SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

ALATENN RESOURCES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Berkowitz, Lefkovits, Isom & Kushner
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/X/ Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:
2
ALATEEN RESOURCES, INC.
P.O. Box 918
FLORENCE, ALABAMA 35631

March 31, 1995

Dear Shareholder:

You are cordially invited to attend the 1995 annual meeting of shareholders
of AlaTenn Resources, Inc., which will be held at the offices of the Company,
100 East Second Street, Sheffield, Alabama on Monday, May 1, 1995 at 10:00 a.m.,
Central Time. A notice of the annual meeting and the Company's proxy statement,
together with a proxy card, accompany this letter.

At the annual meeting, shareholders will be asked to elect three directors,
each to serve for a term of three years, to consider and vote upon a proposal to
amend the Company's Articles of Incorporation to eliminate certain director
liability to the extent permitted by Alabama law, and to ratify the Board of
Directors' appointment of Arthur Andersen LLP as independent accountants. These
matters are described in detail in the accompanying material.

We hope that you will attend the meeting in person. However, whether or not
you plan to be personally present, we urge you to read the accompanying proxy
statement carefully and then complete, date and sign the enclosed proxy card and
return it promptly in the envelope provided herewith. This will ensure
representation of your shares if you are unable to attend the meeting.

Sincerely,

Jerry A. Howard
3

ALATENN RESOURCES, INC.
POST OFFICE BOX 918
FLORENCE, ALABAMA 35631

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders of AlaTenn Resources, Inc.:

Notice is hereby given that the annual meeting of shareholders of AlaTenn
Resources, Inc. (the "Company") will be held at the offices of the Company, 100
East Second Street, Sheffield, Alabama on Monday, May 1, 1995 at 10:00 a.m.,
Central Time, for the following purposes:

1. To elect three directors.

2. To consider and vote upon a proposal to amend the Company's Articles of
Incorporation to eliminate certain director liability to the extent
permitted by Alabama law.

3. To ratify the Board of Directors' appointment of Arthur Andersen LLP as
independent accountants to audit the Company's financial statements for
the year 1995.

4. To transact such other business as may properly come before the meeting.

The Board of Directors has fixed the close of business on March 17, 1995 as
the record date for the determination of shareholders entitled to notice of and
to vote at the annual meeting and at any adjournment thereof.

By Order of the Board of Directors

George G. Petty
Vice President -- Finance,
Chief Financial Officer and
Secretary-Treasurer

March 31, 1995

IMPORTANT

YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT PROMPTLY IN THE ENVELOPE PROVIDED HEREWITH. IF YOU ATTEND THE MEETING, YOU
MAY, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE IN PERSON.
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ALATENN RESOURCES, INC.
POST OFFICE BOX 918
FLORENCE, ALABAMA 35631

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 1995

GENERAL INFORMATION

This proxy statement is being furnished to the shareholders of AlaTenn
Resources, Inc. (the "Company") in connection with the solicitation of proxies
by the Board of Directors of the Company to be voted at the annual meeting of
shareholders to be held at the offices of the Company, 100 East Second Street,
Sheffield, Alabama on Monday, May 1, 1995 at 10:00 a.m., Central Time, and at
any adjournment of such meeting. This proxy statement and the accompanying form
of proxy are being first sent or given to shareholders on or about March 31,
1995. The 1994 Annual Report of the Company is being mailed to shareholders with
this proxy statement.

PURPOSE OF THE MEETING

At the annual meeting, the Company's shareholders will consider and vote
upon the election of three directors, a proposal to amend the Company's Articles
of Incorporation to eliminate certain director liability to the extent permitted
by Alabama law, and a proposal to ratify the Board of Directors' appointment of
Arthur Andersen LLP as independent accountants to audit the Company's financial
statements for the year 1995.

VOTING SECURITIES AND RECORD DATE

At the close of business on March 17, 1995, which has been fixed as the
record date for the annual meeting, the Company had outstanding 2,115,484 common
shares, the only voting securities of the Company. Holders of record of common
shares outstanding on the record date will be entitled to one vote for each
share held of record on that date upon each matter presented to the shareholders
to be voted upon at the meeting. The presence, in person or by proxy, of the
holders of a majority of the common shares outstanding on the record date is
necessary to constitute a quorum at the annual meeting.

Common shares of the Company represented by properly executed proxies
received in time for the annual meeting, unless previously revoked, will be
voted at the annual meeting as specified by the shareholders on the proxies. If
no such specification is made, shares represented by such proxies will be voted
for the election as directors of the three nominees listed below, for approval
of the proposed amendment to the Company's Articles of Incorporation and for
ratification of the Board of Directors' appointment of Arthur Andersen LLP to
audit the Company's financial statements for the year 1995. A proxy may be
revoked by giving notice to the Company in writing prior to its use. Abstentions
and broker non-votes will be counted as present or represented at the annual
meeting for the purpose of determining whether a quorum exists. However,
abstentions and broker non-votes with respect to any matter voted upon at the
annual meeting will be treated as shares not voting for the purpose of
determining whether the requisite vote has been obtained.

