[EXECUTION COPY]
MARCH 5 AGREEMENT
This Agreement (this "Agreement") is made and entered into as
of March 5, 2009, by and between Southern Union Company, a Delaware corporation
(the "Company"), and the entities listed on SCHEDULE A hereto (collectively, the
"Xxxxxxx Group") (each of the Company and the Xxxxxxx Group, a "Party" to this
Agreement, and collectively, the "Parties").
RECITALS
A. The Xxxxxxx Group beneficially owns, in the aggregate,
10,636,806 shares of the Company's outstanding common stock, par value $1.00 per
share (the "Common Stock"), and has notified the Company of its intention to
nominate directors in anticipation of initiating a proxy solicitation (the
"Proxy Solicitation") to elect four individuals to the Company's Board of
Directors (the "Board");
B. The Parties have agreed that the Xxxxxxx Group shall
withdraw its nominees to the Board and terminate the Proxy Solicitation and that
the Xxxxxxx Group will not present any nominees or proposals at the Company's
2009 and 2010 Annual Meetings of Stockholders (including any adjournments or
postponements thereof, the "Annual Meetings");
C. The Corporate Governance Committee has recommended to the
Board and the Board has determined that it is in the best interests of the
stockholders of the Company to nominate Xxxxxxx Xxxxxxx and Xxxxxxx Xxxx (each
of such nominees a "Nominee" and together, the "Nominees"), to the Board for
election at the Annual Meetings as additions to the members of the Board and to
recommend the Nominees for election to the Board;
D. The Xxxxxxx Group has agreed to certain restrictions with
respect to the Company prior to the end of the Standstill Period (as defined
below), including refraining from submitting any stockholder proposal or
director nominations at the Annual Meetings or at any other meetings of
stockholders which may be held prior to the end of the Standstill Period and to
vote in favor of the Company's nominees for directors at the Annual Meetings;
E. The Company and the Xxxxxxx Group desire, in connection
with the foregoing, to make certain covenants and agreements with one another
pursuant to this Agreement.
NOW THEREFORE, in consideration of the covenants and premises
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows:
1. Upon the issuance of the press release referred to in Section 8 of this
Agreement, the Xxxxxxx Group withdraws its nomination of Xxxxxxx Xxxxxxx,
Xxxxxxx Xxxx, Xxxxx Xxxxxxx and Xxxx Xxxxxxxx, and withdraws and terminates the
Proxy Solicitation.
2. (a) The Company agrees that, (i) the Nominees will be nominated by the Board
for election at the Annual Meetings, (ii) the Board will recommend a vote "for"
the Nominees at the Annual Meetings, and shall solicit its stockholders to vote
for such Nominees,
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(iii) proxies solicited by the Board will be voted "for" the Nominees at the
Annual Meetings and (iv) each of the Nominees will serve on at least one
committee of the Board, with any such committee assignment to be determined by
the Board.
(b) The Company further agrees that, except as otherwise set forth herein,
during the term of his office as a director, in the event that a Nominee dies or
is unable or unwilling to perform his duties as a director, the Company will
consult with the Xxxxxxx Group (so long as it continues to own more than five
percent (5%) of the outstanding Common Stock) regarding any replacement for such
Nominee.
(c) The Company agrees that, prior to the 2011 Annual Meeting of Stockholders,
it will not increase the size of the Board to more than 12 directors except in
connection with a business combination transaction.
3. The Xxxxxxx Group will cause all shares of Common Stock beneficially owned by
it and its controlled affiliates to be present for quorum purposes and to be
voted at the Annual Meetings in favor of election of the Company's slate of
director nominees for the Annual Meetings (including the Nominees). For purposes
of this Agreement, "affiliate" has the meaning set forth in Rule 12b-2
promulgated by the SEC under the Exchange Act.
