<PAGE>
Southern
Union
Company
504 Lavaca Street, Eighth Floor
Austin, Texas 78701
September 29, 1995
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Southern Union Company to be held at 2:00 p. m.
(Central Standard Time) on Tuesday, November 7, 1995 in the
eighth floor atrium of the Company's offices at Lavaca Plaza, 504
Lavaca Street, Austin, Texas. A notice of the meeting, a proxy
and a proxy statement containing information about the matters to
be acted upon are enclosed.
In addition to the specific matters to be acted upon, there will
be a report on the progress of the Company and an opportunity for
questions of general interest to the stockholders.
Whether or not you plan to attend the meeting on November 7, 1995
please mark, sign and date the enclosed proxy and return it in
the envelope provided (which requires no postage if mailed in the
United States) so that your shares will be represented. Your
prompt cooperation will be appreciated.
On behalf of the Board of Directors,
Sincerely,
GEORGE L. LINDEMANN
Chairman of the Board and
Chief Executive Officer
Southern Union Company
504 Lavaca Street, Eighth Floor
Austin, Texas 78701
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 7, 1995
To the Holders of Common Stock of
SOUTHERN UNION COMPANY:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Stock-
holders (the "Meeting") of Southern Union Company, a Delaware
corporation (the "Company"), will be held in the eighth floor
atrium of the Company's office at Lavaca Plaza, 504 Lavaca
Street, Austin, Texas, on Tuesday, November 7, 1995 at 2:00 p. m.
(Central Standard Time) for the purpose of considering and acting
upon: (i) the election of four persons to serve as the Class II
directors until the 1998 Annual Meeting of Stockholders or until
their successors are duly elected and qualified; (ii) a proposed
increase in employee contributions subject to Company matching
from two percent to five percent under the Southern Union Company
Supplemental Deferred Compensation Plan; and (iii) such other
business as may properly come before the Meeting or any adjourn-
ment or postponement thereof. The Board of Directors is not
aware of any other business to come before the Meeting.
The Board of Directors has fixed September 22, 1995, as the
record date (the "Record Date") for the determination of stock-
holders entitled to notice of, and to vote at, the Meeting and
any adjournment or postponement thereof. Only holders of record
of the Company's common stock, par value $1.00 per share ("Common
Stock"), at the close of business on the Record Date are entitled
to vote on all matters coming before the Meeting or any adjourn-
ment or postponement thereof. A complete list of stockholders of
record entitled to vote at the Meeting will be maintained in the
Company's offices at 504 Lavaca Street, Eighth Floor, Austin,
Texas 78701, for ten days prior to the Meeting.
Whether or not you plan to attend the Meeting in person, please
mark, execute, date and return the enclosed proxy in the envelope
provided (which requires no postage if mailed within the United
States). Should you attend the Meeting in person you may, if you
wish, withdraw your proxy and vote your shares in person.
By Order of the Board of Directors,
DENNIS K. MORGAN
Secretary
Austin, Texas
September 29, 1995
Southern Union Company
504 Lavaca Street, Eighth Floor
Austin, Texas 78701
-------------------
PROXY STATEMENT
-------------------
The accompanying proxy, to be mailed to stockholders together
with the Notice of Annual Meeting and this Proxy Statement on or
about October 2, 1995, is solicited by Southern Union Company
(the "Company") in connection with the Annual Meeting of Stock-
olders to be held on November 7, 1995 (the "Meeting"). A proxy
may be revoked by a stockholder at any time prior to its exercise
by executing and returning another proxy bearing a later date, by
giving written notice of revocation to the Secretary of the
Company, or by attending the Meeting and voting in person.
All properly executed, unrevoked proxies received before the
Meeting will be voted in accordance with the directions of the
stockholders. When no direction has been given by a stockholder
returning a signed proxy, the proxy will be voted FOR ALL
NOMINEES named in this proxy statement for election as directors
and FOR the proposed increase in employee contributions subject
to Company matching from two percent to five percent under the
Southern Union Company Supplemental Deferred Compensation Plan.
Proxies should NOT be sent by stockholders to the Company but to
Continental Stock Transfer & Trust Company, the Company's
Registrar and Transfer Agent, at 2 Broadway, New York, New York
10275-0491.
September 22, 1995, has been set as the record date (the "Record
Date") for determination of stockholders entitled to notice of
and to vote at the Meeting. Holders of the Company's common
stock, $1.00 par value (the "Common Stock"), at the close of
business on the Record Date will be entitled to one vote per
share on all proper business brought before the Meeting. With
respect to the election of directors, holders of Common Stock
have cumulative voting rights, which entitle each stockholder to
that number of votes which equals the number of shares held
multiplied by the number of directors to be elected. The Bylaws
of the Company provide that any stockholder who intends to so
cumulate votes must give written notice to the Secretary of the
Company no later than ten (10) days after the date on which
notice of the Meeting was first sent to stockholders.
On the Record Date, there were outstanding and entitled to vote
11,518,622 shares of Common Stock. The presence, in person or by
proxy, of a majority of the outstanding shares of Common Stock
entitled to vote at the Meeting will constitute a quorum.
Proxies submitted that contain abstentions or broker non-votes
will be deemed present at the Meeting for purposes of determining
the presence of a quorum. In all matters other than the election
of directors, the affirmative vote of a majority of shares
present in person or represented by proxy and entitled to vote on
the subject matter shall constitute shareholder action.
Accordingly, an abstention other than with respect to the
election of a director has the same effect as a negative vote.
Directors are elected by a plurality of the votes of shares
present in person or represented by proxy and entitled to vote in
the election.
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three
classes, each of which serves a staggered three-year term. The
terms of the Class II directors expire at the Meeting. The Class
III directors will serve until the 1996 Annual Meeting of Stock-
holders and the Class I directors will serve until the 1997
Annual Meeting of Stockholders. Aaron I. Fleischman,
Kurt A. Gitter, Adam M. Lindemann and George Rountree, III (the
"Nominees") are the Class II directors standing for election for
a three-year term of office expiring at the 1998 Annual Meeting
of Stockholders or when their successors are duly elected and
qualified.
The Company is informed that each of the Nominees is willing, if
elected, to serve as a director; however, if any of them should
decline or become unable to serve as a director for any reason,
votes will be cast instead for a substitute nominee designated by
the Board of Directors or, if none is so designated, will be cast
according to the judgment of the person or persons voting the
proxy. If cumulative voting is in effect at the Meeting, unless
authority is withheld, the persons named in the enclosed proxy
will allocate the votes represented by such proxy in the manner
they deem proper in their best judgment.
Pursuant to the Company's Bylaws, any stockholder entitled to
vote at a meeting called for the election of directors may nomi-
nate candidates for election as directors if written notice is
delivered to the Company's Secretary at least 45 days before an
annual meeting (which was September 25, 1995 for the Meeting) or
no later than ten days after the date of the notice of a special
meeting. Accordingly, no stockholder may make additional nomina-
tions at the Annual Meeting. The notice must include certain
information about the nominating stockholder and the nominees.
