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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 “Sandell Group”)
(each of the Company and the Sandell Group, a “Party” to this Agreement, and
collectively, the “Parties”).
 
 
RECITALS
 
 
A. The Sandell 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 Sandell Group shall withdraw its nominees to
the Board and terminate the Proxy Solicitation and that the Sandell 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 Stephen Beasley and Michael Egan (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 Sandell 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 Sandell 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 Sandell Group withdraws its nomination of Stephen Beasley,
Michael Egan, Keith Gollust and Nick Graziano, 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, (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.
 

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(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 Sandell 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 Sandell 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 Sandell 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
Sandell Group from (i) making public statements (including statements
contemplated by Rule 14a-1(l)(2)(iv) under the Exchange Act), (ii) engaging in
discussions with other stockholders (so long as the Sandell 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 Sandell Group or any of its controlled
affiliates with respect to the Company;
 

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(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 Sandell 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 Sandell Group and their controlled
affiliates, or (ii) enter into any negotiations, arrangements or understandings
with any third parties, other than members of the Sandell 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 Sandell
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 Sandell 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 Sandell 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, (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 Sandell 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.
 

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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 Sandell Group to discuss the
business and operations of the Company.
 
 
7.           If at any time during the Standstill Period the Sandell Group fails
to beneficially own at least five percent (5%) of the outstanding Common Stock,
the Sandell 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 Sandell 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 Sandell Group or any member thereof, and with respect to the
Sandell Group, during the Standstill Period, neither the Company nor the Sandell
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 Sandell Group from taking a Permitted Action with respect to any
Material Transaction).
 
 

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9.           The Sandell 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 Sandell Group will not offer or pay
any form of remuneration, including any contingent remuneration, to any such
Nominee, (b) with respect to Mr. Beasley (i) the compensation arrangements
between the Sandell Group and Mr. Beasley will be amended in such a manner as to
terminate any compensation otherwise owed to Mr. Beasley from and after the time
that he becomes a director of the Company, and (ii) from and after the date that
Mr. Beasley becomes a director of the Company and during his service as a
director of the Company, Mr. Beasley will not perform any consulting or other
services for the Sandell 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 Sandell Group shall not be entitled to any rights
with respect to a replacement Nominee pursuant to Section 2(b) of this
Agreement.
 
 
10.           The Sandell 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 Sandell 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
Sandell 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 Sandell 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.
 
 

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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/ Eric D. Herschmann
                                                               Name:
 
Eric D. Herschmann
                                                               Title:
 
President & Chief Operating Officer

 

 
 
[Signature Page to Settlement Agreement]
 

     

 
 

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                                                                SANDELL ASSET
MANAGEMENT CORP.
   
                                                                 By:
 
/s/ Thomas E. Sandell
                                                                 Name:
 
Thomas E. Sandell
                                                                 Title:
 
CEO
 
                                                                CASTLERIGG
MASTER INVESTMENTS LTD.
   
                                                                 By:
 
/s/ Thomas E. Sandell
                                                                 Name:
 
Thomas E. Sandell
                                                                 Title:
 
Authorized Signatory
 
                                                                CASTLERIGG
INTERNATIONAL LIMITED
   
                                                                By:
 
/s/ Thomas E. Sandell
                                                                Name:
 
Thomas E. Sandell
                                                                Title:
 
Director
 
                                                                CASTLERIGG
INTERNATIONAL HOLDINGS LIMITED
   
                                                                By:
 
/s/ Thomas E. Sandell
                                                                Name:
 
Thomas E. Sandell
                                                                Title:
 
Authorized Signatory
   

[Signature Page to Settlement Agreement]

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SCHEDULE A
 
SANDELL GROUP
 
 
Sandell Asset Management Corp.
 
 
Castlerigg Master Investments Ltd.
 
 
Castlerigg International Limited
 
 
Castlerigg International Holdings Limited
 

 
 

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EXHIBIT A
 
FORM OF PRESS RELEASE
 
 
SOUTHERN UNION AND SANDELL ASSET MANAGEMENT REACH AGREEMENT
 
 
HOUSTON, Texas. (March 5, 2009) – Southern Union Company (NYSE: SUG) and Sandell
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 Sandell to the Board of Directors of Southern Union will be nominated for
election at the 2009 and 2010 annual meetings as additions to the members of the
Board.  Also, as part of the settlement, Sandell 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 Eric D. Herschmann,
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.”
 
 
Thomas Sandell 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 www.sug.com.

 
 

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About Sandell Asset Management Corp.  
 
Sandell Asset Management Corp. is a multi-billion dollar global investment
management firm, founded by Thomas E. Sandell, that focuses on corporate events,
credit opportunities and restructurings throughout North America, Continental
Europe, the United Kingdom, Latin America and the Asia-Pacific theatres. Sandell
frequently will take an “active involvement” in facilitating financial or
organizational improvements accruing to the benefit of investors.
 
 
Forward-looking Statements
 
 
This release contains forward-looking statements relating to Southern Union
Company’s settlement agreement with Sandell 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:
 

     
John F. Walsh
Vice President - Investor Relations
Southern Union Company
212-659-3208
 
 
Thomas Sandell
Chief Executive Officer
 Sandell Asset Management Corp.
212/603-5700

 
 

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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 “Sandell 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 “Sandell
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 Sandell Group.
 
 
The address and facsimile number to which notices may be sent to the undersigned
is as follows:
 
 
                              Address:
 
          Facsimile No.:
 

 

                                               
Name:
Date:
                     

 
 

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EXHIBIT C
 
ADDRESSES FOR NOTICE
 
If to the Company:
 
Southern Union Company
5444 Westheimer Road
Houston, TX 77056
Attention: Senior Vice President & General Counsel
Facsimile: 713-989-1213
Telephone: 713-989-7567
Email: monica.gaudiosi@sug.com

 
with a copy to:
 
Sullivan & Cromwell, LLP
125 Broad Street
New York, NY 10004
Attention: Joseph B. Frumkin
Facsimile: 212-558-3588
Telephone: 212-558-4101
Email: frumkinj@sullcrom.com

If to the Sandell Group:

Sandell Asset Management Corp.
40 West 57th Street
New York, NY 10019
Attention: Thomas E. Sandell
Facsimile: 212-603-5710
Telephone: 212-603-5700
Email:

with a copy to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Attention: David Rosewater/Marc Weingarten
Facsimile: 212-593-5955
Telephone: 212-756-2208/212-756-2280
Email: Davidrosewater@SRZ.com/Marcweingarten@SRZ.com

 
 

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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 Sandell Asset Management Corp., Castlerigg Master Investments
Ltd., Castlerigg International Limited, and Castlerigg International Holdings
Limited (collectively, the “Sandell 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 Sandell 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 Sandell Group fails to
beneficially own at least five percent (5%) of the outstanding Common Stock
and/or (ii) I [For Beasley only -- (a) fail to resign as a director of Williams
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 Sandell 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]