SOLICITATION OF PROXIES

The cost of soliciting proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited personally or by telephone by the
directors, officers and employees of the Company without additional
compensation. Brokerage firms, nominees, fiduciaries and other custodians will
be requested to forward, at the Company's expense, soliciting materials to the
beneficial owners of the common shares of the Company held in their names or in
those of their nominees.
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ELECTION OF DIRECTORS

The Company's Board of Directors is divided into three classes: Class I,
Class II and Class III. Three Class III directors are to be elected at the
annual meeting to serve until the annual meeting of shareholders to be held in
1998 and until the election and qualification of their respective successors in
office. Each of the three nominees for election as a Class III director
currently is a member of the Board of Directors and previously was elected by
the shareholders. To be elected as a director, each nominee must receive a
majority of the votes cast by the holders of the common shares entitled to vote
at the meeting with respect to such election, provided that a quorum is present
at the time the vote is taken. Abstentions and broker non-votes will have no
impact on the outcome of the vote. If any of the nominees listed below, each of
whom has indicated his willingness to serve as a director if elected, is unable
or declines to serve, the Board of Directors will name a substitute nominee, in
which event, pursuant to the accompanying proxy, votes will be cast for such
substitute nominee.

The following information is furnished with respect to each nominee for
election as a director and each director whose term will continue after the
annual meeting.

NAME, AGE, SERVICE AS A DIRECTOR OF THE COMPANY (a), PRINCIPAL OCCUPATION,
POSITIONS AND OFFICES, OTHER DIRECTORSHIPS AND BUSINESS EXPERIENCE
--------------------------------------------------------------------------------

NOMINEES FOR ELECTION AS DIRECTORS

Class III -- Term Ending in 1998

JERRY A. HOWARD

Mr. Howard, age 52, has been a director of the Company since 1985. He is
Chairman of the Board, President and Chief Executive Officer of the Company
and of Alabama-Tennessee Natural Gas Company and is Chairman of the Board or
President of each of the Company's other subsidiaries. Mr. Howard joined the
Company as President in December 1984 and was elected to the additional
positions of Chief Executive Officer of the Company and Chairman of the Board
and Chief Executive Officer of Alabama-Tennessee Natural Gas Company in May
1985, President of Alabama-Tennessee Natural Gas Company in May 1986, Chairman
of the Board or President of the Company's other subsidiaries at various times
in the period from May 1985 to May 1994 and Chairman of the Board of the
Company in January 1991.

ROGER F. STEBBING

Mr. Stebbing, age 54, has been a director of the Company since 1992. Mr.
Stebbing is President and Chief Executive Officer of Marlboro Enterprises,
Inc., a company engaged in chemical plant engineering, design, construction
and operation, and has served in such capacities since 1976. He is also
President and Chief Executive Officer of Stebbing and Associates, Inc., an
engineering consulting company, and has served in such capacities since 1986.

JOHN P. STUPP, JR.

Mr. Stupp, age 44, has been a director of the Company since 1985. He is the
Executive Vice President and Secretary of Stupp Bros., Inc., a structural
steel fabrication company, and has served in such capacities since December
1989 and January 1979, respectively. Since January 1992, Mr. Stupp has also
been President of Stupp Corporation, a division of Stupp Bros., Inc. He is a
director of Maverick Tube Corporation.

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DIRECTORS CONTINUING IN OFFICE

Class I -- Term Ending in 1996(b)

EMILE A. BATTAT

Mr. Battat, age 57, has been a director of the Company since 1987. Mr. Battat
is a private investor. Mr. Battat served as the President and Chief Executive
Officer of Minemet, Inc., a company engaged in international trade, from
August 1978 until February 1994. He is a director of Advanced Oxygen
Technologies, Inc.

J. KENNETH SMITH

Mr. Smith, age 67, has been a director of the Company since 1982. Mr. Smith
was the Director -- Government Relations of Oryx Energy Company, a company
engaged in oil and gas production, from May 1982 until his retirement in April
1986.

Class II -- Term Ending in 1997

RICHARD O. JACOBSON

Mr. Jacobson, age 58, has been a director of the Company since 1992. Mr.
Jacobson is President and Chief Executive Officer of Jacobson Warehouse
Company, Inc., a company engaged in public warehousing and distribution, and
has served in such capacities for 27 years. He is a director of Advanced
Oxygen Technologies, Inc., Allied Group, Inc., FelCor Suite Hotels Inc. and
Heartland Express, Inc.

JEROME J. MCGRATH

Mr. McGrath, age 72, has been a director of the Company since 1988. Mr.
McGrath is Of Counsel to the law firm of Gallagher, Boland, Meiburger &
Brosnan and has held such position since January 1988. From January 1978
through December 1987, Mr. McGrath served as President of the Interstate
Natural Gas Association of America.

HUGH J. MORGAN, JR.

Mr. Morgan, age 66, has been a director of the Company since 1988. Mr. Morgan
is Chairman of the Board of National Bank of Commerce of Birmingham and has
served in such position since February 1990. From May 1987 to February 1990,
he was Vice Chairman of the Board of said bank. From September 1984 until his
retirement in 1987, Mr. Morgan served as Vice Chairman of the Board of Sonat
Inc., a diversified energy holding company, and as Chairman of the Board of
Southern Natural Gas Company, a natural gas pipeline company and a wholly
owned subsidiary of Sonat Inc.
---------------

(a) Each director also has served as a director of Alabama-Tennessee Natural Gas
Company, a Company subsidiary, since first becoming a director of the
Company, except that Mr. Smith began serving as a director of
Alabama-Tennessee Natural Gas Company in 1975, preceding the organization
of the Company in 1982.
(b) The Board of Directors has not yet recruited a suitable replacement to fill
the vacancy existing in the Class I directors resulting from the
resignation of Simpson Russell, who was last elected by the shareholders at
the 1993 annual meeting and whose term was due to expire at the 1996 annual
meeting. Accordingly, no person has been nominated by the Board of
Directors for election as a Class I director at the annual meeting, and the
accompanying proxy will not be voted for more than three nominees.