Certain persons are also disqualified from serving as directors.
A copy of the relevant Bylaw provisions may be obtained from the
Company's Secretary. As of the date hereof, no stockholder has
nominated any person to serve as a director of the Company.
The following pages contain information concerning the Nominees
and the directors whose terms of office will continue after the
meeting.
Nominees
Class II - Term expires in 1998
Aaron I. Fleischman has been Senior Partner of Fleischman and
Walsh, L.L.P., a Washington, D.C. law firm specializing in regu-
latory, corporate-securities and litigation matters for telecom-
munications and regulated utility companies since 1976.
Mr. Fleischman is also a director of Citizens Utilities Company.
Age: 56.
Kurt A. Gitter, M.D. has been an ophthalmic surgeon in private
practice in New Orleans, Louisiana, since 1969. He has also been
a Clinical Professor of Ophthalmology at Louisiana State Univer-
sity since 1978 and an assistant professor of ophthalmology at
Tulane University since 1969. From 1986 to 1993 Mr. Gitter
served as Chief of Ophthalmology at Touro Infirmary. Mr. Gitter
has been a Director of the Company since June 1995. Age: 58.
Adam M. Lindemann has been a securities analyst for Oppenheimer &
Company since November 1994. Previously during 1994, he was a
corporate finance associate with Perry Partners, a money manage-
ment firm. From May 1992 until 1994 he was primarily engaged in
private investments. Prior to May 1992, he had been Vice
President - Corporate Development of Metro Mobile CTS, Inc.
("Metro Mobile") and President of Vision Energy Resources, Inc.,
a wholly owned subsidiary of Metro Mobile primarily engaged in
the distribution of propane. Adam M. Lindemann is the son of
George L. Lindemann, Chairman of the Board and Chief Executive
Officer of Southern Union. Age: 34.
George Rountree, III has been an attorney in private practice in
Wilmington, North Carolina where he has been a senior partner in
the firm of Rountree & Seagle since its formation in 1977. Age:
62.
THE BOARD RECOMMENDS A VOTE FOR ALL NOMINEES TO SERVE AS CLASS II
DIRECTORS.
Directors Continuing in Office
Class I - Term expires in 1997
John E. Brennan has been Vice Chairman of the Board of Southern
Union since February 1990. Mr. Brennan devotes only a small part
of his business time to the Company. Mr. Brennan has been pri-
marily engaged in private investments since May 1992. Prior to
May 1992, Mr. Brennan had been President and Chief Operating
Officer of Metro Mobile. Age: 49.
Frank W. Denius has been a director of Southern Union since 1976
and previously served as a director from 1955 to 1975. Since
February 1990, Mr. Denius has been Chairman Emeritus of the Com-
pany. Mr. Denius was Chairman of the Board and President of the
Company from 1986 until February 1990 and Chief Executive Officer
from 1985 until February 1990. Since February 1990, Mr. Denius
has been engaged primarily in the private practice of law in
Austin, Texas. Mr. Denius is also a director of TCC Industries.
Age: 70.
Roger J. Pearson has been an attorney in private practice in
Stamford, Connecticut for more than the past five years. He has
been of counsel to the firm of Neville, Shaver, Kelly & McLean
since 1991. Mr. Pearson was First-Selectman (Mayor) of Green-
wich, Connecticut from 1983 to 1985. Mr. Pearson has been a
Director of the Company since January 1992. Age: 49.
Class III - Term expires in 1996
George L. Lindemann has been Chairman of the Board and Chief
Executive Officer of Southern Union since February 1990. He has
been Chairman of the Executive Committee of the Board of
Directors since March 1990. Mr. Lindemann does not devote his
full business time to the Company. He was Chairman of the Board
and Chief Executive Officer of Metro Mobile from its formation in
1983 through April 1992. He has been President and a director
of Cellular Dynamics, Inc., the managing general partner of
Activated Communications Limited Partnership, a private invest-
ent business, since May 1982. Age: 59.
Peter H. Kelley has been President and Chief Operating Officer of
Southern Union since February 1990, President and Chief Operating
Officer of Southern Union Gas Company ("Southern Union Gas"), a
division of the Company, since October 1990, and Chief Executive
Officer of Missouri Gas Energy ("MGE"), a division of the Com-
pany, since December 1993. From December 1993 to September 1995,
Mr. Kelley was also President of MGE. Prior to joining the Com-
pany, he had been an officer of Metro Mobile since 1986.
Mr. Kelley is also a director of Texas Commerce Bank, N.A. --
Austin. Age: 48.
Dan K. Wassong has been the President, Chief Executive Officer
and a director of Del Laboratories, Inc., a manufacturer of
cosmetics, toiletries and pharmaceuticals, for more than the past
five years. Mr. Wassong is also a director of Moore Medical
Corporation. Age: 65.
With the exception of Messrs. Denius, Gitter and Pearson as
described above, each of the above-named directors and Nominees
first became a director of the Company in February 1990.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Executive Officers of the Company are elected by the Board to
serve at the pleasure of the Board or until their successors are
elected and qualified. Generally, officers are reelected
annually by the Board. The following Executive Officers of the
Company are not directors.
C. Thomas Clowe, Jr. has been President and Chief Operating
Officer of MGE since September 1995. Prior to joining the Com-
pany, Mr. Clowe served as Chairman of the Board, President and
Chief Executive Officer of Central Freight Lines, Inc. from 1990
until 1995. Age: 62.
Ronald J. Endres has been Senior Vice President - Finance and
Administration since October 1990 and Chief Financial Officer
since October 1989. He has been a Senior Vice President since
April 1987. Previously, Mr. Endres held other financial and
operating positions with the Company since June 1969. Mr. Endres
was President of Southern Union Gas from January 1986 until
October 1990. Age: 51.
David J. Kvapil has been Vice President - Controller since July
1993 and Controller since August 1992. Prior to joining the
Company in 1992, Mr. Kvapil was with the accounting firm of
Coopers & Lybrand L.L.P. Age: 40.
Dennis K. Morgan has been Vice President - Legal and Secretary
since April 1991 and a Vice President since January 1991.
Previously, he held various legal positions with Southern Union
Exploration Company, a former oil and gas subsidiary of the
Company. Age: 47.
Donald A. Scovil has been Senior Vice President - Planning since
October 1990. He was Vice President - Controller of Southern
Union Gas from 1984 until October 1990. Previously, Mr. Scovil
held other financial positions with the Company since 1978. Age:
46.
THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, composed of
Messrs. George Lindemann (Chairman), Brennan and Kelley. The
Executive Committee held one meeting and acted by unanimous
written consent on six occasions during fiscal year 1995. During
the intervals between meetings of the Board of Directors, this
committee has the authority to, and may exercise all of the
powers of, the Board of Directors in the management of the busi-
ness, property and affairs of the Company in all matters that are
not required by statute or by the Company's Certificate or Bylaws
to be acted upon by the Board of Directors. This committee must
exercise such authority in such manner as it deems to be in the
best interests of the Company and consistent with any specific
directions of the Board of Directors.
