by any of the foregoing committees are reported to the Board  
at its next regular meeting.                                                    

Board Meetings. Ten meetings of the Company's Board of Directors were held  
during the 1996 fiscal year. All of the directors attended at least 75% of the  
aggregate of all meetings of the Board of Directors and Committees of the       
Board on which they served.                                                     

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REPORT OF THE COMPENSATION AND MANAGEMENT 
DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS 

Executive Compensation Program. One of the roles of the Committee is to     
establish and oversee the Company's executive compensation policies and         
programs and to recommend to the Board of Directors compensation for executive  
officers of the Company and the salaries to be paid to certain of those         
officers. In carrying out this role, we believe it is important to align        
executive compensation with Company values and objectives, business             
strategies, management initiatives, business financial performance and          
enhanced shareholder value.                                                     

Our Committee is comprised of independent outside directors, none of whom is
or was an officer or employee of the Company or its subsidiaries. Periodically  
we solicit and receive recommendations and advice from independent third party  
compensation consultants. Towers Perrin has acted in this capacity since 1986.  
Compensation for chief executive officers of subsidiary companies is            
determined by the respective subsidiary Board of Directors under the same       
process described herein.                                                       

Our executive compensation program is designed to attract and retain key    
executives with outstanding abilities and to motivate them to perform to the    
full extent of those abilities. We believe that executives should have a        
greater portion of their compensation at risk than other employees, and that    
executive compensation should be tied directly to the performance of the        
business and be aligned with benefits realized by the Company's shareholders.   

Compensation for Company executives consists of both cash and equity based  
opportunities. The annual cash compensation consists of (i) base salary and     
(ii) annual bonus opportunity under the Company's Annual Bonus Plan. Equity     
based opportunities are provided on a long-term basis under the Company's 1992  
Stock Option and Dividend Equivalent Plan (through 1996), and, subject to       
approval by shareholders, a new 1997 Stock Option and Dividend Equivalent       
Plan.                                                                           

The Committee determines base salary ranges for executive officers based    
upon competitive pay practices in the businesses and industries in which the    
Company and its subsidiaries compete. The base salary ranges for all executive  
officers were set at the 50th percentile of the survey companies. For 1996, as  
has been the practice in the past, the Committee reviewed a comparison of base  
salary ranges for executive officers with published survey results in Towers    
Perrin's Executive Compensation Survey of 507 national non-utility, non-        
financial companies, the American Gas Association's Executive Compensation      
Survey of 93 utility companies, and Edison Electric Institute's Executive       
Compensation Survey of 98 utility companies. This comparison was weighted to    
reflect the Company's approximate business mix of general industry and          
utility.                                                                        

Annually, the Committee recommends to the Board of Directors changes in     
actual salaries based on judgments of past performance, expanded job duties,    
scope and responsibilities (if any), and expected future contributions of each  
executive officer. The most recent past performance is the prime determinant.   

The Committee also oversees the Company's Annual Bonus Plan for executive   
officers. We establish challenging annual objectives based on business          
prospects. For Mr. Greenberg, Mr. Ladner and Mr. Westerman, the sole objective  
is achieving financial performance for the Company. Mr. Bunn is covered under   
the UGI Utilities, Inc. Annual Bonus Plan, and prior to his retirement, Mr.     
Mauch was covered under the AmeriGas Partners, L.P. Annual Bonus Plan. For      
each, the sole objective is achieving the financial performance goal for his    
respective company. For Mr. Cuzzolina, the bonus opportunity is based on        
achieving both the current financial performance objective and individual       
strategic and operating objectives related to longer term earnings, with        
greater weight (75%) given to the current financial performance objective.      

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Following the end of each fiscal year, after completion of the audit of the 
Company's financial statements, the Committee reviews business results and      
individual performance of each executive officer and determines and recommends  
to the Board of Directors cash bonus payments under the terms of the Annual     
Bonus Plan. The financial objective for 1996 for UGI Corporation executives     
was based on the weighted achievement of financial performance goals by each    
of UGI Utilities, Inc. and AmeriGas Partners, L.P. ("AmeriGas Partners").       
Weighting is based on the Company's business mix. For executives whose sole     
objective is achieving a financial performance goal, bonus payments are         
subject to a maximum 15% adjustment of the target bonus based on the            
individual's contribution having a significant impact on corporate              
performance. In addition, for all participants, the financial performance       
factor is subject to a maximum 10% adjustment based on the positive or          
negative contribution from UGI Corporation (other than utility and propane      
business performance) on overall Company financial performance. During fiscal   
year 1996, the financial objective for UGI Utilities, Inc. was earnings         
applicable to common stock. For AmeriGas Partners, the financial objective was  
profitability based on cash flow derived from the business, adjusted for real   
volume growth, net customer gains or losses, and return on assets. 1996 bonus   
awards reflect the financial performance of UGI Utilities, Inc., which          
exceeded its goal, and the overall Company performance. The awards also         
reflect the fact that AmeriGas Partners did not achieve its financial           
performance goal.                                                               

Periodically the Committee reviews the overall competitiveness of the Annual
Bonus Plan with its compensation consultant. For 1996 using the published       
survey sources and methodology previously identified, the Annual Bonus Plan     
target bonus opportunity for each executive remained at the 75th percentile of  
the survey companies. The 75th percentile level was determined to be            
appropriate in light of the Committee's view that the annual bonus              
opportunities should have a high reward potential to recognize the difficulty   
of achieving the annual goals, and the significant positive corporate impact    
of doing so.                                                                    

The Company's long-term equity based 1992 Stock Option and Dividend         
Equivalent Plan (the "1992 SODEP"), which was approved by the Company's         
shareholders in May of 1992, will end this year. In its place, a new 1997       
Stock Option and Dividend Equivalent Plan (the "1997 SODEP") has been approved  
by this Committee and the Board of Directors and is being submitted for         
approval by shareholders at the 1997 Annual Meeting. The Committee oversees     
these Plans for executives. The 1992 SODEP consists of non-qualified stock      
option grants, with an opportunity to earn during a five-year performance       
period an amount equivalent to or greater than the dividends paid on the        
shares covered by options. Payment of dividend equivalents is subject to a      
comparison of the total return realizable on a share of the Company's Common    
Stock with the total return achieved by each member of a group of comparable    
peer companies over the 1992 SODEP's five-year performance period. (A list of   
the comparable peer companies appears under the heading "Corporate              
Performance" following this report.) No payment of dividend equivalents will    
be made when the current five-year performance period ends on December 31,      
1996.                                                                           

The 1997 Stock Option and Dividend Equivalent Plan being recommended is     
similar to the 1992 SODEP. Payment of dividend equivalents will be based on     
the Company's total shareholder return relative to a new group of peer          
companies over a three-year performance period rather than a five-year          
performance period. The peer group for the 1997 SODEP will be the S&P Utility   
Index, modified by eliminating all telecommunication companies. The new peer    
group consists of thirty-nine companies, which is a larger group than the       
previous peer group. A summary of the proposed 1997 SODEP is included in this   
Proxy Statement.                                                                

The Committee believes that a shareholder's investment in the Company and   
the long-term return on the investment can be judged on a relative basis        
against comparable investment opportunities and that it is, in turn,            
appropriate to relate this judgment to an executive's long-term compensation.   
The Committee believes that grants made under these Plans will focus            
executives on increasing shareholder value. Stock option awards were            
determined utilizing Towers Perrin's Long-Term                                  

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Incentive Plan Survey comprised of 270 national companies and competitive       
award levels recommended to the Committee by Towers Perrin. The awards were     
valued by the Black-Scholes model.                                              

Fiscal Year 1996 CEO Compensation. The compensation for Mr. Greenberg       
recommended to the Board of Directors by the Committee was based upon a number  
of factors and criteria. These include the procedure for determining base       
salary ranges and actual salaries within ranges described earlier in this       
report, as well as a review and evaluation of the Company's financial           
performance.                                                                    

Base Salary. The Committee set Mr. Greenberg's base salary at the same level
set for fiscal year 1995. The Committee's determination was based on the        
Company's overall performance in 1995 and on Mr. Greenberg's relatively short   
tenure in his position. Mr. Greenberg is not separately compensated for his     
responsibilities as interim Chief Executive Officer of AmeriGas Propane, Inc.   

Annual Bonus. Mr. Greenberg's annual bonus award was based on achievement of
one of the predetermined financial goals and recognition by the Committee of    
the contribution to overall corporate performance made by UGI Enterprises,      
Inc., one of the Company's newest subsidiaries and the significant reduction    
in corporate overhead achieved during the year. The portion of Mr. Greenberg's  
bonus target attributable to AmeriGas Partners' performance was not paid.       

Long-Term Incentive. No awards were made to Mr. Greenberg during fiscal year
1996 under the 1992 SODEP. Previously, Mr. Greenberg was awarded 143,959 non-   
qualified stock options (each with a corresponding dividend equivalent), under  
the 1992 SODEP. Mr. Greenberg is currently vested in 105,278 of these options.  
All grants made under the 1992 SODEP are based on competitive award levels.     
The purchase price of each option is $20.125, which was the fair market value   
of a share of the Company's Common Stock at the beginning of the 1992 SODEP's   
five-year performance period. As previously stated, no payout of dividend       
equivalents will be made when the 1992 SODEP's five-year performance period     
ends on December 31, 1996.                                                      

Policy on Deductibility of Compensation. Section 162(m) of the Internal     
Revenue Code limits the tax deduction to $1,000,000 for compensation paid to    
the Chief Executive Officer and other Named Executive Officers unless certain   
requirements are met. One of the requirements is that compensation over         
$1,000,000 must be based upon attainment of performance goals approved by       
shareholders. Most awards under the 1992 Stock Option and Dividend Equivalent   
Plan are not subject to the deductibility cap. At this time, the Committee is   
not recommending that any of the Company's existing executive compensation      
plans be amended to meet the requirements of Section 162(m) for exclusion from  
the deductibility cap, given the relatively small amounts, if any, that might   
exceed the cap. The 1997 Stock Option and Dividend Equivalent Plan has been     
designed to meet the requirements of Section 162(m) with respect to stock       
option and dividend equivalent awards, and is being submitted to the Company's  
shareholders for approval.                                                      

Compensation and Management Development Committee 

            Robert C. Forney, Chairman
  Richard C. Gozon
       Quentin I. Smith, Jr.
 David I.J. Wang

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CORPORATE PERFORMANCE 

The line graph shown below illustrates a five-year comparison of the        
cumulative total shareholder return on the Common Stock of the Company with     
the cumulative total return on the S&P 500 Index and a peer index of natural    
gas distributors (the "1992 SODEP Peer Index"*) during the five years ended     
September 30, 1996. The annualized returns reflected in the graph for the       
Company, the S&P 500 Index and the SODEP Peer Index were 9.90%, 15.23% and      
11.66%, respectively.                                                           

----------------------------------------------------------  
Comparison of Five-Year Cumulative Total Shareholder  
Return Among UGI Corporation, 1992 SODEP Peer Index   
and S&P 500 Index   
----------------------------------------------------------  

[BAR GRAPH APPEARS HERE]  

                                                                [Download Table]

                          1991   1992   1993   1994   1995   1996 
------------------------------------------------------------------
                                                                  
  UGI                    100.00 111.47 136.85 112.18 132.04 160.33
------------------------------------------------------------------
  1992 SODEP Peer Index  100.00 120.15 147.39 130.03 144.07 173.54
------------------------------------------------------------------
  S&P 500                100.00 111.05 125.49 130.12 168.81 203.13

Assumes that the value of the investment in UGI 
Common Stock and each index was $100 on         
September 30, 1991 and that all dividends were  
reinvested.                                     
--------                                                                        
*  The 1992 SODEP Peer Index includes AGL Resources, Inc., Atmos Energy         
 Corporation, Bay State Gas Company, The Brooklyn Union Gas Company, Cascade
Natural Gas Corporation, Colonial Gas Company, Connecticut Energy         
Corporation, Connecticut Natural Gas Corporation, Energen Corporation,    
Indiana Energy, Inc., Laclede Gas Company, National Fuel Gas Company, New 
 Jersey Resources Corporation, Northwest Natural Gas Company, Peoples Energy
Corporation, Piedmont Natural Gas Company, Inc., Public Service Company of
North Carolina, Inc., Providence Energy Corporation, South Jersey         
Industries, Inc., United Cities Gas Company, Washington Energy Company and
Washington Gas Light Company.                                             

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The line graph shown below includes five-year cumulative total shareholder  
return data for the utility companies in the new peer group for the 1997        
SODEP**. The annualized returns reflected in the graph for the Company, the     
S&P 500 Index, the 1992 SODEP Peer Index and the 1997 SODEP Peer Index were     
9.90%, 15.23%, 11.66% and 8.92%, respectively.                                  