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SECURITIES OWNERSHIP OF MANAGEMENT

The following table sets forth information regarding the beneficial
ownership of common shares of the Company as of March 1, 1995 by (i) each of the
directors of the Company, three of whom are also the nominees for election as
directors at the annual meeting; (ii) one executive officer of the Company who
is not a director or nominee; and (iii) all directors and executive officers of
the Company as a group.

Number of Shares Percent
Name Beneficially Owned(a) of Class(a)
------------------------------------------------------------- --------------------- -----------

Emile A. Battat.............................................. 41,800 1.9%
Jerry A. Howard.............................................. 31,327(b) 1.4%
Richard O. Jacobson.......................................... 54,600 2.5%
Jerome J. McGrath............................................ 1,800 *
Hugh J. Morgan, Jr........................................... 22,600 1.0%
J. Kenneth Smith............................................. 2,080(c) *
Roger F. Stebbing............................................ 800 *
John P. Stupp, Jr............................................ 92,320(d) 4.3%
George G. Petty.............................................. 12,150(e) *
All directors and executive officers as a group.............. 274,139(f) 12.6%

---------------

* Less than 1% of class outstanding
(a) The above information is based upon information furnished by the persons
listed. For purposes of this table, the percentage of class beneficially
owned has been computed, in accordance with Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934, on the basis of 2,115,484 common shares
outstanding on March 1, 1995, plus 55,750 common shares issuable pursuant
to incentive stock options exercisable on March 1, 1995 or within 60 days
thereafter. Except as otherwise indicated in the notes to this table,
beneficial ownership includes sole voting and investment power.
(b) Includes 1,801 shares held in Mr. Howard's account under the
Alabama-Tennessee Natural Gas Company Thrift Plan and 17,500 shares
issuable to Mr. Howard pursuant to incentive stock options exercisable on
March 1, 1995 or within 60 days thereafter.
(c) Includes 420 shares held under usufruct as to which Mr. Smith has voting
power but no dispositive power.
(d) Includes 90,000 shares held by Stupp Bros., Inc. as to which shares Mr.
Stupp shares voting power and investment power as a director and executive
officer of, and as a voting trustee of a voting trust which owns 100% of
the stock of, Stupp Bros., Inc.
(e) Includes 4,150 shares held jointly by Mr. Petty and his wife, and 8,000
shares issuable to Mr. Petty pursuant to incentive stock options
exercisable on March 1, 1995 or within 60 days thereafter.
(f) See notes (b)-(e) above. Includes 162 shares held by one officer of the
Company not listed above, 2,000 shares held by one officer of a Company
subsidiary who is not listed above and 12,500 shares issuable to certain
officers of the Company or a Company subsidiary who are not listed above
pursuant to incentive stock options exercisable on March 1, 1995 or within
60 days thereafter.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes of ownership of the Company's common shares with the
Securities and Exchange Commission. Executive officers and directors are
required to furnish the Company with copies of Section 16(a) forms that they
file. Based upon a review of these filings and written representations from the
Company's directors and executive officers regarding the filing of such reports,
the Company believes that its directors and executive officers complied with all
applicable Section 16(a) filing requirements during 1994.

INFORMATION REGARDING BOARD OF DIRECTORS AND COMMITTEES

The Company's Board of Directors held seven meetings during 1994. Each
director attended at least 75% of the aggregate of the number of meetings of the
Board of Directors and the number of meetings of all committees on which he
served held in 1994 during the time he served as a director or as a member of
such committees.

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The Board of Directors has three standing committees, the Executive
Committee, the Compensation Committee and the Audit Committee. The Executive
Committee, which is currently comprised of Jerry A. Howard, Hugh J. Morgan, Jr.
and J. Kenneth Smith, has the authority to act on matters during the intervals
between meetings of the Board of Directors. The Executive Committee met once
during 1994. The Compensation Committee, which is currently comprised of Emile
A. Battat, Richard O. Jacobson, Hugh J. Morgan, Jr., J. Kenneth Smith and John
P. Stupp, Jr., makes recommendations to the Board of Directors as to the
remuneration of all officers of the Company and its subsidiaries and administers
the AlaTenn Resources, Inc. 1990 Stock Option Plan (the "Stock Option Plan") and
the AlaTenn Resources, Inc. 1994 Key Employee Stock Incentive Plan (the "Stock
Incentive Plan"), including the selection of key employees to participate and
the determination of options and other awards to be granted thereunder. The
Compensation Committee met five times in 1994. The Audit Committee, the current
members of which are Jerome J. McGrath, Roger F. Stebbing and John P. Stupp,
Jr., has the responsibility of reviewing the Company's financial results, the
scope and result of audits and internal accounting controls. The Audit Committee
also recommends to the Board of Directors the appointment of the Company's
independent auditors. The Audit Committee met two times in 1994.

Alabama-Tennessee Natural Gas Company, a subsidiary of the Company, pays
each director of said subsidiary who is not an employee of the Company or any of
its subsidiaries a fee of $1,000 per month and $750 for each meeting of the
Board of Directors of said subsidiary at which he is in attendance. Alabama-
Tennessee Natural Gas Company also reimburses each non-employee director for
travel and out-of-pocket expenses incurred in connection with attending such
meetings. Each of the directors of the Company also serves as a director of
Alabama-Tennessee Natural Gas Company.

