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United Cites Gas Company
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URGENT FEDERAL EXPRESS INSTRUCTIONS
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November 7, 1996
Dear Shareholder:
In order to assure that your latest dated proxy is tabulated, please take time
to sign and date management's enclosed WHITE PROXY CARD and Federal Express it
back to our proxy solicitor, Corporate Investor Communications, Inc., in the
prepaid return FedEX envelope.
You can arrange for your proxy to be picked up by Federal Express simply by
calling (800) 463-3339, and telling the operator your address and the time you
would like them to pick it up.
You must arrange for pick up no later than 5:00 PM on Monday, November 11, 1996.
It is critical to the success of the merger between Atmos Energy and Unted
Cities that we receive your latest dated proxy.
Thank you for your support and cooperation.
United Cities Gas Company
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United Cites Gas Company
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IMPORTANT NOTICE
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November 1, 1996
Dear Shareholder,
As you are aware by now, Southern Union has launched a self-serving campaign
attempting to derail the proposed merger of United Cities Gas Company and Atmos
Energy Corporation at the Special Meeting of Shareholders scheduled to be held
on November 12, 1996.
The Board of Directors of United Cities urges you to ignore any proxy
solicitation materials you receive from Southern Union. DO NOT RETURN SOUTHERN
UNION'S PROXY CARD. Instead, please VOTE ALL WHITE PROXY CARDS sent to you by
United Cities. If you have previously voted a white proxy card, we appreciate
your support and ask that you be patient during this critical time and please
continue to vote all WHITE PROXY CARDS as you receive them.
WHY IS SOUTHERN UNION TRYING TO CONVINCE YOU TO
VOTE AGAINST A MERGER AGREEMENT THAT IS IN YOUR BEST INTERESTS?
The company resulting from the combination of Atmos and United Cities would be
well-positioned to compete with Southern Union on the acquisition of properties
and other business opportunities. In addition, Southern Union claims in its
preliminary proxy materials that is has had an interest in acquiring United
Cities. Your management believes that Southern Union's sole purpose in launching
its campaign is to break up or weaken a transaction that it perceives is a
threat to its self-interest.
HOW WILL SOUTHERN UNION TRY TO
CONVINCE YOU THAT THE MERGER IS NOT IN YOUR BEST INTERESTS?
Southern Union will claim that your Board of Directors did not act in your best
interests. They will imply that this deal is inferior and less than what you
deserve. And finally, they will attempt to discredit your Board of Directors.
Let's look at the facts:
(i) The merger consideration represents a 52.2% premium at the time of the
announcement of the merger.
(ii) While Southern Union claims it tried to discuss a possible transaction
with United Cities - a claim denied by United Cities in the context of
ongoing litigation between the parties - more than three months have
passed since the announcement of this Merger, and no one, including
Southern Union, has come forward with any alternative proposal.
(iii)Southern Union criticizes the employment arrangements of your
management in connection with the merger. The fact is, it was a
condition to the merger agreement that your management waive certain
retirement benefits with a value several times in excess of what will
be received in exchange for these waivers.
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EXERCISING DISSENTERS' RIGHTS POSES SIGNIFICANT RISKS,
AND COULD HELP SOUTHERN UNION'S EFFORTS TO DERAIL THIS MERGER.
Southern Union will attempt to influence shareholders to exercise dissenters'
rights. There are no guarantees that more money will be received in an appraisal
proceeding. And you may be subject to tax liabilities on the excess of the
amount of cash received in an appraisal proceeding, unlike the Merger
consideration, the receipt of which is intended to have no tax liability on the
shareholders.
PLEASE REMEMBER, SUPPORTING SOUTHERN UNION'S EFFORTS
TO DERAIL THE MERGER WITH ATMOS WILL BE IN ITS BEST INTERESTS,
NOT YOURS!
If you have any further questions, please call our proxy solicitor toll-free at
(888) 868-3347.
Sincerely,
Gene C. Koonce
Chairman of the Board, President and
Chief Executive Officer
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EXTREMELY IMPORTANT
Please vote FOR the proposed merger between United Cities Gas
Company and Atmos Energy Corporation by SIGNING, DATING and
MAILING the enclosed WHITE PROXY CARD today in the postage paid
envelope provided. Only the latest dated proxy counts.
We urge you not to return any Proxy Cards sent to you by Southern
Union Company. If you accidentally vote a later dated card sent
to you by Southern Union, please sign and date a new WHITE PROXY
CARD or call us for assistance. If your shares are held with a
brokerage firm, your broker cannot vote your shares unless he
receives your specific instructions.
If you have any questions about how to vote your shares, please
call our proxy solicitor toll-free at:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, NJ 07072
(888) 868-3347
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