4. During the period commencing with the execution of this Agreement and ending
on the earlier to occur of (a) the date that is one hundred and thirty (130)
calendar days prior to the anniversary of the date the Company's proxy statement
is released to stockholders in connection with the 2010 Annual Meeting of
Stockholders (provided, however, that if the Board takes any action to amend the
Company's bylaws in such a manner as to increase the time period prior to the
2011 Annual Meeting of Stockholders by which a holder of the Company's Common
Stock must provide timely notice to the Company of (i) its nomination of a
person or persons to the Board at a meeting of the Company's stockholders, or
(ii) its proposal to bring business before a meeting of the Company's
stockholders (clause (i) and (ii) together, the "Stockholder Matters"), then the
Standstill Period shall expire ten (10) days prior to the date on which a
stockholder must give notice to the Company with respect to any Stockholder
Matters for the 2011 Annual Meeting), and (b) a material breach by the Company
of its obligations under this Agreement (the "Standstill Period"), neither the
Xxxxxxx Group nor any of its controlled affiliates shall, without the prior
written consent of the Company:
(a) other than as provided in this Agreement, seek or propose to influence or
control the management or the policies of the Company (provided that either
Nominee's actions (or those of his replacement as contemplated by Section 2 of
this Agreement) as a member of the Board shall not be deemed to violate the
foregoing) or to obtain representation on the Board (other than the nomination
of the Nominees), directly or indirectly engage in any activities in opposition
to the recommendation of the Board (including the recommendation of the Nominees
to be elected at the Annual Meetings), submit any proposal (whether pursuant to
Rule 14a-8 or otherwise) or nomination of a director or directors for
stockholder action, or solicit, or encourage or in any way participate in the
solicitation of, any proxies or consents with respect to any voting securities
of the Company; provided, however, that the foregoing shall not prohibit the
Xxxxxxx Group from (i) making public statements (including statements
contemplated by Rule 14a-1(1)(2)(iv) under the Exchange Act), (ii) engaging in
discussions with other stockholders (so
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long as the Xxxxxxx Group does not seek directly or indirectly, either on its
own or another's behalf, the power to act as proxy for a security holder and
does not furnish or otherwise request, or act on behalf of a person who
furnishes or requests, a form of revocation, abstention, consent or
authorization, and such discussions are in compliance with subsection (d)
hereof) (clause (i) and (ii), together, "Permitted Actions") with respect to any
transaction that has been publicly announced by the Company involving a
recapitalization of the Company, an acquisition, disposition or sale of assets
or a business by the Company where the consideration to be received or paid in
such transaction exceeds $500 million in the aggregate, or a change of control
of the Company (each, a "Material Transaction"), (iii) voting as it sees fit on
any matter other than with respect to the election of directors or (iv)
privately contacting the Board or management of the Company to express its views
regarding Company matters so long as such contact or communication will not
require or result in an amendment to or other public disclosure in connection
with the Schedule 13D filed by the Xxxxxxx Group or any of its controlled
affiliates with respect to the Company;
(b) make any public announcement with respect to, or publicly offer to effect,
seek or propose (with or without conditions) a merger, consolidation, business
combination or other extraordinary transaction with or involving the Company or
any of its subsidiaries or any of its or their securities or assets; provided,
however, that nothing in this subsection (c) shall prevent the Xxxxxxx Group
from taking Permitted Actions with respect to a Material Transaction;
(c) (i) form, join or in any way participate in a "group" as defined in Section
13(d)(3) of the Exchange Act, and the rules and regulations promulgated
thereunder, other than a "group" that includes only all or some lesser number of
persons identified as members of the Xxxxxxx Group and their controlled
affiliates, or (ii) enter into any negotiations, arrangements or understandings
with any third parties, other than members of the Xxxxxxx Group and their
controlled affiliates, in connection with becoming a "group" as defined in
Section 13(d)(3) of the Exchange Act; or
(d) publicly seek or request permission to do any of the foregoing, publicly
request to amend or waive any provision of this paragraph (including, without
limitation, any of clauses (a)-(d) hereof) so long as any private request to
amend or waive any provision will not require or result in an amendment to or
other public disclosure in connection with the Schedule 13D filed by the Xxxxxxx
Group or any of its controlled affiliates with respect to the Company, or make
or seek permission to make any public announcement with respect to any of the
foregoing.
5. The Xxxxxxx Group agrees that, during the Standstill Period, it shall not
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend (other than in a customary commingled brokerage account in the
ordinary course of business), or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable, directly or indirectly, for Common Stock, whether
any such transaction described above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise (any such action a
"Transfer"), in each case without the prior written consent of the Company;
provided that the foregoing shall not restrict the Xxxxxxx Group from (i) a
Transfer of any shares to a controlled affiliate which agrees to be bound by the
terms of this Agreement and executes a Joinder Agreement in the form attached
hereto as EXHIBIT B,
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(ii) subject to compliance with law, the Transfer of shares in either (1)
brokers' transactions (within the meaning of Rule 144(g) of the Securities Act
of 1933 (the "Securities Act")), but not in transactions directly with a market
maker (as defined in Section 3(a)(38) of the Exchange Act), or (2) private
Transfers (including transactions with, or indirectly through, a market maker),
in a single Transfer or series of related Transfers, which would not result in
the ultimate transferee of such shares of Common Stock from the Xxxxxxx Group
beneficially owning, together with its affiliates, following such Transfer or
Transfers, in excess of 5% of the Company's Common Stock in the aggregate, or
(iii) Transfers made pursuant to (x) tender offers in respect of the Company's
Common Stock made by the Company or any third party, or (y) repurchase offers in
respect of the Company's Common Stock made directly with the Company.