Alabama-Tennessee Natural Gas Company has a deferred compensation plan
pursuant to which its non-employee directors may elect to defer receipt of all
or a portion of their monthly fees and meeting fees. Such election may be made
during certain periods of each year and the percentages specified in such
election may be changed prospectively once each year. Alabama-Tennessee Natural
Gas Company is to maintain certain bookkeeping accounts to which it is to credit
the amount of such fees which each non-employee director has elected to defer
for each year, together with interest. The balances in such accounts are payable
within 30 days after the earlier of the date specified by the non-employee
director and the date on which he ceases to be a non-employee director.

Pursuant to the Company's Restricted Shares Compensation Plan for
Non-Employee Directors (the "Restricted Shares Plan"), which was approved by the
Board of Directors and the shareholders in 1991, the Company is to issue on July
10 of each year 400 common shares of the Company to each person who was serving
as a non-employee director of the Company on the day before the immediately
preceding annual meeting of shareholders and who had been elected to such
position at least 11 months prior to such date. The aggregate number of common
shares of the Company that may be awarded pursuant to the Restricted Shares Plan
may not exceed 35,000; however, such number will be adjusted to give proper
effect to any change in the common shares of the Company by reason of a
recapitalization, stock split, stock dividend or other change in capitalization
affecting the common shares. The Restricted Shares Plan provides that the common
shares awarded to a non-employee director may not be sold, assigned,
transferred, pledged or otherwise encumbered until the earliest of (i) the
non-employee director's death, (ii) the non-employee director's permanent and
total disability or (iii) the date which is 12 months from the date on which
such common shares were issued.

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EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the annual
and long-term compensation for services in all capacities to the Company and its
subsidiaries for the years ended December 31, 1994, 1993 and 1992 of those
persons during 1994 who were (i) the Chief Executive Officer of the Company and
(ii) the only other executive officer of the Company whose salary and bonus for
the year ended December 31, 1994 exceeded $100,000 (such officers are referred
to herein as the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
-------------------------
Awards
Annual Compensation -------------------------
------------------------------------ Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Bonus Compensation(1) Awards Options(2) Compensation
---------------------------- ---- -------- ------- --------------- ---------- ---------- ------------

Jerry A. Howard............. 1994 $394,375 $16,000 $ -- $ 17,500(2) 10,200 $ 34,066(3)
Chairman of the Board, 1993 379,375 15,400 -- 0 7,500 32,751
President and Chief 1992 360,000 14,800 -- 0 5,000 27,513
Executive Officer
George G. Petty............. 1994 $140,500 $ 5,680 $ -- $ 0 3,600 $ 12,440(4)
Vice President -- Finance, 1993 135,375 5,520 -- 0 3,000 11,988
Chief Financial Officer 1992 128,000 5,240 -- 0 2,000 9,952
and Secretary-Treasurer

---------------

(1) For the years ended December 31, 1994, 1993 and 1992, none of the Named
Executive Officers received perquisites or other personal benefits in
excess of the amounts required to be disclosed under the revised rules on
executive compensation disclosure adopted by the Securities and Exchange
Commission; accordingly, such amounts are omitted from this column.
(2) The restricted stock award in the table represents an award granted under
the Stock Incentive Plan, and the dollar amount thereof is the fair market
value of the award on the date of grant, based upon the closing price of
the Company's common shares, as reported by Nasdaq, on such date. As of
December 31, 1994, Mr. Howard held 1,000 restricted shares with an
aggregate value of $16,500, based upon the closing price of the Company's
common shares, as reported by Nasdaq, on such date. Dividends are paid on
the restricted shares during the restriction period, which is one year from
July 27, 1994, the date of grant. Options granted during 1994 represent
incentive stock options granted under the Stock Incentive Plan. Options
granted prior to 1994 represent incentive stock options granted under the
Stock Option Plan. See "Information Concerning Stock Options."
(3) Includes the following: (i) Alabama-Tennessee Natural Gas Company's matching
contributions to the Alabama-Tennessee Natural Gas Company Thrift Plan in
the amount of $9,240; (ii) Alabama-Tennessee Natural Gas Company's
contribution to the Alabama-Tennessee Natural Gas Company Supplemental
Executive Thrift Plan in the amount of $14,423; and (iii) the payment by
Alabama-Tennessee Natural Gas Company of life insurance premiums in the
amount of $10,403.
(4) Includes the following: (i) Alabama-Tennessee Natural Gas Company's matching
contributions to the Alabama-Tennessee Natural Gas Company Thrift Plan in
the amount of $8,430; and (ii) the payment by Alabama Tennessee Natural Gas
Company of life insurance premiums in the amount of $4,010.

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INFORMATION CONCERNING STOCK OPTIONS

The following tables summarize certain information concerning grants to and
exercises by the Named Executive Officers during the year ended December 31,
1994 of options and the value of all unexercised options held by such persons as
of December 31, 1994.

