<PAGE>
=================================================================
As filed with the Securities and Exchange Commission on
May 27, 1999
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
SOUTHERN UNION COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware 75-0571592
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
--------------------
SOUTHERN UNION COMPANY SUPPLEMENTAL DEFERRED
COMPENSATION PLAN
(Full Title of the Plan)
With a copy to:
Dennis K. Morgan, Esq. Stephen A. Bouchard, Esq.
Senior Vice President - FLEISCHMAN AND WALSH, L.L.P.
Legal and Secretary 1400 Sixteenth Street, N. W.
SOUTHERN UNION COMPANY Suite 600
504 Lavaca Street, Suite 800 Washington, DC 20036
Austin, Texas 78701 (202) 939-7900
(512) 477-5852
(Name, Address and Telephone Number, Including Area Code
of Agent for Service)
---------------------
CALCULATION OF REGISTRATION FEE
=================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
to be Price Per Offering Registration
Title of Securities Registered Share Price Fee
to be Registered (1) (2) (2)
- -----------------------------------------------------------------
Common Stock, par
value $1.00 per
share 500,000 $21.96875 $10,984,375 $3,053.66
- --------------------
(1) In addition, pursuant to Rule 416 under the Securities Act
of 1933, as amended, this Registration Statement also covers
an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(2) Estimated in accordance with Rule 457(c), solely for the
purpose of calculating the registration fee and based upon
the average of the high and low sales prices for shares of
the Registrant's Common Stock on the New York Stock Exchange
on May 20, 1999 of $22.5 and $21.4375 per share, respec-
tively.
=================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of
Form S-8 will be sent or given to participants in the Southern
Union Company Supplemental Deferred Compensation Plan (the
"Plan") as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act").
Such document(s) (along with the documents incorporated by
reference into the Registration Statement pursuant to Item 3 of
Part II hereof) constitute a prospectus that meets the require-
ments of Section 10(a) of the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- ------ -----------------------------------------------
The following documents previously or concurrently filed by
Southern Union Company (the "Company") with the Commission are
hereby incorporated by reference in this Registration Statement:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1998 filed pursuant to Rule 13a-1 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(b) the Company's Quarterly Report on Form 10-Q for each of the
quarters ended September 30, 1998, December 31, 1998 and
March 31, 1999;
(c) all other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the Annual Report referred to above;
(d) the Company's definitive Proxy Statement for its Annual
Meeting of Stockholders held on November 12, 1998; and
(e) the description of the common stock, par value $1.00 per
share, of the Registrant (the "Common Stock") contained in
the Registrant's Registration Statement on Form S-3 (File
No. 333-10585) filed with the Commission on August 22, 1996
and all amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant with the Com-
mission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference into this Registration State-
ment and to be a part thereof from the date of the filing of such
documents. Any statement contained in the documents incorpo-
rated, or deemed to be incorporated, by reference herein or
therein shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement
contained herein or therein or in any other subsequently filed
document which also is, or is deemed to be, incorporated by
reference herein or therein modifies or supersedes such state-
ment. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
The Company shall furnish without charge to each person to whom
the Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the documents incorporated
by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference to the infor-
mation that is incorporated). Requests should be directed to
George E. Yankowski, Treasurer and Director of Investor Rela-
tions, Southern Union Company, 504 Lavaca Street, Suite 800,
Austin, Texas 78701, telephone number (512) 477-5852.
All information appearing in this Registration Statement is
qualified in its entirety by the detailed information, including
financial statements, appearing in the documents incorporated
herein or therein by reference.
Item 4. Description of Securities.
- ------ -------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
- ------ --------------------------------------
Not Applicable
Item 6. Indemnification of Directors and Officers.
- ------ -----------------------------------------
Section 145 of the General Corporation of Delaware empowers a
corporation to indemnify its directors and officers, subject to
certain limitations. The Company's Bylaws require the Company
to indemnify their respective directors and officers to the
fullest extent permitted by law.
Article Fourteen of the Restated Certificate on Incorporation of
the Company eliminates personal liability of directors to the
fullest extent permitted by Delaware law.
Officers and directors of the Company are covered by insurance
that (with certain exceptions and within certain limitations)
indemnifies them against losses and liabilities arising from any
alleged "wrongful act," including any alleged error, misstate-
ment, misleading statement, omission, neglect or breach of duty.
Item 7. Exemption from Registration Claimed.
- ------ -----------------------------------
Not Applicable.
Item 8. Exhibits.
- ------ --------
Reference to
Regulation Prior Filing or
S-K Exhibit Exhibit Number
Number Document Attached Hereto
- ----------- --------------------------------- ---------------
4 Southern Union Company Amended Attached as
Supplemental Deferred Compensa- Exhibit 4
tion Plan with amendments
5 Opinion of Barton and Vanderburg Attached as
Exhibit 5
23.1 Consent of Independent Attached as
Accountant Exhibit 23.1
23.2 Consent of Barton and Vanderburg Included in
Exhibit 5
hereto
24 Power of Attorney Attached as
Exhibit 24
Item 9. Undertakings.
- ------ ------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this regis-
tration statement to include any material information
with respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration state-
ment.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new regis-
tration statement relating to the securities offered
therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforce-
able. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or con-
trolling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that is has reasonable grounds to believe
that it meets the requirements for filing on Form S-8 and the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized in the City of Austin, State of Texas on May 27, 1999.
SOUTHERN UNION COMPANY
By: RONALD J. ENDRES
------------------
Ronald J. Endres
Executive Vice President and
Chief Financial Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
on behalf of the Registrant and in the capacities indicated on
May 27, 1999.
Signature/Name Title
- ------------------------ --------------------------------------
GEORGE L. LINDEMANN* Chairman of the Board, Chief Executive
Officer and Director
(Principal Executive Officer)
JOHN E. BRENNAN* Director
AARON I. FLEISCHMAN* Director
PETER H. KELLEY Director
ADAM M. LINDEMANN* Director
ROGER J. PEARSON* Director
GEORGE ROUNTREE, III* Director
DAN K. WASSONG* Director
KURT A. GITTER, M.D.* Director
RONALD J. ENDRES Executive Vice President and Chief
- ----------------
Ronald J. Endres Financial Officer
(Principal Financial Officer)
DAVID J. KVAPIL Senior Vice President and
- ---------------
David J. Kvapil Corporate Controller
(Principal Accounting Officer)
*By: RONALD J. ENDRES
------------------
Ronald J. Endres
Attorney-in-fact
<PAGE>
EXHIBIT 4
SOUTHERN UNION COMPANY AMENDED SUPPLEMENTAL
DEFERRED COMPENSATION PLAN WITH AMENDMENTS
TABLE OF CONTENTS
PAGE
----
INTRODUCTION
ARTICLE 1 DEFINITIONS
1.1 Account
1.2 Beneficiary
1.3 Benefits Committee
1.4 Code
1.5 Compensation
1.6 Employee Salary Deferral Amount
1.7 Employee Salary Deferral Contribution
1.8 Employer Discretionary Amount
1.9 Employer Discretionary Contribution
1.10 Employer Matching Amount
1.11 Employer Matching Contribution
1.12 Distribution Event
1.13 Highly Compensated Employee
1.14 1934 Act
1.15 1994 Shareholders' Meeting
1.16 Non-Salary Deferral Amount
1.17 Other Participant
1.18 Participant
1.19 Plan
1.20 Plan Year; 1993 Plan Year
1.21 Revenue Procedure 92-64
1.22 Revenue Procedure 92-65
1.23 Section 16(b) Participant
1.24 Southern Union
1.25 Southern Union Stock
1.26 Trust
1.27 Year of Vesting Service
ARTICLE 2 PARTICIPATION
2.1 Eligible Class
2.2 Selection from Eligible Class
ARTICLE 3 CONTRIBUTIONS
3.1 Employee Salary Deferral Contributions
3.2 Employer Matching Contributions
3.3 Employer Discretionary Contributions
ARTICLE 4 PARTICIPANT ACCOUNTS
ARTICLE 5 VESTING
5.1 Vesting Schedule
5.2 Forfeitures
ARTICLE 6 DISTRIBUTIONS
6.1 Termination of Employment
6.2 Unforeseeable Emergency
6.3 Investment Intent
6.4 Issuance of Certificates; Legends
ARTICLE 7 RESTRICTIONS APPLICABLE TO SECTION 16(b)
PARTICIPANTS
7.1 Shareholder Approval
7.2 Employee Salary Deferral Contributions
7.3 Other Contributions
7.4 Vesting
ARTICLE 8 PARTICIPANTS' RIGHTS
ARTICLE 9 ANTIALIENATION
ARTICLE 10 UNFUNDED STATUS
ARTICLE 11 PLAN ADMINISTRATION
11.1 Powers and Duties
11.2 Consultants
ARTICLE 12 AMENDMENT AND TERMINATION
12.1 Amendment
12.2 Termination
ARTICLE 13 CLAIMS PROCEDURE
13.1 Claims
13.2 Notice of Decision
13.3 Content of Notice
13.4 Appeal Procedure
13.5 Review Procedure
13.6 Disputes
13.7 Appeals Committee
ARTICLE 14 GENERAL PROVISIONS
14.1 Governing Law
14.2 Captions
14.3 Facility of Payment
14.4 Withholding
14.5 Administrative Expenses
14.6 Severability
14.7 Liability
14.8 Binding Effect
14.9 Construction
<PAGE>
SOUTHERN UNION COMPANY
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
INTRODUCTION
WHEREAS, Southern Union Company ("Southern Union") desires to
retain the services of and to provide rewards and incentives to
members of a select group of management employees who contribute
to the success of Southern Union;
WHEREAS, the Southern Union Company Supplemental Deferred Compen-
sation Plan (the "Plan"), as set forth herein, is intended, in
general, to provide supplemental retirement benefits to certain
management employees who have been selected to participate in the
Plan and who elect to defer income under the terms of the Plan;
WHEREAS, some of the benefits to be provided under the Plan may,
in general, be similar to the benefits that would have been pro-
vided under the Southern Union Savings Plan in the absence 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;
WHEREAS, it is the intention of Southern Union that the Plan will
be considered to be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is contemplated that funds set aside by Southern
Union to meet obligations under the Plan may be held in the
Southern Union Company Supplemental Executive Retirement Trust,
which will conform to the terms of the model trust described in
Revenue Procedure 92-64;
NOW, THEREFORE, effective June 1, 1993, Southern Union hereby
adopts the Plan set forth in this document.
ARTICLE 1
DEFINITIONS
-----------
Where the following words and phrases appear in the Plan, they
shall have the meanings specified below unless a different
meaning is clearly required by the context.
1.1 Account. The term "Account" refers to the separate account
-------
maintained for each Participant under the provisions of
Article 4, to which the Participant's Employee Salary
Deferral Contributions, Southern Union's Employer Matching
Contributions and Southern Union's Employer Discretionary
Contributions, if any, as well as income, gains and losses
with respect to all such Contributions are credited.