6. The Company agrees that, during the Standstill Period, the Company will make
its representatives available periodically, but not more than quarterly, to meet
with representatives of the Xxxxxxx Group to discuss the business and operations
of the Company.
7. If at any time during the Standstill Period the Xxxxxxx Group fails to
beneficially own at least five percent (5%) of the outstanding Common Stock, the
Xxxxxxx Group shall cause both of the Nominees to promptly tender their
resignation from the Board and any committees of the Board on which the Nominees
then sit. In furtherance of this Section 7 and the provisions of Section 9, each
Nominee has on the date hereof delivered and executed an irrevocable resignation
as director in the form attached hereto as EXHIBIT D (and, in case of
replacement nominees, such replacement shall deliver his or her executed
irrevocable resignation as director in such form prior to being appointed to the
Board). For purposes of this Section 7, to the extent a person enters into a
transaction for the purpose and with the effect of disposing of such person's
economic interests in shares of the Company, including pursuant to any hedging
transaction or other derivative security, contract or instrument, then such
person shall be deemed to have disposed of such person's beneficial ownership in
a ratable portion of such shares.
8. (a) Promptly following the execution of this Agreement, the Company and the
Xxxxxxx Group shall jointly issue a mutually agreeable press release announcing
the terms of this Agreement, in the form attached hereto as EXHIBIT A.
(b) With respect to the Company, during the period ending on the date described
in Section 4(a) so long as there has not been a material breach of this
Agreement by the Xxxxxxx Group or any member thereof, and with respect to the
Xxxxxxx Group, during the Standstill Period, neither the Company nor the Xxxxxxx
Group, nor any of their respective affiliates will, directly or indirectly, make
or issue or cause to be made or issued any disclosure, announcement or statement
(including without limitation the filing of any document or report with the SEC
or any other governmental agency or any disclosure to any journalist, member of
the media or securities analyst) concerning the other Party or any of its
controlled affiliates, which disparages such Party or any of its controlled
affiliates as individuals (provided that each Party, after consultation with
counsel, may make any disclosure that it determines in good faith is required to
be made under applicable law; and provided further, that the foregoing shall not
prohibit the Xxxxxxx Group from taking a Permitted Action with respect to any
Material Transaction).
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9. The Xxxxxxx Group agrees that (a) following election of the Nominees to the
Board at the 2009 Annual Meeting and during such time that any Nominee is a
director of the Company, the Xxxxxxx Group will not offer or pay any form of
remuneration, including any contingent remuneration, to any such Nominee, (b)
with respect to Xx. Xxxxxxx (i) the compensation arrangements between the
Xxxxxxx Group and Xx. Xxxxxxx will be amended in such a manner as to terminate
any compensation otherwise owed to Xx. Xxxxxxx from and after the time that he
becomes a director of the Company, and (ii) from and after the date that Xx.
Xxxxxxx becomes a director of the Company and during his service as a director
of the Company, Xx. Xxxxxxx will not perform any consulting or other services
for the Xxxxxxx Group, and (c) if there is a breach of any of the provisions of
Section 9(b) or any Nominee is in breach of sub-section (ii) of the second
paragraph of the irrevocable resignation attached hereto as EXHIBIT D, the
applicable Nominee will be deemed to have tendered his resignation in accordance
with the irrevocable resignation as director in the form attached hereto as
EXHIBIT D and the Xxxxxxx Group shall not be entitled to any rights with respect
to a replacement Nominee pursuant to Section 2(b) of this Agreement.
10. The Xxxxxxx Group agrees it will cause its controlled affiliates to comply
with the terms of this Agreement.
11. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
facsimile, when such facsimile is transmitted to the facsimile number set forth
below and the appropriate confirmation is received or (b) if given by any other
means, when actually received during normal business hours at the address
specified in EXHIBIT C or such other address as may be given pursuant to this
notice provision.
12. This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. No modifications of this Agreement can be made except in
writing signed by an authorized representative of each the Company and the
Xxxxxxx Group. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns, and nothing in
this Agreement is intended to confer on any person other than the parties hereto
or their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
13. If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this Agreement.
14. Each Party agrees to take or cause to be taken such further actions, and to
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents, as may be
reasonably required or requested by the other party in order to effectuate fully
the purposes, terms and conditions of this Agreement. The
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Xxxxxxx Group has heretofore provided to the Company all information required by
the rules and regulations of the SEC to be included with respect to the Nominees
in the Company's proxy statement for the Annual Meetings. The Xxxxxxx Group
acknowledges that the Nominees (or any replacement as contemplated by Section 2
of this Agreement) will be, subject to all of the Company's policies and
procedures applicable to independent directors, including the Company's policies
concerning trading in the Company's securities, and acknowledges that it is
aware of the restrictions imposed by the federal securities laws on trading in
securities.