OPTION GRANTS IN 1994

Individual Grants
-------------------------------------------------- Potential
Percentage Realizable Value At
of Total Assumed Annual
No. of Options Rates of Stock Price
Securities Granted to Appreciation
Underlying Employees Exercise for Option Term(2)
Options in Fiscal Price Expiration ---------------------
Name Granted(1) Year Per Share Date 5% 10%
--------------------------------- ---------- ------------ --------- ---------- -------- --------

Jerry A. Howard.................. 10,200 27% $ 17.50 7/27/04 $112,259 $284,475
George G. Petty.................. 3,600 10% $ 17.50 7/27/04 $ 39,621 $100,403

---------------

(1) All options granted in 1994 are "incentive stock options" pursuant to the
Stock Incentive Plan and the applicable provisions of the Internal Revenue
Code. The exercise price of the options granted is equal to the fair market
value of the common shares on the date of grant, which was July 27, 1994.
Options are exercisable in whole or in part during each relevant time
period, with one-third exercisable one year after grant, an additional
one-third three years after grant and the remaining one-third five years
after grant. The options granted under the Stock Incentive Plan are not
transferable by the optionee except by will or by the laws of descent and
distribution, and each option is exercisable during the lifetime of the
optionee, only by the optionee or, in the event of disability, by the
optionee's guardian or representative. All options terminate three months
after the optionee's termination of employment except in case of
disability, in which case the options terminate one year after termination
of employment. The number of options granted, the term thereof and the
manner in which options are to be exercised are determined by the
Compensation Committee.
(2) Potential realizable value is based upon the assumption that the market
price of the common shares of the Company will appreciate at the compounded
annual rate shown from the date of grant until the end of the option term.
The dollar amounts in the foregoing table have been calculated based upon
the requirements in the revised rules on executive compensation disclosure
adopted by the Securities and Exchange Commission and do not reflect the
Company's estimate of future growth in the price of the Company's common
shares.

AGGREGATED OPTION EXERCISES IN 1994 AND YEAR-END OPTION VALUES

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options at Year End Options at Year End(1)
Acquired on Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
--------------------------------- ----------- -------- ----------- ------------ ----------- ------------

Jerry A. Howard.................. 0 $0 17,500 15,200 $16,250 $0
George G. Petty.................. 0 $0 8,000 5,600 $ 8,125 $0

---------------

(1) Such value is equal to the product of (i) the closing price of the common
shares of the Company on December 31, 1994 ($16.50 per share) less the
exercise price and (ii) the number of shares subject to the in-the-money
option.

RETIREMENT PLANS

The Company's subsidiary, Alabama-Tennessee Natural Gas Company, maintains
a non-contributory pension plan (the "Pension Plan") that applies to all its
employees and the employees of Ryder International Corporation, another Company
subsidiary, including officers, meeting certain age and service requirements.
The Pension Plan provides benefits for retirement at age 65, for early
retirement and for disability retirement,

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11

and provides for death benefits under certain circumstances. Any employee can
qualify to become a participant in the Pension Plan by completing one year of
employment in which he has 1,000 or more hours of service. Under the Pension
Plan, an employee of Alabama-Tennessee Natural Gas Company who retires at age
65, which is the normal retirement age provided in the Pension Plan, will be
eligible to receive a monthly benefit payable throughout his lifetime in an
amount based on such employee's compensation for the preceding five years and
years of credited service. An employee of Ryder International Corporation will
be entitled to receive a monthly benefit equal to the product of his years of
credited service and a fixed amount. The benefits payable under the Pension Plan
are not subject to Social Security or other offset. Alabama-Tennessee Natural
Gas Company also has a supplemental non-contributory pension plan (the
"Supplemental Executive Retirement Plan") for its eligible employees, including
officers. The Supplemental Executive Retirement Plan provides for benefit
payments in addition to those payable under the Pension Plan and is intended to
provide benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan benefits.

The following table illustrates the estimated maximum annual benefits
payable under the Pension Plan and the Supplemental Executive Retirement Plan
under the life annuity option, assuming retirement in 1994 at age 65, and
without considering any additional benefits for years of credited service in
excess of 30.

PENSION PLAN TABLE

Final
Average Years of Service
Annual -----------------------------------------------------------------------
Compensation 5 10 15 20 25 30
------------ ------- ------- -------- -------- -------- --------

$100,000 9,295 18,590 27,885 37,180 46,475 55,770
150,000 14,295 28,590 42,885 57,180 71,475 85,770
200,000 19,295 38,590 57,885 77,180 96,475 115,770
250,000 24,295 48,590 72,885 97,180 121,475 145,770
300,000 29,295 58,590 87,885 117,180 146,475 175,770
350,000 34,295 68,590 102,885 137,180 171,475 205,770
400,000 39,295 78,590 117,885 157,180 196,475 235,770
450,000 44,295 88,590 132,885 177,180 221,475 265,770
500,000 49,295 98,590 147,885 197,180 246,475 295,770

The compensation used to calculate the retirement benefits under the
Pension Plan and the Supplemental Executive Retirement Plan is to be determined
on the basis of salary and bonus as shown in the Summary Compensation Table. As
of December 31, 1994, Messrs. Howard and Petty had 10 1/12 years and 7 11/12
years, respectively, of credited service.

SEVERANCE COMPENSATION AGREEMENTS

The Company is a party to agreements with Messrs. Howard and Petty which
are intended to encourage each such officer to continue to carry out his duties
with the Company in the event of a potential change in control of the Company.
The agreements provide that if, following a change in control of the Company (as
defined in the agreements), the officer's employment with the Company is
terminated either by the Company for other than cause or permanent disability or
by such officer for good reason (as defined in the agreements), then the officer
will receive (a) a lump sum payment equal to three times the greater of (i) the
highest annual salary plus bonus paid by the Company to the officer in the five
fiscal years of the Company preceding the year in which the termination of
employment occurs and (ii) the officer's "annualized includable compensation" as
defined in the Internal Revenue Code, (b) certain other payments respecting,
among other things, the Company's retirement plans and relocation costs or
losses and (c) various welfare benefits for a specified period of time after
termination of employment. The Internal Revenue Code imposes certain excise
taxes on the recipient of, and limits the deductibility of, certain compensatory
payments made by a corporation to or for the benefit of certain individuals if
such payments are contingent upon a change in ownership of a substantial portion
of the assets, or a change in control, of such corporation. The agreements limit
the compensation payments thereunder to amounts which can be paid by the Company
without such adverse tax consequences.

