FORM 5
[ ] Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
[ ] Form 3 Holdings Reported
[ ] Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

                                                                                  

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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public
Utility Holding Company Act of 1935 or Section 30(f) of the Investment Company Act of 1940
                      

1. Name and Address of Reporting Person *

Herschmann Eric D

2. Issuer Name and Ticker or Trading Symbol

SOUTHERN UNION CO [SUG]

5. Relationship of Reporting Person(s) to Issuer (Check all applicable)

_____ Director                      _____ 10% Owner
__ X __ Officer (give title below)      _____ Other (specify below)
Vice Chairman, Pres. & COO

(Last)          (First)          (Middle)

C/O SOUTHERN UNION COMPANY,  5051 WESTHEIMER ROAD

3. Statement for Issuer's Fiscal Year Ended (MM/DD/YYYY)
12/31/2011 
(Street)

HOUSTON, TX 77056

(City)        (State)        (Zip)
4. If Amendment, Date Original Filed (MM/DD/YYYY)

 
6. Individual or Joint/Group Filing (Check Applicable Line)

_ X _ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person


Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)
2. Trans. Date 2A. Deemed Execution Date, if any 3. Trans. Code
(Instr. 8)
4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)
5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)
6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)
7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price
Common Stock   12/30/2011     G   12300   D   (1) 484916.1   (2) (3) D    
Common Stock                 18200   I   (4) Owned by Children  
Common Stock                 12300   I   Herschmann Family Foundation  

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 3)
2. Conversion or Exercise Price of Derivative Security 3. Trans. Date 3A. Deemed Execution Date, if any 4. Trans. Code
(Instr. 8)
5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)
6. Date Exercisable and Expiration Date
(MM/DD/YYYY)
7. Title and Amount of Securities Underlying Derivative Security
(Instr. 3 and 4)
8. Price of Derivative Security
(Instr. 5)
9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)
10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)
11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Employee Stock Options (right to purchase)   $ 23.6191                   (5) 6/27/2015   Common Stock   262500     262500   D    
Employee Stock Options (right to purchase)   $ 23.63                   (5) 12/30/2015   Common Stock   100000     100000   D    
Employee Stock Options (right to purchase)   $ 28.48                   (5) 12/17/2017   Common Stock   275629     275629   D    
Employee Stock Options (right to purchase)   $ 12.55                   (5) 12/15/2018   Common Stock   292934     292934   D    
Employee Stock Option (right to purchase)   $ 21.64                   (6) 12/15/2019   Common Stock   140107     140107   D    
Employee Stock Option (right to purchase)   $ 24.8                   (7) 12/13/2020   Common Stock   114598     114598   D    
Cash Restricted Stock Units                     (8) (9)   (8) (9) Common Stock   71293     71293   D    

Explanation of Responses:
( 1)  On December 30,2011, the Reporting Person made a contribution of 12,300 shares to the Herschmann Family Foundation. The shares, which constitute a bona fide gift, remain subject to the Second Amended and Restated Support Agreement by and between the Reporting Person and Energy Transfer Equity, L.P. dated as of July 19, 2011 and filed as a part of Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on July 20, 2011.
( 2)  This share amount uncludes 103,457 restricted shares awarded to the Reporting Person on December 13, 2010 ("Grant Date 2010"). The restrictions on the restricted stock will expire in equal installments on the first, second and third anniversaries of Grant Date 2010. The expiration of the restrictions on the restricted shares will be accelerated in the event of (i) a change of control of the Company or (ii) the death, disability or termination without cause of the Reporting Person. To date, restrictions on 34,485 restricted shares have expirec.
( 3)  This share amount uncludes 119,743 restricted shares awarded to the Reporting Person on December 15, 2009 ("Grant Date 2009"). The restrictions on the restricted stock will expire in equal installments on the first, second and third anniversaries of Grant Date 2009. The expiration of the restrictions on the restricted shares will be accelerated in the event of (i) a change of control of the Company or (ii) the death, disability or termination without cause of the Reporting Person. To date, restrictions on 79,828 restricted shares have expired.
( 4)  The Reporting Person may be deemed to hold indirectly 18,200 shares owned by his minor children; however, the Reporting Person hereby continues to disclaim any beneficial in these shares, except to the extent of his pecuniary interest therein.
( 5)  These options are fully vested and exercisable. The expiration of the options shall not be accelerated.
( 6)  Each stock option was awarded at an exercise price of $21.64 per share, which price is equal to the closing price on Grant Date 2009. The options awarded will vest in equal installments on the first, second and third anniversaries of Grant Date 2009. The vesting of the options will be accelerated in the event of (i) a change of control of the Company or (ii) the death, disability or termination without cause of the Reporting Person. The expiration of the options shall not be accelerated, except in the event of a termination of employment with cause or by a voluntary termination of employment. To date 93,404 stock options have vested and are exercisable.
( 7)  Each stock option was awarded at an exercise price of $24.80 per share, which price is equal to the closing price on Grant Date 2010. The options awarded will vest in equal installments on the first, second and third anniversaries of Grant Date 2010. The vesting of the options will be accelerated in the event of (i) a change of control of the Company or (ii) the death, disability or termination without cause of the Reporting Person. The expiration of the options shall not be accelerated, except in the event of a termination of employment with cause or by a voluntary termination of employment. To date, 38,199 stock options have vested and are exercisable.
( 8)  71,293 cash restricted stock units ("RSUs") were awarded to the Reporting Person on November 6, 2011 ("Grant Date 2011"). The RSUs were awarded in accordance with the Company's Third Amended and Restated 2003 Stock and Incentive Plan. The RSUs permit the Reporting Person to receive cash in an amount equal to a specified number of shares of the Company's common stock valued at the closing price of the Company's common stock on the dates such restrictions expire. Restrictions on such award will expire in equal amounts on the first, second and third anniversaries of Grant Date 2011, unless the restrictions are earlier terminated in accordance with the Plan or the applicable award agreement. The restrictions on the Reporting Person's RSUs also will be accelerated in the event of his death, disability or termination of employment without cause.
( 9)  On July 19, 2011, the Company entered into a Second Amended and Restated Agreement and Plan of Merger with Energy Transfer Equity, L.P. ("ETE") and Sigma Acquisition Corporation, a wholly-owned subsidiary of ETE (as amended by Amendment No. 1 to Agreement and Plan of Merger dated as of September 14, 2011, the "Merger Agreement"). The RSUs awarded to the Reporting Person will be treated in accordance with the terms and conditions of the Merger Agreement. The Merger Agreement is available in its entirety as Annex A to the Company's definitive Proxy Statement filed with the SEC on October 27, 2011.

Reporting Owners
Reporting Owner Name / Address
Relationships
Director 10% Owner Officer Other
Herschmann Eric D
C/O SOUTHERN UNION COMPANY
5051 WESTHEIMER ROAD
HOUSTON, TX 77056


Vice Chairman, Pres. & COO

Signatures
Robert M. Kerrigan, III for Eric D. Herschmann 2/14/2011
** Signature of Reporting Person Date


Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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