1.2 Beneficiary. The term "Beneficiary" refers to the person
-----------
or persons that the Participant designates in writing to
receive a benefit hereunder at the time of the Partici-
pant's death. If the Participant fails to make such
written designation and the Participant is not married at
the time of his death, the term "Beneficiary" refers to the
executor or administrator of the Participant's estate. If
the Participant fails to make such written designation and
the Participant is married at the time of his death, the
term "Beneficiary" refers to the Participant's spouse (or
the executor or administrator of the estate of the Partici-
pant's spouse should the spouse be married to the Partici-
pant at the time of the Participant's death but die prior
to receiving the benefit to which the spouse would have
been entitled had the spouse survived).
1.3 Benefits Committee. The term "Benefits Committee" refers
------------------
to the Southern Union Benefits Committee which is made up
of individuals appointed by the Board of Directors of
Southern Union, as it exists from time to time. Any action
(including but not limited to decisions, determinations and
interpretations) that may be taken by the Benefits Commit-
tee under the Plan may be taken by the Secretary of the
Benefits Committee on behalf of the Benefits Committee.
1.4 Code. The term "Code" refers to the Internal Revenue Code
----
of 1986, as amended, and as may be amended from time to
time subsequent to the date that this Plan is executed.
1.5 Compensation. The term "Compensation" includes an indi-
------------
vidual's base salary from Southern Union, bonuses from
Southern Union, salary deferrals under the Southern Union
Savings Plan, which is a Code Section 401(k) plan, and
salary deferrals under the Southern Union Company Employee
Flexible Benefits Plan, which is a Code Section 125 plan,
and excludes any severance payments that an individual may
receive from Southern Union.
1.6 Employee Salary Deferral Amount. The term "Employee Salary
-------------------------------
Deferral Amount" refers to that portion of a Participant's
Account that is attributable to Employee Salary Deferral
Contributions and all income, gains and losses attributable
thereto.
1.7 Employee Salary Deferral Contribution. The term "Employee
-------------------------------------
Salary Deferral Contribution" refers to the amount that a
Participant elects to defer under the provisions of Section
3.1 and that is credited to the Participant's Account.
1.8 Employer Discretionary Amount. The term "Employer Discre-
tionary Amount" refers to that portion of a Participant's
Account that is attributable to Employer Discretionary Con-
tributions and all income, gains and losses attributable
thereto.
1.9 Employer Discretionary Contribution. The term "Employer
-----------------------------------
Discretionary Contribution" refers to the amount that the
Board of Directors of Southern Union elects, in its sole
and absolute discretion, to credit to a Participant's
Account under the provisions of Section 3.3.
1.10 Employer Matching Amount. The term "Employer Matching
------------------------
Amount" refers to that portion of a Participant's Account
that is attributable to Employer Matching Contributions and
all income, gains and losses attributable thereto.
1.11 Employer Matching Contribution. The term "Employer
------------------------------
Matching Contribution" refers to the amount that Southern
Union credits to a Participant's Account under the provi-
sions of Section 3.2.
1.12 Distribution Event. The term "Distribution Event" refers
------------------
to an event after which a Participant other than a Section
16(b) Participant would be entitled to receive a distribu-
tion following his termination of employment with Southern
Union under Section 6.1, following a determination by the
Benefits Committee that he is entitled to an unforeseeable
emergency withdrawal under Section 6.2, or following
Southern Union's termination of the Plan under Section
12.2.
1.13 Highly Compensated Employee. The term "Highly Compensated
---------------------------
Employee" refers to each employee of Southern Union who
qualifies as a "highly compensated employee" under the
provisions of Code Section 414(q).
1.14 1934 Act. The term "1934 Act" refers to the Securities
--------
Exchange Act of 1934, as amended, and as may be amended
from time to time subsequent to the date that this Plan is
executed.
1.15 1994 Shareholders' Meeting. The term "1994 Shareholders'
--------------------------
Meeting" refers to the first annual meeting of Southern
Union shareholders following the effective date of the
Plan.
1.16 Non-Salary Deferral Amount. The term "Non-Salary Deferral
--------------------------
Amount" refers to that portion of a Participant's Account
comprised of the Employer Matching Amount and the Employer
Discretionary Amount.
1.17 Other Participant. The term "Other Participant" refers to
-----------------
a Participant not designated by Southern Union to be an
officer subject to the provisions of Section 16(b) of the
1934 Act.
1.18 Participant. The term "Participant" refers to a management
-----------
employee of Southern Union who is eligible to participate
in the Plan under the provisions of Section 2.1, who is
selected to participate in the Plan under the provisions of
Section 2.2 and for whom an Account is maintained under the
provisions of Article 4.
1.19 Plan. The term "Plan" refers to the Southern Union Company
----
Supplemental Deferred Compensation Plan.
1.20 Plan Year; 1993 Plan Year. The term "1993 Plan Year" shall
-------------------------
refer to the seven-month period beginning on June 1, 1993
(the effective date of the Plan) and ending on December 31,
1993. The term "Plan Year" shall refer to the 1993 Plan
Year and to each subsequent calendar year beginning on or
after January 1, 1994.
1.21 Revenue Procedure 92-64. The term "Revenue Procedure 92-
-----------------------
64" refers to Internal Revenue Service Revenue Procedure
92-64, 1992-33 I.R.B. 11.
1.22 Revenue Procedure 92-65. The term "Revenue Procedure 92-
-----------------------
65" refers to Internal Revenue Service Revenue Procedure
92-65, 1992-33 I.R.B. 16.
1.23 Section 16(b) Participant. The term "Section 16(b) Par-
-------------------------
ticipant" refers to a Participant who Southern Union
designates to be an officer subject to the provisions of
Section 16(b) of the 1934 Act.
1.24 Southern Union. The term "Southern Union" refers to
--------------
Southern Union Company, a corporation existing under the
laws of the State of Delaware.
1.25 Southern Union Stock. The term "Southern Union Stock"
--------------------
refers to shares of common stock of Southern Union.
1.26 Trust. The term "Trust" refers to the Southern Union
-----
Company Supplemental Executive Retirement Trust which may
be established by Southern Union to meet obligations under
the Plan and which, if established, will conform to the
terms of the model trust described in Revenue Procedure
92-64. If established, the assets of the Trust will be
subject to the claims of Southern Union's creditors in the
event of Southern Union's insolvency as determined in the
Trust.
1.27 Year of Vesting Service. A Participant shall receive
-----------------------
credit for a "Year of Vesting Service" for each full 12-
month period during which he is employed by Southern Union.
A Participant's Years of Vesting Service shall be deter-
mined based on the Participant's period of employment with
Southern Union without regard to the number of hours that
the Participant completes during his employment and without
regard to whether the Participant's period or periods of
employment are contiguous. In calculating Years of Vesting
Service, a Participant shall receive credit for periods of
employment prior to the establishment of this Plan.
ARTICLE 2
PARTICIPATION
-------------
2.1 Eligible Class. Only those management employees of
--------------
Southern Union who are considered Highly Compensated
Employees of Southern Union may be selected to participate
in the Plan under the provisions of Section 2.2.
2.2 Selection from Eligible Class. Eligibility of management
-----------------------------
employees for participation in the Plan shall be determined
by the Board of Directors of Southern Union, in its sole
discretion, on an individual basis. The Board of Directors
of Southern Union shall have the right to remove a Partici-
pant from participation in the Plan at any time, in its
sole discretion, in which case the Participant shall not be
eligible to have additional Employee Salary Deferral Con-
tributions, additional Employer Matching Contributions or
additional Employer Discretionary Contributions credited to
his Account. The Benefits Committee shall give written
notice to those management employees who have been selected
by the Board of Directors of Southern Union to participate
in the Plan and to those Participants who have been removed
by the Board of Directors of Southern Union from participa-
tion in the Plan.
ARTICLE 3
CONTRIBUTIONS
-------------
3.1 Employee Salary Deferral Contributions. For the 1993 Plan
--------------------------------------
Year, each Participant may elect, in his sole discretion
and prior to June 25, 1993, to defer up to ten percent of
the Compensation payable to him with respect to each of his
payroll checks beginning with his July 15, 1993 payroll
check (which is to cover the June 26, 1993 through July 7,
1993 payroll period) and ending with the final payroll
check that the Participant receives in 1993. For Plan
Years subsequent to the 1993 Plan Year, each Participant
may elect, in his sole discretion and in accordance with
the following sentence, to defer up to five percent of the
Compensation (or such other percentage of Compensation that
may be determined, prior to the beginning of the Plan Year,
by the Board of Directors of Southern Union with respect to
such Plan Year) payable to him with respect to each of his
payroll checks beginning with the first payroll check in
such Plan Year that does not cover a payroll period that
includes any period within the prior Plan Year and ending
with the final payroll check that the Participant receives
in such Plan Year. The election under the preceding
sentence of each Section 16(b) Participant must be made at
least six months prior to the commencement of the Plan Year
for which the election is being made, and the election
under the preceding sentence of each Other Participant must
be made prior to the commencement of the Plan Year for
which the election is being made. A Participant may elect
an Employee Salary Deferral Contribution under the provi-
sions of this Section 3.1 by giving written notice to
Southern Union, which notice (a) must be received by
Southern Union within the time periods set forth above in
this Section 3.1, (b) must be in the form attached hereto
as Exhibit A (in the case of each Section 16(b) Partici-
---------
pant) or Exhibit B (in the case of each Other Participant)
---------
and otherwise in accordance with the Plan, and (c) must set
forth the Participant's irrevocable election as to the
percentage of his Compensation to be deferred in accordance
with this Section 3.1. The percentage of his Compensation
that a Participant elects to defer under this Section 3.1
shall be deducted from each of his payroll checks described
in the first two sentences of this Section 3.1. A Partici-
pant's Employee Salary Deferral Contributions under this
Section 3.1 shall be credited to the Participant's Account
as soon as administratively feasible following the date
that such Employee Salary Deferral Contributions are
deducted from the Participant's payroll checks under this
Section 3.1. At the time an Employee Salary Deferral
Contribution is credited to a Participant's Account and at
any time subsequent thereto, such Employee Salary Deferral
Contribution (as adjusted to reflect prior deemed invest-
ment and/or earnings performance, if any), in the discre-
tion of the Benefits Committee, (a) may be deemed to be
invested in Southern Union Stock at the price at which
Southern Union Stock is trading on the date the deemed
investment is made, and the Participant's Account shall be
adjusted from time to time to reflect the investment and/or
earnings performance of such Southern Union Stock so long
as such deemed investment continues, or (b) may be deemed
to be invested in such other investments as the Benefits
Committee may from time to time determine, and the Par-
ticipant's Account shall be adjusted from time to time to
reflect the investment and/or earnings performance of such
deemed investments so long as such deemed investments
continue.