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The agreements also provide that, while the officer is employed by the Company
for a period up to four years following the change in control, such officer is
to continue to receive (i) annual compensation in an amount not less than the
officer's annual fixed or base salary as in effect immediately prior to the
change in control, (ii) an annual amount not less than the aggregate annual
bonus or incentive pay made to the officer for the calendar year preceding the
year in which the change in control occurs, and (iii) full participation in all
employee retirement income and welfare benefit policies and programs of the
Company.

The Supplemental Executive Retirement Plan and the Alabama-Tennessee
Natural Gas Company Supplemental Executive Thrift Plan provide that upon a
change in control of the Company, participants therein whose employment
terminates may elect to receive immediately their benefits thereunder and
account balances therein, respectively. Under the Stock Option Plan and the
Stock Incentive Plan, in the event of a change in control of the Company all
outstanding options are to become fully exercisable and all restricted shares
are to become fully vested, and the value of the outstanding options and
restricted shares is to be cashed out, unless otherwise determined by the
Compensation Committee.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's executive compensation program is administered by the
Compensation Committee, all the members of which are non-employee directors of
the Company. This program is designed to attract, retain and motivate management
and includes compensation that is tied to enhanced shareholder value. The
Compensation Committee is responsible for recommendations for base salaries,
salary increases and bonuses and for the administration of the Company's stock
incentive program, including the granting of stock options and restricted stock
awards.

Compensation Policies

In 1993, the Compensation Committee conducted a comprehensive review of the
Company's executive officers compensation program and concluded that base salary
and stock option awards would be the principal components of compensation for
the Company's executive officers. The Compensation Committee concluded, however,
that it would continue to review other forms of executive compensation, and, in
1994, restricted stock awards were added as a form of executive compensation to
be utilized in appropriate situations.

Base salaries of the Company's executive officers are reviewed annually and
adjustments made on the basis of the Company's performance as measured by
certain financial and non-financial criteria, various survey information
respecting compensation of executive officers, compensation levels for executive
officers in a broad range of companies in the energy and utilities industries,
cost-of-living information and individual performance of the particular
executive officer. The Compensation Committee has not assigned relative weights
or values to any of such criteria. With respect to all executive officers other
than Mr. Howard, the Compensation Committee takes into consideration a review of
individual performance provided by Mr. Howard and recommendations regarding
adjustments of compensation provided by him. With respect to the financial
performance of the Company, the Compensation Committee takes into consideration
the Company's operating income, net income (both inclusive and exclusive of
one-time items), return on invested capital and total shareholder return, both
compared to the Edward D. Jones Diversified Natural Gas Index and on a
stand-alone basis. The Compensation Committee has also concluded that in
evaluating the Company's performance it will give consideration to certain
non-financial criteria including customer relations, safety
record, corporate citizenship and environmental awareness. A new executive's
base salary is determined on the basis of the responsibilities of the position,
the experience of the new executive and the competitive marketplace for
management talent. The Compensation Committee has also acknowledged that, in
fixing base salaries and adjustments, consideration is to be given to the cost
of living in the Sheffield, Alabama area as compared to the cost of living in
larger population areas where many companies engaged in the transportation,
marketing and distribution segments of the natural gas industry are located.

Stock options and restricted stock awards are the components of executive
compensation which are designed to motivate executives to improve the long term
performance of the Company's common shares in the market, to encourage them to
achieve superior results over the long term and to align executive officer and

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shareholder interests. Decisions respecting the restricted stock awards are made
on the basis of the criteria referred to above, and decisions respecting the
grant of stock options are made using the same criteria as well as the number of
unexercised options held by key employees. The Compensation Committee has also
concluded that, where appropriate, it will stagger the exercise dates for
options and the restriction period for restricted stock over a period of time so
that the key employee receiving stock option or restricted stock awards will be
rewarded only if he remains with the Company for an extended period and in order
to emphasize the significance of the Company's long-term performance.