----------------------------------------------------------  
Comparison of Five-Year Cumulative Total Shareholder  
Return Among UGI Corporation, 1992 SODEP Peer Index   
S&P 500 and 1997 SODEP Peer Index   
----------------------------------------------------------  

[BAR GRAPH APPEARS HERE]  

                                                                [Download Table]

                          1991   1992   1993   1994   1995   1996 
------------------------------------------------------------------
                                                                  
  UGI                    100.00 111.47 136.85 112.18 132.04 160.33
------------------------------------------------------------------
  1992 SODEP Peer Index  100.00 120.15 147.39 130.03 144.07 173.54
------------------------------------------------------------------
  S&P 500                100.00 111.05 125.49 130.12 168.81 203.13
------------------------------------------------------------------
  1997 SODEP Peer Index  100.00 113.78 139.31 112.77 141.86 153.33

Assumes that the value of the investment in UGI Common                
Stock and each index was $100 on September 30, 1991 and               
that all dividends were reinvested.                                   

The cumulative total shareholder return illustrated above is calculated in  
accordance with applicable regulations of the SEC. The calculation of "total    
return" provided for in the proposed 1997 Stock Option and Dividend Equivalent  
Plan is somewhat different. See "Item 3--Approval of Proposed UGI Corporation   
1997 Stock Option and Dividend Equivalent Plan."                                
--------                                                                        
** The new 1997 SODEP Peer Index includes American Electric Power Company,      
Inc., Baltimore Gas & Electric Company, Carolina Power & Light Company,   
 Central & South West Corporation, Cinergy Corporation, Coastal Corporation,
Columbia Gas System, Inc., Consolidated Edison Co. of N.Y., Inc.,         
Consolidated Natural Gas Company, Dominion Resources, Inc., DTE Energy    
Company, Duke Power Company, Eastern Enterprises, Edison International,   
 Enron Corporation, Entergy Corporation, FPL Group, Inc., GPU, Inc., Houston
Industries, Inc., Niagara Mohawk Power Corporation, NICOR, Inc., Noram    
Energy Corporation, Northern States Power Company, Ohio Edison Company,   
ONEOK, Inc., Pacific Enterprises, Pacific Gas & Electric Company,         
Pacificorp, PanEnergy Corp., PECO Energy Company, Peoples Energy          
Corporation, PP&L Resources, Inc., Public Service Enterprise Group, Inc., 
 Sonat, Inc., Southern Company, Texas Utilities Company, Unicom Corporation,
Union Electric Company and The Williams Companies, Inc.                   

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COMPENSATION OF DIRECTORS 

The following table shows information concerning director compensation for  
fiscal year 1996:                                                               

DIRECTORS' COMPENSATION(1)(2) 

                                                                [Download Table]

                                       CASH COMPONENT EQUITY COMPONENT
----------------------------------------------------------------------
                                                                      
  Annual Retainer                         $18,500       72 shares(3)  
  Annual Option Grant                         --      1,000 options(4)
  Annual Retainer for Committee Chair     $ 2,500            --       
  Annual Retainer for Executive/                                      
   Nominating Committee member            $ 1,500            --       
  Board Attendance Fee (per meeting)      $   850            --       
  Committee Attendance Fee                                            
   (per meeting)                          $   700            --       

(1) No director who is an officer or employee of the Company          
or its subsidiaries is compensated for service on the         
Board or on any Committee. Directors may elect to defer,      
until the later of termination of services as a director      
or attainment of the age of 70, the receipt of all or a       
part of retainers and fees payable to them for services as    
a director. No director has elected this deferral option.     
(2) In addition, each director accrued benefits under the             
Retirement Plan for Outside Directors described below.        
(3) $1,500 of the Annual Retainer of $20,000 was paid in              
shares of the Company's Common Stock pursuant to the 1992     
Directors' Stock Plan described below. The fractional         
portion of a share was paid in cash. On February 8, 1996,     
directors received shares having a fair market value of       
$20.75 per share.                                             
(4) Options were granted on February 27, 1996 pursuant to the         
1992 Directors' Stock Plan described below. Each option       
has an exercise price of $22.25.                              

During 1996, the Company engaged the services of Towers Perrin, its         
compensation consultant, to conduct a review of the Company's compensation      
program for outside directors. Following its review, Towers Perrin made         
recommendations to management and the Compensation and Management Development   
Committee of the Board. After evaluating these recommendations, the Committee   
and the Board of Directors approved a new program, which includes the proposed  
UGI Corporation Directors' Equity Compensation Plan (the "Directors' 1997       
Plan"). If approved by the shareholders, the Directors' 1997 Plan will take     
the place of the UGI Corporation 1992 Directors' Stock Plan (the "Directors'    
1992 Plan") and the UGI Corporation Retirement Plan for Outside Directors. The  
full text of the Directors' 1997 Plan is included as Annex A to this Proxy      
Statement. The plan is summarized under the caption "Directors' 1997 Plan       
Summary."                                                                       

UGI Corporation 1992 Directors' Stock Plan. Under the Directors' 1992 Plan, 
each non-employee director was entitled to receive an option to purchase 1,000  
shares of the Company's Common Stock each year during the period 1992 through   
1996 upon annual election to the Board of Directors. In addition, that portion  
of the annual retainer payable to a non-employee director prior to January 1,   
1997 in excess of $18,500, was paid in shares of the Company's Common Stock in  
lieu of cash.                                                                   

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Retirement Plan for Outside Directors. The Company has a Retirement Plan for
Outside Directors (the "Directors' Retirement Plan") which provides for         
payment of retirement benefits to members of the Board of Directors who are     
neither employed by, nor entitled to pension benefits from, the Company or its  
affiliates as a result of any employment period and who have satisfied          
applicable age and service criteria or have become disabled. Benefits are       
payable under the Directors' Retirement Plan in the event of a change in        
control of the Company. The annual benefit payable under the Directors'         
Retirement Plan to any particular director is equal to the annual Board         
retainer on the date of that director's retirement, exclusive of retainers for  
service on Committees. In general, benefits under the Directors' Retirement     
Plan continue during the former director's lifetime until the number of         
quarterly payments made equals the number of calendar quarters of service as a  
director. The Directors' Retirement Plan provides a lump sum payment option     
and a spousal benefit option. Subject to shareholder approval of the            
Directors' 1997 Plan, the Company will terminate the Retirement Plan for        
Outside Directors effective December 31, 1996.                                  

If the Directors' Equity Compensation Plan is approved by the shareholders, 
amounts accrued under the Retirement Plan for Outside Directors through         
December 31, 1996 will be converted into deferred stock units under the         
Directors' 1997 Plan.                                                           

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COMPENSATION OF EXECUTIVE OFFICERS  

Summary of Compensation. The following table shows information concerning   
the annual and long-term compensation earned during the last three fiscal       
years by the Company's Chief Executive Officer ("CEO"), and each of the five    
other most highly compensated executive officers, including Mr. Mauch who       
retired effective September 1, 1996 (collectively referred to as the "Named     
Executives").                                                                   

                                                        [Enlarge/Download Table]


                          SUMMARY COMPENSATION TABLE                                          
----------------------------------------------------------------------------------------------

                                                                     LONG-TERM                
                                                                    COMPENSATION              
                                                                 ----------------             
                   ANNUAL COMPENSATION                           AWARDS   PAYOUTS             
----------------------------------------------------------------------------------------------
                                                               SECURITIES                     
                                                        OTHER    UNDER-                       
                                                       ANNUAL    LYING                        
                                                       COMPEN-  OPTIONS/   LTIP    ALL OTHER  
                                      SALARY   BONUS   SATION     SARS    PAYOUTS COMPENSATION
  NAME AND PRINCIPAL POSITION   YEAR   ($)     ($)(1)  ($)(2)    (#)(3)     ($)    ($)(4)(5)  
----------------------------------------------------------------------------------------------
                                                                                              
  Lon R. Greenberg              1996 $465,000 $122,760 $ 7,359        0     $ 0     $ 10,462  
   Chairman, President and      1995 $381,923 $      0 $ 7,365   14,167     $ 0     $ 11,439  
   Chief Executive Officer,     1994 $255,402 $126,463 $ 1,281   42,292     $ 0     $  2,891  
   UGI Corporation                                                                            
----------------------------------------------------------------------------------------------

  Richard L. Bunn               1996 $305,900 $137,655 $ 5,855        0     $ 0     $ 10,579  
   President and Chief          1995 $305,900 $164,268 $ 6,684        0     $ 0     $  9,732  
   Executive Officer,           1994 $305,900 $126,643 $ 3,906        0     $ 0     $  3,441  
   UGI Utilities, Inc.                                                                        
----------------------------------------------------------------------------------------------

  Robert C. Mauch               1996 $346,481 $163,350 $62,133        0     $ 0     $876,131  
   President and Chief          1995 $323,462 $ 32,076 $ 8,707        0     $ 0     $ 56,203  
   Executive Officer,           1994 $307,992 $191,608 $ 2,426        0     $ 0     $ 23,780  
   AmeriGas Propane,                                                                          
   Inc.                                                                                       
----------------------------------------------------------------------------------------------

  George W. Westerman           1996 $250,000 $ 65,250 $ 7,789        0     $ 0     $  6,498  
   Senior Vice President--      1995 $250,000 $ 38,813 $ 7,144        0     $ 0     $  8,313  
   Administration,              1994 $242,546 $119,467 $ 1,143        0     $ 0     $  2,679  
   UGI Corporation                                                                            
----------------------------------------------------------------------------------------------

  Charles L. Ladner             1996 $245,000 $ 52,920 $ 8,881        0     $ 0     $  6,480  
   Senior Vice                  1995 $245,000 $ 42,998 $ 8,851        0     $ 0     $  8,219  
   President--Finance,          1994 $237,860 $120,311 $ 2,064        0     $ 0     $  2,627  
   UGI Corporation                                                                            
----------------------------------------------------------------------------------------------

  Michael J. Cuzzolina          1996 $168,000 $ 28,843 $ 7,955        0     $ 0     $  4,336  
   Vice President--             1995 $168,000 $ 24,696 $ 8,090        0     $ 0     $  5,223  
   Accounting and               1994 $162,988 $ 64,120 $ 1,491        0     $ 0     $  1,800  
   Financial Control                                                                          
   UGI Corporation                                                                            

(1) Bonuses earned under the Annual Bonus Plan are for the year reported,       
regardless of the year paid. The Company's Annual Bonus Plan is based on
the achievement of pre-determined business and/or financial performance 
objectives which support business plans and goals. Bonus opportunities  
vary by position and for fiscal year 1996 ranged from 0% to 117% of base
salary for Mr. Greenberg, 0% to 50% for Mr. Bunn, from 0% to 96% for    
Messrs. Westerman and Ladner, and from 0% to 65% for Mr. Cuzzolina.     
(2) Amounts represent tax payment reimbursements for certain benefits, except   
for Mr. Mauch, in 1996. In addition to a tax payment reimbursement of   
$9,561, in 1996 Mr. Mauch received other perquisites available to       
  executive officers generally, and $38,631 for certain accrued vacation and
personal days.                                                          