3.2 Employer Matching Contributions. As soon as administra-
-------------------------------
tively feasible following each date that Participant
Employee Salary Deferral Contributions are credited to the
Participants' Accounts under Section 3.1, Southern Union
shall credit to the Account of each Participant who defers
a portion of his Compensation as an Employee Salary Defer-
ral Contribution under the provisions of Section 3.1, the
following amounts: (a) for the 1993 Plan Year, 50 percent
of the first four percent of the Participant's Compensa-
tion, to the extent that the Participant elects to defer
such first four percent of Compensation as an Employee
Salary Deferral Contribution under the provisions of
Section 3.1, with respect to each of his payroll checks
that he receives in 1993, beginning with his July 15, 1993
payroll check, and (b) for Plan Years subsequent to the
1993 Plan Year, 50 percent (or such other percentage that
may be determined, prior to the beginning of the Plan Year,
by the Board of Directors of Southern Union with respect to
such Plan Year) of the first two percent of the Partici-
pant's Compensation (or such other percentage of the Par-
ticipant's Compensation that may be determined, prior to
the beginning of the Plan Year, by the Board of Directors
of Southern Union with respect to such Plan Year), to the
extent that the Participant elects to defer such percentage
as an Employee Salary Deferral Contribution under the pro-
visions of Section 3.1, with respect to each of his payroll
checks that he receives in such Plan Year, beginning with
the first payroll check in such Plan Year that does not
cover a payroll period that includes any period within the
prior Plan Year. At the time a Southern Union Employer
Matching Contribution with respect to a Participant's
Employee Salary Deferral Contribution is credited to a
Participant's Account, and at any time subsequent thereto,
such Southern Union Employer Matching Contribution (as
adjusted to reflect prior deemed investment and/or earnings
performance, if any), in the discretion of the Benefits
Committee, (a) may be deemed to be invested in Southern
Union Stock at the price at which Southern Union Stock is
trading on the date the deemed investment is made, and the
Participant's Account shall be adjusted from time to time
to reflect the investment and/or earnings performance of
such Southern Union Stock so long as such deemed investment
continues, or (b) may be deemed to be invested in such
other investments as the Benefits Committee may from time
to time determine, and the Participant's Account shall be
adjusted from time to time to reflect the investment and/or
earnings performance of such deemed investments so long as
such deemed investments continue.
3.3 Employer Discretionary Contributions. From time to time,
------------------------------------
the Board of Directors of Southern Union, in its sole and
absolute discretion, may elect to credit any dollar amount
to a Participant's Account in the year following the year
in which such election is made. The Board of Directors of
Southern Union may elect, under the provisions of this Sec-
tion 3.3, to credit an Employer Discretionary Contribution
to the Account of an individual Participant without
electing to credit Employer Discretionary Contributions to
the Accounts of other Plan Participants and/or may elect to
credit Employer Discretionary Contributions in different
amounts (which may or may not reflect the Participants'
Compensation levels) to two or more Participants. At the
time a Southern Union Employer Discretionary Contribution
is credited to a Participant's Account, and at any time
subsequent thereto, such Southern Union Employer Discre-
tionary Contribution (as adjusted to reflect prior deemed
investment and/or earnings performance, if any), in the
discretion of the Benefits Committee, (a) may be deemed to
be invested in Southern Union Stock at the price at which
Southern Union Stock is trading on the date the deemed
investment is made, and the Participant's Account shall be
adjusted from time to time to reflect the investment and/or
earnings performance of such Southern Union Stock so long
as such deemed investment continues, or (b) may be deemed
to be invested in such other investments as the Benefits
Committee may from time to time determine, and the Par-
ticipant's Account shall be adjusted from time to time to
reflect the investment and/or earnings performance of such
deemed investments so long as such deemed investments
continue.
ARTICLE 4
PARTICIPANT ACCOUNTS
--------------------
A separate Account shall be established and maintained for each
Participant and shall reflect the elected Employee Salary Defer-
ral Contributions that are credited to a Participant's Account
under the provisions of Section 3.1, the Employer Matching Con-
tributions that are credited to a Participant's Account under the
provisions of Section 3.2, the Employer Discretionary Contribu-
tions, if any, that are credited to a Participant's Account under
the provisions of Section 3.3 and all adjustments to reflect the
investment and/or earnings performance of deemed investments of
such credited amounts.
ARTICLE 5
VESTING
-------
5.1 Vesting Schedule. Subject to the provisions of Article 8,
----------------
a Participant's Employee Salary Deferral Amount shall be
100 percent vested at all times. Subject to the limita-
tions set forth in Article 7 with respect to Section 16(b)
Participants and the provisions of Article 8 and Section
12.2, a Participant's Non-Salary Deferral Amount shall
vest, based on the Participant's Years of Vesting Service
as defined in Section 1.27, in accordance with the fol-
lowing schedule:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 years 0%
2 years but not 3 years 20%
3 years but not 4 years 40%
4 years but not 5 years 60%
5 years but not 6 years 80%
6 or more years 100%
The preceding sentence notwithstanding, subject to the
limitations set forth in Article 7 with respect to Section
16(b) Participants and the provisions of Article 8 and
Section 12.2, a Participant's Non-Salary Deferral Amount
shall become 100 percent vested upon the death of the
Participant while the Participant is employed by Southern
Union.
5.2 Forfeitures. That portion of a Participant's Account that
-----------
is not vested upon the Participant's termination of employ-
ment and that is forfeited shall, at the discretion of
Southern Union, be used to pay expenses relating to the
Plan and the Trust, if the Trust is established, and/or be
allocated in the Plan Year in which the forfeiture occurs
(and, if necessary, in subsequent Plan Years) in the same
manner and amounts as Employer Matching Contributions are
allocated under Section 3.2 for such Plan Year or Years,
thereby reducing Southern Union's Employer Matching Con-
tributions for the Plan Year or Years in which so allo-
cated.
ARTICLE 6
DISTRIBUTIONS
-------------
6.1 Termination of Employment. Except as provided in Article 7
-------------------------
with respect to Section 16(b) Participants and except in
the case of an earlier distribution required by Section
12.2, if a Participant terminates his employment with
Southern Union, the Participant, if he is living (or the
Participant's Beneficiary if the Participant is not
living), shall receive a distribution of the entire vested
portion of the Participant's Account, as determined under
Section 5.1, on the later of (a) 30 days following the
Participant's termination of employment with Southern
Union, or (b) July 1, 1994.
6.2 Unforeseeable Emergency. Subject to the limitations set
-----------------------
forth in Article 7 with respect to Section 16(b) Partici-
pants, in the case of a proven unforeseeable emergency, as
determined under this Section 6.2, and in the discretion of
the Benefits Committee in accordance with uniform princi-
ples consistently applied, the Benefits Committee may
permit a Participant to withdraw a portion of his Account
under the Plan. An unforeseeable emergency justifying a
withdrawal under this Section 6.2 must constitute an
unanticipated emergency that is caused by an event beyond
the control of the Participant and that would result in
severe financial hardship to the Participant if the early
withdrawal were not permitted. An unforeseeable emergency
justifying a withdrawal under this Section 6.2 must consti-
tute a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident
of the Participant or of a dependent (as defined in Code
Section 152(a)) of the Participant, loss of the Partici-
pant's property due to casualty, or other similar extraor-
dinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant. The cir-
cumstances that will constitute an unforeseeable emergency
will depend upon the facts of each case, but, in any case,
a withdrawal may not be made under this Section 6.2 to the
extent that the hardship is or may be relieved (a) by
reimbursement or compensation by insurance or otherwise,
(b) by liquidation of the Participant's assets, to the
extent the liquidation of such assets would not itself
cause severe financial hardship, or (c) by cessation of
Employee Salary Deferral Contributions under the Plan.
Examples, without limitation, of circumstances that are not
to be considered unforeseeable emergencies under this
Section 6.2 include the need to send a Participant's child
to college or the desire to purchase a home. An unfore-
seeable emergency withdrawal under this Section 6.2 shall
be limited to the amount necessary to satisfy the emergency
need, as determined in the discretion of the Benefits
Committee.
6.3 Investment Intent. Except as provided in Section 6.2, a
-----------------
Participant shall, contemporaneously with his receipt of a
distribution of Southern Union Stock hereunder, execute and
deliver to Southern Union a written statement, in form
satisfactory to Southern Union, in which such Participant
represents and warrants that such Participant has acquired
the shares of Southern Union Stock distributed hereunder
for such Participant's own account, for investment only and
not with a view to the resale or distribution thereof, and
agrees that any subsequent offer for sale or sale or dis-
tribution of any of such shares of Southern Union Stock
shall be made only pursuant to either (a) a Registration
Statement on an appropriate form under the Securities Act
of 1933, as amended (the "Securities Act"), which Registra-
tion Statement has become effective and is current with
regard to the shares of Southern Union Stock being offered
or sold, or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such
exemption the holder shall, if so requested by Southern
Union, prior to any offer for sale or sale of such shares
of Southern Union Stock, obtain a prior favorable written
opinion, in form and substance satisfactory to Southern
Union, from counsel for or approved by Southern Union, as
to the applicability of such exemption thereto. The fore-
going restriction on shares of Southern Union Stock dis-
tributed hereunder shall not apply to (i) issuances by
Southern Union so long as the shares of Southern Union
Stock being issued are registered under the Securities Act
and a prospectus in respect thereof is current or (ii)
reofferings of shares of Southern Union Stock by affiliates
of Southern Union as defined in Rule 405 or any successor
rule or regulation promulgated under the Securities Act) if
the shares of Southern Union Stock being reoffered are
registered under the Securities Act and a prospectus in
respect thereof is current.
6.4 Issuance of Certificates; Legends. Southern Union may
---------------------------------
endorse such legend or legends upon the certificates for
shares of Southern Union Stock distributed hereunder and
may issue such "stop transfer" instructions to its transfer
agent in respect of such shares of Southern Union Stock as,
in its discretion, it determines to be necessary or appro-
priate to (i) prevent a violation of, or to perfect an
exemption from, the registration requirements of the
Securities Act, or (ii) implement the provisions of the
Plan and any agreement between Southern Union and the
holder of such shares of Southern Union Stock.
ARTICLE 7
RESTRICTIONS APPLICABLE TO SECTION 16(b) PARTICIPANTS
-----------------------------------------------------
7.1 Shareholder Approval. Approval of the Plan by the share-
--------------------
holders of Southern Union shall be required only if
Southern Union's securities counsel determines prior to the
1994 Shareholders' Meeting that shareholder approval of the
Plan is required by Section 16(b) of the 1934 Act. Any
other provision of the Plan notwithstanding, in the event
that Southern Union's securities counsel determines prior
to the 1994 Shareholders' Meeting that shareholder approval
of the Plan is required by Section 16(b) of the 1934 Act
and the shareholders of Southern Union do not approve the
Plan at the 1994 Shareholders' Meeting, (a) each Section
16(b) Participant (or the Section 16(b) Participant's
Beneficiary if the Section 16(b) Participant is not living)
shall forfeit all rights to his Non-Salary Deferral Amount,
(b) each Section 16(b) Participant (or the Section 16(b)
Participant's Beneficiary if the Section 16(b) Participant
is not living) shall receive a distribution of his Employee
Salary Deferral Amount not later than the later of 30 days
after the date of the 1994 Shareholders' Meeting or July 1,
1994, and (c) there shall be no further Employee Salary
Deferral Contributions, Employer Matching Contributions or
Employer Discretionary Contributions with respect to any
Section 16(b) Participant.
