Document:

Exhibit 10.1

    
      

    

     

    Exhibit
      10.1

     

    

      

      Southern
        Union Company

      417
        Lackawanna Avenue

      Scranton,
        PA 18503

      

      

      November
        7, 2005

      

      Thomas
        F.
        Karam

      103
        Stonegate Road

      Waverly,
        PA 18471

      

      Dear
        Mr.
        Karam:

       

      This
        will
        confirm the agreement (the “Agreement”) that has been reached with you in
        connection with your separation of employment from Southern Union Company
        (the
“Company”). 

       

      1. 
        Effective immediately, the Company hereby amends the Employment Agreement
        dated
        as of December 28, 1999 (the “Employment Agreement”) between you and the Company
        to terminate your participation in all arrangements under the Employment
        Agreement and, subject to your consent to the General Release set forth in
        paragraph 9 hereof and provided that you execute and do not revoke this
        Agreement within the time period and in the manner specified herein, to
        distribute all amounts of compensation provided for under the Employment
        Agreement in such a way that all such amounts, all such amounts subject to
        termination of your participation and the full amount of the distribution
        under
        the Employment Agreement are includable in your income in calendar year 2005.
        Such distribution shall be subject to applicable federal, state and local
        withholding taxes and deductions. By your execution and delivery of this
        Agreement, you hereby consent to the Company’s amendment of the Employment
        Agreement as provided for in the first sentence of this paragraph 1.

       

      2. 
        You hereby confirm that your last day of employment with the Company is November
        8, 2005 and waive any notice period otherwise applicable under the Employment
        Agreement. Moreover, you hereby confirm your resignations from any and all
        of
        your positions as officer or director of the Company, including but not limited
        to President and Chief Operating Officer of the Company, and any of its
        subsidiaries, divisions, joint ventures or other affiliates, effective as
        of
        November 8, 2005, and agree that you shall take such further actions as may
        be
        necessary or desirable to effectuate the foregoing. 

       

      3. 
        In consideration of your obligations set forth in this Agreement, including,
        but
        not limited to, your consent to the General Release set forth in paragraph
        9 below,
        and provided that you execute and do not revoke this Agreement within the
        time
        period and in the manner specified herein, the Company and you have agreed
        as
        follows:

       

      	(a)  	
              The
                Company
                accepts your resignation effective November
                8, 2005.

            

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      	(b)  	
              The
                Company agrees to pay you severance in the amount of Three Million
                Three
                Hundred Thousand dollars ($3,300,000.00), less all applicable federal,
                state and local withholding taxes and deductions, which amount shall
                be
                paid in a lump sum no later than ten (10) business days after the
                Effective Date (as defined below in paragraph 14) of this
                Agreement.

            

       

      	(c)  	
              The
                Company agrees to pay you a special discretionary bonus in respect
                of work
                performed in calendar year 2005 in the amount of Four Hundred Twelve
                Thousand dollars ($412,000.00), less all applicable federal, state
                and
                local withholding taxes and deductions, which amount shall be paid
                in a
                lump sum no later than ten (10) business days after the Effective
                Date.

            

       

      	(d)  	
              You,
                your spouse and your dependent children who are covered under any
                of the
                Company’s group health plans (collectively, the “Plan”) at the time of
                your termination will lose coverage under the Plan on November 30,
                2005.
                This loss of coverage will entitle you, your spouse and dependent
                children
                to elect to receive continuation coverage in the Plan pursuant to
                the
                provisions of the Consolidated Omnibus Budget Reconciliation Act
                of 1985,
                as amended (“COBRA”), for eighteen (18) months following the date that
                coverage under the Plan is lost (i.e.,
                through May 31, 2007). As described in more detail in the COBRA notice
                that you will receive when you lose coverage under the Plan, this
                eighteen-month period may be extended upon the occurrence of certain
                events that occur during such eighteen-month period. In the event
                that
                you, your spouse or dependent children elect to receive COBRA continuation
                coverage under the Plan, the Company agrees to reimburse you for
                the
                required premium that you pay for such COBRA continuation coverage
                for the
                eighteen-month period ending May 31, 2007. Any COBRA continuation
                coverage
                to which you, your spouse or dependent children may be entitled after
                May
                31, 2007 shall be at your own expense. If you, your spouse or a dependent
                child first becomes eligible to be covered under another group health
                plan
                (as an employee or otherwise) or first becomes entitled to benefits
                under
                Title XVIII of the Social Security Act during such eighteen-month
                period
                (as such period may be extended), you agree to report such eligibility
                for
                coverage to the Company and the Company’s reimbursement obligation shall
                cease permanently with respect to coverage under any group health
                plan,
                including the Plan, with respect to such individual. Except as set
                forth
                herein, continuation coverage shall in all respects be subject to
                the
                requirements, conditions and limitations of COBRA and the Plan, which
                may
                be amended from time to time.