The Board of Directors has an Audit Committee, currently composed
of Messrs. Pearson (Chairman) and Rountree. The Audit Committee
met three times during fiscal year 1995. This committee has the
duties of recommending to the Board of Directors the appointment
of independent auditors, reviewing their charges for services,
reviewing the scope and results of the audits performed,
reviewing the adequacy and operation of the Company's internal
audit function, and performing such other duties or functions
with respect to the Company's accounting, financial and operating
controls as deemed appropriate by it or the Board of Directors.
The Board of Directors has a Long-Term Stock Incentive Plan Com-
mittee which may consist of no fewer than two directors. The
committee is currently composed of Messrs. Rountree (Chairman)
and Pearson who have the authority to make all decisions
regarding: (i) the granting of awards under the Company's 1992
Long-Term Stock Incentive Plan (the "1992 Plan"); (ii)
eligibility of employees to receive awards under the 1992 Plan;
and (iii) interpretation of the 1992 Plan. To serve on the Plan
Committee a director may not receive any awards under the 1992
Plan during the prior year, and cannot currently be eligible to
receive any awards under the 1992 Plan.
The Board of Directors held two meetings and acted by unanimous
written consent on ten occasions during fiscal year 1995. Except
for Mr. Aaron I. Fleischman, who was unable to attend one meeting
of the Board of Directors, all directors attended all of the
meetings of the Board and committees on which they served that
were held in fiscal year 1995 while they were directors and a
member of any such committee. Compensation for each director is
$20,000 per year, payable in quarterly installments, except for:
Mr. George Lindemann (who receives $200,000 per year as Chairman
of the Board and Chief Executive Officer of the Company and
Chairman of the Executive Committee); Mr. Brennan (who receives
$80,000 per year as Vice Chairman of the Board of the Company and
a member of the Executive Committee); Mr. Kelley (who receives no
compensation as a director in addition to his compensation as a
full-time executive officer and employee of the Company and its
divisions and subsidiaries); and the chairman and each other mem-
ber of the Audit Committee of the Company's Board of Directors,
who receive $30,000 and $25,000 per year, respectively. Members
of the Board of Directors also are reimbursed for travel expenses
incurred in connection with Company business, including
attendance at meetings of the Board of Directors and its
committees.
The Board of Directors has a Directors' Deferred Compensation
Plan which is designed to attract and retain well-qualified
individuals to serve as outside directors and to enhance the
identity of their interests and the interests of stockholders.
Participation in the Directors' Deferred Compensation Plan is
optional and is subject to an irrevocable election to satisfy the
requirements of the exemption from the short-swing profit rules
of the Securities and Exchange Commission under Section 16(b) of
the Securities Exchange Act of 1934, as amended.
Under the Directors' Deferred Compensation Plan, each director
who is not also an employee of the Company may choose to defer
all or any percentage of his or her director's fees and invest
such deferred amount in Common Stock, if an appropriate irrevo-
cable written election to defer is made at least six months prior
to the beginning of the year to which such deferral applies. The
Directors' Deferral Plan requires the Company to make a matching
contribution of 50% of the first 7% of the participant's total
director's fees, to the extent deferred.
A participating director is 100% vested with respect to the
amount of director's fees that he elects to defer and any related
income, gains and losses. The Company's matching contributions
do not vest until the participating director either has completed
five (5) years of service as a director or dies while serving as
a director. Deferred amounts may not be withdrawn by a partici-
pant until (i) thirty (30) days after such time as the director
either retires or ceases to be a director of the Company; or (ii)
with the permission of the Board in the event of an unforeseeable
emergency arising from events beyond the control of the partici-
pant which results in severe financial hardship.
The Directors' Deferred Compensation Plan operates under pro-
cedures set forth in such plan. No discretion regarding adminis-
tration of the Directors' Deferred Compensation Plan is vested in
the Board, any committee of the Board, or any officer or director
of the Company. The Board may terminate, suspend or amend the
Directors' Deferred Compensation Plan; provided that, certain
material amendments must be submitted for stockholder approval to
the extent necessary for the Directors' Deferred Compensation
Plan to satisfy the requirements of the exemption from the short-
swing profit rules of the Securities and Exchange Commission
under Section 16(b) of the Securities Exchange Act of 1934, as
amended.
Pursuant to Section 16(a) of the Securities Exchange Act of 1934,
as amended, each director and executive officer of the Company
was required to report in a timely manner to the Securities
Exchange Commission on Form 3, Form 4 and/or Form 5 any change to
his or her beneficial ownership of the Company's Common Stock, or
derivative interests therein, that occurred during the Company's
fiscal year ended June 30, 1995. During the said fiscal year,
there was one late filing made pursuant to Section 16(a):
Dan K. Wassong, a director of the Company, reported the purchase
in December 1994 of 1,000 shares of the Company's Common Stock on
a Form 4 on January 13, 1995, three days after the January 10,
1995 deadline for the filing of such form. The Company is aware
of no other reporting violation under Section 16(a) by its
directors, executive officers or securities holders.
SECURITY OWNERSHIP
The following table sets forth the number of all shares of the
Company's Common Stock beneficially owned by each director, by
each executive officer named in the management compensation
tables and related footnotes (see "Management Compensation"), by
each person known by the Company to beneficially own 5% or more
of the Company's outstanding Common Stock, and by all directors
and executive officers as a group on September 22, 1995, unless
otherwise indicated in the footnotes. Each of the following per-
sons and members of the group had sole voting and investment
power with respect to the shares shown unless otherwise indicated
in the footnotes.
Percent of
Name of Beneficial Owner Number Of Shares Held Class
- - ---------------------------- --------------------- ----------
George L. Lindemann 1,665,053(1)(2) 14.41%
Adam M. Lindemann 999,553(2) 8.68%
George Lindemann, Jr. 999,553(2) 8.68%
11950 Maidstone Drive
Wellington, Florida 33414
Sloan N. Lindemann 999,553(2) 8.68%
800 Fifth Avenue
New York, New York 10022
John E. Brennan 180,111(3) 1.55%
Frank W. Denius 11,570(4) *
Aaron I. Fleischman 148,142(5) 1.28%
Kurt A. Gitter, M.D. 66,479 *
Peter H. Kelley 74,736(6) *
Roger J. Pearson 8,543(7) *
George Rountree, III 20,369(8) *
Dan K. Wassong 9,690 *
Eugene N. Dubay 45,766(9) *
Ronald J. Endres 65,640(10) *
Dennis K. Morgan 6,701(11) *
Lee M. Bass 604,208(12)(13) 5.25%
201 Main Street
Fort Worth, Texas 76102
Sid R. Bass Management Trust(14) 604,208(12)(15) 5.25%
201 Main Street
Fort Worth, Texas 76102
Snyder Capital Management,
Inc.(16) 636,574(16) 5.53%
350 California Street
Suite 1460
San Francisco, California 94104
All Directors and Executive
Officers as a group (15 in
group) 3,310,991(17) 27.96%
- - ----------------------------
(1) Of these shares: 738,008 are owned by Mr. Lindemann
including approximately 892 vested shares held by the
Southern Union Savings (401(k)) Plan and 727 vested shares
held through the Southern Union Company Supplemental
Deferred Compensation Plan; 890,820 shares owned by his
wife, Dr. F.B. Lindemann; and 36,225 shares of common
stock Mr. Lindemann is entitled to purchase upon the exer-
cise of presently exercisable stock options pursuant to
the Company's 1992 Long-Term Stock Incentive Plan (the
"1992 Plan"). Such number excludes options to acquire
shares of common stock that are not exercisable within
sixty days of the date hereof. See "Management Compensa-
tion." A total of 1,633,761 shares held by Mr. and Mrs.