7.2 Employee Salary Deferral Contributions. Except in the case
--------------------------------------
of an earlier distribution required by Section 7.1, upon
the occurrence of a Distribution Event with respect to a
Section 16(b) Participant, the Section 16(b) Participant
(or the Section 16(b) Participant's Beneficiary if the
Section 16(b) Participant is not living) shall be entitled
to receive from his Employee Salary Deferral Amount such
part or all of such Employee Salary Deferral Amount as such
Section 16(b) Participant would have been entitled to
receive (on account of such Distribution Event) if such
Section 16(b) Participant had been an Other Participant and
at the same time at which any Other Participant would be
entitled to receive a distribution upon the occurrence of
such Distribution Event and under the same circumstances
pursuant to which any Other Participant would be entitled
to receive a distribution upon the occurrence of such
Distribution Event. In addition, special rules relating to
Section 16(b) Participants' elections to make Employee
Salary Deferral Contributions to the Plan are set forth in
Section 3.1.
7.3 Other Contributions. If, upon the occurrence of a Distri-
-------------------
bution Event with respect to a Section 16(b) Participant,
Southern Union's securities counsel has determined that
approval of the Plan by the shareholders of Southern Union
is not required by Section 16(b) of the 1934 Act, the Sec-
tion 16(b) Participant (or the Section 16(b) Participant's
Beneficiary if the Section 16(b) Participant is not living)
shall be entitled to receive from his Non-Salary Deferral
Amount such part or all of such vested Non-Salary Deferral
Amount (as determined under Section 5.1) as such Section
16(b) Participant would have been entitled to received (on
account of such Distribution Event) if such Section 16(b)
Participant had been an Other Participant and at the same
time at which any Other Participant would be entitled to
receive a distribution upon the occurrence of such Distri-
bution Event and under the same circumstances pursuant to
which any Other Participant would be entitled to receive a
distribution upon the occurrence of such Distribution
Event. Any other provision of the Plan notwithstanding and
unless a forfeiture occurs under the provisions of Section
7.1, if, upon the occurrence of a Distribution Event with
respect to a Section 16(b) Participant, Southern Union's
securities counsel has determined that approval of the Plan
by the shareholders of Southern Union is required by Sec-
tion 16(b) of the 1934 Act or has not made a determination
as to whether such shareholder approval of the Plan is
required, (a) the Section 16(b) Participant (or the Section
16(b) Participant's Beneficiary if the Section 16(b) Par-
ticipant is not living) shall be entitled to receive the
Section 16(b) Participant's Non-Salary Deferral Amount on
the latest of (i) 30 days after the date of the 1994 Share-
holders' Meeting, (ii) 30 days after termination of the
Section 16(b) Participant's employment with Southern Union,
or (iii) July 1, 1994 in the case of a Distribution Event
constituting a termination of employment with Southern
Union under Section 6.1, (b) the Section 16(b) Partici-
pant's Non-Salary Deferral Amount shall not be subject to
withdrawal under the provisions of Section 6.2 until after
the 1994 Shareholders' Meeting in the case of a Distribu-
tion Event constituting a determination by the Benefits
Committee that the Participant has experienced an unforsee-
able emergency under Section 6.2, and (c) the Section 16(b)
Participant (or the Section 16(b) Participant's Beneficiary
if the Section 16(b) Participant is not living) shall be
entitled to receive his Non-Salary Deferral Amount 30 days
after the later of the 1994 Shareholders' Meeting and the
termination of the Plan in the case of a Distribution Event
constituting Southern Union's termination of the Plan under
Section 12.2.
7.4 Vesting. If a Section 16(b) Participant dies after
-------
Southern Union's securities counsel has determined that
approval of the Plan by the shareholders of Southern Union
is not required by Section 16(b) of the 1934 Act, the
Section 16(b) Participant shall become 100 percent vested
in his Non-Salary Deferral Amount upon his death. Any
other provision of the Plan notwithstanding and unless a
forfeiture occurs under the provisions of Section 7.1, if a
Section 16(b) Participant dies after Southern Union's
securities counsel has determined that approval of the Plan
by the shareholders of Southern Union is required by
Section 16(b) of the 1934 Act or at a time when Southern
Union's securities counsel has not made a determination as
to whether such approval of the Plan is required, the
Section 16(b) Participant shall become 100 percent vested
in his Non-Salary Deferral Amount immediately following the
date of the 1994 Shareholders' Meeting.
ARTICLE 8
PARTICIPANTS' RIGHTS
--------------------
Nothing contained in this Plan shall be construed as giving any
employee of Southern Union or any Participant the right to be
retained in Southern Union's service or employ or shall be con-
strued to interfere with the right of Southern Union to discharge
any employee of Southern Union or any Participant at any time
regardless of the effect that such discharge would have upon him
as a Participant in the Plan. Nothing contained herein shall be
construed to interfere with Southern Union's right to discharge
any employee at will for any reason or for no reason at all.
Nothing contained in this Plan shall be construed as giving any
employee of Southern Union or any Participant the right to
receive any benefit not specifically provided by the Plan. Any
other provision of the Plan notwithstanding, a Participant shall
not have any interest in the amounts credited to his Account
until such Account is distributed in accordance with the provi-
sions of Article 6, Article 7 or Section 12.2. All Employee
Salary Deferral Contributions, all Employer Matching Contribu-
tions, all Employer Discretionary Contributions and all earnings,
gains and losses with respect to such Employee Salary Deferral
Contributions, Employer Matching Contributions and Employer
Discretionary Contributions shall remain subject to the claims of
Southern Union's general creditors in accordance with the provi-
ions of the Plan and, if the Trust is established, in accordance
with the terms of the Trust. With respect to amounts credited to
a Participant's Account, the rights of the Participant, the Bene-
ficiary of the Participant or any other person claiming through
the Participant under this Plan shall be solely those of
unsecured general creditors of Southern Union; and the obliga-
tions of Southern Union hereunder shall be purely contractual.
To the extent that benefits under the Plan are not paid from the
Trust, if it is established, such benefits shall be paid from the
general assets of Southern Union. As contemplated by Revenue
Procedure 92-65, Participants shll have the status of general
unsecured creditors of Southern Union and the Plan shall con-
stitute a mere promise of Southern Union to make benefit payments
in the future.
ARTICLE 9
ANTIALIENATION
--------------
The rights of a Participant to the payment of deferred compensa-
tion as provided in this Plan and the rights of a Participant
with respect to amounts credited to his Account shall not be
assigned, transferred, pledged or encumbered or be subject in any
manner to alienation or anticipation. No Participant may borrow
against his Account. No Account shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind,
whether voluntary or involuntary, including but not limited to
any liability which is for alimony or other payments for the
support of a spouse or former spouse, or for any other relative
of a Participant. Neither a Participant's Account hereunder nor
a Participant's rights to benefits hereunder may be assigned to
any other party by means of a judgment, decree or order
(including approval of a property settlement agreement) relating
to the provision of child support, alimony payments, or marital
property rights of a spouse, former spouse, child or other depen-
dent of the Participant. As contemplated by Revenue Procedure
92-65, a Participant's rights to benefit payments under the Plan
shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant or the Participant's
Beneficiary.
ARTICLE 10
UNFUNDED STATUS
---------------
Any and all payments made to a Participant pursuant to the Plan
shall be made from the assets of the Trust, if the Trust is
established. If the Trust is not established, or to the extent
that the assets of the Trust are insufficient to make such
payments, such payments shall be made from the general assets of
Southern Union. Any payments made in good faith under the terms
of the Plan to a Participant, his Beneficiary or to any other
party under the provisions of Section 14.3 shall fully discharge
the Plan, the Trust and the Trustee of the Trust (if the Trust is
established), Southern Union and the Benefits Committee from all
further obligations with respect to such payments. Southern
Union intends that the Plan and the Trust (if it is established)
shall be considered unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974.
ARTICLE 11
PLAN ADMINISTRATION
-------------------
11.1 Powers and Duties. The Benefits Committee shall administer
-----------------
the Plan and shall keep records of individual Accounts. It
shall have the authority to interpret, construe and imple-
ment the Plan, to adopt and review rules and regulations
relating to the Plan and to make all other determinations
relating to the administration of the Plan. Any decision
or interpretation of any provision of the Plan adopted by
the Benefits Committee shall be final and conclusive. A
Participant who is also a member of the Benefits Committee
shall not participate in any decision involving any
requests made by him or relating in any way solely to his
rights, duties and obligations as a Participant under the
Plan.
11.2 Consultants. The Benefits Committee may employ such
-----------
counsel, accountants, actuaries and other agents as it
shall deem advisable. Southern Union shall pay the com-
pensation of such counsel, accountants, actuaries and other
agents and any other expenses incurred by the Benefits Com-
mittee in the administration of the Plan to the extent that
such compensation and expenses are not paid from forfei-
tures under the provisions of Section 5.2.
ARTICLE 12
AMENDMENT AND TERMINATION
-------------------------
12.1 Amendment. Southern Union reserves the right to amend or
---------
to modify the Plan at any time by formal action of its
Board of Directors, including the right to amend or to
modify the Plan retroactively, as long as the amendment or
modification does not adversely affect a Participant's
rights with respect to vested amounts then credited to his
Account, which rights are subject to the provisions of the
Plan, including the provisions of Article 6, Article 7,
Article 8 and Section 12.2.
12.2 Termination. Southern Union reserves the right to termi-
-----------
nate the Plan at any time by formal action of its Board of
Directors. Subject to the limitations set forth in Article
7 with respect to Section 16(b) Participants, notwith-
standing Article 5 of the Plan, upon termination of the
Plan, each Participant shall become 100 percent vested in
his Account and distributions of the Participants' Accounts
shall be made not later than 30 days after the termination
of the Plan.
ARTICLE 13
CLAIMS PROCEDURE
----------------
13.1 Claims. A Participant or any designated Beneficiary of a
------
deceased Participant may make a claim for benefits by
filing a written claim for such benefits with the Benefits
Committee, in a form that may be prescribed by the Benefits
Committee, which shall set forth: (a) the name, address
and Social Security number of the Participant, (b) the
period of time the Participant was employed with Southern
Union, and (c) such other information as the Benefits
Committee may require.
13.2 Notice of Decision. If a claim is wholly or partially
------------------
denied, notice of the decision, in accordance with Section
13.3, shall be furnished to the claimant within a reason-
able period of time, not to exceed 90 days after the Bene-
fits Committee's receipt of the claim, unless special
circumstances require an extension of time for processing
the claim. If such an extension of time is required,
written notice of the extension shall be furnished to the
claimant prior to the termination of the initial 90-day
period. In no event shall such extension exceed a period
of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances
requiring an extension of time and the date on which the
Benefits Committee expects to render a decision. If
neither notice of denial of claim nor notice of extension
of time is furnished, then such claim shall be deemed
denied and the claimant may proceed with the review
procedure specified in Sections 13.4 and 13.5.