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(3) Non-qualified stock options granted under the 1992 SODEP. The 1992 SODEP    
consists of non-qualified stock option grants and the opportunity for   
 participants to earn an amount equivalent to the dividends paid on shares
  covered by options, subject to a comparison of the total return realizable
  on a share of the Company's Common Stock (the "Company's Return") with the
total return achieved by each member of a group of comparable peer      
companies (the "SODEP Peer Group") over a five-year period beginning    
January 1, 1992 and ending December 31, 1996. Total return encompasses  
both changes in the per share market price and dividends paid on a share
of Common Stock. No credited dividend equivalents will be paid when the 
performance period ends on December 31, 1996.                           
(4) Amounts represent Company contributions in accordance with the provisions   
of the UGI Utilities, Inc. and AmeriGas Propane, Inc. Employee Savings  
Plans, as applicable, and/or allocations under the Executive Retirement 
Plan. Effective January 1, 1994, the Employee Savings Plans and the     
Executive Retirement Plan adopted a plan year ending September 30 to    
correspond to the Company's fiscal year. As a result, Company matching  
contributions and allocations for 1994 are based on a nine-month plan   
year. During 1996, 1995, and 1994, the following contributions were made
  to the Named Executives: (i) under the Employee Savings Plans: For each of
 Messrs. Greenberg, Bunn, Westerman, Ladner and Cuzzolina, $3,375, $3,375,
and $1,688; Mr. Mauch, $0, $2,250, and $1,688; and (ii) under the       
 Executive Retirement Plan: Mr. Greenberg, $7,087, $8,064, and $1,203; Mr.
  Mauch, $0, $41,983, and $13,114; Mr. Bunn, $7,204, $6,357, and $1,753; Mr.
  Westerman, $3,123, $4,938, and $991; Mr. Ladner, $3,105, $4,844, and $939;
Mr. Cuzzolina, $961, $1,848, and $112. In addition, the following       
contributions were made to Mr. Mauch as a participant in the AmeriGas   
Propane, Inc. Retirement Income Plan for 1996, 1995, and 1994: $11,865, 
$11,970, and $8,978.                                                    
(5) Mr. Mauch retired as President and Chief Executive Officer, AmeriGas        
Propane, Inc. effective September 1, 1996. In addition to the benefits  
detailed in footnote (4) above, the 1996 amount shown for Mr. Mauch     
includes payments under an agreement which recognized Mr. Mauch's       
  substantial contributions to AmeriGas Propane, Inc. The agreement provided
for payments of earned and accrued vacation and personal holidays,      
including the amount of $57,772 which is included in this column, and a 
supplemental payment of $806,494.                                       

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION      
VALUES                                                                          

The following table shows fiscal year 1996 information concerning exercised 
and unexercised stock options for each of the Named Executives.                 

OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES  

                                                        [Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------

                                                          NUMBER OF                                  
                                                         SECURITIES                 VALUE OF         
                                                         UNDERLYING                UNEXERCISED       
                                                         UNEXERCISED              IN-THE-MONEY       
                                                         OPTIONS AT                OPTIONS AT        
                           SHARES                  FISCAL YEAR END (#)(1)    FISCAL YEAR END ($)(2)  
                        ACQUIRED ON     VALUE     ------------------------- -------------------------
          NAME          EXERCISE (#) REALIZED ($)                                                    
                                                  EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-----------------------------------------------------------------------------------------------------
                                                                                                     
  Lon R. Greenberg            0          $ 0        105,278      38,681      $355,313     $130,548   
  Robert C. Mauch             0          $ 0         70,000      17,500      $236,250     $ 59,063   
  Richard L. Bunn             0          $ 0         70,000      17,500      $236,250     $ 59,063   
  George W. Westerman         0          $ 0         70,000      17,500      $236,250     $ 59,063   
  Charles L. Ladner           0          $ 0         70,000      17,500      $236,250     $ 59,063   
  Michael J. Cuzzolina        0          $ 0         24,000       6,000      $ 81,000     $ 20,250   

(1) Options granted under the 1992 SODEP.                                       
(2) Value based on comparison of price per share at September 30, 1996 (fair    
market value $23.50) to 1992 SODEP option price ($20.125).              

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RETIREMENT BENEFITS                                                             

The following pension plan table shows the annual benefits upon retirement  
at age 65 in 1996, without regard to statutory maximums, for various            
combinations of final average earnings and lengths of service which may be      
payable to the Named Executives under the Company's Qualified Retirement Plan   
(the "Retirement Plan") and its Non-Qualified Executive Retirement Plan.        

PENSION PLAN BENEFITS TABLE 

                                                                [Download Table]
---------------------------------------------------------------------------

                    ANNUAL BENEFIT FOR YEARS OF CREDITED SERVICE SHOWN(2)  
              -------------------------------------------------------------
   FINAL 5-YEAR                                                            
  AVERAGE ANNUAL                                                           
   EARNINGS(1)     15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS  40 YEARS  
---------------------------------------------------------------------------
                                                                           
  $100,000         $ 28,500 $ 38,000 $ 47,500 $ 57,000 $ 66,500 $ 68,400(3)
  $200,000         $ 57,000 $ 76,000 $ 95,000 $114,000 $133,000 $136,800(3)
  $300,000         $ 85,500 $114,000 $142,500 $171,000 $199,500 $205,200(3)
  $400,000         $114,000 $152,000 $190,000 $228,000 $266,000 $273,600(3)
  $500,000         $142,500 $190,000 $237,500 $285,000 $332,500 $342,000(3)
  $600,000         $171,000 $228,000 $285,000 $342,000 $399,000 $410,400(3)
  $700,000         $199,500 $266,000 $332,500 $399,000 $465,500 $478,800(3)
  $800,000         $228,000 $304,000 $380,000 $456,000 $532,000 $547,200(3)
  $900,000         $256,500 $342,000 $427,500 $513,000 $598,500 $615,600(3)
  $1,000,000       $285,000 $380,000 $475,000 $570,000 $665,000 $684,000(3)

(1) Consists of (i) base salary, commissions and cash payments under the        
  Annual Bonus Plan, and (ii) deferrals thereof permitted under the Internal
Revenue Code.                                                           
(2) Annual benefits are computed on the basis of straight life annuity          
amounts. These amounts include pension benefits, if any, to which a     
  participant may be entitled as a result of participation in a pension plan
of a subsidiary during previous periods of employment. The amounts shown
do not take into account exclusion of up to 35% of the estimated primary
Social Security benefit. The Retirement Plan provides a minimum benefit 
equal to 25% of a participant's final 12 months' earnings, reduced      
 proportionately for less than 15 years of credited service at retirement.
The minimum Retirement Plan benefit is not subject to Social Security   
offset.                                                                 
(3) The Retirement Plan formula maximum benefit equal to 60% of a               
 participant's highest consecutive 12 months' earnings during the last 120
months.                                                                 

Messrs. Greenberg, Bunn, Westerman, Ladner and Cuzzolina had, respectively, 
16 years, 38 years, 28 years, 23 years and 22 years of estimated credited       
service under these Plans at September 30, 1996. Mr. Mauch participated in the  
Company's Retirement Plan through December 31, 1992 and had 15 years of         
estimated credited service as of that date. On January 1, 1993, Mr. Mauch       
began participating in the AmeriGas Propane, Inc. Pension Plan.                 

Agreement with Robert C. Mauch. At the time of Mr. Mauch's retirement,      
AmeriGas Propane entered into an agreement which recognized his substantial     
contributions to AmeriGas Propane. As set forth in the Summary Compensation     
Table, in addition to his retirement benefits, the agreement provided for       
payment of his earned and accrued vacation and personal holidays, a pro-rated   
1996 annual bonus, a supplemental payment of $806,494, continuation of          
medical, dental, long-term disability and certain other insurance benefits      
through September 30, 1997, and certain professional services not to exceed     
$75,000 in value.                                                               

Severance Pay Plan for Senior Executive Employees. The Severance Pay Plan   
for Senior Executive Employees (the "Severance Plan") assists certain senior    
level employees in the event their employment is terminated without fault on    
their part. Specified benefits are payable to a senior executive covered        

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by the Severance Plan if the senior executive's employment is involuntarily     
terminated for any reason other than for cause or as a result of the senior     
executive's death or disability.                                                

Benefits payable include a lump sum cash payment in an amount approximately 
equal to the sum of (i) three months of compensation (18 months in the case of  
Mr. Greenberg), (ii) a pro rata portion of the senior executive's annual        
target bonus under the Annual Bonus Plan for the current year, and              
(iii) separation pay and pay in lieu of vacation and holidays determined in a   
manner consistent with that payable to employees generally. Employee benefits   
are continued for a specified period (the "Employee Benefit Period") not        
exceeding 15 months (30 months in the case of Mr. Greenberg) after              
termination, or the senior executive may be paid a lump sum equal to the        
present value of such benefits. The Severance Plan also provides for payment    
in cash to a senior executive of an amount approximately equal to all dividend  
equivalents credited (including those that would be credited during the         
Employee Benefit Period) to the senior executive's account under the 1992       
Stock Option and Dividend Equivalent Plan or the 1997 SODEP, whichever is in    
effect. Senior executives may designate a beneficiary for these payments.       

Change of Control Arrangements. On April 30, 1996, the Board of Directors of
the Company approved Change of Control Agreements (individually, an             
"Agreement"), for senior executive officers of the Company and certain of its   
subsidiaries, including Messrs. Greenberg, Mauch, Bunn, Westerman, Ladner and   
Cuzzolina. The Agreements operate independently of the Severance Plan,          
continue through June 2001, and are automatically extended in one-year          
increments thereafter unless, prior to a change of control, the Company         
terminates an Agreement. In the absence of a change of control, each Agreement  
will terminate when, for any reason, the executive terminates his employment    
with the Company or its subsidiaries.                                           

A change of control is generally deemed to occur if: (i) any person (other  
than the executive, his affiliates and associates, the Company or any of its    
subsidiaries, any employee benefit plan of the Company or any of its            
subsidiaries, or any person or entity organized, appointed, or established by   
the Company or its subsidiaries for or pursuant to the terms of any such        
employee benefit plan), together with all affiliates and associates of such     
person, acquires securities representing 20% or more of either (x) the then     
outstanding shares of common stock of the Company or (y) the combined voting    
power of the Company's then outstanding voting securities, in either case       
unless the members of the Executive Committee of the Board of Directors in      
office immediately prior to such acquisition (the "Executive Committee")        
determine that the circumstances do not warrant the implementation of the       
provisions of the Agreement; (ii) 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  
thereof; (iii) 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% of the outstanding common stock and the combined voting power,         
respectively, of the then outstanding voting securities of the surviving or     
acquiring corporation after the transaction, in any such case, unless the       
Executive Committee determines at the time of such transaction that the         
circumstances do not warrant the implementation of the provisions of the        
Agreement; or (iv) the Company is liquidated or dissolved.                      

Severance benefits are payable under the Agreements if there is a           
termination of the executive's employment without cause at any time within      
three years after a change of control. In addition, following a change of       
control, the executive may elect to terminate his or her employment without     
loss of severance benefits in certain specified contingencies, including        
termination of officer status; a significant adverse change in authority,       
duties, responsibilities or compensation; the failure of the Company to comply  
with and satisfy any of the terms of the Agreement; or a substantial            
relocation or excessive travel requirements.                                    