Lindemann and their three children have been pledged to
Activated Communications Limited Partnership
("Activated"). Activated, which is owned and managed by
or for the benefit of the Lindemanns, provided the funds
used to purchase such shares. Mr. Lindemann is the
Chairman of the Board and President, and Mrs. Lindemann is
a director of the sole general partner of Activated.
(2) This information regarding direct share ownership by mem-
bers of the Lindemann family was obtained from and is re-
ported herein in reliance upon a Schedule 13D (as amended
through November 4, 1994) filed by Adam M. Lindemann,
Dr. F.B. Lindemann, George L. Lindemann, George Lindemann,
Jr. and Sloan N. Lindemann. Except as described in Note
(1), each member of the Lindemann family disclaims bene-
ficial ownership of any shares owned by any other member
of the Lindemann family. Accordingly, except as described
in Note (1), the numbers of shares set forth in the table
were obtained from said Schedule 13D and reflect only such
individual's direct ownership.
(3) Of these shares, approximately 437 vested shares are held
by the Southern Union Savings (401(k)) Plan , 357 vested
shares are held through the Southern Union Company Supple-
mental Deferred Compensation Plan, 1,865 shares are owned
by his wife, 78,246 are held in two separate trusts for
the benefit of members of his family and 77,175 represent
shares that Mr. Brennan is entitled to purchase upon the
exercise of presently exercisable stock options granted to
him pursuant to the Company's 1982 Stock Option Plan (the
"1982 Plan") and the 1992 Plan. Such number excludes
options to acquire shares of common stock that are not
exercisable within sixty days of the date hereof. See
"Management Compensation - Stock Options."
(4) Includes 5,250 shares that The Effie and Wofford Cain
Foundation, in which Mr. Denius is a Director, own and
approximately 1,040 vested shares allocated to Mr. Denius
pursuant to the Southern Union Company Directors' Deferred
Compensation Plan. Mr. Denius disclaims beneficial owner-
ship of those shares held by the Foundation since he does
not have a pecuniary interest in or control the Founda-
tion's assets.
(5) Includes: 39,375 shares that Fleischman and Walsh, L.L.P.,
in which Mr. Fleischman is Senior Partner, is entitled to
purchase upon exercise of a warrant; approximately 2,011
vested shares allocated to Mr. Fleischman pursuant to the
Southern Union Company Directors' Deferred Compensation
Plan; and 39,309 shares owned by the Fleischman and Walsh,
L.L.P. 401(k) Profit Sharing Plan ("F&W Plan") for which
Mr. Fleischman is a trustee and a beneficiary.
Mr. Fleischman disclaims beneficial ownership of those
shares held by the F&W Plan in which he does not have a
pecuniary interest.
(6) Includes 61,425 shares that Mr. Kelley is entitled to
purchase upon the exercise of presently exercisable stock
options granted pursuant to the 1982 Plan and the 1992
Plan. Such number excludes options to acquire shares of
common stock that are not exercisable within sixty days of
the date hereof. See "Management Compensation." Such
number also includes: approximately 4,869 vested shares
held by the Southern Union Savings (401(k)) Plan; 274
vested shares held through the Southern Union Stock Pur-
chase Plan; and 1,776 vested shares held through the
Southern Union Company Supplemental Deferred Compensation
Plan (the "Supplemental Plan").
(7) Includes 6,737 shares owned jointly by Mr. Pearson and his
father.
(8) Includes: 542 shares owned by his wife; and approximately
2,439 vested shares allocated to Mr. Rountree pursuant to
the Directors' Deferred Compensation Plan.
(9) Includes 40,950 shares Mr. Dubay is entitled to purchase
upon the exercise of presently exercisable stock options
pursuant to the 1982 Plan and the 1992 Plan. Such number
excludes options to acquire shares of common stock that
are not exercisable within sixty days of the date hereof.
See "Management Compensation." Such number also includes:
approximately 1,257 vested shares held through the
Southern Union (401(k)) Savings Plan; and 1,821 vested
shares held through the Supplemental Plan. In September
1995, Mr. Dubay tendered his resignation to the Company.
(10) Includes 58,275 shares Mr. Endres is entitled to purchase
upon the exercise of presently exercisable stock options
pursuant to the 1982 Plan and the 1992 Plan. Such number
excludes options to acquire shares of common stock that
are not exercisable within sixty days of the date hereof.
See "Management Compensation." Such number also includes:
approximately 2,650 vested shares held through the
Southern Union (401(k)) Savings Plan; and 1,455 vested
shares held through the Supplemental Plan.
(11) Includes 4,725 shares Mr. Morgan is entitled to purchase
upon the exercise of presently exercisable stock options
pursuant to the 1992 Plan. Such number excludes options
to acquire shares of common stock that are not exercisable
within sixty days of the date hereof. See "Management
Compensation." Such number also includes: approximately
1,350 vested shares held through the Southern Union
(401(k)) Savings Plan; and approximately 626 vested shares
held through the Supplemental Plan.
(12) Does not include 51,975 (representing less than 1% of the
common stock outstanding) owned by BEPCO International,
Inc., which is owned in equal parts by Lee M. Bass,
Sid R. Bass and two other persons. Neither Lee M. Bass
nor Sid R. Bass is a director or officer of BEPCO
International, Inc. This information, the information set
forth in note (14) and the number of shares owned by
Lee M. Bass and Sid R. Bass Management Trust set forth in
the table were obtained from and is reported herein in
reliance upon a Schedule 13D filed by Sid R. Bass,
Lee M. Bass, Sid R. Bass Management Trust and BEPCO
International, Inc., as adjusted for the stock dividend
and split since the date of such reports.
(13) Does not include shares reported to be held by Sid R. Bass
Management Trust. See notes (12), (14) and (15).
(14) Sid R. Bass Management Trust is a Revocable Trust under
Texas law for which Sid R. Bass, Lee M. Bass and one other
person are trustees. See note (12).
(15) Does not include shares reported to be held by
Lee M. Bass. See notes (12) and (13).
(16) This information was obtained from and is reported herein
in reliance upon a Schedule 13G filed by Snyder Capital
Management, Inc., as adjusted for the stock dividend and
split since the date of such reports.
