Connecticut Stock Option and Dividend Equivalent Plan Overview: The Connecticut Stock Option and Dividend Equivalent Plan is a unique compensation program offered by UGI Corp. to its employees in the state of Connecticut. It provides employees with the opportunity to earn stock options and dividend equivalents, enhancing their overall compensation package. UGI Corp. offers various types of Connecticut Stock Option and Dividend Equivalent Plans to cater to the diverse needs of its employees. 1. Connecticut Stock Option Plan: The Connecticut Stock Option Plan enables eligible employees to purchase a specific number of UGI Corp. common shares at a predetermined price, known as the exercise price or the strike price. This price is typically set below the current market value, offering employees a favorable opportunity to accumulate company shares. The plan typically includes vesting schedules to encourage long-term commitment and loyalty. Exhibit 1: Sample Vesting Schedule for the Connecticut Stock Option Plan Year of Service Percentage Vested 1st Year 25% 2nd Year 35% 3rd Year 50% 4th Year 75% 5th Year 100% 2. Connecticut Dividend Equivalent Plan: The Connecticut Dividend Equivalent Plan allows eligible employees to receive cash payments equivalent to the dividends expected to be paid on UGI Corp. shares. This plan ensures that employees benefit from the value generated by the company even if they do not directly hold the stock. Dividend equivalents are paid periodically, typically on the same schedule as regular dividend payments to shareholders. Exhibit 2: Sample Dividend Equivalent Payments for the Connecticut Dividend Equivalent Plan Quarter Dividend Equivalent Payment Q$1500 Q$2750 Q$3600 Q$4900 Different Types of Connecticut Stock Option and Dividend Equivalent Plans: 1. Incentive Stock Option Plan (ISO): UGI Corp. may offer an Incentive Stock Option Plan as a type of Connecticut Stock Option and Dividend Equivalent Plan. This plan provides favorable tax treatment for employees since the gain on the sale of ISO shares is typically taxed at a lower rate. It encourages long-term employment and shareholding. 2. Non-Qualified Stock Option Plan (NO): UGI Corp. may offer a Non-Qualified Stock Option Plan, which does not qualify for the same tax benefits as ISO plans. However, NO plans provide greater flexibility in terms of eligibility criteria and options exercise rules, making them more accessible to a wider range of employees. Exhibit 3: Eligibility Comparison for Incentive Stock Option (ISO) and Non-Qualified Stock Option (NO) Plans Criteria ISO Plan NO Plan Employee Type Limited Broad Exercise Rules Strict Flexible Tax Treatment Favorable Regular UGI Corp. is committed to providing its employees in Connecticut with attractive compensation plans, including the Connecticut Stock Option and Dividend Equivalent Plans. These plans offer employees the opportunity to participate in the company's growth and success, aligning their interests with those of the shareholders while rewarding their contributions.
Connecticut Stock Option and Dividend Equivalent Plan with exhibits of UGI Corp.
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FAQ
UGI's transfer agent, Computershare Trust Company, N.A., sponsors and administers the direct stock purchase of UGI Corporation stock.
For a securities lending or sale-repurchase transaction, the amount of the dividend equivalent for each underlying security is the amount of the actual per-share dividend paid on the underlying security multiplied by the number of shares of the underlying security.
Dividend Equivalent means an amount determined by multiplying the number of shares of UGI common stock subject to the target award of Performance Units by the per-share cash dividend, or the per-share fair market value of any dividend in consideration other than cash, paid by UGI on its common stock.
A dividend equivalent right entitles the recipient to receive credits equal to the cash or stock dividends or other distributions that would have been received on shares of stock had the shares been issued and outstanding on the dividend record date.
A dividend equivalent payment is treated as a dividend from sources within the United States. ingly, the dividend is subject to the flat 30-percent withholding tax (or lower withholding tax rate, if provided for by a treaty) if received by a nonresident alien or foreign corporation (IRC § 871(m); Reg. §1.881-2).