13.3 Content of Notice. The Benefits Committee shall provide
-----------------
every claimant who is denied a claim for benefits written
notice setting forth, in a manner calculated to be under-
stood by the claimant, the following: (a) the specific
reason or reasons for the denial; (b) specific reference to
pertinent Plan provisions upon which the denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is neces-
sary; and (d) an explanation of the Plan's claims review
procedure, as set forth in Sections 13.4 and 13.5 below.
13.4 Appeal Procedure. The purpose of the review procedure set
----------------
forth in this Section 13.4 and in Section 13.5 is to pro-
vide a procedure by which a claimant, under the Plan, may
have a reasonable opportunity to appeal denial of a claim
to the Appeals Committee for a full and fair review. To
accomplish that purpose, the claimant (or his duly
authorized representative) may: (a) request review upon
written application to the Appeals Committee; (b) review
pertinent Plan documents; and (c) submit issues and
comments in writing. A claimant (or his duly authorized
representative) shall request a review by filing a written
application for review with the Appeals Committee within 60
days after the claimant receives written notice of the
denial of his claim.
13.5 Review Procedure. Decision on review of a denied claim
----------------
shall be made in the following manner: the decision on
review shall be made by the Appeals Committee, which may,
in its discretion, hold a hearing on the denied claim; the
Appeals Committee shall make its decision promptly, and not
later than 60 days after the Appeals Committee receives the
request for review, unless special circumstances require
extension of time, in which case a decision shall be ren-
dered as soon as possible, but not later than 120 days
after receipt of the request for review; if such an exten-
sion of time for review is required, written notice of the
extension shall be furnished to the claimant prior to the
commencement of the extension; the decision on review
shall be in writing and shall include specific reasons for
the decision, written in a manner calculated to be under-
stood by the claimant, and specific references to the
pertinent Plan provisions on which the decision is based;
and the decision shall be furnished to the claimant within
the period set forth in Section 13.5, but if the decision
is not furnished within the period set forth in Section
13.5, the claim shall be deemed denied on review.
13.6 Disputes. If a dispute arises with respect to any matter
--------
under this Plan, the Benefits Committee may refrain from
taking any other or further action in connection with the
matter involved in the controversy until the dispute has
been resolved.
13.7 Appeals Committee. For purposes of this Article 13, the
-----------------
Appeals Committee shall consist of a committee of at least
three but not more than five individuals appointed by the
Board of Directors of Southern Union.
ARTICLE 14
GENERAL PROVISIONS
------------------
14.1 Governing Law. Except to the extent superseded by federal
-------------
law, the laws of the State of Texas shall be controlling in
all matters relating to the Plan, including the construc-
tion and performance hereof, notwithstanding principles of
conflicts of laws.
14.2 Captions. The captions of Articles and Sections of this
--------
Plan are for convenience of reference only and shall not
control or affect the meaning or construction of any of its
provisions.
14.3 Facility of Payment. Any amounts payable hereunder to any
-------------------
person who is under legal disability or who, in the
judgment of the Benefits Committee, is unable to manage his
financial affairs properly may be paid to the legal repre-
sentative of such person or may be applied for the benefit
of such person in any manner that the Benefits Committee
may select, and any such payment shall be deemed to be
payment for such person's account.
14.4 Withholding. To the extent required by the laws in effect
-----------
at the time compensation or deferred compensation payments
are made hereunder, Southern Union shall withhold from such
compensation, or from such deferred compensation payments,
any taxes required to be withheld for federal, state or
local government purposes.
14.5 Administrative Expenses. Except as provided in the Trust,
-----------------------
if the Trust is established, all expenses relating to the
Plan and its administration shall, at the discretion of
Southern Union, be paid from forfeitures under the
provisions of Section 3.2 or shall be borne by Southern
Union.
14.6 Severability. Any provision of this Plan prohibited by the
------------
law of any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such prohibition without
invalidating the remaining provisions hereof.
14.7 Liability. Except as otherwise expressly provided herein,
---------
no member of the Board of Directors of Southern Union, no
member of the Benefits Committee, and no officer, employee
or agent of Southern Union or the Benefits Committee
(specifically including but not limited to an employee of
Southern Union acting at the direction of the Benefits
Committee) shall have any liability to any person, firm or
corporation based on or arising out of the Plan except in
the case of gross negligence or fraud. Southern Union
agrees to indemnify each member of its Board of Directors
and each member of its Benefits Committee against all
liabilities arising out of the performance of his duties
hereunder, excluding liabilities resulting from the
member's gross negligence or fraud.
14.8 Binding Effect. This Plan shall be binding upon and shall
--------------
inure to the benefit of Southern Union, its successors and
assigns and each Participant and his heirs, executors,
administrators and legal representatives.
14.9 Construction. Any words herein used in the masculine shall
------------
be read and construed in the feminine where they would so
apply. Words in the singular shall be read and construed
as though used in the plural in all cases where they would
so apply.
EXECUTED this 30th day of June, 1994, to replace the Southern
Union Company Supplemental Deferred Compensation Plan executed on
May 31, 1993.
SOUTHERN UNION COMPANY
By: NANCY CAPEZZUTI
-----------------
Title:
<PAGE>
EXHIBIT A
- ---------
(ELECTION FORM TO BE USED IN THE CASE OF PARTICIPANTS DESIGNATED
BY SOUTHERN UNION COMPANY TO BE OFFICERS SUBJECT TO THE PROVI-
SIONS OF SECTION 16(b) OF THE SECURITIES EXCHANGE ACT OF 1934 IF
STOCKHOLDER APPROVAL IS REQUIRED BY SECTION 7.1 OF THE SOUTHERN
UNION COMPANY SUPPLEMENTAL DEFERRED COMPENSATION PLAN)
ELECTION FORM
-------------
SOUTHERN UNION COMPANY SUPPLEMENTAL DEFERRED COMPENSATION PLAN
(the "Deferred Compensation Plan")
( ) I irrevocably elect to defer under the Deferred Compensa-
tion Plan percent (not to exceed five percent) of
------
the "gross compensation" (including bonuses, but excluding
severance payments) that I may be entitled to receive from
Southern Union Company ("Southern Union") in connection
with each of my 199 payroll checks, beginning with my
--
January , 199 payroll check. I understand that my
--- --
gross compensation, for purposes of determining the amount
to be deferred under the Deferred Compensation Plan
pursuant to this election, will be determined before any
deductions for any salary deferral elections that I may
have made (or may make) under the Southern Union Savings
Plan and/or the Southern Union Company Employee Flexible
Benefit Plan.
( ) I do not elect to defer compensation under the Deferred
Compensation Plan in 199 .
--
Subject to the provisions of the second paragraph following this
paragraph, I understand that Southern Union will match 50 percent
of the first two percent of each of my payroll checks that I
elect to defer under the above salary deferral election and that,
in general, Southern Union's matching contributions will not vest
until the Deferred Compensation Plan is approved by the stock-
holders of Southern Union and until I have completed six years of
service with Southern Union.
Subject to the provisions of the following paragraph, I under-
stand that the value of my account under the Deferred Compensa-
tion Plan, which will reflect contributions under the above
salary deferral election as well as matching contributions, will
increase if the assets set aside to distribute benefits under the
Deferred Compensation Plan when they become due appreciate in
value and earn income and will decrease if such assets depreciate
in value and experience losses.
I understand that the funds set aside under the Deferred Compen-
sation Plan will be subject to the claims of Southern Union's
general creditors and that I will be considered an unsecured
creditor with respect to my benefits under the Deferred Compensa-
tion Plan.
I also understand that the Deferred Compensation Plan does not
provide for loans and that, unless the Deferred Compensation Plan
is terminated, generally, I will not have access to the salary
deferrals that I elect to make under the Deferred Compensation
Plan until the later of July 1, 1994 or 30 days following the
date on which my employment with Southern Union terminates and
that, unless the Deferred Compensation Plan is terminated,
generally, I will have access to Southern Union's vested matching
contributions that are set aside for me under the Deferred Com-
pensation Plan at the same time that I have access to my
deferrals under the Deferred Compensation Plan, except that
matching contributions will not be available until the stock-
holders of Southern Union approve the Deferred Compensation Plan
(if such approval is required by Section 7.1 of the Deferred
Compensation Plan).
Further, I understand that until the Deferred Compensation Plan
is approved by the stockholders of Southern Union (if such
approval is required by Section 7.1 of the Deferred Compensation
Plan), all purchases of Southern Union common stock that are
credited to my participant account under the terms of the
Deferred Compensation Plan will be subject to the short-swing
profit provisions of Section 16(b) of the Securities Exchange Act
of 1934, as amended, and that if stockholder approval is required
by Section 7.1 of the Deferred Compensation Plan, I may not
directly or indirectly sell or dispose of any shares of Southern
---
Union common stock which I may be considered to beneficially own
for securities law purposes, however acquired, until at least six
months after the earlier of (i) the date that the Deferred Com-
pensation Plan is approved by Southern Union's stockholders or
(ii) the date that I am no longer deferring compensation under
the Deferred Compensation Plan.
Finally, I understand that my rights to benefits under the
Deferred Compensation Plan will be subject to the terms of the
Deferred Compensation Plan.
EXECUTED this day of , 199 .
----- --------------- --
------------------------------------
Participant
Print Name:
------------------------
EXHIBIT B
(ELECTION FORM TO BE USED IN THE CASE OF PARTICIPANTS NOT DESIG-
NATED BY SOUTHERN UNION COMPANY TO BE OFFICERS SUBJECT TO THE
PROVISIONS OF SECTION 16(b) OF THE SECURITIES EXCHANGE ACT OF
1934)
ELECTION FORM
-------------
SOUTHERN UNION COMPANY SUPPLEMENTAL DEFERRED COMPENSATION PLAN
(the "Deferred Compensation Plan")
( ) I irrevocably elect to defer under the Deferred Compensa-
tion Plan percent (not to exceed five percent) of
------
the "gross compensation" (including bonuses, but excluding
severance payments) that I may be entitled to receive from
Southern Union Company ("Southern Union") in connection
with each of my 199 payroll checks, beginning with my
--
January , 199 payroll check. I understand that my
-- --
gross compensation, for purposes of determining the amount
to be deferred under the Deferred Compensation Plan
pursuant to this election, will be determined before any
deductions for any salary deferral elections that I may
have made (or may make) under the Southern Union Savings
Plan and/or the Southern Union Company Employee Flexible
Benefit Plan.
( ) I do not elect to defer compensation under the Deferred
Compensation Plan in 199 .
--
Subject to the provisions of the second paragraph following this
paragraph, I understand that Southern Union will match 50 percent
of the first two percent of each of my payroll checks that I
elect to defer under the above salary deferral election and that,
in general, Southern Union's matching contributions will vest
over a period of six years.
Subject to the provisions of the following paragraph, I under-
stand that the value of my account under the Deferred Compensa-
tion Plan, which will reflect contributions under the above
salary deferral election as well as matching contributions, will
increase if the assets set aside to distribute benefits under the
Deferred Compensation Plan when they become due appreciate in
value and earn income and will decrease if such assets depreciate
in value and experience losses.
I understand that the funds set aside under the Deferred Compen-
sation Plan will be subject to the claims of Southern Union's
general creditors and that I will be considered an unsecured
creditor with respect to my benefits under the Deferred Compensa-
tion Plan.