Compensation of Chief Executive Officer

In reaching its decisions respecting Mr. Howard's base salary in 1994 and
stock option and restricted stock awards, the Compensation Committee reviewed
Mr. Howard's base salary, bonuses and stock option awards for 1991, 1992 and
1993, the changes in such compensation made during such period and certain of
the factors considered by the Company when those changes in compensation were
made. Additionally, the Compensation Committee took into consideration the
Company's performance measured by the Company's operating income, net income
(both inclusive and exclusive of one-time items), return on invested capital and
total shareholder return, both compared to the Edward D. Jones Diversified
Natural Gas Index and on a stand-alone basis, but did not assign relative
weights or values to any of such criteria in assessing the Company's
performance. The Compensation Committee noted that operating income in 1993 was
down 3.7% from 1992, net income including one-time items was up 57.2% from 1992,
net income excluding one-time items was down 4.6%, return on invested capital in
1993 including one-time items was 32.7% and excluding one-time items was 20.1%,
and total shareholder return in 1993 was a negative 6.4% as compared to total
shareholder return of 15% reflected by the Edward D. Jones Diversified Natural
Gas Index. The Compensation Committee also took into account that in 1992 total
shareholder return for the Company was 53% while the total shareholder return
reflected by the Edward D. Jones Diversified Natural Gas Index was 9.2%. In
addition, the Compensation Committee considered surveys of executive officer
compensation, information respecting the compensation levels for chief executive
officers in the energy and utilities industries, Mr. Howard's individual
performance and the number of unexercised stock options held by Mr. Howard. In
reaching its conclusions respecting Mr. Howard's base salary and stock incentive
awards, the Compensation Committee concluded that, notwithstanding certain
negative factors, the criteria reviewed by it reflected that overall the Company
had achieved a strong financial and non-financial performance in 1993 and noted
Mr. Howard's leadership and his ability to attract, manage and retain highly
qualified executive officers for the Company and its subsidiaries. While
acknowledging such performance and leadership, the Compensation Committee
concluded that Mr. Howard's base salary should be increased by only 3.9% in
light of increases put into effect over the past several years. In further
recognition of the Company's performance, reflected by the above criteria, and
Mr. Howard's individual performance and to further align Mr. Howard's interests
with those of the Company's other shareholders, the Compensation Committee
awarded Mr. Howard options to purchase 10,200 common shares exercisable in equal
amounts after one, three and five years and made a restricted stock award to him
of 1,000 common shares. In taking such action, the Compensation Committee
concluded that by deferring the dates on which the options could first be
exercised and the restrictions on the 1,000 shares would lapse, additional
emphasis would be placed on Mr. Howard's remaining with the Company and on the
Company's long-term performance and the long-term performance of the Company's
common shares in the market. Mr. Howard, like all other employees of
Alabama-Tennessee Natural Gas Company, was also awarded a bonus in December 1994
equal to 4% of base salary. The Compensation Committee recommended this award in
light of the general practice of the Company to award bonuses equal to such
percent of base salary to all employees of Alabama-Tennessee Natural Gas Company
in December of each year and in light of the Company's financial performance for
the first nine months of 1994.

MEMBERS OF THE COMPENSATION COMMITTEE

Emile A. Battat J. Kenneth Smith
Richard O. Jacobson John P. Stupp, Jr.
Hugh J. Morgan, Jr.

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PERFORMANCE OF COMMON SHARES

The following graph compares the cumulative total return on investment (the
change in year-end stock price plus reinvestment of dividends), for each of the
last five fiscal years, assuming that $100 was invested on December 31, 1989 in
each of (i) the Company, (ii) a group of stocks consisting of all companies
whose stocks are included in the S&P 500 Composite Index and (iii) a group of
stocks consisting of 21 diversified natural gas companies in the Edward D. Jones
Diversified Natural Gas Index. The companies included in such industry index
are, in addition to the Company, the following: Chesapeake Utilities Corp.; The
Columbia Gas System, Inc.; Consolidated Natural Gas Co.; Eastern Enterprises;
Energen Corp.; Enserch Corp.; Equitable Resources, Inc.; K N Energy, Inc.;
National Fuel Gas Co.; National Gas & Oil Co.; Noram Energy Corp.; Oneok, Inc.;
Pacific Enterprises; Pennsylvania Enterprises, Inc.; Questar Corp.; South Jersey
Industries, Inc.; Southwest Gas Corp.; Southwestern Energy Co.; UGI Corp.; and
Valley Resources, Inc.

Edward D.
Jones
Diversified
Measurement Period AlaTenn Natural Gas
(Fiscal Year Covered) Resources S&P 500 Index

1989 100 100 100
1990 137 97 88
1991 162 126 75
1992 249 136 79
1993 233 150 90
1994 202 152 78

CERTAIN TRANSACTIONS

During 1994, AlaTenn Credit Corp., a wholly owned subsidiary of the
Company, was a party to a loan agreement (the "Loan Agreement") with Third
National Bank in Nashville and The First National Bank of Florence, pursuant to
which such lenders agreed to make revolving loans from time to time up to a
commitment amount which was $10,000,000 throughout 1994 and which, upon
satisfying certain requirements, could have been increased to any amount up to
$20,000,000. Borrowings under the Loan Agreement were unsecured but were
guaranteed by the Company and each of its other subsidiaries. The maximum
principal balance outstanding under the Loan Agreement during 1994 and during
the period from January 1, 1995 until termination of the Loan Agreement on
January 20, 1995 was $6,562,132. During the period from January 1, 1994 until
termination of the Loan Agreement on January 20, 1995, AlaTenn Credit Corp. made
interest payments in the aggregate amount of $121,826 and paid fees in the
aggregate amount of $26,696. On January 20, 1995, AlaTenn Credit Corp. repaid
the then-outstanding indebtedness under, and terminated, the Loan Agreement and
entered into a $20,000,000 revolving loan agreement with a different bank.
Simpson Russell, who served as a director of the Company from 1986 until June
1994, is Chairman of the Board and Chief Executive Officer of The First National
Bank of Florence and is also the Chairman of the Board, President and Chief
Executive Officer of its holding company, First United Bancorp, Inc.

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PROPOSAL TO AMEND THE COMPANY'S
ARTICLES OF INCORPORATION

INTRODUCTION

The Board of Directors has approved and recommended unanimously that the
shareholders adopt an amendment to the Company's Articles of Incorporation (the
"Amendment") as permitted by the recently revised Alabama Business Corporation
Act. The proposed Amendment would add a new Section 9.2 to the Articles of
Incorporation which would eliminate the personal liability of the Company's
directors to the Company and its shareholders for money damages in the event of
certain breaches of fiduciary duty.