            

       

      	(e)  	
              The
                Company agrees to pay you for any unused vacation time that has accrued
                as
                of November
                8, 2005, less all applicable federal, state and local withholding
                taxes
                and deductions, which amount shall be paid in a lump sum no later
                than ten
                (10) business days after the Effective Date,
                and the
                Company agrees to reimburse you for any legitimate unreimbursed business
                expenses incurred by you prior to November 8, 2005, promptly following
                your
                submission of proper documentation of such expenses to the Company.
                As of
                the date hereof, the value of accrued but unused vacation totaled
                $160,437.

            

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      	(f)  	
              Effective
                ten (10) business days following the Effective Date, the Company
                agrees to
                amend the Southern Union Company Supplemental Deferred Compensation
                Plan
                (the “Shadow Plan”) to terminate your participation, and all of your
                deferred compensation arrangements, under the Shadow Plan, and to
                distribute all amounts of your deferred compensation under the Shadow
                Plan, in kind to the extent provided under the terms of the Shadow
                Plan,
                no later than December 31, 2005, in such a way that all such deferred
                amounts, all such amounts subject to termination of your participation,
                and the full amount of the distribution under the Shadow Plan are
                includable in your income in calendar year 2005. Such distribution
                shall
                be subject to applicable federal, state and local withholding taxes
                and
                deductions. By your execution and delivery of this Agreement, you
                hereby
                consent to the Company’s amendment of the Shadow Plan as provided for in
                the preceding sentence. As of October 26, 2005, your account balance
                under
                the Shadow Plan totaled 77,088.9147 shares of Southern Union common
                stock.

            

       

      	(g)  	
              Not
                later than ten (10) business days after the Effective Date, you agree
                to
                prepay in full the outstanding balance, together with any accrued
                but
                unpaid interest (but otherwise without any premium or penalty), under
                that
                certain Secured Promissory Note dated December 20, 1999 and made
                by you in
                favor of the Company in the original principal amount of Four Million
                dollars ($4,000,000.00) (the “Note”), upon which prepayment that certain
                Security Agreement dated as of December 20, 1999 made by you in favor
                of
                the Company shall be deemed released and of no further force or effect.
                As
                of the date hereof, the outstanding principal balance under the Note
                totaled $2,383,486.51.

            

       

      	(h)  	
              The
                Company agrees to engage you as a consultant, and you agree to accept
                such
                engagement, to perform services as the Company may reasonably request
                and
                to provide reasonable assistance in transitioning your duties to
                other
                employees at the Company for approximately fifteen (15) hours per
                week, as
                needed, including but not limited to business development and strategic
                growth initiatives, for a period of twenty-four (24) months commencing
                January 1, 2006 (the “Consulting Period”). As compensation for your
                agreement and availability to provide the foregoing services as a
                consultant during the Consulting Period, you shall be paid a rate
                of
                Sixty-Six Thousand One Hundred Sixty-Six and 67/100 dollars ($66,166.67)
                per month, in arrears; provided,
                however,
                that the foregoing payments for consulting services shall cease
                permanently if and to the extent that you obtain other employment
                with, or
                otherwise provide services as a consultant to, any business, entity
                or
                individual during the Consulting Period other than Permitted Services
                (as
                defined below). For purposes of this Agreement, “Permitted Services” shall
                mean your provision of services to (1) an educational, not-for-profit
                or
                charitable organization, (2) a governmental organization that does
                not
                have any regulatory or oversight function with respect to the Company
                or
                any of its subsidiaries or affiliates, or (3) a company whose principal
                business does not include the operation of an interstate natural
                gas
                pipeline or natural gas local distribution company and/or does not
                otherwise compete in any way, directly or indirectly, with the businesses
                of the Company, its subsidiaries or affiliates as of November 8,
                2005
                (“Category 3”), and provided that your provision of such services does not
                adversely affect your availability to provide consulting services
                to the
                Company as required herein. The parties agree that in the event you
                seek a
                limited waiver of this provision, you will notify the Company in
                writing
                and the Company will attempt to respond promptly to your request.
                You
                agree to promptly notify the Company in writing upon securing any
                other
                employment or consultancy engagements (whether or not they involve
                Permitted Services) and the Company shall have the right to stop
                any
                payment not yet due and recoup payments already made in the event
                that you
                fail to notify the Company of any Category 3 employment or consultancy
                engagements as provided herein. The Company acknowledges that from
                time to
                time you may have personal commitments (e.g., travel, vacation) during
                the
                Consulting Period and the Company agrees to work with you to accommodate
                any such commitments in scheduling or otherwise requesting your consulting
                services.