(17) Excludes options granted pursuant to the 1982 Plan and the
1992 Plan to acquire shares of common stock that are not
presently exercisable or do not become exercisable within
sixty days of the date hereof. Includes approximately
26,949 vested shares held through certain Company benefit
and deferred savings plans for which certain executive
officers and directors may be deemed beneficial owners,
but excludes shares which have not vested under the terms
of such plans.
* Indicates less than one percent (1%).
MANAGEMENT COMPENSATION
The following table sets forth the remuneration paid by the
Company and its subsidiaries (i) to the Chairman of the Board and
Chief Executive Officer and (ii) to each of the four most highly
compensated key executive officers of the Company for the years
indicated:
Summary Compensation Table
Secur-
ities
Other Under- All
Name and Annual lying Other
Principal Compen- Options Compen-
Position Year* Salary Bonus sation(1) SARs(2) sation(3)
- - ------------- ----- -------- ------- --------- ------- ---------
George L.
Lindemann
Chairman of 1995 $166,017 $ -- $380,000 -- 5,870
the Board 1994 115,787 -- -- 39,375 2,127
and Chief 1993 110,024 -- -- -- --
Executive
Officer
Peter H.
Kelley
President 1995 338,900 -- -- -- 36,618(4)
and Chief 1994 274,998 -- -- 39,375 6,713
Operating 1993 261,520 -- -- -- 3,865
Officer
Eugene N.
Dubay(5)
Executive 1995 178,584 9,000 -- -- 2,048
Vice 1994 169,765 75,149 220,000 15,570 45,366(6)
President 1993 153,870 9,378 -- -- 4,636
and Chief
Operating
Officer --
Missouri
Gas Energy
Ronald J.
Endres
Senior Vice 1995 199,751 26,096 -- -- 5,051
President - 1994 184,302 80,654 -- 23,625 9,073
Finance and 1993 176,147 1,585 -- -- 4,805
Administra-
tion and
Chief Finan-
cial Officer
Dennis K.
Morgan
Vice 1995 118,560 21,127 -- -- 5,006
President - 1994 108,602 55,567 -- 7,875 6,411
Legal and 1993 104,450 853 -- -- 3,873
Secretary
- - --------------------------
* Compensation in 1995 and 1994 reflects the twelve months
ended June 30 while compensation in 1993 reflects the year
ended December 31.
(1) Includes for the years indicated the difference between the
price paid by the individual for common stock of the Com-
pany purchased from the Company upon the exercise of stock
options and the fair market value of such common stock.
(2) No Stock Appreciation Rights were granted in 1995, 1994 or
1993.
(3) Company matching provided through the Southern Union
(401(k)) Savings Plan and the Southern Union Company Sup-
plemental Deferred Compensation Plan.
(4) Includes $27,761 for forgiveness of debt by the Company.
See "Certain Relationships."
(5) In September 1995 Mr. Dubay resigned as Executive Vice
President and Chief Operating Officer of Missouri Gas
Energy.
(6) Includes moving expenses for relocation from Texas to
Missouri.
OPTION GRANTS IN 1995
There were no stock options granted during 1995 to the persons
named in the Summary Compensation Table.
OPTIONS/SARS EXERCISED IN 1995 AND 1995 YEAR-END VALUES
The following table provides information regarding the exercise
of stock options by each of the named executive officers and the
value of unexercised "in-the-money" options as of June 30, 1995.
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year End Fiscal Year End
Shares Exercisable/ Exercisable/
Acquired Unexercisable(1) Unexercisable(2)
---------------- ----------------
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- - ------------ -------- -------- ------- ------- ------- -------
George L.
Lindemann 50,400 $380,000 36,225 70,875 $248,448 $352,761
Peter H.
Kelley * * 61,425 70,875 515,568 365,203
Eugene N.
Dubay * * 40,950 37,800 370,960 233,840
Ronald J.
Endres * * 58,275 44,100 534,988 236,959
Dennis K.
Morgan * * 4,725 11,025 25,964 40,895
- - ---------------------
* No options were exercised during the year ended June 30,
1995 by the named executive officer.
(1) The securities underlying unexercised options have been
adjusted to reflect the 5% stock dividend distributed on
June 30, 1994 to stockholders of record on June 14, 1994 and
the three for two stock split distributed as a 50% stock
dividend on March 9, 1994 to stockholders of record on
February 23, 1994.
(2) Based on a closing price on June 30, 1995 of 18 1/8 per
share as reported by the New York Stock Exchange.
RETIREMENT BENEFITS
The following table reflects the combined benefits available from
Plans A and B, described below and the non-qualified plan.
PENSION PLAN TABLE
Years of Service
------------------------------------------------
Remuneration 15 20 25 30 35
- - ------------ -------- -------- -------- -------- --------
$ 125,000 $ 40,400 $ 53,867 $ 53,867 $ 54,605 $ 63,705
150,000 49,775 66,367 66,367 66,605 77,705
175,000 59,150 78,867 78,867 78,867 91,705
200,000 68,525 91,367 91,367 91,367 105,705
225,000 77,900 103,867 103,867 103,867 109,200
250,000 87,275 109,200 109,200 109,200 109,200
300,000 106,025 109,200 109,200 109,200 109,200
400,000 109,200 109,200 109,200 109,200 109,200
450,000 109,200 109,200 109,200 109,200 109,200
500,000 109,200 109,200 109,200 109,200 109,200
The Company sponsors two retirement Income Plans. "Plan B"
covers all employees of Missouri Gas Energy and "Plan A" covers
all employees other than employees of Missouri Gas Energy, Lavaca
Realty Company or Mercado Gas Services, Inc. In both plans,
benefits are based upon average annual basic earnings for the
five highest consecutive years in the applicable period. All
officers, except for Mr. Dubay, are presently covered by Plan A.
Mr. Dubay was previously covered by Plan A, but is presently
covered by Plan B. However, after application of the non-
ualified supplemental plan, Mr. Dubay's combined benefits are
generally on the same basis as the other officers. Basic
earnings, as defined by Plan A, was redefined in December of 1989
to include W-2 earnings minus certain defined exclusions.
Effective December 31, 1989, the Plan A formula was modified to
conform with the requirements of the Tax Reform Act of 1986, as
amended, and the plan no longer integrates with Social Security.
In order to retain the previous benefit levels for selected
highly compensated employees, a separate Non-Qualified Plan was
established.
As of June 30, 1995, Messrs. Lindemann, Kelley, Dubay, Endres and
Morgan were credited with 5, 5, 13, 26 and 14 years of service,
respectively. Benefits are computed on the basis of a lifetime
annuity with a ten-year certain payment period commencing at age
65. With respect to the Non-Qualified Plan benefits, certain
offsets are included in the formula for estimated Social Security
benefits. Those offsets have been reflected in the amounts
presented in the table. The maximum compensation considered in
the Qualified Plan is $150,000.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-
CONTROL ARRANGEMENTS
All executive officers of the Company serve at the discretion of
the Board of Directors. Generally, the executive officers are
appointed to their position by the Board annually.
