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Exhibit 10.2
 

162(m) of the Internal Revenue Code unless any such grant of restricted stock is
made pursuant to a performance based benchmark established by the Compensation
Committee.

Other Awards. In the case of other awards, the participant generally will
recognize ordinary income in an amount equal to any cash received and the fair
market value of any shares received on the date of payment or the date of
delivery of the underlying shares and the Company generally will be entitled to
a corresponding tax deduction.

If an award under the Amended 2003 Plan constitutes a deferral of compensation
subject to the requirements of section 409A of the Internal Revenue Code, and if
the award fails to meet those requirements or to be operated in accordance with
those requirements, the recipient of the award will realize taxable income,
generally, at the time of the deferral (or, if later, at the time the award
ceases to be subject to a substantial risk of forfeiture), and an interest
charge and additional 20% tax will also apply. It is anticipated, however, that
any awards under the Amended 2003 Plan that are subject to the requirements of
section 409A will be made and administered in accordance with those
requirements.

New Plan Benefits

In general, the awards that will be granted to eligible participants under the
Amended 2003 Plan are subject to the discretion of the Compensation Committee
and, therefore, are not determinable at this time. The Amended 2003 Plan
provides that each non-employee director will receive annually a restricted
stock award totaling 2,000 shares (or such lesser or greater amount (but not to
exceed 4,000 shares) as the Compensation Committee, in its absolute discretion,
may determine), or, at the election of the director, options having an
equivalent value, which will be granted at such time or times as the
Compensation Committee shall determine.

2003 Stock and Incentive Plan Awards

The following awards have been made under the 2003 Stock and Incentive Plan. On
February 6, 2004, the Compensation Committee authorized the award of up to
800,000 options under the 2003 Stock and Incentive Plan. On the same date,
694,500 options were awarded to senior level executives of the Company and
below, excluding members of the Executive Committee. The awarded options vest
over a five-year period. The exercise price of the options is $17.67.

 
Vote Required and Board Recommendation
 

The proposal to amend the 2003 Stock and Incentive Plan requires the approving
vote of a majority of the votes cast at the Annual Meeting. Broker non-votes and
abstentions will have no effect on the vote. The Board of Directors has adopted
a resolution seeking stockholder approval of, and recommends a vote for, the
amendment of the 2003 Stock and Incentive Plan.

BOARD OF DIRECTORS

Board Size and Composition

Currently, the Board of Directors is comprised of 11 directors and is divided
into three classes, each of which serves a staggered three-year term. The terms
of the Class III directors expire at this year’s Annual Meeting. The terms of
the Class I directors are scheduled to expire in 2006, and the terms of Class II
directors are scheduled to expire in 2007.

The following pages contain information concerning the current directors.

Class III - Term Expires in 2005

George L. Lindemann has been Chairman of the Board, Chief Executive Officer, a
director and Chairman of the Executive Committee of the Board of Directors of
Southern Union since 1990. He was Chairman of the Board and Chief Executive
Officer of Metro Mobile CTS, Inc. from its formation in 1983 until April 1992.
He has been President and a director of Cellular Dynamics, Inc., the managing
general partner of Activated Communications Limited Partnership, a family
investment entity, since 1982. Age: 69.
 
 
 
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