15. Each of the Parties acknowledges and agrees that irreparable injury to the
other Parties hereto would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached and that such injury would not be adequately compensable in
damages. It is accordingly agreed by each of the Parties that a Party so moving
(the "Moving Party") shall each be entitled to specific enforcement of, and
injunctive relief to prevent any violation of, the terms hereof and the other
Parties hereto will not take action, directly or indirectly, in opposition to
the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity.
16. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware without reference to the conflict of laws
principles thereof. Each of the Parties hereto irrevocably agrees that any legal
action or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of any
judgment in respect of this Agreement and the rights and obligations arising
hereunder brought by any other Party hereto or its successors or assigns, shall
be brought and determined exclusively in the Delaware Court of Chancery and any
state appellate court therefrom within the State of Delaware (or, if the
Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware). Each of the
Parties hereto hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Agreement in any court other
than the aforesaid courts.
17. This Agreement may be executed in one or more counterparts which together
shall constitute a single agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused the same to be executed by its duly authorized
representative as of the date first above written.
SOUTHERN UNION COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: President & Chief Operating Officer
[Signature Page to Settlement Agreement]
XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CEO
CASTLERIGG MASTER INVESTMENTS LTD.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
CASTLERIGG INTERNATIONAL LIMITED.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CASTLERIGG INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
[Signature Page to Settlement Agreement]
SCHEDULE A
XXXXXXX GROUP
Xxxxxxx Asset Management Corp.
Castlerigg Master Investments Ltd.
Castlerigg International Limited
Castlerigg International Holdings Limited
EXHIBIT A
FORM OF PRESS RELEASE
SOUTHERN UNION AND XXXXXXX ASSET MANAGEMENT REACH AGREEMENT
HOUSTON, Texas. (March [ ], 2009) - Southern Union Company (NASDAQ: SUG) and
Xxxxxxx Asset Management Corp. ("Sandell"), affiliates of which own 8.6% of the
Company's outstanding shares, today announced that they have reached an
agreement that will avoid a proxy contest at the Company's 2009 annual meeting
of stockholders.
The settlement agreement, which will be incorporated into a report on Form 8-K
to be filed by Southern Union, provides that two candidates previously nominated
by Xxxxxxx to the Board of Directors of Southern Union will be nominated for
election at the 2009 and 2010 annual meetings in addition to the current members
of the Board. Also, as part of the settlement, Xxxxxxx has agreed to abide by
certain standstill provisions.
"We are pleased that this matter has been resolved in a manner that serves the
best interests of all Southern Union stockholders," said Xxxx X. Xxxxxxxxxx,
President and Chief Operating Officer of Southern Union. "This agreement will
enable Southern Union's management to focus its efforts on the Company's
operations and avoid a costly and time consuming proxy contest."
Xxxxxx Xxxxxxx said, "We are pleased that we were able to work constructively
with Southern Union and reach an agreement to avoid a protracted proxy contest.
We look forward to working with the Company to maximize value for the benefit of
all shareholders. In that regard, we have always believed it is important for
Southern Union to maintain its investment grade rating. Therefore, in the
current economic environment, we do not believe the Company should undertake
extraordinary transactions such as the creation of an MLP, sales of LDC assets
or payment of a special dividend or increased dividends."
ABOUT SOUTHERN UNION COMPANY
Southern Union Company, headquartered in Houston, is one of the nation's leading
diversified natural gas companies, engaged primarily in the transportation,
storage, gathering, processing and distribution of natural gas. The company owns
and operates one of the nation's largest natural gas pipeline systems with
approximately 20,000 miles of gathering and transportation pipelines and North
America's largest liquefied natural gas import terminal, along with serving more
than half a million natural gas end-user customers in Missouri and
Massachusetts. For further information, visit xxx.xxx.xxx.
ABOUT XXXXXXX ASSET MANAGEMENT CORP.
Xxxxxxx Asset Management Corp. (and affiliated companies), with offices in New
York, NY, London and Hong Kong, is a global investment management firm founded
by Xxxxxx X. Xxxxxxx that focuses on corporate event driven investing worldwide.