The Company has an agreement with Mr. Kelley that upon certain
occurrences, the outstanding balance on his promissory note due
to the company will be canceled and deemed paid in full. These
occurrences include, among other items, termination of employment
other than for cause, diminution in base salary or a change-in-
control of the Company. See "Certain Relationships."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors of the Company does not have a separate
compensation committee. Except with respect to the 1992 Plan,
which is administered by the Board's Long-Term Stock Incentive
Plan Committee, all decisions regarding management compensation
are made by the full Board of Directors of the Company.
Directors Brennan, George Lindemann and Kelley, who are also
executive officers of the Company, participated in deliberations
of the Board of Directors concerning compensation for members of
management but did not participate in Board votes as to compen-
sation for themselves. See "Certain Relationships."
BOARD OF DIRECTORS REPORT ON
EXECUTIVE COMPENSATION
The Board of Directors closely aligns the total compensation of
the executive officers with the profitability of the Company.
Merit increases to the base salaries for the officer group have
been moderate in comparison to industry standards. The Southern
Union 1992 Long-Term Stock Incentive Plan was introduced in order
to focus the attention of management on the long-term improvement
of stockholder value.
The Company's 1995 short-term incentive plan was aligned with
each officer's and manager's compensation to directly reflect the
desired short-term marketing and profitability goals of the Com-
pany applicable to such officer or manager. By balancing the use
of short- and long-term incentive and adequate base salary, the
Board of Directors believes it has been and will continue to be
able to recruit the talent needed to manage the Company, retain
the talents of current management and align the successes of the
Company and management.
The factors and criteria utilized by the Board of Directors
includes the assessment of comparable information from other
utilities and similarly-sized operations. It is the philosophy
of the Company's Board to set the base salaries of executive
officers at an amount lower than the average of a financial peer
group of other mid-sized natural gas local distribution companies
("LDCs"), with opportunities to earn above the average based on
excellent individual and corporate performance. This peer group
includes neighboring and other similarly sized LDCs which share
operating and financial characteristics with the Company. The
Board believes the performance on which executive officer compen-
sation is based should be assessed both on an annual basis and
also over a longer period of time to ensure that executive
officers work to support both the Company's current objectives as
well as its strategic objectives.
The Board of Directors regularly reviews the Chief Operating
Officer's recommended base salary merit increases, cash incentive
plan and stock option plan awards for the Company's other execu-
tive officers. Base salary merit increase and cash incentive
award recommendations, if any, are primarily based on corporate
operating and financial performance, as well as on executive
officers' individual performance, for the prior fiscal year.
Merit increases are also based on a review of peer group base
salaries and executive officers' individual contributions to the
Company's strategic objectives. Stock option recommendations, if
any, are primarily based on executive officers' individual per-
formance during the prior fiscal year, but also relate to per-
formance judgments as to the past contributions of the individual
executive officers and judgments as to their individual contribu-
tions to the Company's strategic objectives. The Board of
Directors then determines compensation for such executive
officers, in light of (a) the Company's actual performance as
compared to its corporate financial goals for the prior fiscal
year, (b) individual executive officers' actual performance as
compared to their individual goals supporting the Company's
financial and operating objectives, (c) the Company's executive
officer compensation levels relative to its peer group and (d)
periodic reports from independent compensation consultants
regarding the compensation competitiveness of the Company. The
Board of Directors also reviews the above types of compensation
for the Chief Executive Officer with the assistance of the
Company's human resources staff and recommends adjustments as
deemed appropriate based on the above compensation review
criteria and its expectation as to his future contributions in
leading the Company.
Neither the Chairman of the Board and Chief Executive Officer nor
the President and Chief Operating Officer were included in the
Short-Term Incentive Plan for 1995. The Executive Vice President
- - - Chief Operating Officer - Missouri Gas Energy, the Senior Vice
President - Finance and Administration and Chief Financial
Officer, and the Vice President - Legal and Secretary had the
ability to obtain short-term incentive awards for 1995.
The Long-Term Stock Incentive Plan Committee considers all
aspects of compensation provided to the executive officers prior
to determining appropriate awards to be given under the 1992 Plan
to each executive. The 1992 Plan was approved at the annual
meeting of stockholders held on May 12, 1993. Under the 1992
Plan, options to purchase 819,000 shares may be granted to
officers and key employees at prices not less than the market
value on the date of grant. Options granted under the 1992 Plan
are exercisable for periods of ten years from the date of grant
or such lesser period as may be designated for particular
options, and become exercisable after a specified period of time
from the date of grant in cumulative annual installments. The
1992 Plan also allows for the granting of stock appreciation
rights, dividend equivalents, performance shares and restricted
stock.
In 1993, the Board of Directors established the Supplemental
Plan. The Supplemental Plan as revised on June 14, 1995 by the
Board of Directors, is designed to encourage greater ownership of
Company shares by highly compensated employees by increasing the
Company matching contribution, and to provide employee benefits
similar to the benefits such employee would have received under
the Southern Union (401(k)) Savings Plan if not for the existence
of certain limitations that are set forth in the Internal Revenue
Code of 1986, as amended (the "Code"), relating to "highly com-
pensated employees" as defined in the Code. Under the Supplemen-
tal Plan, an eligible employee may defer up to 5% of his or her
annual compensation (salary and bonus) through payroll deductions
(the "Employee Contributions"). In addition, the Supplemental
Plan as revised requires the Company to make a 50% matching con-
tribution on Employee Contributions up to a maximum of 5% (up
from 2%) of the participant's annual compensation. The Employee
Contributions, together with the Company's matching contribu-
tions, are invested by the Supplemental Plan's trustee in shares
of Common Stock. See "Proposal to Increase Employee Contribu-
tions Subject To Company Matching From Two Percent To Five
Percent Under the Southern Union Company Supplemental Deferred
Compensation Plan."
A participant is at all times 100% vested with respect to the
amount of his or her Employee Contributions and to the income,
gains and losses with respect to such contributions. The Com-
pany's matching contributions and any income, gains and losses
with respect to such matching contributions vest at a rate of 20%
per year beginning with the date that the participant has com-
pleted two years of service with the Company. A participant is
fully vested with respect to such amounts upon either completing
six (6) years of service with the Company or if the participant
dies while employed by the Company. Employee Contributions and
the Company's matching contributions that are vested may not be
withdrawn by a participant until (i) thirty (30) days after such
time the participant is no longer an employee of the Company, or
(ii) with the permission of the Company's benefits committee in
the event of an unforeseeable emergency arising from events
beyond the control of the participant which results in severe
financial hardship.
The Supplemental Plan is operated under procedures set forth in
the plan, and is administered by the Company's benefits
committee. The Board of Directors may terminate, suspend or
amend the Supplemental Plan; provided that, certain material
amendments must be submitted for stockholder approval to the
extent necessary for the Supplemental Plan to satisfy the
requirements of the exemption from the short-swing profit rules
of the Securities and Exchange Commission under Section 16(b) of
the Securities Exchange Act of 1934, as amended.
