EMPLOYEE AGREEMENT

This EMPLOYEE AGREEMENT (this Agreement), is made as of the 26^th day of January, 2006, by and between SOUTHERN UNION COMPANY, a Delaware corporation (Seller), and UGI CORPORATION, a Pennsylvania corporation (Buyer).

W I T N E S S E T H:

WHEREAS, Seller is engaged in the Business;

WHEREAS, Seller and Buyer have entered into the Purchase and Sale Agreement, dated as of January 26, 2006 (the Sale Agreement), in which this Agreement is incorporated by reference; and

WHEREAS, Buyer intends to cause an Affiliate to offer employment to all persons who are employed in the Business and to assume responsibility for certain employee benefits upon the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the respective covenants, representations and

warranties herein contained, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1 General. Capitalized terms used in this Agreement (including Schedules to this Agreement) not defined herein shall have the meanings ascribed to them in the Sale Agreement. For purposes of this Agreement (including Schedules to this Agreement), the following terms shall have the meanings set forth below.

Base Compensation shall mean an Employees base hourly wages or base salary, as applicable.

COBRA shall mean the continuation coverage requirements for group health plans under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in IRC Section 4980B and ERISA Sections 601-608.

Continuation Period shall mean the one-year period following the Closing Date.

Employee shall mean a person who is a full-time or part-time employee of Seller, whether or not covered by a collective bargaining agreement, whose responsibilities pertain primarily to the Business on the Closing Date, including an employee who is not actively at work on the Closing Date because the employee is on workers compensation, on an approved leave of absence (including an approved leave of absence with a legal or contractual right to reinstatement, military leave, maternity leave, or leave under the Family and Medical Leave Act of 1993) or absent due to vacation, disability, illness or other similar circumstance except that a person who is absent due to, and who is on, long-term disability shall not be deemed to be an Employee hereunder where such person is unable to perform the essential functions of his or her job, with or without reasonable accommodation (or otherwise consistent with applicable Legal Requirements). A preliminary list of Employees, as of January 26, 2006, is set forth in Schedule 1.1.

For Cause shall mean (1) the commission by the Transferred Employee of a criminal or other act that causes or is reasonably likely to cause substantial economic damage to Buyer or substantial injury to the business reputation of Buyer, (2) the commission by the Transferred Employee of an act of fraud, theft or financial dishonesty in the performance of the Transferred Employees duties on behalf of Buyer, (3) the continuing failure or continuing refusal of the Transferred Employee to satisfactorily perform the duties of the Transferred Employee to Buyer, (4) the material disregard or violation by the Transferred Employee of the legal rights of any employees of the Buyer or of the Buyers written policies regarding harassment or discrimination, or (5) any other conduct materially detrimental to the Buyers business.

Former Employee shall mean a person who was formerly employed by Seller whose responsibilities pertained primarily to the Business and who is not an Employee on the Closing Date.

Liabilities shall mean any direct or indirect liability (whether absolute, accrued or unaccrued, fixed or unfixed, choate or inchoate, secured or unsecured, liquidated or unliquidated, matured or unmatured, known or unknown, contingent or otherwise), indebtedness, obligation, expense, claim, charge, cause of action, deficiency, guarantee or endorsement of or by a party, including those arising under any applicable law or action, under any award of any court, administrative agency, tribunal or arbitrator, and under any contract or undertaking.

Transferred Employee shall mean an Employee who accepts Buyers offer of employment pursuant to Section 2.3 and commences employment with Buyer or its Affiliate.
 

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