April 20, 1995
BY FEDERAL EXPRESS
Mr. David Oldam
Prudential Investments Advisors
751 Broad Street, Fifth Floor
Newark, New Jersey 07101
Re: Sonat Inc. 1995 Annual Meeting
Dear David:
Enclosed are Sonat's Annual Report, Proxy Statement
and proxy card for our 1995 Annual Meeting.
As Warren Spitz and I discussed, some of our
shareholders have expressed concern that Sections 4.3 and
4.4 of the Plan could enable the Executive Compensation
Committee to "reprice" an existing stock option. I have
spoken to Ron Kuehn, Sonat's Chairman and CEO, about this
issue, and he has emphasized his personal opposition to
option repricing, and feels that the Compensation Committee
and the entire Board share that view.
We would appreciate it if you could vote in favor of the
Executive Award Plan proposal. In order to secure your
support, Ron will ask the Board, at its April 27 meeting (after
the shareholders' meeting), to revise the Plan to prohibit
amending any then-outstanding option in order to reduce the
option's exercise price (except if the amendment is made
necessary by a stock split or other change in the Company's
capitalization), and to prohibit cancelling an option and
replacing it with an option with a lower exercise price. Ron
and I believe that this amendment will have the Board's
complete support.
If you have any questions, or if you would like to
discuss this matter further, please give me a call.
Very truly yours,
Thomas W. Barker, Jr.