            

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      	(i)  	
              You
                agree not to obtain other employment with, or otherwise provide services
                as a consultant to, any business, entity or individual from and after
                the
                date hereof through the last day of the Consulting Period other than
                Permitted Services. You further agree
                that during such period you shall not, directly or indirectly, on
                your own
                behalf or on behalf of any other person or entity, solicit, or attempt
                to
                solicit, or hire any employee, agent or contractor of the Company
                or any
                of its subsidiaries, divisions, joint ventures or other affiliates,
                known
                by you to be such, to leave the employ of or cease doing business
                with the
                Company or any of its subsidiaries, divisions, joint ventures or
                other
                affiliates for any reason whatsoever. You additionally agree that
                during
                such period you shall not, directly or indirectly, on your own behalf
                or
                on behalf of any other person or entity, interfere with or induce
                any
                customer or prospective customer to discontinue any business relationship
                with the Company or any of its subsidiaries, divisions, joint ventures
                or
                other affiliates or to refrain from entering into a business relationship
                or transaction with the Company or any of its subsidiaries, divisions,
                joint ventures or other affiliates. As compensation for the foregoing
                non-competition and non-solicitation agreements, the
                Company agrees to pay you the amount of Five Hundred Forty Thousand
                dollars ($540,000.00), less all applicable federal, state and local
                withholding taxes and deductions, which amount shall be paid in a
                lump sum
                no later than ten (10) business days after the Effective Date of
                this
                Agreement. 

            

       

      	(j)  	
              Nothing
                herein shall be construed to constitute an employer/employee relationship
                during the Consulting Period or to authorize you to act as an agent
                on
                behalf of the Company, at any time following November 8, 2005 without
                the
                express written consent of the Company. Your relationship with the
                Company
                during the Consulting Period shall only be that of an independent
                contractor and you shall not receive or be entitled to any unemployment,
                disability, workers’ compensation or medical insurance or any other
                employee benefits (including but not limited to vacation or pension
                benefits) as a result of your performing consulting services for
                the
                Company pursuant to this Agreement. You shall also be responsible
                for
                payment of any taxes, fees, interest or penalties that may be imposed
                or
                incurred as a result of the consulting fees paid to you under paragraph
                3(h) above. You shall be entitled to reimbursement, upon receipt
                by the
                Company of suitable documentation, for reasonable and necessary travel
                and
                other expenses that you may incur during the Consulting Period at
                the
                specific request of the Company and as approved by the Company in
                advance,
                in accordance with its policies and procedures established from time
                to
                time.

            

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      	(k)  	
              You
                and the Company each agrees that neither shall be liable to the other
                for
                any claims, liabilities or expenses (other than expenses as expressly
                provided herein) arising out of or relating to your provision of
                consulting services to the Company during the Consulting Period,
                except
                for violation of any of the representations, warranties or covenants
                made
                in this Agreement where such violation results from a party’s bad faith,
                gross negligence, intentional misconduct or violation of law. In
                no event
                shall you or the Company ever be liable to the other for consequential,
                special, indirect, incidental, punitive or exemplary loss, damage
                or
                expense with respect to your provision of consulting services to
                the
                Company during the Consulting Period, except to the extent finally
                judicially determined to have resulted primarily from a party’s
                intentional misconduct. The provisions of this paragraph shall apply
                to
                the fullest extent of the law, whether in contract, statute, tort
                (such as
                negligence) or otherwise. 