Xxxxxxx often will take an "active involvement" in facilitating financial or
organizational improvements that will accrue to the benefit of shareholders.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements relating to Southern Union
Company's settlement agreement with Xxxxxxx Asset Management Corp. The words
"believe," "expect," "intend," "anticipate," variations of such words, and
similar expressions identify forward-looking statements, but their absence does
not mean that the statement is not forward looking. Although Southern Union
believes that its expectations are based on reasonable assumptions, it can give
no assurance that such assumptions will materialize. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements herein are enumerated in Southern Union's Forms 10-K
and 10-Q as filed with the Securities and Exchange Commission. Southern Union
assumes no obligation to publicly update or revise any forward-looking
statements made herein or any other forward-looking statements made by Southern
Union, whether as a result of new information, future events, or otherwise.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. Southern Union
undertakes no obligation to update publicly any forward-looking statements to
reflect new information, events or circumstances after the date of this release
or to reflect the occurrence of unanticipated events.
CONTACTS:
Xxxx X. Xxxxx Xxxxxx Xxxxxxx
Vice President - Investor Relations Chief Executive Officer
Southern Union Company Xxxxxxx Asset Management Corp.
000-000-0000 000-000-0000
EXHIBIT B
FORM OF JOINDER AGREEMENT
The undersigned hereby agrees, effective as of the date hereof, to become a
party to that certain Agreement, dated as of March 5, 2009, by and among
Southern Union Company, a Delaware corporation (the "Company"), and the entities
listed on SCHEDULE A thereto (collectively, the "Xxxxxxx Group") (the
"Settlement Agreement"). By executing this joinder agreement, the undersigned
hereby agrees to be, and shall be, deemed a "Party" and a member of the "Xxxxxxx
Group" for all purposes of the Settlement Agreement, entitled to the rights and
subject to the obligations thereunder with respect to the voting securities of
the Company acquired from the Xxxxxxx Group.
The address and facsimile number to which notices may be sent to the undersigned
is as follows:
Address:
Facsimile No.:
Name:
Date:
EXHIBIT C
ADDRESSES FOR NOTICE
If to the Company:
Southern Union Company
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Senior Vice President & General Counsel
Facsimile: 000-000-0000
Telephone: 000-000-0000
Email: xxxxxx.xxxxxxxx@xxx.xxx
with a copy to:
Xxxxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Email: xxxxxxxx@xxxxxxxx.xxx
If to the Xxxxxxx Group:
Xxxxxxx Asset Management Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000
Email:
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx/Xxxx Xxxxxxxxxx
Facsimile: 000-000-0000
Telephone: 000-000-0000/000-000-0000
Email: Xxxxxxxxxxxxxx@XXX.xxx/Xxxxxxxxxxxxxx@XXX.xxx
EXHIBIT D
FORM OF IRREVOCABLE RESIGNATION
March 5, 2009
Attention: Chairman of the Board of Directors
Reference is made to that certain Settlement Agreement (the "Settlement
Agreement"), dated as of March 5, 2009, between Southern Union Company (the
"Company") and Xxxxxxx Asset Management Corp., Castlerigg Master Investments
Ltd., Castlerigg International Limited, and Castlerigg International Holdings
Limited (collectively, the "Xxxxxxx Group"). Capitalized terms used but not
defined herein (and terms otherwise defined in the Settlement Agreement and used
herein) shall have the meanings assigned to such terms in the Settlement
Agreement.
In accordance with Section 7 of the Settlement Agreement, regarding stock
ownership of the Xxxxxxx Group, and in respect of certain of my relationships,
effective upon my election as a director, I hereby tender my conditional
resignation as a director of the Board and as a member of any committee of the
Board of which I am then a member, provided that this resignation shall be
effective upon the Board's acceptance of this resignation, and only in the event
that (i) at any time during the Standstill Period, the Xxxxxxx Group fails to
beneficially own at least five percent (5%) of the outstanding Common Stock
and/or (ii) I [For Xxxxxxx only -- (a) fail to resign as a director of Xxxxxxxx
Pipeline Partners L.P. if requested by the Board at any time I am a director of
the Company or there is a breach of any of the provisions of Section 9(b) of the
Settlement Agreement, (b)] [(a)] fail to obtain the written approval of the
Board prior to accepting any directorship or consulting engagement with a
company in the natural gas industry, [(c)] [(b)] communicate directly with
representatives of the Xxxxxxx Group while serving as a director of the Company
or [(d)] [(c)] receive any remuneration in violation of Section 9(a) of the
Settlement Agreement.
This resignation may not be withdrawn by me at any time.
Very truly yours,
---------------------------
[Name]