I also understand that the Deferred Compensation Plan does not
provide for loans and that, unless the Deferred Compensation Plan
is terminated, generally, I will not have access to the funds set
aside under the Deferred Compensation Plan until the later of
July 1, 1994 or 30 days following the date on which my employment
with Southern Union terminates.
Finally, I understand that my rights to benefits under the
Deferred Compensation Plan will be subject to the terms of the
Deferred Compensation Plan.
EXECUTED this day of , 199 .
---- ------------------- --
------------------------------------
Participant
Print Name:
------------------------
<PAGE>
AMENDMENT
TO
SOUTHERN UNION COMPANY
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
WHEREAS, the Southern Union Company Supplemental Deferred Com-
pensation Plan (the "Plan") became effective June 1, 1993;
WHEREAS, until December 31, 1996, the only individuals selected
to participate in the Plan, pursuant to Article 2 of the Plan,
were management employees who were officers of Southern Union
Company ("Southern Union"); and
WHEREAS, effective January 1, 1997, in addition to management
employees who were officers of Southern Union, certain management
employees who were Directors (as defined below) of Southern Union
were also selected to participate in the Plan pursuant to Article
2;
NOW, THEREFORE, pursuant to Section 12.1 of the Plan, the Plan is
amended, effective January 1, 1997, as set forth below.
1. The Plan is amended to add a new Section 1.3A, entitled
Change in Control, to read as follows:
-----------------
1.3A Change in Control. For purposes of Section 5.1, a
-----------------
"Change in Control" of Southern Union occurs if: (a)
any "person" (defined as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended) other than a "person" who together
with all members of such person's family as of July 1,
1992 was the beneficial owner, directly or indirectly,
of 25 percent or more of Southern Union's "Common
Stock" (defined as such term is used in the Southern
Union 1992 Long Term Incentive Plan, as amended), is
or becomes the beneficial owner, directly or indi-
rectly, of securities of Southern Union representing
25 percent or more of the combined voting power of
Southern Union's outstanding securities then entitled
to vote for the election of directors; (b) there is a
change in the composition of the Board of Directors of
Southern Union (the "Board") over a period of 24 con-
secutive months or less such that a majority of the
Board members (rounded up to the next whole number)
cease, by reason of one or more proxy contests for the
election of Board members, to be comprised of indi-
viduals who either (x) have been Board members con-
tinuously since the beginning of such period or (y)
have been elected or nominated for election as Board
members during such period by at least two-thirds of
the Board members described in clause (x) who were
still in office at the time such election or nomina-
tion was approved by the Board; or (c) the share-
holders shall approve the sale of all or substantially
all of the assets of Southern Union or any merger,
consolidation, issuance of securities or purchase of
assets, the result of which would be the occurrence of
any event described in clause (a) or (b) above.
1. The Plan is amended to add a new Section 1.5A, entitled
Director, to read as follows:
--------
1.5A Director. The term "Director" refers to a management
--------
employee of Southern Union who Southern Union desig-
nates in its records as a "Director" with respect to a
particular function and/or division of Southern Union.
For purposes of calculating Years of Vesting Service
under Section 1.27, an employee of Southern Union
shall not be considered a Director until such time as
he is designated as a Director in accordance with the
preceding sentence.
1. Section 1.27 of the Plan, entitled Year of Vesting Service,
-----------------------
is amended in its entirety to read as follows:
1.27 Year of Vesting Service.
-----------------------
(a) Subject to the provisions of paragraph (c) of
this Section 1.27, a Participant who is not a
Director shall receive credit for a "Year of
Vesting Service" for each full 12-month period
during which he is an employee of Southern Union.
For purposes of the preceding sentence, in the
case of a Participant who is not a Director, the
Participant's Years of Vesting Service shall be
determined based on the period in which he is an
employee of Southern Union, without regard to the
number of hours that he completes during such
period and without regard to whether the period
or periods in which he is an employee of Southern
Union are contiguous. In calculating Years of
Vesting Service under the first sentence of this
paragraph (a), a Participant who is not a Direc-
tor shall receive credit for periods in which he
is an employee of Southern Union that occur prior
to the establishment of this Plan.
(b) Subject to the provisions of paragraph (c) of
this Section 1.27, a Participant who is a Direc-
tor shall receive credit for a "Year of Vesting
Service" for each full 12-month period during
which he is a Director of Southern Union. For
purposes of the preceding sentence, in the case
of a Participant who is a Director, the Partici-
pant's Years of Vesting Service shall be deter-
mined based on the period in which he is a
Director of Southern Union, without regard to the
number of hours that he completes during such
period and without regard to whether the period
or periods in which he is a Director of Southern
Union are contiguous. In calculating Years of
Vesting Service under the first sentence of this
paragraph (b), a Participant who is a Director
shall receive credit for periods in which he is a
Director of Southern Union that occur prior to
the establishment of this Plan.
(c) Effective January 1, 1997 and thereafter, in
applying the vesting schedules set forth in
Section 5.1, as of the first day of each Plan
Year, a Participant shall be deemed to have com-
pleted the number of Years of Vesting Service
that the Participant would complete as of the
last day of such Plan Year, assuming that the
Participant continues to be an employee (in the
case of a Participant who is not a Director) or a
Director (in the case of a Participant who is a
Director) of Southern Union throughout the Plan
Year.
1. Section 5.1 of the Plan, entitled Vesting Schedule, is
----------------
amended in its entirety to read as follows:
5.1 Vesting Schedule. Subject to the provisions of Article
----------------
8, a Participant's Employee Salary Deferral Amount
shall be 100 percent vested at all times. Subject to
the limitations set forth in Article 7 with respect to
Section 16(b) Participants and the provisions of
Article 8 and Section 12.2, a Participant's Non-Salary
Deferral Amount shall vest, based on the Participant's
Years of Vesting Service, as determined under Section
1.27, (a) in accordance with the vesting schedule set
forth under paragraph (a), below, in the case of Par-
ticipants who are not Directors of Southern Union, and
(b) in accordance with the vesting schedule set forth
under paragraph (b), below, in the case of Participants
who are Directors of Southern Union; provided, however,
that if a management employee of Southern Union becomes
an officer of Southern Union (and is no longer a Direc-
tor), and if the vested percentage of such management
employee, calculated as if he were still a Director for
purposes of Section 1.27 and paragraph (b), below, is
greater than the vested percentage of such management
employee, calculated as if he were not a Director for
purposes of Section 1.27 and paragraph (a), below, such
management employee's vested percentage shall be calcu-
lated as if he were still a Director for purposes of
Section 1.27 and paragraph (b), below.
(a) Subject to the limitations described in the second
sentence of this Section 5.1, the following
vesting schedule shall apply to the Non-Salary
Deferral Amounts of all Participants who are not
Directors of Southern Union.
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 years 0%
2 years but not 3 years 20%
3 years but not 4 years 40%
4 years but not 5 years 60%
5 years but not 6 years 80%
6 or more years 100%
(b) Subject to the limitations described in the second
sentence of this Section 5.1, the following
vesting schedule shall apply to the Non-Salary
Deferral Amounts of all Participants who are
Directors of Southern Union.
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 1 year 0%
1 year but not 2 years 20%
2 years but not 3 years 40%
3 years but not 4 years 60%
4 years but not 5 years 80%
5 or more years 100%
The preceding provisions of this Section 5.1 notwithstanding,
subject to the limitations set forth in Article 7 with respect to
Section 16(b) Participants and the provisions of Article 8 and
Section 12.2, a Participant's Non-Salary Deferral Amount shall
become 100 percent vested upon the death of the Participant while
the Participant is employed by Southern Union. The preceding
provisions of this Section 5.1 notwithstanding, subject to the
limitations set forth in Article 7 with respect to Section 16(b)
Participants and the provisions of Article 8 and Section 12.2, a
Participant's Non-Salary Deferral Amount shall become 100 percent
vested in the event that the Participant terminates employment
with Southern Union within 12 months of a Change in Control of
Southern Union, and as a direct result of such Change in Control.
Executed this 24th day of February, 1997.
SOUTHERN UNION COMPANY
By: NANCY CAPEZZUTI
-----------------
Officer
<PAGE>
AMENDMENT
TO
SOUTHERN UNION COMPANY
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
Pursuant to Section 12.1 of the Southern Union Company Supple-
mental Deferred Compensation Plan (the "Plan"), the Plan is
amended, effective January 1, 1997 (except as otherwise provided
herein), as set forth below.
1. In order to document the Benefits Committee's interpretation
and construction of Section 1.5 of the Plan pursuant to Sec-
tion 11.1 of the Plan, Section 1.5 of the Plan, entitled
Compensation, is amended to add one sentence, to read as
------------
follows:
In no event shall income relating to stock options be con-
sidered "Compensation" hereunder.
2. The Plan is amended to add a new Section 1.5B, entitled
Disability, to read as follows:
----------
1.5B Disability. For purposes of Section 5.1, the term
----------
"Disability" refers to a physical or mental condition,
either occupational or nonoccupational in cause,
which, as determined by the Benefits Committee on the
basis of medical evidence or other showings satisfac-
tory to it, wholly disables a Participant from con-
tinuing in the active service of Southern Union in any
capacity, provided, however, that no condition shall
be deemed to be a "Disability" for purposes of Section
5.1 which (a) was contracted, suffered or incurred
while the Participant was engaged in a felonious
enterprise or resulted therefrom, or (b) results from
an intentionally self-inflicted injury.
3. Section 1.18 of the Plan, entitled Participant, is amended
-----------
in its entirety to read as follows:
1.18 Participant. The term "Participant" refers to a
-----------
management employee of Southern Union who is eligible
to participate in the Plan under the provisions of
Article 2 and for whom an Account is maintained under
the provisions of Article 4.
4. The Plan is amended to add a new Section 1.20A, entitled
Post-1998 Benefits, to read as follows:
------------------
1.20A Post-1998 Benefits. The term "Post-1998 Benefits"
------------------
refers to that portion of the Participant's Account
that is attributable to the Participant's Employee
Salary Deferral Contributions, Southern Union's
Employer Matching Contributions and Southern Union's
Employer Discretionary Contributions, if any, that are
made to the Plan with respect to periods beginning on
or after January 1, 1999, as well as income, gains and
losses with respect to such Contributions.
5. The Plan is amended to add a new Section 1.20B, entitled
Pre-1999 Benefits, to read as follows:
-----------------
1.20B Pre-1999 Benefits. The term "Pre-1999 Benefits"
-----------------
refers to that portion of the Participant's Account
that is attributable to the Participant's Employee
Salary Deferral Contributions, Southern Union's
Employer Matching Contributions and Southern Union's
Employer Discretionary Contributions, if any, that are
made to the Plan with respect to the period beginning
June 1, 1993 and ending December 31, 1998, as well as
income, gains and losses with respect to such Con-
tributions.
6. Article 2 of the Plan, entitled PARTICIPATION, is amended in
-------------
its entirety to read as follows:
ARTICLE 2
PARTICIPATION
2.1 Eligible Class. Management or highly compensated
--------------
employees of Southern Union may participate in the Plan
in accordance with the provisions of Section 2.2.