            

       

      	(l)  	
              You
                agree that the Company shall be entitled to net against any amounts
                payable by the Company to you under this Agreement amounts payable
                by you
                to the Company hereunder. 

            

       

      4. 
        You acknowledge that the payments and benefits referred to in paragraph 3(a)
        through (f) above are in lieu of and in full satisfaction of any amounts
        that
        might otherwise be payable under any contract, plan, policy or practice,
        past or
        present, of the Company, or any of its subsidiaries and affiliates, including
        but not limited to the Employment Agreement, the Southern Union Company
        Severance Plan, the Southern Union Company Severance Pay Plan and the Southern
        Union Company Corporate Reorganization Plan. You shall not be eligible to
        receive benefits under any employee benefit plans or compensation arrangements
        of the Company, or any of its subsidiaries or affiliates, subsequent to November
        8, 2005, with the exception of (a) your right to elect COBRA continuation
        coverage as described above, and (b) any vested benefits you may have, as
        of
        November 8, 2005, in the Southern Union Savings Plan, the Employees’ Retirement
        Plan of Southern Union Company Pennsylvania Division and/or the Southern
        Union
        Company Employee Stock Purchase Plan.

       

      5. 
        You hereby relinquish and convey to the Company any
        and
        all rights and interests you have or may have with respect to options to
        purchase shares of stock of the Company or any of its subsidiaries or affiliates
        under any plan or other arrangement, including but not limited to the
        Pennsylvania Enterprises, Inc. Stock Incentive Plan, the Pennsylvania
        Enterprises, Inc. 1992 Stock Option Plan, the Southern Union 1992 Long Term
        Stock Incentive Plan and the Southern Union Company 2003 Stock and Incentive
        Plan (as amended or restated from time to time, the “Option Plans”), and
        acknowledge and agree that such options shall be forfeited as
        of
November
        8, 2005; provided,
        however,
        that
        with respect to any option that has vested on or before November 8, 2005,
        you
        may, from and after November 8, 2005, exercise any such options in accordance
        with the terms of the applicable Option Plan or, if different, as specified
        in
        respect of any specific option grant. Any vested options that have not been
        exercised on or before their expiration date as determined in accordance
        with
        the immediately preceding sentence shall thereafter expire and be forfeited.
        Nothing contained in this paragraph 5 shall be deemed to amend the terms
        of the
        Option Plans or any specific option grant. 

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      6. 
        You agree that in the course of your employment with the Company you have
        had
        access, and during the Consulting Period you may have access, to confidential
        and proprietary information (“Confidential Information”) relating to the
        Company, its subsidiaries and affiliates, and their respective businesses,
        clients, finances, operations, strategic or other plans, employees, trade
        practices, trade secrets, know how or other matters that are not publicly
        known
        outside the Company, which are integral to the operations and success of
        the
        Company, and that such Confidential Information has been disclosed or will
        be
        disclosed to you in confidence and only for the use of the Company. You hereby
        represent and warrant that you have not disclosed any such Confidential
        Information to date to anyone other than your counsel and that your counsel
        has
        not disclosed any such Confidential Information to any third party. You further
        understand and agree that (a) you will keep such Confidential Information
        confidential at all times during and after your employment with the Company,
        (b)
        you will not make use of such Confidential Information on your own behalf,
        or on
        behalf of any third party, and (c) you have returned or will return to the
        Company any and all copies, duplicates, reproductions or excerpts of such
        Confidential Information within your possession, custody or control on or
        before
        November 8, 2005 (or, to the extent provided to you during the Consulting
        Period, on or before expiration of the Consulting Period). Until such time
        as
        the Company may be required by applicable law or regulation to publicly disclose
        this Agreement, you further agree to keep the terms of this Agreement
        confidential and not to disclose the Agreement or the terms thereof to any
        person, except (a) to your immediate family and as may be required for obtaining
        legal or tax advice; (b) for the filing of income tax returns or required
        financial disclosures; or (c) as may be required by law or in any proceeding
        to
        enforce this Agreement. In the case of any disclosure to immediate family
        or a
        legal or tax advisor, you shall require any person receiving such information
        to
        maintain its confidentiality. 

