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United Cities Gas Company
November 4, 1996
Dear Shareholder:
I am pleased to advise you that United Cities Gas Company and Atmos Energy
Corporation have reached an agreement with Southern Union Company under which
Southern Union has agreed not to exercise dissenters' rights with respect to the
proposed merger between United Cities and Atmos and has agreed not to solicit
United Cities' shareholders to exercise their dissenter's rights with respect to
the merger. Southern Union has also agreed not to solicit proxies against the
merger. United Cities and Atmos have agreed to stop contesting Southern Union's
ownership of United Cities shares and the Atmos shares into which such shares
will be converted in the merger. Atmos has also agreed to give Southern Union a
right of first offer in respect of certain properties it may dispose of during
the two years following consummation of the merger. Atmos does not currently
contemplate the sale of any properties.
We are very happy that we will now be able to proceed directly to our
shareholders meeting on November 12 to consider this very advantageous
transaction to our shareholders without a proxy fight and without the risk of
litigation delay. I personally want to thank all of you for your support and
understanding during this process.
Sincerely,
Gene C. Koonce
Chairman of the Board, President and
Chief Executive Officer