2.2. Participation within Eligible Class. A management or
-----------------------------------
highly compensated employee who is an officer of
Southern Union shall be eligible to participate in the
Plan as of the January 1 following his appointment as
an officer. A management or highly compensated
employee who is a Director of Southern Union shall be
eligible to participate in the Plan as of the January 1
following the first anniversary of his appointment as a
Director.
7. Without changing the first sentence of Section 3.1 of the
Plan, entitled Employee Salary Deferral Contributions, and
---------------------------------------
without changing the last two sentences of Section 3.1 of
the Plan, Section 3.1 of the Plan is amended to replace the
second, third, fourth and fifth sentences of Section 3.1 of
the Plan, with five sentences, to read as follows:
For Plan Years subsequent to the 1993 Plan Year and before
the Plan Year beginning January 1, 1998, each Participant
may elect, in his sole discretion and in accordance with the
applicable provisions of this Section 3.1, to defer up to
five percent of the Compensation (or such other percentage
of Compensation that may be determined, prior to the
beginning of the Plan Year, by the Board of Directors of
Southern Union with respect to such Plan Year) payable to
him with respect to each of his payroll checks beginning
with the first payroll check in such Plan Year that does not
cover a payroll period that includes any period within the
prior Plan Year and ending with the final payroll check that
the Participant receives in such Plan Year. For Plan Years
beginning on or after January 1, 1998, each Participant may
elect, in his sole discretion and in accordance with the
applicable provisions of this Section 3.1, to defer up to
ten percent of the Compensation (or such other percentage of
Compensation that may be determined by the Board of Direc-
tors of Southern Union) payable to him with respect to each
of his payroll checks beginning with the first payroll check
that the Participant receives in the Plan Year following the
Plan Year in which the Participant makes his election under
this sentence, and such election by the Participant shall
remain in force and effect and shall cover each payroll
check that the Participant receives before the first payroll
check that the Participant receives in the Plan Year fol-
lowing the Plan Year in which the Participant revokes his
election under this sentence, or changes the percentage of
Compensation that the Participant elects to defer in his
election under this sentence, by giving written notice to
the Senior Vice President of Human Resources of Southern
Union. The election under the two preceding sentences of
each Section 16(b) Participant must be made at least six
months prior to the commencement of the Plan Year for which
the election is being made, and the election under the two
preceding sentences of each Other Participant must be made
prior to the commencement of the Plan Year for which the
election is being made. A Participant may elect an Employee
Salary Deferral Contribution under the provisions of this
Section 3.1 by giving written notice to Southern Union,
which notice (a) must be received by Southern Union within
the time periods set forth above in this Section 3.1, (b)
must be in a form acceptable to the Benefits Committee and
otherwise in accordance with the Plan, (c)(1) for Plan Years
before the Plan Year beginning January 1, 1998, must set
forth the Participant's irrevocable election as to the per-
centage of his Compensation to be deferred in accordance
with this Section 3.1, and (c)(2) for Plan Years beginning
on or after January 1, 1998, must set forth the Partici-
pant's election as to the percentage of his Compensation to
be deferred in accordance with this Section 3.1, which shall
be irrevocable except as set forth in the second preceding
sentence. The percentage of his Compensation that a Par-
ticipant elects to defer under this Section 3.1 shall be
deducted from each of his payroll checks described in the
first three sentences of this Section 3.1.
8. Section 5.1 of the Plan, entitled Vesting Schedule, is
----------------
amended to replace the final two sentences of Section 5.1
with one sentence, to read as follows:
The preceding provisions of this Section 5.1 notwith-
standing, subject to the limitations set forth in Article 7
with respect to Section 16(b) Participants and the provi-
sions of Article 8 and Section 12.2, a Participant's Non-
Salary Deferral Amount shall become 100 percent vested (a)
upon the death of the Participant while the Participant is
employed by Southern Union; (b) in the event that the Par-
ticipant terminates employment with Southern Union within 12
months of a Change in Control of Southern Union, and as a
direct result of such Change in Control; (c) in the event
that the Participant terminates employment with Southern
Union on or after the Participant attains age 62; or (d) in
the event that the Participant terminates employment with
Southern Union because of the Participant's Disability.
9. Section 6.1 of the Plan, entitled Termination of Employment,
-------------------------
is amended in its entirety to read as follows:
6.1 Termination of Employment.
-------------------------
(a) Pre-1999 Benefits. Except in the case of an
-----------------
earlier distribution required by Section 12.2, if
a Participant's employment with Southern Union
terminates, the Participant, if he is living (or
the Participant's Beneficiary if the Participant
is not living), shall receive a distribution of
the entire vested portion of the Participant's
Pre-1999 Benefits, as determined under Section
5.1, on or about 30 days following the end of the
Plan Year in which the Participant terminates
employment with Southern Union.
(b) Post-1998 Benefits. Except in the case of an
------------------
earlier distribution required by Section 12.2 and
except as the Participant may elect under the
terms of the following two sentences, if a Par-
ticipant's employment with Southern Union termi-
nates, the Participant, if he is living (or the
Participant's Beneficiary if the Participant is
not living), shall receive a distribution of the
entire vested portion of the Participant's Post-
1998 Benefits, determined under Section 5.1, on or
about 30 days following the end of the Plan Year
in which the Participant terminates employment
with Southern Union. Except in the case of an
earlier distribution required by Section 12.2, a
management employee who becomes eligible to par-
ticipate in the Plan on or before January 1, 1999
may make an irrevocable election, by returning the
Distribution Election Form provided by the Bene-
fits Committee to the individual(s) designated by
the Senior Vice President of Human Resources on or
before December 31, 1998, to receive his Post-1998
Benefits, after he terminates employment with
Southern Union, under one of the three options set
forth in the second following sentence. Except in
the case of an earlier distribution required by
Section 12.2, a management employee who becomes
eligible to participate in the Plan on or after
January 1, 2000 may make an irrevocable election,
by returning the Distribution Election Form pro-
vided by the Benefits Committee to the indi-
vidual(s) designated by the Senior Vice President
of Human Resources on or before the December 31
immediately preceding the January 1 on which the
management employee becomes eligible to partici-
pate in the Plan, to receive his Post-1998 Bene-
fits, after he terminates employment with Southern
Union, under one of the three options set forth in
the following sentence. In accordance with the
two preceding sentences, a Participant may elect
to receive
(1) All of his Post-1998 Benefits on or about
January 30 of the first Plan Year following
the Plan Year in which the Participant termi-
nates employment with Southern Union;
(2) His Post-1998 Benefits in annual installments
over a period of years selected by the Par-
ticipant, which may be any whole number of
years from two to ten years, beginning on or
about January 30 of the first Plan Year fol-
lowing the Plan Year in which the Participant
terminates employment with Southern Union,
and continuing on or about each succeeding
January 30 until the elected installment dis-
tributions have been completed; or
(3) His Post-1998 Benefits in annual installments
over a period of years selected by the Par-
ticipant, which may be any whole number of
years from two to nine years, beginning on or
about January 30 of the second Plan Year fol-
lowing the Plan Year in which the Participant
terminates employment with Southern Union,
and continuing on or about each succeeding
January 30 until the elected installment dis-
tributions have been completed.
If a Participant elects installment payments under option (2) or
option (3) described in the preceding sentence, each installment
distribution will be calculated by multiplying the value of the
Participant's Post-1998 Benefits, as of the December 31 preceding
the January 30 on which the calculated distribution is to be
made, by a fraction, the numerator of which is 1 and the denomi-
nator of which is the total number of installment distributions
(including the distribution that is being calculated) remaining
to be paid to the Participant, with the final installment distri-
bution being adjusted for income, gains and losses from the
December 31 immediately preceding the date of the final install-
ment distribution through the date that the final installment
distribution is made.
EXECUTED this 11th day of December, 1998.
SOUTHERN UNION COMPANY
By: NANCY CAPEZZUTI
-----------------
Officer
<PAGE>
AMENDMENT
TO
SOUTHERN UNION COMPANY
SUPPLEMENTAL DEFERRED COMPENSATION PLAN
Pursuant to Section 12.1 of the Southern Union Company Supplemen-
tal Deferred Compensation Plan (the "Plan"), the Plan is amended,
effective July 1, 1999 (except as otherwise provided herein), as
set forth below.
1. Effective as of the effective date of the Plan, the first
sentence of Section 1.26, entitled Trust, is amended to read
-----
as follows:
The term "Trust" refers to the Trust under the Southern
Union Company Supplemental Deferred Compensation Plan which
may be established by Southern Union to meet obligations
under the Plan and which, if established, will conform to
the terms of the model trust described in Revenue Procedure
92-64.
2. The final sentence of Section 3.1, entitled Employee Salary
---------------
Deferral Contributions, is amended to read as follows:
----------------------
At the time an Employee Salary Deferral Contribution is
credited to a Participant's Account, and at any time subse-
quent thereto, such Employee Salary Deferral Contribution
(as adjusted to reflect prior deemed investment and/or
earnings performance, if any) shall be deemed to be
invested, and shall be adjusted to reflect deemed investment
and/or earnings performance, as provided in Article 15.
3. The final sentence of Section 3.2, entitled Employer
--------
Matching Contributions, is amended to read as follows:
----------------------
At the time a Southern Union Employer Matching Contribution
with respect to a Participant's Employee Salary Deferral
Contribution is credited to a Participant's Account, and at
any time subsequent thereto, such Southern Union Employer
Matching Contribution (as adjusted to reflect prior deemed
investment and/or earnings performance, if any) shall be
deemed to be invested, and shall be adjusted to reflect
deemed investment and/or earnings performance, as provided
in Article 15.
4. The final sentence of Section 3.3, entitled Employer
--------
Discretionary Contributions, is amended to read as follows:
---------------------------
At the time a Southern Union Employer Discretionary Con-
tribution is credited to a Participant's Account, and at any
time subsequent thereto, such Southern Union Employer Dis-
cretionary Contribution (as adjusted to reflect prior deemed
investment and/or earnings performance, if any) shall be
deemed to be invested, and shall be adjusted to reflect
deemed investment and/or earnings performance, as provided
in Article 15.
5. The Plan is amended to add a new ARTICLE 15, entitled
ADJUSTMENTS TO PARTICIPANT ACCOUNTS, to read as follows:
-----------------------------------
ARTICLE 15
ADJUSTMENTS TO PARTICIPANT ACCOUNTS
-----------------------------------
15.1 Deemed Investment Selections. Employee Salary
----------------------------
Deferral Contributions, Employer Matching Contribu-
tions and Employer Discretionary Contributions (as
adjusted to reflect prior deemed investment and/or
earnings performance, if any) shall be deemed to be
invested as set forth under paragraph (a) or paragraph
(b) of this Section 15.1, whichever is applicable.