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An executive who is terminated with rights to severance compensation under  
an Agreement will be entitled to receive an amount equal to 1.0 or 1.5 (2.5 in  
the case of Mr. Greenberg) times his average total cash remuneration for the    
preceding five calendar years. The net amount payable under the Agreement,      
taking into account payments due under other plans, as appropriate, may not     
exceed 2.99 times the executive's "base amount" (as defined in Section 280G of  
the Internal Revenue Code of 1986, as amended (the "Code")) which, generally,   
is the average of the executive's taxable annual income received from the       
Company and its subsidiaries during the five-year period preceding the change   
of control, to avoid the special federal tax rules applicable to "excess        
parachute payments."                                                            

To protect both parties to the Agreements, if the severance compensation    
payable under the Agreement, either alone or together with other payments to    
an executive, would constitute "excess parachute payments," as defined in       
Section 280G of the Code, such severance compensation payment would be reduced  
to the largest amount which would result in no portion of such payments being   
disallowed as deductions to the Company under Section 280G of the Code, and no  
portion of such payments being subject to the excise tax imposed on the         
recipient by Section 4999 of the Code. The determination of such reductions     
will be made, in good faith, by the Company's independent accountants and will  
be conclusively binding.                                                        

--------------------------------------------------------------------------------

ITEM 2 -- APPROVAL OF PROPOSED UGI CORPORATION DIRECTORS' EQUITY              
COMPENSATION PLAN 

--------------------------------------------------------------------------------
INTRODUCTION                                                                    

During 1996, in response to changes in competitive practices and in         
anticipation of the expiration of the UGI Corporation 1992 Directors' Stock     
Plan in December 1996, the Company engaged the services of Towers Perrin to     
conduct a review of its compensation program for outside directors. As a        
result of this review, and in keeping with the philosophy of directly aligning  
directors' compensation with shareholder interests, Towers Perrin recommended   
the adoption of the UGI Corporation Directors' Equity Compensation Plan (the    
"Directors' 1997 Plan"), concurrent with the elimination of the Directors'      
1992 Plan and the Directors' Retirement Plan. On October 29, 1996, the Board    
of Directors approved the Directors' 1997 Plan, to be effective January 1,      
1997, subject to shareholder approval. The purpose of the Directors' 1997 Plan  
is to provide further ownership of the Company's Common Stock by non-employee   
directors, thereby aligning such directors' interests more closely with the     
interests of shareholders of the Company. The Directors' 1997 Plan is also      
intended to assist the Company in securing and retaining highly qualified       
persons to serve as non-employee directors, in which position they may          
contribute to the long-term growth and profitability of the Company. Only non-  
employee directors will participate in the Plan.                                

DIRECTORS' 1997 PLAN SUMMARY                                                    

The following summary of the Directors' 1997 Plan is qualified in its       
entirety by the full text of the plan, which is set forth in Annex A to this    
Proxy Statement.                                                                

General Description. In consideration of their services, the Directors' 1997
Plan provides for awards to directors of (i) shares of the Company's common     
stock ("Shares") and (ii) "Deferred Units" which are neither actual Shares nor  
other securities, but which will be accounted for on a basis which directly     
correlates the value of each Deferred Unit ("Unit") to the fair market value    
of a Share. Units will be converted to whole Shares and paid out to directors   
upon their retirement or termination of service.                                

Directors will receive annual awards of Shares in lieu of cash for that     
portion of their annual retainer fee which is in excess of $18,500. The fair    
market value of such Shares will be determined as                               

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of the first day of the Plan Year, and the Shares will be issued promptly       
after the first meeting of the Board of Directors in each Plan Year. The        
amount of the annual retainer fee and the corresponding grant of Shares will    
be prorated for any director who commences service during a Plan Year. Any      
fractional Shares will be paid in cash. Prior to the beginning of each Plan     
Year, participants may elect to defer any portion of their meeting fees and     
the cash portion of their annual retainer into Units.                           

All directors with accrued benefits under the Directors' Retirement Plan    
will have credited to their account an initial award of Units on January 1,     
1997, equal in value to their accrued retirement benefits. To determine the     
number of Units to be credited, the present value of accrued retirement         
benefits for each Participant will be divided by the average of the closing     
sales prices for the Common Stock as reported on the New York Stock Exchange    
Composite Transactions tape for each trading day in the period October 1, 1996  
through December 31, 1996. In addition, directors will receive an annual award  
of 630 Units each year. This annual award is in lieu of continuing benefits     
under the Directors' Retirement Plan and the Directors' 1992 Plan (which        
provided annual stock option grants). Both of these plans will terminate on     
December 31, 1996. Annual awards will be made after the first meeting of the    
Board of Directors in each Plan Year.                                           

Dividend Equivalents. All whole Units credited to a Director will earn      
dividend equivalents on each record date for the payment of a dividend by the   
Company on its Common Stock. A dividend equivalent is an amount determined by   
multiplying the number of Units credited to a participant's account by the      
per-share cash dividend, or the per-share fair market value of any non-cash     
dividend, paid by the Company on its Shares on a dividend payment date.         
Accrued dividend equivalents will be converted to additional whole Units        
annually, on the last day of the Plan Year.                                     

Vesting and Payment. All Units and dividend equivalents are fully vested    
when credited to the participant's account. Account balances will become due    
and payable in Shares upon retirement or termination of service, unless the     
participant shall have elected to defer such benefits. Participants have the    
ability to defer receipt of benefits due upon retirement or termination of      
service until they reach 65 years of age. In addition, participants have the    
option to receive their benefits in a lump sum, or in installments over a       
period of up to 10 years. Participants who defer payment or elect an            
installment payout will continue to be credited with dividend equivalents       
during the deferral and installment periods. In the event of a "change of       
control," account balances will become due and payable in cash unless the       
participant shall have elected to defer such benefits.                          

Administration. The Plan will be administered by the Compensation and       
Management Development Committee. The Board of Directors may amend, suspend or  
terminate the Plan at any time, although without the written consent of a       
participant, accrued benefits may not be adversely affected.                    

Federal Income Tax Consequences. The Company believes recipients of Units   
will not recognize any income for federal income tax purposes until they        
receive payment. The Company will not be entitled to any deduction at the time  
the Units are granted or dividend equivalents are credited to the accounts of   
the recipients, but upon receipt of benefits by the recipient, the Company      
will be entitled to a deduction and the recipient will be subject to ordinary   
income taxes on the value of the Shares and cash, if any, received.             

The annual award of Shares will produce immediate tax consequences for both 
the recipient and the Company. The recipient will be treated as having          
received taxable compensation in an amount equal to the then fair market value  
of the Shares distributed to him or her. The Company will have a corresponding  
deduction of the same amount.                                                   

The preceding discussion is only a general summary of certain federal income
tax consequences arising from participation in the Directors' 1997 Plan. Local  
and state tax authorities may also tax compensation awarded under this Plan.    

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1997 ESTIMATED PLAN BENEFITS                                                    

The following table reflects the estimated awards of Shares and Units for   
the initial Plan Year, not including the one-time award of Units which will be  
made to compensate directors for the loss of their accrued retirement benefits  
due to the termination of the Directors' Retirement Plan on December 31, 1996.  
Those awards are not yet determinable because they will be made based on the    
average price for Shares during the fourth calendar quarter of 1996.            

DIRECTORS' EQUITY COMPENSATION PLAN 
1997 ESTIMATED BENEFITS(1)  

                                                                [Download Table]
---------------------------------------------------------------------

                                                   NUMBER OF         
                                                   SHARES OF  DOLLAR 
  NAME                              DEFERRED UNITS STOCK(2)   VALUE  
---------------------------------------------------------------------
                                                                     
  James W. Stratton                       630          154   $ 17,738
  Robert C. Forney                        630          154   $ 17,738
  David I. J. Wang                        630          154   $ 17,738
  Richard C. Gozon                        630          154   $ 17,738
  Cyrus H. Holley                         630          154   $ 17,738
  Quentin I. Smith, Jr.                   630          154   $ 17,738
  Stephen D. Ban                          630          154   $ 17,738
  Anne Pol                                630          154   $ 17,738
  Outside directors as a Group (8)      5,040        1,232   $141,904

(1) The number of Shares and the Dollar Value shown above reflects a fair       
  market value of $22.625 per Share, based on the average of the highest and
lowest sales prices reported on the New York Stock Exchange Composite   
Transactions tape on December 10, 1996, rounded to the next full one-   
eighth of a point.                                                      
(2) Based on an Annual Retainer of $22,000, effective January 1, 1997, of       
which $3,500 will be paid in the form of Shares. The actual number of   
Shares awarded will be based upon the fair market value per Share on    
January 1, 1997.                                                        

VOTE REQUIRED FOR APPROVAL                                                      

The affirmative vote of a majority of the outstanding shares of Common Stock
represented at the meeting is required to approve the Directors' 1997 Plan.     

The Board of Directors recommends a vote FOR approval of the UGI Corporation
Directors' Equity Compensation Plan.                                            

--------------------------------------------------------------------------------

ITEM 3 -- APPROVAL OF PROPOSED UGI CORPORATION 1997 STOCK OPTION              
AND DIVIDEND EQUIVALENT PLAN  

--------------------------------------------------------------------------------

INTRODUCTION                                                                    

The Board of Directors of the Company is recommending shareholder approval  
of a third Stock Option and Dividend Equivalent Plan to be effective as of      
December 10, 1996 (the "1997 SODEP"). The 1997 SODEP succeeds the UGI           
Corporation 1992 Stock Option and Dividend Equivalent Plan, which in turn       
succeeded the UGI Corporation 1987 Stock Option and Dividend Equivalent Plan.   
Each of the two prior plans was successful in achieving its objective of        
aligning long-term executive compensation with shareholder return. The Board    
of Directors believes that it continues to be appropriate for long-term         
executive compensation to be based on growth in shareholder value.              

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In 1996 the Company engaged the services of its compensation consultant,    
Towers Perrin, to examine this approach in light of current competitive long-   
term compensation practices. Towers Perrin recommended an approach for the      
1997 SODEP that is fundamentally the same as the two prior plans, with some     
modifications. Among those modifications is changing the performance period to  
three years from the five-year period used in the 1992 SODEP. A three-year      
performance period was recommended to reflect both recent competitive           
practices as well as the accelerating pace of change in the energy industry. A  
second modification relates to the change in peer groups against which          
performance is measured. This modification was made to both increase the        
number of companies in the peer group and to recognize the expanded base of     
comparable companies due to the convergence of energy sources occurring in the  
energy industry.                                                                

Towers Perrin also recommended award levels for participants in the Plan.   
The recommendations of Towers Perrin were presented to the Compensation and     
Management Development Committee of the Board of Directors, which is comprised  
solely of outside directors. That Committee thoroughly reviewed the 1997 SODEP  
and submitted its recommendations to the entire Board of Directors of the       
Company. The Board of Directors approved the 1997 SODEP on October 29, 1996.    

The philosophy behind the proposed 1997 SODEP is the same as the philosophy 
underlying the prior two plans. The 1997 SODEP consists of non-qualified stock  
option grants and the opportunity for participants to earn an amount            
equivalent to the dividends paid on the shares covered by options ("Dividend    
Equivalents"), subject to the Company's achievement of long-term goals. In      
general, the performance of the Company will be compared to that of the         
companies in the S&P Utility Index, modified by eliminating all                 
telecommunication companies (as modified, the "1997 Peer Group"), over a        
proposed three-year performance period beginning January 1, 1997 and ending     
December 31, 1999. Performance criteria for the performance period will be      
UGI's total shareholder return performance compared to the performance of the   
companies in the 1997 Peer Group. No payment of Dividend Equivalents will be    
made at the end of the performance period unless the Company's total            
shareholder return is equal to or greater than that of 50% of the companies in  
the 1997 Peer Group. A graph showing the Company's performance against the      
1997 Peer Group for the five-year period 1991 -- 1996 can be found under the    
caption "Corporate Performance" above.                                          

Through the use of this total return technique, the Board of Directors      
continues to believe that a shareholder's investment can be judged on a         
relative basis against comparable investment opportunities and that it is in    
turn appropriate to relate this judgment to key executives' long-term           
compensation.                                                                   

Shareholders receive the benefits of an investment in the Company's Common  
Stock through dividends and through appreciation in the price of that stock.    
This recommended plan rewards key executives in essentially the same way.       
Stock options attain value for the key executives only if the share price       
increases. In addition, the key executives are afforded the opportunity to      
earn an amount equivalent to or greater than the dividends paid on the shares   
covered by the option if they can provide overall shareholder total return      
performance which is superior in comparison to the companies in the 1997 Peer   
Group. Performance against the 1997 Peer Group is considered significant        
because it is believed that the Company's investors would logically seek        
alternative investment opportunities among the companies included in the 1997   
Peer Group. If performance is not superior within the 1997 Peer Group, the      
dividend equivalents will not be earned; if the share price does not            
appreciate, the option does not have value. Thus, the shareholders' and senior  
management's interests are the same. Indeed, the Board of Directors expects     
that Dividend Equivalents, if earned, will be utilized by participants to       
exercise options to acquire additional shares of Common Stock. The Board of     
Directors believes that the 1997 SODEP continues a focus of attempting to       
excel against external competition and directly aligning participant interest   
to shareholder interest. Thus, the Board of Directors recommends that you vote  
FOR the 1997 Plan.                                                              

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PLAN SUMMARY                                                                    

The following summary of the 1997 SODEP is qualified in its entirety by the 
full text of the Plan which is set forth in Annex B to this Proxy Statement.    