       

      7. 
        All documents (electronic, paper or otherwise), records (electronic, paper
        or
        otherwise), materials, software, equipment, and other physical property,
        and all
        copies of the foregoing, whether or not otherwise containing Confidential
        Information, that have come into your possession or been produced by you
        in
        connection with your employment (“Property”), have been and remain the sole
        property of the Company or its subsidiaries or affiliates, as applicable.
        You
        agree that you have returned all such Property to the Company (or, to the
        extent
        that you have not, that you will do so on or before November 8,
        2005).

       

      8. 
        You agree not to make, or knowingly cause to be made, any statement or
        communication, written or oral, with the intention of disparaging or otherwise
        impugning the business or management of the Company or any of its subsidiaries
        or affiliates, or any of their respective officers, directors, agents,
        representatives or employees. You further agree not to make, or knowingly
        cause
        to be made, any statement or communication, written or oral, with the intention
        of damaging the business or reputation of the Company or any of its subsidiaries
        or affiliates, or the personal or business reputations of any of their
        respective officers, directors, agents, representatives or employees, or
        of
        interfering with, impairing or disrupting the normal operations of the Company
        or any of its subsidiaries or affiliates. The Company agrees that it will
        not
        knowingly permit its senior officers and directors to make, or knowingly
        cause
        to be made, any statement or communication, written or oral, with the intention
        of disparaging or otherwise impugning you, your business or your reputation.
        You
        acknowledge and agree that the Company will issue a press release in a mutually
        agreed form and shall make such other filings and disclosures relating to
        this
        Agreement as may be required by law, regulation or the rules of any national
        stock exchange. 

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      9. 
        You, your heirs, successors, and assigns, hereby knowingly and voluntarily
        remise, release and forever discharge the Company and its subsidiaries and
        affiliates, together with all of their respective current and former officers,
        directors, agents, representatives and employees, and each of their
        predecessors, successors and assigns (collectively, the "Releasees"), from
        any
        and all debts, demands, actions, causes of actions, accounts, covenants,
        contracts, agreements, claims, damages, omissions, promises, and any and
        all
        claims and liabilities whatsoever, of every name and nature, known or unknown,
        suspected or unsuspected, both in law and equity (“Claims”), which you ever had,
        now have, or may hereafter claim to have against the Releasees by reason
        of any
        matter, cause or thing whatsoever arising from the beginning of time to the
        time
        you sign this Agreement (the "General Release"). This General Release of
        Claims
        shall apply to any Claim of any type, including, without limitation, any
        and all
        Claims of any type that you may have arising under the common law, under
        Title
        VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
        Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
        Act, the Americans With Disabilities Act of 1990, the Rehabilitation Act
        of
        1973, the Family and Medical Leave Act of 1993, the Worker Adjustment Retraining
        and Notification Act, the Employee Retirement Income Security Act of 1974,
        the
        Sarbanes-Oxley Act of 2002, or the
        Pennsylvania Human Relations Act, each as amended, and any other federal,
        state
        or local statutes, regulations, ordinances or common law,
        or
        under any plan, program, policy, agreement, contract, understanding or promise,
        written or oral, formal or informal, between any of the Releasees and you,
        including but not limited to the Employment Agreement, the Southern Union
        Company Severance Plan, the Southern Union Company Severance Pay Plan, the
        Southern Union Company Corporate Reorganization Plan, any Claim for bonus
        or
        incentive compensation, attorneys’ fees, costs, and/or any other fringe benefit
        of the Company or any of the other Releasees, and shall further apply, without
        limitation, to any and all Claims in connection with, related to or arising
        out
        of your employment, or the termination of your employment, with the Company,
        and
        all Claims for alleged tortious, defamatory or fraudulent conduct; provided,
        however,
        that
        nothing contained in this Agreement shall (i) impair any vested benefits
        you may
        have, as of November 8, 2005, in the Southern Union Savings Plan, the Employees’
        Retirement Plan of Southern Union Company Pennsylvania Division and/or the
        Southern Union Company Employee Stock Purchase Plan;
        (ii)
        impair your continuing rights to indemnification by the Company, if any,
        to the
        same extent currently available to you pursuant to the Company’s by-laws and
        other organizational documents, any insurance policies maintained by or on
        behalf of the Company, or under applicable law for actions taken or omissions
        made as an employee, officer or director of the Company; or (iii) be construed
        to prohibit you from bringing appropriate proceedings to enforce this Agreement.
        You hereby represent and warrant that you have not filed or caused to be
        filed
        any complaints, charges or lawsuits against the Company or any of the other
        Releasees, and that no such complaints, charges or lawsuits are pending.
        By
        signing this General Release, you further represent that you will not be
        entitled to any personal recovery in any action or proceeding that may be
        commenced on your behalf arising out of the matters released hereby. 