In determining the compensation structure for the Chairman of the
Board and Chief Executive Officer consideration was given to the
fact that Mr. Lindemann does not devote his full business time to
the business of the Company. Accordingly, the Board of Directors
believes that it has concentrated, and intends to continue to
concentrate, the bulk of Mr. Lindemann's compensation on long-
term incentives such as stock option grants which are directly
attributable to increasing stockholder value.
By: The Board of Directors(1)
George L. Lindemann Peter H. Kelley
Frank W. Denius Roger J. Pearson
Aaron I. Fleischman George Rountree, III
Adam M. Lindemann Dan K. Wassong
John E. Brennan
- - ------------------------
(1) Director Kurt A. Gitter, M.D., joined the Board in June
1995 and so did not participate in any Board deliberations
as to executive compensation during fiscal year 1995 other
than the proposed revision in benefits provided under the
Supplemental Plan. See "PROPOSAL TO INCREASE EMPLOYEE
CONTRIBUTIONS SUBJECT TO COMPANY MATCHING FROM TWO PERCENT
TO FIVE PERCENT UNDER THE SOUTHERN UNION COMPANY SUPPLEMEN-
TAL DEFERRED COMPENSATION PLAN."
COMPANY PERFORMANCE CHART
The following performance graph compares the performance of the
Company's common stock to the Standard & Poor's 500 Stock Index
("S & P 500") and to an index of peer companies developed by the
American Gas Association ("AGA"). The comparison assumes $100
was invested on June 30, 1990 in the Company's Common Stock and
in the S & P 500 Index. The comparison also assumes that $100
was invested in the AGA Index on December 31, 1989 and held for a
period of five years ending December 31, 1994. December 31
information was the most recent date that data was available for
the AGA Index. The AGA annual return from 1989 to 1994 is
reflected in the performance chart on the 1990 to 1995 data
points, respectively. Each case assumes reinvestment of
dividends.
Comparison of Five-Year Cumulative Total Return
(Southern Union, AGA, Peer Group and S&P 500)
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Southern Union 100 67 76 105 149 153
AGA Peer Group 100 101 123 147 170 155
S&P 500 Index 100 104 114 126 124 152
The AGA peer group index is comprised of AGA member companies
classified by Edward D. Jones and Co. as gas distribution com-
panies. Each component company was included in the index in
proportion to its market capitalization as determined on the last
trading day of the calendar year in each of the years from 1989
to 1994.
PROPOSAL TO INCREASE EMPLOYEE CONTRIBUTIONS SUBJECT TO COMPANY
MATCHING FROM TWO PERCENT TO FIVE PERCENT UNDER THE SOUTHERN
UNION COMPANY SUPPLEMENTAL DEFERRED COMPENSATION PLAN
As of June 14, 1995, the Board of Directors approved a revision
to the Southern Union Company Supplemental Deferred Compensation
Plan (the "Supplemental Plan"). The Supplemental Plan was
adopted on June 15, 1993, by the Executive Committee of the Board
and approved by the Stockholders at the 1994 Annual Meeting. The
Supplemental Plan was designed to provide employee benefits simi-
lar to the benefits such employee would receive under the
Southern Union (401(k)) Savings Plan if not for the existence of
certain limitations that are set forth in the Internal Revenue
Code of 1986, as amended (the "Code"), relating to "highly compen-
sated employees" as defined in the Code. Under the Supplemental
Plan, an eligible employee may defer up to 5% of his or her
annual compensation (salary and bonus) through payroll deductions
(the "Employee Contributions"). In addition, the Supplemental
Plan requires the Company to make a matching contribution. Such
Employee Contributions, together with the Company's matching con-
tribution, are invested by the Supplemental Plan's trustee in
shares of Common Stock.
The Company desires to encourage greater ownership of Company
Common Stock by its highly compensated employees, and to provide
additional benefits beyond what would be available in the
Southern Union (401(k)) Savings Plan. To accomplish this, the
Board proposes to increase the Company matching contribution from
its current matching of $.50 per $1.00 contributed for the first
two percent (2%) of salary deferred pursuant to the Supplemental
Plan, to $.50 per $1.00 contributed for the first five percent
(5%) deferred pursuant to the Supplemental Plan.
A participant is at all times 100% vested with respect to the
amount of his or her Employee Contributions and to the income,
gains and losses with respect to such contributions. The Com-
pany's matching contributions and any income, gains and losses
with respect to such matching contributions vest at a rate of 20%
per year beginning with the date that the participant has com-
pleted two years of service with the Company. A participant is
fully vested with respect to such amounts upon either completing
six (6) years of service with the Company or if the participant
dies while employed by the Company. Employee Contributions and
the Company's matching contributions that are vested may not be
withdrawn by a participant until (i) thirty (30) days after such
time the participant is no longer an employee of the Company, or
(ii) with the permission of the Company's benefits committee in
the event of an unforeseeable emergency arising from events
beyond the control of the participant which results in severe
financial hardship.
The Supplemental Plan is operated under procedures set forth in
the plan, and is administered by the Company's benefits com-
mittee. The Board of Directors may terminate, suspend or amend
the Supplemental Plan; provided that, certain material amendments
must be submitted for stockholder approval to the extent neces-
sary for the Supplemental Plan to satisfy the requirements of the
exemption from the short-swing profit rules of the Securities and
Exchange Commission under Section 16(b) of the Securities
Exchange Act of 1934, as amended.
The foregoing description is qualified in its entirety by the
text of the Supplemental Plan. A copy of the Supplemental Plan
is available without charge upon written request to the Secretary
of the Company.
Southern Union Company Supplemental Deferred Compensation Plan
The following table sets forth the dollar value of all Company
matching contributions during the fiscal year ended June 30, 1995
and since the inception of the Supplemental Plan to June 30,
1995. The table also sets forth the number of shares contributed
by the Company as matching contributions under the Supplemental
Plan during the fiscal year ended June 30, 1995 and since the
inception of the Supplemental Plan to June 30, 1995.
Dollar Value ($) Number of Shares
---------------- ----------------
During During
Fiscal Fiscal
Year Since Year Since
Ended Plan Ended Plan
June 30, Incep- June 30, Incep-
Name and Position 1995 tion 1995 tion
George L. Lindemann
Chairman of the
Board and Chief
Executive Officer 1,776 2,273 97 125
Peter H. Kelley
President and
Chief Operating
Officer 3,685 6,380 199 352
Eugene N. Dubay
Executive Vice
President and
Chief Operating
Officer --
Missouri Gas
Energy 2,086 5,747 109 317
Ronald J. Endres
Senior Vice
President --
Finance and
Administration,
and Chief
Financial
Officer 2,463 4,950 132 273
Dennis K. Morgan
Vice President
-- Legal and
Secretary 1,767 3,936 94 217
All Executive
Officers 14,677 28,064 789 1,548
All Directors
Who Are Not
Executive
Officers * * * *
All Employees
Who Are Not
Executive
Officers 16,140 33,092 867 1,826
- - -------------------
* Only employees of the Company are eligible to participate.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
INCREASE IN EMPLOYEE CONTRIBUTIONS SUBJECT TO COMPANY MATCHING
FROM TWO PERCENT TO FIVE PERCENT UNDER THE SOUTHERN UNION SUPPLE-
MENTAL DEFERRED COMPENSATION PLAN.