General Description. The 1997 SODEP authorizes granting options to acquire  
shares of the Company's Common Stock (the "Common Stock") to designated key     
employees of the Company and its subsidiaries (currently, 8 individuals). The   
number of shares of Common Stock which may be made the subject of options       
under the 1997 SODEP at any one time may not exceed 1,500,000. In addition, no  
participant may be granted more than 300,000 options in any calendar year. The  
1997 SODEP provides for payment to participants of Dividend Equivalents (as     
described below) on option shares, contingent on the achievement of certain     
performance goals more particularly described below. No participant may accrue  
Dividend Equivalents in excess of $1,000,000 in any calendar year. The 1997     
Plan will be in effect until all Common Stock subject to it has been purchased  
through the exercise of options or all options have terminated without          
exercise.                                                                       

Administration; Eligibility. The 1997 SODEP is administered by the          
Compensation and Management Development Committee (the "Compensation            
Committee") of the Company's Board of Directors. The Compensation Committee     
has the power to determine which employees of the Company and its subsidiaries  
will be granted options under the 1997 SODEP. Full-time salaried employees of   
the Company and its subsidiaries are eligible.                                  

Options are granted to employees who, in the opinion of the Compensation    
Committee, are in a position to participate significantly 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.                                                       

Subject to the limitations contained in the Plan, the Compensation Committee
has the power to determine the number of option shares granted to an employee   
and the other terms and conditions of the options, including their exercise     
price and duration (which will not be more than ten years from the date of      
grant). In addition, the Compensation Committee determines (i) the composition  
of a peer group reasonably comparable to the Company and (ii) measurable        
criteria for comparing the total return realizable by a shareholder on a share  
of Common Stock with that of the other companies in the Peer Group.             

Option Price. The option price for options granted under the 1997 SODEP will
be determined by the Compensation Committee, but may not be less than 100% of   
the fair market value of a share of Common Stock on the date of grant.          

Vesting, Exercise and Payment. Except as otherwise provided by the          
Compensation Committee, all options will be 100% vested on the date of grant.   
Subject to shareholder approval of the Plan, each of the options granted on     
December 10, 1996 is fully vested and immediately exercisable. Upon exercise,   
payment for shares of Common Stock must be made (a) in cash or its equivalent,  
(b) by tendering previously acquired shares of Common Stock already owned for   
more than one year and having a fair market value at the time of exercise       
equal to the option price, (c) by applying Dividend Equivalents payable to the  
participant in an amount equal to the option price, or (d) by such other        
method as the Compensation Committee may approve.                               

Terms of Option. The expiration date of options granted under the 1997 SODEP
is determined by the Compensation Committee and will not be later than the      
tenth anniversary of the date an option is granted. Except as otherwise         
provided by the Compensation Committee, options granted under the 1997 SODEP    
are nontransferable, except by will or laws of descent and distribution, and    
are exercisable only while the participant is employed by the Company or a      
subsidiary. However, when employment is terminated by retirement or a           
determination of total disability, or when employment is terminated without     
cause, the options remain exercisable for 13 months after cessation of          
employment.                                                                     

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Dividend Equivalents. The Company will maintain an account in its records   
for each employee granted an option under the 1997 SODEP. From the date the     
option is granted (or, in the case of options granted during the applicable     
performance period to new participants or to participants with changed          
responsibilities, from such date not earlier than the beginning of such         
performance period as is designated by the Compensation Committee) until the    
end of the applicable performance period associated with Dividend Equivalents   
on the option or until the earlier termination of the employee's employment,    
the Company will credit the account on the record date for each dividend        
payment made by the Company on its Stock with an amount equal to the Dividend   
Equivalent associated with that option. The Dividend Equivalent is determined   
by multiplying the number of shares of Common Stock subject to the option on    
the date it is granted by the per-share cash dividend, or the per-share fair    
market value of any non-cash dividend, paid by the Company on its Common        
Stock. A participant may receive payment of the credited Dividend Equivalents   
at or after the end of the applicable performance period for all options        
granted to date, depending upon the percent of comparable companies which have  
a total return realizable by shareholders which is less than the total return   
on a share of Common Stock. No credited Dividend Equivalents will be earned     
unless the total return realizable by shareholders of the Company is equal to   
or greater than that of 50% of the companies in the 1997 Peer Group. The        
percent of credited Dividend Equivalents payable varies from 75% (if the        
Company's return is equal to or greater than that of 50% of companies in the    
1997 Peer Group) to 200% (if the Company's return is greater than that of all   
of the companies in the 1997 Peer Group).                                       

Dividend Equivalents which are determined to be earned may be paid in       
credits to be applied toward payment of the option price, in cash or partly in  
such credits and partly in cash in the discretion of the Compensation           
Committee. From the date 30 days after the date Dividend Equivalents become     
earned until the date they are actually paid, the account maintained in the     
Company's records will be credited with interest at a rate determined by the    
Compensation Committee. Participants in the 1997 SODEP have the right to defer  
receipt of Dividend Equivalent payments on terms and conditions approved by     
the Compensation Committee.                                                     

Amendments. Subject to Board approval, the Compensation Committee may from  
time to time amend, suspend or terminate the 1997 SODEP without the consent of  
the Company's shareholders, although without the written consent of a           
participant, options and Dividend Equivalents associated with such options may  
not be adversely affected. Any such amendment, suspension or termination shall  
be subject to the approval of the shareholders if such approval is required by  
federal or state law or the rules of any stock exchange on which the Common     
Stock is listed, or if the Compensation Committee determines that shareholder   
approval is advisable.                                                          

Federal Income Tax Consequences. There are no federal income tax            
consequences to participants or to the Company upon the grant of a non-         
qualified stock option ("NQSO") under the 1997 SODEP. Upon the exercise of a    
NQSO, a participant will recognize ordinary compensation income in an amount    
equal to the excess of the fair market value of the shares of Common Stock of   
the Company at the time of the exercise over the per share exercise price of    
the NQSO, and the Company generally will be entitled to a corresponding         
federal income tax deduction. Upon the sale of shares of Common Stock acquired  
by exercise of a NQSO, a participant will have a capital gain or loss (long-    
term or short-term depending upon the length of time the shares of Common       
Stock were held) in an amount equal to the difference between the amount        
realized upon the sale and the participant's adjusted tax basis in the shares   
of Common Stock (the exercise price plus the amount of ordinary income          
recognized by the participant at the time of exercise of the NQSO).             

A participant who has been credited with Dividend Equivalents will not have 
taxable income at the time such credit is recorded, and the Company will not    
be entitled to a deduction at such time. A participant will have ordinary       
income at the time the Dividend Equivalents are paid, and the                   

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Company will have a corresponding deduction, subject to the application of the  
provisions of Section 162(m) of the Internal Revenue Code. See "Report of the   
Compensation and Management Development Committee--Policy on Deductibility of   
Compensation."                                                                  

Local and state tax authorities may also tax incentive compensation awarded 
under the 1997 SODEP.                                                           

Tax Withholding. The Company has the right to require the participant to pay
the Company the amount of any taxes which the Company is required to withhold   
in respect of any option or, to the extent authorized by the Compensation       
Committee, to withhold or receive Common Stock in satisfaction of a             
participant's tax obligations, including tax obligations in excess of           
mandatory withholding requirements.                                             

GRANTS MADE SUBJECT TO SHAREHOLDER APPROVAL                                     

Subject to shareholder approval of the 1997 SODEP, options to purchase an   
aggregate of 445,000 shares of Common Stock were granted to current executive   
officers of the Company as set forth in the table below (6 persons). The        
option price for each of these options is $22.625, the fair market value of     
the Common Stock on December 10, 1996, the date of grant.                       

1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN  
1997 ESTIMATED BENEFITS 

                                                                [Download Table]
-------------------------------------------------------------------------

                                                                NUMBER OF
  NAME AND POSITION                                              OPTIONS 
-------------------------------------------------------------------------
                                                                         
  Lon R. Greenberg                                               200,000 
    Chairman, President and Chief Executive Officer                      
  Richard L. Bunn                                                 75,000 
    President and Chief Executive Officer, UGI Utilities, Inc.           
  Charles L. Ladner                                               75,000 
    Senior Vice President--Finance                                       
  Bradley C. Hall                                                 35,000 
    Vice President--New Business Development                             
  Michael J. Cuzzolina                                            30,000 
    Vice President--Accounting and Financial Control                     
  Brendan P. Bovaird                                              30,000 
    Vice President and General Counsel                                   
  Executive Group                                                445,000 

The last reported sale price of UGI's Common Stock on December 10, 1996 as  
reported on the New York Stock Exchange Composite Transactions tape was         
$22.50.                                                                         

VOTE REQUIRED FOR APPROVAL                                                      

The affirmative vote of a majority of the outstanding shares of Common Stock
represented at the meeting is required to approve the 1997 SODEP.               

The Board of Directors recommends a vote FOR approval of the UGI Corporation
1997 Stock Option and Dividend Equivalent Plan.                                 

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ITEM 4 -- RATIFICATION OF APPOINTMENT   
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 
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Upon the recommendation of the Audit Committee, the Board of Directors has  
appointed Coopers & Lybrand L.L.P. as independent certified public accountants  
to examine and report on the consolidated financial statements of the Company   
for the 1997 fiscal year and recommends that the shareholders approve such      
appointment. If the shareholders should not approve such appointment, the       
Audit Committee and the Board of Directors will consider the appointment of     
other independent certified public accountants. Representatives of Coopers &    
Lybrand L.L.P. will be present at the Annual Meeting and will have the          
opportunity to respond to appropriate questions and to make a statement if      
they wish to do so.                                                             

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ITEM 5 -- OTHER MATTERS 

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The Board of Directors is not aware of any other matters to be presented for
action at the meeting. If any other matter requiring a vote of the              
shareholders should arise, it is intended that the persons named in the         
enclosed proxy (or their substitutes) will vote in accordance with their best   
judgment.                                                                       

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                                                                       ANNEX A

UGI CORPORATION 

DIRECTORS' EQUITY COMPENSATION PLAN 

1. PURPOSE                                                                      

The purpose of the UGI Corporation Directors' Equity Compensation Plan is to
provide a means whereby UGI Corporation (the "Company") may, through the grant  
of common stock of the Company ("Common Stock") or deferred units ("Units")     
relating to such stock, offer a reward and an incentive to the members of the   
board of directors of the Company, motivate such directors to exert their best  
efforts on behalf of the Company and further to align the economic interest of  
such individuals with those of the Company's shareholders. This Plan is         
intended to constitute, in part, a non-qualified deferred compensation plan.    

2. DEFINITIONS                                                                  

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

2.01 "Account" means the Company's record established pursuant to Section 5 
which reflects the number of Units and the amount of Dividend Equivalents       
standing to the credit of a Participant under the Plan.                         