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      10. 
        You hereby represent and warrant that you are not aware of any illegal or
        unlawful actions or omissions by any current or former officer, director,
        employee, agent, attorney, consultant or representative of the Company
        (including yourself) through the date of the execution of this Agreement
        that
        were (individually or collectively) in any way knowingly or intentionally
        harmful or detrimental to the Company, its business and/or its shareholders,
        including, without limitation, violations of any laws, regulations or accounting
        policies or principles, the taking of unreasonable tax positions, or the
        furnishing of inaccurate statements, invoices or other reports to any person
        or
        entity.

       

      11. 
        During, and after the termination of, your employment, you agree to cooperate
        fully with the Company and its subsidiaries and affiliates concerning reasonable
        requests for information about the business of the Company or its subsidiaries
        or affiliates or your involvement and participation therein; the defense
        or
        prosecution of any claims or actions now in existence or which may be brought
        in
        the future against or on behalf of the Company or its subsidiaries or affiliates
        which relate to events or occurrences that transpired while you were employed
        by
        the Company; and in connection with any investigation or review by any federal,
        state or local regulatory, quasi-regulatory or self-governing authority
        (including, without limitation, the Securities and Exchange Commission) as
        any
        such investigation or review relates to events or occurrences that transpired
        while you were employed by the Company. Your full cooperation shall include,
        but
        not be limited to, being available to meet and speak with officers or employees
        of the Company and/or its counsel at reasonable times and locations, executing
        accurate and truthful documents and taking such other actions as may reasonably
        be requested by the Company and/or its counsel to effectuate the foregoing.
        In
        requesting such services, the Company will consider other commitments that
        you
        may have at the time of the request and agrees to work with you to accommodate
        any such commitments. The Company further agrees to reimburse you for any
        reasonable, out-of-pocket travel, hotel and meal expenses incurred in connection
        with your performance of obligations pursuant to this paragraph for which
        you
        have obtained prior, written approval from the Company.

       

      12. 
        Nothing in this Agreement is intended to or shall preclude you from providing
        truthful testimony on any non-privileged subject matter in response to a
        valid
        subpoena, court order, regulatory request or other judicial, administrative
        or
        legal process or otherwise as required by law, in which event you shall notify
        the Company in writing as promptly as practicable after receiving any such
        request of the anticipated testimony and at least ten (10) business days
        prior
        to providing such testimony (or, if such notice is not possible under the
        circumstances, with as much prior notice as is possible) so that the Company
        may
        seek a protective order or other appropriate remedy, and you agree to cooperate
        with the Company in any effort the Company undertakes to obtain a protective
        order or other remedy. If such a protective order or other remedy is not
        obtained, or the Company waives compliance with this Agreement, you shall
        furnish only that portion of such subject matter that is legally required
        and
        shall exercise all reasonable efforts to obtain reliable assurance that
        confidential treatment will be accorded to the subject matter to be
        disclosed.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      13. 
        The Company advises you to consult with an attorney of your choosing prior
        to
        signing this Agreement. You understand and agree that you have the right
        and
        have been given the opportunity to review this Agreement and, specifically,
        the
        General Release in paragraph 9 above, with an attorney. You also understand
        and
        agree that the Company is offering you the payments and benefits set forth
        in
        paragraph 3(a) through (f) in lieu of satisfaction of any obligations of
        the
        Company under Section 6 of the Employment Agreement and you accept such payments
        and benefits in full satisfaction therefor, and that you are under no obligation
        to consent to the General Release. You acknowledge and agree that the payments
        and benefits offered by the Company and set forth in paragraph 3 above are
        sufficient consideration to require you to abide by your obligations under
        this
        Agreement, including but not limited to the General Release. You represent
        that
        you have read this Agreement, including the General Release set forth in
        paragraph 9 above, and understand its terms and that you enter into this
        Agreement freely, voluntarily, and without coercion.