(a) Selected by Participants. To the extent that the
------------------------
Benefits Committee may, from time to time, permit
Participants to direct the manner in which all or
any portion of their Accounts shall be deemed to
be invested, the Participants may select among
the deemed investments determined under Section
15.3 in accordance with the provisions of Section
15.4. Under the provisions of the preceding
sentence, the Benefits Committee may, for
example, permit Participants to select deemed
investments with respect to all or any portion of
their future Employee Salary Deferral Contribu-
tions, their future Employer Matching Contribu-
tions and/or their future Employer Discretionary
Contributions, or may for example, permit Par-
ticipants to select deemed investments with
respect to all or any portion of their Accounts
attributable to past Employee Salary Deferral
Contributions, past Employer Matching Contribu-
tions and/or past Employer Discretionary Contri-
butions (as adjusted to reflect prior deemed
investment and/or earnings performance) upon
satisfying certain age and service requirements.
If a Participant does not select deemed invest-
ments as permitted under the first sentence of
this paragraph (a), that portion of his Account
with respect to which he could have selected
deemed investments shall, in the discretion of
the Benefits Committee, (1) be deemed to be
invested in Southern Union Stock at the price at
which Southern Union Stock is trading on the date
the deemed investment is made, and the Partici-
pants' Accounts shall be adjusted from time to
time to reflect the investment and/or earnings
performance of such Southern Union Stock so long
as such deemed investment continues, or (2) be
deemed to be invested in such other deemed
investments (as determined under Section 15.3) as
the Benefits Committee may from time to time
determine, and the Participants' Accounts shall
be adjusted from time to time to reflect the
investment and/or earnings performance of such
deemed investments so long as such deemed invest-
ments continue.
(b) Selected by Benefits Committee. Except as
------------------------------
provided under paragraph (a) of this Section
15.1, Participant Accounts shall, in the dis-
cretion of the Benefits Committee, (1) be deemed
to be invested in Southern Union Stock at the
price at which Southern Union Stock is trading on
the date the deemed investment is made, and the
Participants' Accounts shall be adjusted from
time to time to reflect the investment and/or
earnings performance of such Southern Union Stock
so long as such deemed investment continues, or
(2) be deemed to be invested in such other deemed
investments (as determined under Section 15.3) as
the Benefits Committee may from time to time
determine, and the Participants' Accounts shall
be adjusted from time to time to reflect the
investment and/or earnings performance of such
deemed investments so long as such deemed invest-
ments continue.
15.2 Deemed Investment and/or Earnings Performance. Parti-
---------------------------------------------
Participant Accounts shall be adjusted from time to
time to reflect the investment and/or earnings per-
formance of deemed investments under Section 15.1 and
this Article 15. Although the Participant Accounts
maintained under the Plan shall reflect the values of
deemed investments and the deemed investment and/or
earnings performance of the deemed investments, (a)
Participants' rights under the Plan shall be deter-
mined under the provisions of the Plan (specifically
including the provisions of Article 8 hereof), and (b)
contributions to the Plan shall be invested, at the
discretion of the Trustee of the Trust under the
Southern Union Company Supplemental Deferred Compen-
sation Plan and in accordance with the terms of the
Trust, to the extent that such contributions are made
to the Trust, or at the discretion of Southern Union
to the extent that such contributions are not made to
the Trust but are set aside by Southern Union to meet
obligations under the Plan.
15.3 Deemed Investments. The Benefits Committee shall from
------------------
time to time select two or more investments and/or
investment funds ("deemed investments") for purposes
of determining amounts to be credited to Participant
Accounts under the Plan. The Benefits Committee may
change, add or remove deemed investments on a prospec-
tive basis at any time and in any manner that it deems
appropriate. Unless otherwise determined by the Bene-
fits Committee, the Plan's deemed investments shall be
the investments and/or the investment funds from time
to time offered under the Southern Union Savings Plan
(which currently consist of a Southern Union Stock
fund, a domestic growth fund, a balanced fund, a fixed
income fund, an international fund and a money market
fund).
15.4 Participant Direction of Deemed Investments. To the
-------------------------------------------
extent permitted under paragraph (a) of Section 15.1,
each Participant may direct the manner in which his
Account shall be deemed to be invested in and among
the deemed investments; provided, however, that such
investment directions shall be made in accordance with
the provisions of paragraphs (a), (b), (c) and (d) of
this Section 15.4.
(a) Nature of Participant Direction. Consistent with
-------------------------------
the provisions of Section 15.2, a Participant's
selection of deemed investments shall be for the
sole purpose of determining adjustments to that
portion, if any, of the Participant's Account
with respect to which the Participant may select
deemed investments under paragraph (a) of Section
15.1. A Participant's selection of deemed
investments shall not be treated or interpreted
in any manner whatsoever as a requirement or
direction to actually invest assets in any par-
ticular investment and/or investment fund.
(b) Contributions. Except as otherwise provided in
-------------
paragraph (c) and/or paragraph (d) of this Sec-
tion 15.4, to the extent permitted by the Bene-
fits Committee under paragraph (a) of Section
15.1, a Participant may make an investment elec-
tion, in such form as the Benefits Committee may
direct or permit, prescribing the percentage of
his Employee Salary Deferral Contributions, his
Employer Matching Contributions and/or his Em-
ployer Discretionary Contributions, with respect
to which he may select deemed investments under
paragraph (a) of Section 15.1, that will be
deemed to be invested in each deemed investment
beginning with the first payroll period that
occurs on or after the first July 1 following the
date that the Participant returns his initial
election form under this paragraph (b) to the
person designated by the Benefits Committee; pro-
vided, however, that a Participant may change his
investment election under this paragraph (b), in
such form as the Benefits Committee may direct or
permit, prescribing the percentage of his Em-
ployee Salary Deferral Contributions, his Em-
ployer ployer Matching Contributions and/or his
Employer Discretionary Contributions, with re-
spect to which he may select deemed investments
under paragraph (a) of Section 15.1, that will be
deemed to be invested in each deemed investment
beginning with the first payroll period that
occurs on or after the first July 1 following the
date that the Participant returns his form
changing his initial investment election under
this paragraph (b) to the person designated by
the Benefits Committee.
(c) Existing Account Balances. Except as otherwise
-------------------------
provided in paragraph (d) of this Section 15.4,
to the extent permitted by the Benefits Committee
under paragraph (a) of Section 15.1, a Partici-
pant may make an investment election, in such
form as the Benefits Committee may direct or per-
mit, prescribing the percentage of his Plan
Account, with respect to which he may select
deemed investments under paragraph (a) of Section
15.1, that will be deemed to be invested in each
deemed investment beginning with the first pay-
roll period that occurs on or after the first
July 1 following the date that the Participant
returns his initial election form under this
paragraph (c) to the person designated by the
Benefits Committee; provided, however, that a
Participant may change his investment election
under this paragraph (c), in such form as the
Benefits Committee may direct or permit, pre-
scribing the percentage of his Plan Account, with
respect to which he may select deemed investments
under paragraph (a) of Section 15.1, that will be
deemed to be invested in each deemed investment
beginning with the first payroll period that
occurs on or after the first July 1 following the
date that the Participant returns his form
changing his initial investment election under
this paragraph (c) to the person designated by
the Benefits Committee. Each election by a Par-
ticipant under this paragraph (c) shall apply
both to that portion of the Participant's
existing Account, with respect to which he may
select deemed investments under paragraph (a) of
Section 15.1 and to that portion of the Partici-
pant's Employee Salary Deferral Contributions,
Employer Matching Contributions and/or Employer
Discretionary Contributions, with respect to
which he may select deemed investments under
paragraph (a) of Section 15.1.
(d) Benefits Committee Discretion. The Benefits
-----------------------------
Committee shall have complete discretion to adopt
and revise procedures to be followed in selecting
deemed investments. Such procedures may include,
but are not limited to, the process of making
selections, the permitted frequency of making
selections, the incremental size of selections,
the deadline for making selections and the
effective date of selections. Any procedures
adopted by the Benefits Committee that are
inconsistent with the deadlines and procedures
specified in this Section 15.4 shall supersede
such provisions of this Section 15.4 without the
necessity of a Plan amendment.
6. In order to document the Benefits Committee's interpretation
and construction of the Plan pursuant to Section 11.1 of the
Plan, the Plan is amended, effective as of the effective
date of the Plan, to add a new Section 14.10, entitled
Income, Gains and Losses, to read as follows:
------------------------
14.10 Income, Gains and Losses. As used in Sections 1.1,
------------------------
1.6, 1.8, 1.10, 1.20A, 1.20B and 6.1, the phrase
"income, gains and losses" shall be deemed to refer
to the investment and/or earnings performance of
deemed investments under the Plan, specifically
including the provisions of Article 15 hereof.
EXECUTED this 15th day of April, 1999.
SOUTHERN UNION COMPANY
By: NANCY CAPEZZUTI
-----------------
Officer
<PAGE>
EXHIBIT 5
OPINION OF BARTON AND VANDERBURG
LYDIA WOMMACK BARTON
DIRECT DIAL NUMBER
(512) 494-1314
May 27, 1999
Southern Union Company
504 Lavaca Street, Suite 800
Austin, Texas 78701
Gentlemen:
It is our opinion that the Southern Union Company Supplemental
Deferred Compensation Plan, as amended (the "Plan") complies with
the applicable requirements of the Employee Retirement Income
Security Act of 1974, as amended.
We hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement on Form S-8 to be filed under the
Securities Act of 1933, as amended, to register 500,000 shares of
common stock of Southern Union Company, $1.00 par value, together
with an indeterminate number of interests to be offered or sold
pursuant to the terms of the Plan.
Sincerely yours,
BARTON AND VANDERBURG
A PROFESSIONAL CORPORATION
By: LYDIA WOMMACK BARTON
----------------------
Lydia Wommack Barton
LWB\pmf
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANT
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated August 25,
1998 relating to the consolidated financial statements, which
appears in Southern Union Company's Annual Report on Form 10-K
for the year ended June 30, 1998.
PricewaterhouseCoopers LLP
Austin, Texas
May 27, 1999
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signa-
ture appears below constitutes and appoints Peter H. Kelley,
Ronald J. Endres, Dennis K. Morgan and David J. Kvapil, acting
individually or together, as such person's true and lawful
attorney(s)-in-fact and agent(s), with full power of substitution
and revocation, to act in any capacity for such person and in
such person's name, place and stead in executing the Registration
Statement on Form S-8 and any amendments thereto, and filing said
Registration Statement, together with all exhibits thereto and
any other documents connected therewith, with the Securities and
Exchange Commission for the purpose of registering the securities
offered pursuant to the Southern Union Company Supplemental
Deferred Compensation Plan.
Dated: May 24, 1999
JOHN E. BRENNAN GEORGE L. LINDEMANN
- --------------- -------------------
John E. Brennan George L. Lindemann
AARON I. FLEISCHMAN GEORGE ROUNTREE, III
- ------------------- --------------------
Aaron I. Fleischman George Rountree, III
PETER H. KELLEY DAN K. WASSONG
- --------------- --------------
Peter H. Kelley Dan K. Wassong
ADAM M. LINDEMANN KURT A. GITTER, M.D.
- ----------------- --------------------
Adam M. Lindemann Kurt A. Gitter
ROGER J. PEARSON
- ----------------
Roger J. Pearson