2.02 "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the      
Exchange Act.                                                                   

2.03 "Beneficial Owner" means that a person shall be deemed the "Beneficial 
Owner" of any securities: (i) that such person or any of such person's          
Affiliates or Associates, directly or indirectly, has the right to acquire      
(whether such right is exercisable immediately or only after the passage of     
time) pursuant to any agreement, arrangement or understanding (whether or not   
in writing) or upon the exercise of conversion rights, exchange rights,         
rights, warrants or options, or otherwise; provided, however, that a person     
shall not be deemed the "Beneficial Owner" of securities tendered pursuant to   
a tender or exchange offer made by such person or any of such person's          
Affiliates or Associates until such tendered securities are accepted for        
payment, purchase or exchange; (ii) that such person or any of such person's    
Affiliates or Associates, directly or indirectly, has the right to vote or      
dispose of or has "beneficial ownership" of (as determined pursuant to Rule     
13d-3 of the General Rules and Regulations under the Exchange Act), including   
without limitation pursuant to any agreement, arrangement or understanding,     
whether or not in writing; provided, however, that a person shall not be        
deemed the "Beneficial Owner" of any security under this clause (ii) as a       
result of an oral or written agreement, arrangement or understanding to vote    
such security if such agreement, arrangement or understanding (A) arises        
solely from a revocable proxy given in response to a public proxy or consent    
solicitation made pursuant to, and in accordance with, the applicable           
provisions of the General Rules and Regulations under the Exchange Act, and     
(B) is not then reportable by such person on Schedule 13D under the Exchange    
Act (or any comparable or successor report); or (iii) that are beneficially     
owned, directly or indirectly, by any other person (or any Affiliate or         
Associate thereof) with which such person (or any of such person's Affiliates   
or Associates) has any agreement, arrangement or understanding (whether or not  
in writing) for the purpose of acquiring, holding, voting (except pursuant to   
a revocable proxy as described in the proviso to clause (ii) above) or          
disposing of any voting securities of the Company; provided, however, that      
nothing in this section shall cause a person engaged in business as an          
underwriter of securities to be the "Beneficial Owner" of any securities        
acquired through such person's participation in good faith in a firm            
commitment underwriting until the expiration of forty days after the date of    
such acquisition.                                                               

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2.04 "Beneficiary" means the person(s) designated by a Participant to       
receive any benefits payable under this Plan subsequent to the Participant's    
death. The Committee shall provide a form for this purpose. In the event a      
Participant has not filed a Beneficiary designation with the Company, the       
Beneficiary shall be the Participant's estate.                                  

2.05 "Board" means the Board of Directors of the Company.                   

2.06 "Change of Control" of the Company means (i) any person (except the    
Director, his Affiliates and Associates, the Company, any subsidiary of the     
Company, any employee benefit plan of the Company or of any subsidiary of the   
Company, or any person or entity organized, appointed or established by the     
Company for or pursuant to the terms of any such employee benefit plan),        
together with all Affiliates and Associates of such person, becomes the         
Beneficial Owner in the aggregate of 20% or more of either (A) the then         
outstanding shares of common stock of the Company (the "Outstanding Company     
Common Stock") or (B) the combined voting power of the then outstanding voting  
securities of the Company entitled to vote generally in the election of         
directors (the "Company Voting Securities"), in either case unless the members  
of the Committee in office immediately prior to such acquisition determine      
within five business days of the receipt of actual notice of such acquisition   
that the circumstances do not warrant the implementation of the Change of       
Control provisions of this Plan; or (ii) individuals who, as of the beginning   
of any twenty-four month period, constitute the Board (the "Incumbent Board")   
cease for any reason to constitute at least a majority of the Board, provided   
that any individual becoming a director subsequent to the beginning of such     
period whose election or nomination for election by the Company's shareholders  
was approved by a vote of at least a majority of the directors then comprising  
the Incumbent Board shall be considered as though such individual were a        
member of the Incumbent Board, but excluding, for this purpose, any such        
individual whose initial assumption of office is in connection with an actual   
or threatened election contest relating to the election of the Directors of     
the Company (as such terms are used in Rule 14a-11 of Regulation 14A            
promulgated under the Exchange Act); or (iii) consummation by the Company of a  
reorganization, merger or consolidation (a "Business Combination"), in each     
case, with respect to which all or substantially all of the individuals and     
entities who were the respective Beneficial Owners of the Outstanding Company   
Common Stock and Company Voting Securities immediately prior to such Business   
Combination do not, following such Business Combination, Beneficially Own,      
directly or indirectly, more than 50% of, respectively, the then outstanding    
shares of common stock and the combined voting power of the then outstanding    
voting securities entitled to vote generally in the election of directors, as   
the case may be, of the corporation resulting from such Business Combination    
in substantially the same proportion as their ownership immediately prior to    
such Business Combination of the Outstanding Company Common Stock and Company   
Voting Securities, as the case may be, in any such case unless the members of   
the Committee in office immediately prior to such Business Combination          
determine at the time of such Business Combination that the circumstances do    
not warrant the implementation of the Change of Control provisions of this      
Plan; or (iv) (A) Consummation of a complete liquidation or dissolution of the  
Company or (B) sale or other disposition of all or substantially all of the     
assets of the Company other than to a corporation with respect to which,        
following such sale or disposition, more than 50% of, respectively, the then    
outstanding shares of common stock and the combined voting power of the then    
outstanding voting securities entitled to vote generally in the election of     
directors is then owned beneficially, directly or indirectly, by all or         
substantially all of the individuals and entities who were the Beneficial       
Owners, respectively, of the Outstanding Company Common Stock and Company       
Voting Securities immediately prior to such sale or disposition in              
substantially the same proportion as their ownership of the Outstanding         
Company Common Stock and Company Voting Securities, as the case may be,         
immediately prior to such sale or disposition, in any such case unless the      
members of the Committee in office immediately prior to such sale or            
disposition determine at the time of such sale or disposition that the          
circumstances do not warrant the implementation of the Change of Control        
provisions of this Plan.                                                        

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2.07 "Committee" means the Compensation and Management Development Committee
of the Board and any successor thereto.                                         

2.08 "Common Stock" means the common stock of the Company.                  

2.09 "Company" means UGI Corporation and any successor thereto.             

2.10 "Director" means a member of the Board who is not an employee of the   
Company or any of its Affiliates.                                               

2.11 "Dividend Equivalent" means an amount determined by multiplying the    
number of Units credited to a Participant's Account 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.                                               

2.12 "Effective Date" means January 1, 1997.                                

2.13 "Exchange Act" means Securities Exchange Act of 1934, as amended.      

2.14 "Fair Market Value" of Common 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. In the event that there are no Common 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      
Common Stock transactions on that exchange.                                     

2.15 "Participant" means any Director who is eligible to participate in the 
Plan under Section 4. In the event of the death or incompetency of a            
Participant, the term shall mean his personal representative or guardian. An    
individual shall remain a Participant until that individual has received full   
distribution of any amount credited to the Participant's Account.               

2.16 "Plan" means the UGI Corporation Directors' Equity Compensation Plan as
the same is set forth herein, and as it may be amended from time to time.       

2.17 "Plan Year" means the calendar year.                                   

2.18 "Separates from Service" means the Director's termination of service as
a member of the Board for any reason other than death. Except as otherwise      
provided herein, a Separation from Service shall be deemed to have occurred on  
the last day of the month during which the Director's service to the Company    
ceases and shall be determined without reference to any compensation            
continuation arrangement that may be applicable.                                

2.19 "Unit" means a single unit granted to a Participant which represents a 
phantom interest equivalent to one share of Common Stock.                       

2.20 "Unit Value" means, at any time, unless otherwise specified in the     
Plan, the value of each Unit issued under the Plan, which value shall be equal  
to the Fair Market Value of the Common Stock on such date.                      

3. ADMINISTRATION                                                               

The Plan shall be administered by the Committee which shall have full power 
and authority to interpret the Plan, to prescribe, amend and rescind any        
rules, forms and procedures as it deems necessary or appropriate for the        
proper administration of the Plan and to make any other                         

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determinations, including factual determinations, and take such other actions   
as it deems necessary or advisable in carrying out its duties under the Plan.   
All decisions and determinations by the Committee shall be final and binding    
on the Company, Participants, Directors, Beneficiaries and any other persons    
having or claiming an interest hereunder. Any other provisions 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).                             

4. PARTICIPATION                                                                

Each Director of the Company shall become a Participant of the Plan on the  
later of (i) the Effective Date or (ii) the date such individual first becomes  
a Director.                                                                     

5. AWARD OF UNITS                                                               

5.01 Initial Award of Units. On the Effective Date, each Director who is a  
Participant on January 1, 1997 shall be awarded the number of Units equal to    
the present value of benefits accrued by that Director through December 31,     
1996 under the UGI Corporation Retirement Plan for Outside Directors, as        
determined by an actuary appointed by the Committee. The value of each Unit to  
be credited to a Participant's Account pursuant to this section shall be equal  
to the average of the closing sales prices for the Common Stock as reported on  
the New York Stock Exchange Composite Tape for each trading day in the period   
October 1, 1996 through December 31, 1996.                                      

5.02 Annual Award of Units. On the first day of each Plan Year, each        
Participant shall receive an award of 630 Units. Such awarded Units shall be    
credited to each Participant's Account as specified in Section 5.04 below. Any  
Participant who was not a Participant on the first day of the Plan Year shall   
receive, on the date such individual becomes a Participant, a pro-rata share    
of the annual award of Units determined based on the number of calendar         
quarters during the Plan Year that such Participant is expected to serve as a   
Director. A Director will be deemed to serve the entire quarter during which    
he is a Director at least one day.                                              

5.03 Dividend Equivalents                                                   

(a) Dividend Equivalent to be Credited. From the date of grant of each  
Unit to a Participant until the Participant's Account has been fully        
distributed, the Company shall credit to each Participant's Account on each 
record date for the payment of a dividend by the Company on its Common      
Stock, an amount equal to the Dividend Equivalent associated with the Units 
in the Account.                                                             

 (b) Conversion to Units. On the last day of each Plan Year, the amount of
the Dividend Equivalents credited to the Participant's Account during that  
Plan Year shall be converted to a number of Units, based on the Unit Value  
on that day. Notwithstanding the foregoing, in the event of a Change of     
Control or in the event the Participant dies or Separates from Service      
prior to the last day of the Plan Year, as soon as practicable following    
such event and in no event later than the date on which Units are redeemed  
in accordance with Section 6, the Company shall convert the amount of the   
Dividend Equivalents credited to the Participant's Account as of the date   
of the Change of Control, death or Separation from Service (the "Conversion 
Date") to the number of Units based on the Unit Value on the Conversion     
Date.                                                                       

5.04 Accounts. The Company shall keep records to reflect the number of Units
and Dividend Equivalents credited to each Participant hereunder; provided,      
however, that no Participant or any other person shall under any circumstances  
acquire any property interest in any specific assets of the                     

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Company. Fractional Units shall accumulate in the Participant's Account and     
shall be added to fractional Units held in such Account to create whole Units.  
Nothing contained in this Plan and no action taken pursuant hereto shall        
create or be construed to create a fiduciary relationship between the Company   
and any Participant or any other person. To the extent that any person          
acquires a right to receive payment from the Company hereunder, such right      
shall be no greater than the right of any unsecured general creditor of the     
Company.                                                                        

6. EVENTS REQUIRING REDEMPTION OF UNITS                                         

The Company shall redeem Units credited to a Participant's Account only at  
the times and in the manner prescribed by the further terms of this Section 6.  
To determine the total amount to be paid, all redemptions shall be made by      
providing a number of shares of Common Stock equal to the number of Units       
being redeemed; provided, however, that any fractional Units credited to a      
Participant's Account shall be paid in cash in an amount equal to the Unit      
Value of such fractional Unit.                                                  

6.01 Death. In the event a Participant dies, the Company shall redeem all of
the Units then credited to the Participant's Account. Any such redemption       
shall be paid to the Participant's Beneficiary in the form of Common Stock.     