CERTAIN RELATIONSHIPS
In April 1992 Southern Union advanced $375,980 to
Peter H. Kelley, President, Chief Operating Officer and a
Director of Southern Union, to enable him to repay certain funds
borrowed by him from his previous employer in connection with his
departure from his previous employer and relocation to become an
executive officer of the Company. In May 1995 the note was
restructured calling for 359 monthly payments of approximately
$1,909 and a balloon payment of $147,746. The restructuring is
evidenced by a renewal promissory note, bearing an annual
percentage interest rate equal to 7.4%. At the time of
restructuring, the outstanding balance on the note was $369,434,
to which Mr. Kelley made a $50,000 principal payment and $27,761
was forgiven by the Company. See "Management Compensation."
On October 4, 1993, Southern Union's Board of Directors approved
and ratified payments by the Company to Activated Communications,
Inc. ("Activated") for use by the Company of Activated's office
space in New York City. Chairman George L. Lindemann and Vice
Chairman John E. Brennan control and operate, and Director
Adam M. Lindemann has a beneficial interest in, Activated; none
of the foregoing Directors participated in such Board action.
Total payments to Activated in 1995, 1994 and 1993 were approxi-
mately $251,000, $125,000 and $187,000, respectively.
Director Fleischman is Senior Partner of Fleischman and Walsh,
L.L.P., which provides legal services to the Company and certain
of its subsidiaries. For the fiscal year ended June 30, 1995,
the total amount paid by the Company to Fleischman and Walsh,
L.L.P. for legal services was $597,000.
STOCKHOLDER PROPOSALS
In order for any stockholder proposal to receive consideration
for inclusion in the Company's Proxy Statement for its 1996
Annual Meeting of Stockholders, such proposals must be received
by June 30, 1996, at the Company's offices at 504 Lavaca Street,
Eighth Floor, Austin, Texas 78701, Attention: Dennis K. Morgan,
Secretary. The Company's Bylaws set forth certain other require-
ments with respect to new or other business proposed to be
brought before the Meeting by a stockholder and with respect to
any nomination by a stockholder for election as a Director of any
person other than the Nominees selected by the Board of
Directors.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. has served as the Certified Public
Accountants of the Company for the fiscal year ended June 30,
1995. Representatives of Coopers & Lybrand L.L.P. are expected
to be present at the Meeting, and to be given an opportunity to
make a statement if they desire to do so and to be available to
respond to appropriate questions. The Audit Committee of the
Board of Directors of the Company presently expects to recommend
to the Board, and the Board is expected to approve, the selection
of Coopers & Lybrand L.L.P. to serve as the Company's Certified
Public Accountants for the fiscal year ending June 30, 1996.
OTHER BUSINESS
The Board of Directors is not aware of any matter other than the
matters described above to be presented for action at the
Meeting. However, if any other proper items of business should
come before the Meeting, it is the intention of the person or
persons acting under the enclosed form of proxy to vote in
accordance with their best judgment on such matters.
MISCELLANEOUS
The Company will pay the expenses of this proxy solicitation. In
addition to solicitation by mail, some of the officers and regu-
lar employees of the Company may solicit proxies personally or by
telephone. Should management of the Company deem it necessary,
the Company may also retain the services of a proxy solicitation
firm to aid in the solicitation of proxies for which the Company
will pay a fee of approximately $10,000 plus reimbursement for
certain expenses. The Company will request brokers and other
fiduciaries to forward proxy-soliciting material to the bene-
ficial owners of shares which are held of record by them, and the
Company may reimburse them for certain reasonable out-of-pocket
expenses incurred by them in connection therewith.
The Company's Annual Report to Stockholders for the fiscal year
ended June 30, 1995, which report includes financial statements
and the Company's 1995 Annual Report on Form 10-K for the fiscal
year ended June 30, 1995, as filed with the Securities and
Exchange Commission, is being mailed along with this Notice of
Annual Meeting and Proxy Statement to all holders of record of
the Company's Common Stock as of the close of business on the
Record Date. Any stockholder who has not received a copy of such
1995 Annual Report may obtain a copy by writing to the Secretary
of the Company. Such 1995 Annual Report is not to be treated as
part of the proxy solicitation materials or as having been
incorporated herein by reference.
By Order of the Board of Directors,
DENNIS K. MORGAN
Secretary
Austin, Texas
September 29, 1995
BACK PAGE
PROXY CARD (FRONT)
PROXY Southern Union Company PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OR
SOUTHERN UNION COMPANY FOR THE NOVEMBER 7, 1995 ANNUAL MEETING OF
STOCKHOLDERS
The undersigned hereby appoints, GEORGE L. LINDEMANN,
JOHN E. BRENNAN, and PETER H. KELLEY, or any one, two or all
three of them, with power of substitution in each, proxies for
the undersigned, to represent the undersigned and to vote all the
Common Stock of the Company which the undersigned would be
entitled to vote, as fully as the undersigned could vote and act
if personally present, at the Annual Meeting of Stockholders to
be held on November 7, 1995 at 2:00 p.m. Central Standard Time,
in the eighth floor atrium of the Company's offices at Lavaca
Plaza, 504 Lavaca Street, Austin, Texas or at any adjournment
thereof.
The Proxies are authorized to vote in their discretion upon all
matters properly brought before the meeting, including any matter
of which Management was not aware a reasonable time before the
solicitation of this proxy.
1. Election of the following nominees as Class II Directors
AARON I. FLEISCHMAN, KURT A. GITTER, M.D., ADAM M. LINDEMANN
and GEORGE ROUNTREE, III.
For All Nominees Withheld for All Nominees
---- ----
Withheld for the following only (write the name of the nominee(s)
on the space below)
- - -----------------------------------------------------------------
2. Proposal to increase employee contributions subject to
Company matching from two percent to five percent under the
Southern Union Company Supplemental Deferred Compensation
Plan.
FOR AGAINST ABSTAIN
---- ---- ----
PROXY CARD (BACK)
The shares represented by this proxy will be voted as directed by
the stockholder. If no direction is given when the duly executed
proxy is returned, such shares will be voted "FOR" all Nominees
and "FOR" proposal 2.
Date , 1995
-----------------
----------------------------
Signature
----------------------------
Signature
Please mark, date and sign as your name(s) appear(s) to the left
and return in the enclosed envelope. If acting as an executor,
administrator, trustee, guardian, etc., you should so indicate
when signing. If the signer is a corporation, please sign the
full corporate name, by duly authorized officer. If shares are
held jointly, each shareholder named should sign.