       

      14. 
        You acknowledge and represent that you have been given at least twenty-one
        (21)
        days during which to review and consider the provisions of this Agreement
        and,
        specifically, the General Release set forth in paragraph 9 above, although
        you
        may sign and return it sooner if you so desire. You further acknowledge and
        represent that you have been advised by the Company that you have the right
        to
        revoke this Agreement for a period of seven (7) days after signing it. You
        acknowledge and agree that, if you wish to revoke this Agreement, you must
        do so
        in a writing, signed by you and received by the Company no later than 5:00
        p.m.
        Eastern Time on the seventh (7th) day of the revocation period. If no such
        revocation occurs, the General Release and this Agreement shall become effective
        on the eighth (8th) day following your execution of this Agreement (the
“Effective Date”). You further acknowledge and agree that, in the event that you
        revoke this Agreement, it shall have no force or effect, and you shall have
        no
        right to receive any of the payments or benefits provided for
        hereunder.

       

      15. 
        It is the desire and intent of the parties that the provisions of this Agreement
        shall be enforced to the fullest extent permissible under the laws and public
        policies applied in each jurisdiction in which enforcement is sought. In
        the
        event that any one or more of the provisions of this Agreement shall be held
        to
        be invalid, illegal or unenforceable, the validity, legality and enforceability
        of the remaining provisions shall not in any way be affected or impaired
        thereby. Moreover, if any one or more of the provisions contained in this
        Agreement shall be held to be excessively broad as to duration, scope, activity
        or subject, such provisions shall be construed by limiting or reducing them
        so
        as to be enforceable to the maximum extent compatible with applicable
        law.

       

      16. 
        No waiver by either party of any breach by the other party of any condition
        or
        provision of this Agreement to be performed by such other party shall be
        deemed
        a waiver of any other provision or condition at the time or at any prior
        or
        subsequent time. This Agreement and the provisions contained in it shall
        not be
        construed or interpreted for or against either party because that party drafted
        or caused that party's legal representative to draft any of its
        provisions.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      17. 
        The terms described in this Agreement set forth the entire agreement and
        understanding of the parties and supersede all prior agreements, arrangements
        and understandings, written or oral, between the parties, including but not
        limited to the Employment Agreement. You
        acknowledge and agree that you are not relying on any representations or
        promises by any representative of the Company concerning the meaning or any
        aspect of this Agreement. This Agreement may not be altered or modified other
        than in writing signed by you and an authorized representative of the Company,
        and shall be governed by and construed and enforced in accordance with the
        laws
        of the State of New York, without reference to its choice of law
        rules.

       

      18. 
        The Company’s offer to you of this Agreement is not, and shall not be construed
        as, any admission of liability or of any improper conduct on the part of
        the
        Company or any of the other Releasees, all of which the Company specifically
        denies.

       

      19. 
        This Agreement may be executed in counterparts, each of which shall be deemed
        an
        original but all of which together shall constitute one and the same
        instrument.

       

      20. 
        Any notice, demand or other communication which is required or permitted
        by this
        Agreement to be given or made by a party hereto shall be in writing to the
        following addresses:

       

      	(a)  	
              to
                the Company at:

            

       

      Southern
        Union Company

      c/o
        Monica M. Gaudiosi, Esq.

      5444
        Westheimer Road

      Houston,
        Texas 77056

      

      	(b)  	
              to
                you at the address listed above

            

      

      or
        at
        such other address as any party may from time to time advise the other party
        by
        notice in writing.

      

      
        
          
             

          

           

        

        
          10

          
            

          

        

        
           

        

      

      If
        the
        above sets forth our agreement as you understand it and consent to it, please
        so
        signify by executing the enclosed copy of this letter and return it to me
        at the
        address listed above.

       

      Very
        truly yours,

      Southern
        Union Company

      

      

      /s/
        George L. Lindemann  

      By: George
        L.
        Lindemann

      Title: Chairman
        & Chief Executive Officer

      

      Agreed
        to
        and Accepted:

      

      

      

      /s/
        Thomas F. Karam  

      Thomas
        F.
        Karam

      Dated:
        November 7, 2005

       

    
      
         

      

      
         

        
          

        

      

      
        11Exhibit 10.2

    
      

    

     

    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.

    

     

     

    
      
         

      

      
        18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]