6.02 Separation from Service. In the event a Participant Separates from     
Service, the Company shall redeem all of the Units then credited to the         
Participant's Account as soon as practicable following such Separation from     
Service. Any such redemption shall be paid in the form of Common Stock. A       
Participant may elect to defer receipt of such payment until such Participant   
attains a specified age, not to exceed age sixty-five (65). In addition, a      
Participant may elect to receive such payment in (i) a single distribution or   
(ii) annual or quarterly installments over a period not to exceed ten (10)      
years. Both such elections made hereunder must be made no later than September  
30th of the calendar year preceding the year of Separation from Service.        
Dividend Equivalents will be credited to such Participant's Account in          
accordance with Section 5 until the full amount of the Participant's Account    
has been distributed. Each installment payment shall be calculated by dividing  
the Participant's total Account balance as of such payment date by the number   
of payments remaining in the installment period.                                

6.03 Change of Control. Unless otherwise provided by the Committee, in the  
event of a Change of Control of the Company, the Company shall redeem all of    
the Units then credited to the Participant's Account. Any such redemption       
shall be made in the form of cash. The amount paid shall equal the product of   
the number of Units being redeemed multiplied by the then Unit Value. A         
Participant may elect to defer receipt of such payment until such Participant   
attains a specified age, not to exceed age sixty-five (65). In addition, a      
Participant may elect to receive such payment in (i) a single distribution or   
(ii) annual or quarterly installments over a period not to exceed ten (10)      
years. Both such elections made hereunder must be made no later than September  
30th of the calendar year preceding the year of the Change of Control.          

7. RETAINER AWARDS                                                              

7.01 Annual Grants. The Committee is authorized, subject to limitations     
under applicable law, to grant to any Participant awards of Common Stock in     
lieu of a portion of their annual retainer. Unless otherwise determined by the  
Committee, the number of shares of Common Stock to be paid to Directors         
annually under this Section 7.01 will be equal to (i) the amount by which the   
annual retainer at the rates then in effect exceeds $18,500 divided by (ii)     
the Fair Market Value of the Common Stock as of the first day of the Plan       
Year. The shares of Common Stock to be paid pursuant to this section will       
become due on the date of the first meeting of the Board of Directors during    
the Plan Year. No fractional shares of Common Stock will be granted; instead,   
the amount remaining will be paid to the Participant in cash. As promptly as    
practicable, the Company will issue to the Participant shares of Common Stock   
registered in the name of the Participant (or, if directed by the Participant,  
in joint                                                                        

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names of the Participant and his or her spouse). Any Participant who commences  
service during the Plan Year shall receive a pro-rata share of the annual       
retainer, the same proportion of which will be paid in Common Stock as was      
paid to a Director serving a full Plan Year, determined based on the number of  
calendar quarters during the Plan Year that the Participant is expected to      
serve as a Director.                                                            

7.02 Deferral of Retainers and Meeting Attendance Fees. A Participant may   
elect, no later than the end of the calendar year preceding the calendar year   
of payment to convert all or any part of (i) the cash portion of the annual     
retainer, (ii) Committee Chair annual retainer, and (iii) meeting attendance    
fees, into Units under this Plan, payable in accordance with the terms of the   
Plan. Dividend Equivalents will be credited and Units will be awarded to such   
Participant's Account in accordance with the provisions of Section 5.03 during  
such deferral period.                                                           

8. MISCELLANEOUS                                                                

8.01 Transferability. No Unit awarded under this Plan shall be transferred, 
assigned, pledged or encumbered by the Participant, and a Unit may be redeemed  
during the lifetime of a Participant only from such Participant.                

8.02 No Rights as Shareholder. No Participant shall have any rights as a    
shareholder of the Company, including the right to any cash dividends, or the   
right to vote, as a result of the grant to the Participant, or the              
Participant's holding of, any Units.                                            

8.03 Adjustment Upon Acquisitions, Dispositions or other Events not in the  
Ordinary Course of Business. Notwithstanding anything herein to the contrary,   
if the Company's financial performance is affected by any event that is of a    
non-recurring nature including an acquisition or disposition of the assets or   
stock of a business, the Committee, in its sole discretion, may make such       
adjustments in the number of Units or the Unit Value of each Unit for the then  
current Plan Year as it shall determine to be equitable and appropriate in      
order to make the value of each Unit, as nearly as may be practicable,          
equivalent to the value of the Unit immediately prior to such event.            

8.04 No Rights to Service. Nothing in this Plan, and no action taken        
pursuant hereto, shall affect the Participant's term of service as a Director.  

8.05 Notices. Any notice hereunder to be given to the Company shall be in   
writing and shall be delivered in person to the Secretary of the Company, or    
shall be sent by registered mail, return receipt requested, to the Secretary    
of the Company at the Company's executive offices, and any notice hereunder to  
be given to the Participant shall be in writing and shall be delivered in       
person to the Participant, or shall be sent by registered mail, return receipt  
requested, to the Participant at his last address as shown in the employment    
records of the Company. Any notice duly mailed in accordance with the           
preceding sentence shall be deemed given on the date postmarked.                

8.06 Termination and Amendment of the Plan/Modification of Units. The Plan  
may be terminated, modified or amended by the Committee at any time, except     
with respect to any Units then outstanding under the Plan; provided, however,   
that the Committee may accelerate the redemption of any Units then outstanding  
as if a redemption were then being made under Section 6.                        

8.07 Miscellaneous.                                                         

(a) If the Company shall find that any person to whom any payment is    
payable under this Plan is unable to care for his affairs because of        
illness or accident, or is a minor, any payment due (unless a prior claim   
therefor shall have been made by a duly appointed guardian, committee or    
other legal representative) may be paid to the spouse, a child, a parent,   
or a brother or sister, or to any person deemed by the Company to have      
incurred expense for such person otherwise entitled                         

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to payment, in such manner and proportions as the Company may determine.    
Any such payment shall be a complete discharge of the liabilities of the    
Company under this Plan.                                                    

(b) 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.                        

 (c) This Plan shall be construed in accordance with, and governed by, the
law of the Commonwealth of Pennsylvania.                                    

8.08 Shareholder Approval. This Plan shall be effective on the Effective    
Date, subject to the approval by a majority of the shareholders of the Company  
at the next annual meeting following the Effective Date.                        

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                                                                       ANNEX B

UGI CORPORATION 

1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN  

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.         

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.                        

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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.           

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 1,500,000 in the aggregate, 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 300,000. 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.                                                

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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. 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 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.                                                          

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(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 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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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):                                       

                                                                [Download Table]

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

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.                          

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                                       

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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   
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 close of business on the day the Option is exercised. 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 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 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   

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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 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                  

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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 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.      

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                                                                     EXHIBIT 1

1. PERFORMANCE PERIOD                                                           

January 1, 1997 to December 31, 1999.                                       

2. COMPARISON GROUP                                                             

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,  
Edison International                      Inc.                              
Enron Corporation                         Sonat, Inc.                       
Entergy Corporation                       Southern Company                  
FPL Group, Inc.                           Texas Utilities Company           
GPU, Inc.                                 Unicom Corporation                
Houston Industries, Inc.                  Union Electric Company            
Niagara Mohawk Power Corporation          The Williams Companies, Inc.      

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.                                                         

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                                                                     EXHIBIT 2

UGI CORPORATION 

1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN  
STOCK OPTION AGREEMENT  

This Stock Option Agreement is dated as of          [date of grant]. The    
parties are UGI Corporation, a Pennsylvania corporation ("UGI"), and            
("Employee"), an employee of UGI or a Subsidiary of UGI (collectively   
referred to as the "Company"), residing at                        .             

In consideration of the mutual agreements set forth below and other good and
valuable consideration the receipt and adequacy of which is hereby              
acknowledged, and intending to be legally bound by this Agreement, the Company  
and Employee agree as follows:                                                  

1. INCORPORATION OF PLAN BY REFERENCE. This Stock Option Agreement evidences
the grant of an Option to Employee under the Company's 1997 Stock Option and    
Dividend Equivalent Plan (the "Plan"), a copy of which is attached hereto. All  
of the terms, conditions, and other provisions of the Plan are hereby           
incorporated by reference into this Stock Option Agreement (the "Agreement").   
Capitalized terms used in this Agreement but not defined herein shall have the  
same meanings as in the Plan. If there is any conflict between the provisions   
of this Agreement and the provisions of the Plan, the provisions of the Plan    
shall govern.                                                                   

2. GRANT OF OPTION AND DIVIDEND EQUIVALENTS.                                

(a) Option. UGI hereby confirms the grant to Employee as of the date    
hereof of a non-qualified stock option to purchase all or any part of an    
aggregate of      shares of its Stock at the Option Price of $     per      
share, subject to all the terms and conditions set forth in this Agreement  
and in the Plan (the "Option"). The Option granted hereunder is not         
intended to constitute an incentive stock option within the meaning of      
Section 422 of the Internal Revenue Code of 1986, as amended. The terms of  
the Option are subject to adjustment in certain circumstances, as provided  
in the Plan. The Employee shall be required to pay no consideration for the 
grant of the Option, except for his or her other agreements set forth       
herein.                                                                     

(b) Dividend Equivalents. UGI hereby confirms that, in connection with  
the grant of the Option, Employee is entitled to the crediting of Dividend  
Equivalents in accordance with Section 8 of the Plan (subject to all        
conditions, including the risk of forfeiture, set forth in Section 8 of the 
Plan). The Performance Period with respect to such Dividend Equivalents     
shall begin on      , 19  and end on      , 19 . The exercise of any        
portion of the Option prior to expiration of the Performance Period will    
not result in the forfeiture of Dividend Equivalents credited with respect  
to such portion of the Option.                                              

3. VESTING AND TERMINATION OF OPTION.                                       

(a) Vesting Schedule. The Option shall be exercisable with respect to   
of the total number of shares of Stock subject to the Option on   
    . The Option may be exercised in whole or in part and from time to
time, and any partial exercise of the Option for less than the full number  
of shares underlying the Option or as to which the Option is then           
exercisable will not affect Employee's right to exercise the Option from    
time to time in accordance with this Agreement as to the remaining shares.  

(b) Acceleration of Vesting. The provisions of Section 3(a) above       
notwithstanding, the exercisability of the Option may accelerate in         
accordance with Section 7.3 of the Plan.                                    

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(c) Expiration of Option. The Option, to the extent it has not been     
previously exercised, shall expire at 5:00 p.m. (Eastern Time) on      ,    
20 , unless earlier terminated in accordance with the terms of the Plan.    

4. EXERCISE AND PAYMENT.                                                    

 (a) Notice of Exercise and Payment of Purchase Price. The Option shall be
exercised by the giving of written notice of exercise, in the form attached 
as Exhibit A-1 (or with appropriate changes if notice is given by a person  
other than Employee), to the Secretary of UGI, signed by the Employee or    
other person entitled to exercise the Option (the "Notice") specifying the  
number of shares to be purchased, the Date of Grant of the Option and the   
method of payment. The notice shall be accompanied by payment in full of    
the aggregate Option Price for all such shares being purchased and shall be 
received by 5:00 p.m. on the day the Notice is delivered to the Secretary   
of UGI. The Option Price shall be payable to UGI either (i) in cash or its  
equivalent, (ii) by tendering shares of previously acquired Stock already   
beneficially owned by Employee for more than one year and having an         
aggregate Fair Market Value at the time of exercise equal to the Option     
Price being paid thereby, (iii) by applying Dividend Equivalents payable to 
the Participant in accordance with Section 8 of the Plan in an amount equal 
to the Option Price being paid thereby (if and to the extent such Dividend  
Equivalents have become payable in the form of credits to be applied toward 
payment of the 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). Certificates for any      
shares of Stock so tendered in payment of the Option Price shall be         
delivered by Employee to UGI in negotiable form, duly endorsed in blank or  
with separate stock powers attached, and shall be delivered free and clear  
of all liens, encumbrances, claims and any other charges thereon of any     
kind.                                                                       

 (b) Issuance of Stock. Subject to the provisions of Section 6 below, such
exercise shall be effective upon receipt by the Secretary of UGI of such    
written notice and payment, following which the Treasurer shall deliver to, 
or credit electronically on behalf of, Employee or such other person as may 
be entitled thereto, within an administratively reasonable time, the        
purchased shares. UGI agrees to pay all original issue or stock transfer    
taxes, if any, on the exercise of the Option and all other fees and         
expenses (other than broker fees) necessarily incurred by it in connection  
therewith.                                                                  

(c) Other Methods of Exercise and Payment. In addition to the method of 
exercise and payment set forth in Section 4(a) and (b) hereof, the Option   
may be exercised and payment to UGI made in accordance with any other       
procedures specified in Plan rules and regulations as may be adopted from   
time to time by the Committee.                                              

5. TERMINATION OF EMPLOYMENT. The Option will terminate in accordance with  
the provisions of the Plan.                                                     

6. GOVERNMENTAL AND OTHER APPROVALS. If at any time the listing,            
registration or qualification of the shares covered hereby upon any securities  
exchange or under any state or federal law, or the consent or approval of any   
governmental regulatory body or other person, is necessary or desirable as a    
condition of or in connection with the purchase of shares hereunder, the        
Option shall not be exercised in whole or in part unless and until such         
listing, registration, qualification, consent or approval shall have been       
effected or obtained free of any conditions not acceptable to UGI. UGI agrees   
to use reasonable diligence to obtain any such listing, registration,           
qualification, consent or approval. If the Option is exercised at a time that   
the offer and sale of shares to be delivered to Employee is not covered by an   
effective registration statement under the Securities Act of 1933, as amended,  
or any applicable state securities law, Employee shall deliver such investment  
representations as UGI may reasonably require, and certificates representing    
the shares delivered upon such exercise will bear an                            

(ii)  

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appropriate legend and be subject to such stop-transfer orders and other        
restrictions as may be applicable under such laws and regulations.              

7. NON-TRANSFERABILITY OF OPTION. The Option and rights to Dividend         
Equivalents shall not be transferable otherwise than by will or the laws of     
descent and distribution, and the Option may be exercised during the lifetime   
of the Employee only by the Employee.                                           

8. TAX WITHHOLDING. Employee hereby agrees that, upon exercise of the       
Option, the Company shall be entitled to withhold from Employee's regular       
salary payments, or to separately receive payment from Employee, of an amount   
sufficient to satisfy federal, state and local withholding tax requirements.    
If and to the extent authorized under rules and regulations adopted by the      
Committee and in effect at the time of the exercise of the Option, Employee     
may elect to have the Company withhold from the shares to be delivered upon     
the exercise of the Option, or to deliver to the Company from shares of Stock   
owned separately by the Employee, a sufficient number of such shares to         
satisfy the Employee's federal, state, and local withholding tax obligations    
relating to the Option exercise. In such case, the shares withheld or the       
shares surrendered will be valued at their Fair Market Value at the time of     
the exercise of the Option.                                                     

9. MISCELLANEOUS.                                                           

(a) No Right to Employment. The granting or the exercise of the Option  
shall not constitute or be evidence of any agreement or understanding,      
expressed or implied, that the Company will employ the Employee for any     
specific period of time, in any specific position or at any particular rate 
of remuneration. Nothing herein contained shall affect (i) the Company's    
right to terminate Employee's services at any time for any reason           
whatsoever; or (ii) the right of Employee to participate or receive         
benefits under and in accordance with the provisions of any pension,        
retirement, insurance or other employee welfare benefit plan or program of  
the Company.                                                                

(b) Governing Law. The validity, construction, interpretation and effect
of this Agreement shall exclusively be governed by and determined in        
accordance with the laws of the Commonwealth of Pennsylvania. All section   
headings are for convenience only and shall in no way modify or restrict    
any of the terms or provisions of this Agreement.                           

 (c) Binding Effect; Integration. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and any successors to the        
business of the Company, but neither this Agreement nor any rights          
hereunder shall be assignable by Employee. This Agreement (including Plan   
provisions incorporated by reference herein) constitutes the entire         
agreement between the parties with respect to the Option, and supersedes    
any prior agreements or documents (other than the Plan) with respect to     
such Option. Any amendment, alteration, suspension, discontinuation, or     
termination of this Agreement must be expressed in a written instrument     
duly executed in the name and on behalf of the Company and by the Employee. 

IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement as of
the date first above written.                                                   

                   UGI Corporation

_________________________________         By: _________________________________ 
Employee                                      Title:                            

(iii) 

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                                                                   EXHIBIT A-1

Corporate Secretary                                                             
UGI Corporation                                                                 
460 North Gulph Road                                                            
King of Prussia, PA 19406                                                       
Telephone: 610-337-1000                                                         
Fax: 610-992-3258                                                               

NOTICE OF EXERCISE OF STOCK OPTION--  

UGI CORPORATION 1997 STOCK OPTION AND DIVIDEND EQUIVALENT PLAN  

I hereby elect to purchase     shares of Common Stock of UGI Corporation    
(the "Shares") at the Option Price of $     per share, in accordance with the   
Stock Option Agreement dated as of     , 19 , evidencing the grant to me of an  
Option on that date.                                                            

I hereby elect to pay for the Shares as follows (check method(s)):          

[_]in cash; I enclose herewith my check to the order of UGI Corporation 
in the amount of $    ;                                           

[_]by surrender of     shares of UGI Common Stock owned by me for more  
than one year prior to the date of exercise; I hereby deliver my  
stock certificate(s), numbered    ,    , and    , together with   
stock powers duly executed by me, in accordance with Section 4 of 
the Stock Option Agreement, in payment for the Shares;            

[_]by surrender of credits of Dividend Equivalents accrued under the    
Plan and applicable toward payment of the Option Price, in the    
amount of $    and/or                                             

[_]by payment through the following broker _____________________________

Address _____________________________                               

Telephone ___________________________                               

This notice of exercise shall be valid only if the tendered consideration is
sufficient to pay the entire Option Price for the purchase of the Shares.       

I hereby agree to remit to UGI payment in cash of the full amount of any    
federal, state and local withholding taxes due in connection with my exercise   
of the Option.                                                                  

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COMPLETE SECTION A OR SECTION B AS APPLICABLE AND SIGN SECTION C BELOW:         

A. Certificates to be registered as follows:                                    

        NAME(S)           SOCIAL SECURITY NUMBER(S)   NUMBER OF SHARES
        -------           -------------------------   ----------------

------------------------------------------------------------------------    

------------------------------------------------------------------------    
------------------------------------------------------------------------    

B. I hereby authorize the Company to issue certificates or effect a book entry  
to:                                                                             

____________________________________________________________________________

DTC Participant No. ________________________________________________________

COMPANY TO COMPLETE THE FOLLOWING:                                              

Received by:                                                                    

UGI Corporation                                                                 

By: _________________________________     _____________________________________ 
Name:                                     (Date)                                
Title:                                                                          

Fair Market Value of UGI Common Stock on date received: $    .                  

*    *    *    *

C. Signature:                                                                   

_____________________________________                                           
(Signature of Employee)                                                         

_____________________________________                                           
(Street address)                                                                

_____________________________________                                           
(City)     (State)    (Zip)                                                     

_____________________________________                                           
(Date)                                                                          

A-2 

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PROXY                                                                      PROXY

UGI CORPORATION 

Proxy Solicited by the Board of Directors 

The undersigned hereby appoints Robert C. Forney, James W. Stratton and Lon R.  
Greenberg, or any of them, with full power of substitution, as proxies to       
represent and vote all shares of UGI Common Stock of the undersigned, including 
any shares credited under the UGI Dividend Reinvestment Plan, at the Annual     
Meeting of Shareholders of UGI Corporation to be held February 25, 1997, and any
adjournments thereof, as hereinafter specified and, in their discretion, upon   
such other matters as may properly come before the meeting.                     

THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED. ON     
MATTERS FOR WHICH YOU DO NOT SPECIFY A CHOICE, YOUR SHARES WILL BE VOTED IN     
ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS.                   

                                    (Continued and to be signed on reverse side)

. FOLD AND DETACH HERE .  

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                                                   Annex C    Please mark    [X]
                                                         your votes as
                                                        indicated in
                                                        this example

The Board of Directors recommends that you vote "FOR" Numbers 1,2,3 and 4.      

1. ELECTION OF DIRECTORS              J.W. Stratton, R.C. Forney, D.I.J. Wang   
                                     R.C. Gozon, C.H. Holley, Q.I. Smith, Jr.,
 FOR            WITHHOLD        S.D. Ban, A. Pol and L.R. Greenberg.
all nominees       AUTHORITY                                              
(except as noted) (all nominees)     (INSTRUCTION: To withhold authority to   
                                   vote for any individual nominee, strike
     [_]               [_]          a line through the nominee's name in the
        list above.)

                                                        [Enlarge/Download Table]

                                                                                      
2. APPROVAL OF UGI CORPORATION               3. APPROVAL OF UGI CORPORATION 1997 STOCK
   DIRECTORS' EQUITY COMPENSATION PLAN.         OPTION AND DIVIDEND EQUIVALENT PLAN.  

     FOR  AGAINST  ABSTAIN                           FOR  AGAINST  ABSTAIN            
     [_]    [_]      [_]                             [_]    [_]      [_]              

4. APPROVAL OF APPOINTMENT OF COOPERS & LYBRAND                                       
   L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS.                                          

     FOR  AGAINST  ABSTAIN                                                            
     [_]    [_]      [_]                                                              

                                    When shares are held by joint tenants,
                               both should sign. When signing as
                                attorney, executor, administrator,
                                    trustee, or guardian, please give full
                                     title as such. If a corporation, please
                                  sign the full corporate name by duly
                 authorized officer.

                                       -----------------------------------------
          Signature(s)

   Dated
                                            ------------------------------------

................................................................................
FOLD AND DETACH HERE  

[LOGO OF UGI CORPORATION APPEARS HERE]                                          

Dear Shareholder:                                                               

        Enclosed are materials relating to UGI Corporation's 1997 Annual Meeting
of Shareholders. The Notice of the Meeting and Proxy Statement describe the     
formal business to be transacted at the meeting.                                

  Your vote is important to us. Please complete, sign and return the
attached proxy card in the accompanying postage-paid envelope whether or not you
expect to attend the meeting.                                                   

                                 Barton D. Whitman
                                   Corporate Secretary

--------------------------------------------------------------------------------
  UGI NEWS & REPORTS                         You can obtain news and other
 --------------------                        information about UGI and our
  24 Hours a day -- Every day!            majority-owned AmeriGas Partners, L.P.
  1-800-UGI-9453 Or                           conveniently by telephone or
http://www.shareholder.com/ugi/                        by the Internet.         
--------------------------------------------------------------------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		12/31/06		38					10-Q
		12/31/99		25		45			10-Q
		12/10/97		44
		9/30/97		20					10-K,  8-K/A
		8/28/97		5
For Period End:		2/25/97		2		51
Deleted on:		1/10/97
		1/2/97		6		7
		1/1/97		16		45
		12/31/96		12		33			10-Q
		12/27/96		2		4
Filed on:		12/26/96							10-K405
		12/13/96		4		9
		12/10/96		24		44
		11/1/96		6
		10/29/96		22		25
		10/1/96		23		33
		9/30/96		7		20			10-K405
		9/1/96		18		19
		7/31/96		7
		4/30/96		21
		2/27/96		16
		2/8/96		16
		1/1/94		19
		1/1/93		20
		12/31/92		20
		1/1/92		19
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