The proposed Amendment is consistent with Ala. Code sec. 10-2B-2.02(b)(3),
which is part of the new Alabama Business Corporation Act effective January 1,
1995. That section permits Alabama corporations to include in their articles of
incorporation a provision eliminating or limiting, subject to certain
exceptions, the liability of directors to a corporation or its shareholders for
money damages for any action taken, or any failure to take any action, as a
director. The Alabama statutory provision is not unique. Other states also
include in their statutes provisions permitting corporations to limit or reduce
the personal risks inherent in serving as a director of a corporation.

The statutory provision is designed generally to allow Alabama corporations
to limit the liability of directors in situations involving unintentional errors
or the directors' exercise of judgment and is not designed to limit or eliminate
liability in situations involving intentional wrongdoing or bad faith. The Board
of Directors believes that the proposed Amendment is in the best interests of
the Company and its shareholders in that it will make the Company better able to
attract and retain qualified directors. Because the provisions for elimination
of such liability under certain circumstances must be contained in the Company's
Articles of Incorporation, such provisions require approval by the shareholders.

BACKGROUND AND REASONS FOR THE PROPOSED AMENDMENT

Under Alabama law, directors of an Alabama corporation are deemed to stand
in a fiduciary relation to such corporation and its shareholders and are to
discharge their duties in good faith, with the care which an ordinarily prudent
person in a like position would exercise under similar circumstances and in a
manner the director believes to be in the best interests of the corporation. In
appropriate cases, a corporation or its shareholders may bring an action to
recover monetary damages from a director for breach of such fiduciary duty and
may also seek equitable relief enjoining or rescinding a transaction resulting
from such a breach. In recent years, directors of public companies have
increasingly become subject to substantial personal liability for actions taken
or omitted by them as directors, as well as to significant expenses in defending
such actions. The Alabama legislature apparently has recognized the importance
of allowing Alabama corporations to provide protection against the risk to the
personal resources of their directors occasioned by their service in such
positions. For example, Alabama corporations are allowed, subject to certain
limitations, to indemnify directors and officers against expenses, judgments,
settlement payments and other costs incurred in connection with litigation and
similar proceedings. Alabama corporations are also authorized to obtain
insurance to protect directors and officers from certain liabilities, whether or
not a corporation would have the power to indemnify its directors and officers
against such liabilities. However, the proliferation of litigation in recent
years has in large part made it difficult and expensive to obtain directors' and
officers' liability insurance. Over the past several years, some insurance
carriers have ceased to write directors' and officers' liability insurance
policies and other insurance carriers that have remained in the business have
curtailed the coverage they are willing to provide and in some instances have
significantly increased premiums.

Although the Company has to date been able to obtain insurance coverage for
directors on a basis which it believes acceptable, the Company has experienced
increases in premiums. So long as directors' and officers' liability insurance
remains available at a reasonable cost in relation to the risk covered, the
Company intends to maintain such insurance. The proposed Amendment is designed
to ensure that directors of the Company continue to have protection to the
fullest extent available under Alabama law, even if insurance coverage decreases
in the future or becomes unavailable.

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The Company believes that the proposed Amendment will enable the Company to
continue to attract and retain qualified directors. The Board of Directors
believes that concerns over possible personal liability can hamper the
decision-making process to the detriment of the Company. The Board of Directors
further believes that adoption of the proposed Amendment will permit the
directors of the Company to exercise more freely their business judgment by
reducing their concern over potential personal liability with respect to their
decisions which may be challenged with the benefit of hindsight. The Board of
Directors believes that the level of scrutiny, diligence and care exercised by
directors of the Company will not be lessened by adoption of the proposed
Amendment. Generally, the Company has not experienced difficulty in recruiting
and retaining qualified directors, and the proposed Amendment is not being
proposed in response to any resignation or threat of resignation of any
director, or in response to any refusal by any director to continue to serve or
to stand for reelection. The Company is not aware of any pending or threatened
claim which would be covered by the proposed Amendment, and the Company is not
submitting the proposed Amendment for shareholder approval in anticipation of
any such claim. However, the Board of Directors believes that the Company should
take every step to ensure that the Company will be able to attract and retain
the best possible directors.

The proposed Amendment is consistent with the recently enacted provision of
the revised Alabama Business Corporation Act described in more detail below. It
should be noted that the present directors will benefit at the potential expense
of the Company and its shareholders by adoption of the proposed Amendment,
inasmuch as the proposed Amendment will reduce potential monetary liability of
directors with respect to conduct subsequent to the effective date of the
proposed Amendment.

DESCRIPTION AND EFFECT OF THE PROPOSED AMENDMENT

Ala. Code sec. 10-2B-2.02(b)(3) authorizes Alabama corporations to provide
in their articles of incorporation a provision eliminating or limiting the
liability of a director to the corporation or its shareholders for money damages
for any action taken, or any failure to take any action, as a director, except
liability for (i) the amount of a financial benefit received by a director to
which he or she is not entitled; (ii) an intentional infliction of harm on the
corporation or the shareholders; (iii) a violation of Ala. Code sec. 10-2B-8.33
(which imposes liability for unlawful distributions); (iv) an intentional
violation of criminal law; or (v) any breach of such director's duty of loyalty
to the corporation or its shareholders. The text of the proposed Amendment,
which would be added as a new Section 9.02 to the Company's Articles of
Incorporation, is as follows:

"9.02. A director of the Corporation shall have no personal
liability to the Corporation or its shareholders for money damages for
any action taken, or any failure to take any action, as a director,
except liability for (i) the amount of any financial benefit received
by a director to which he or she is not entitled; (ii) an intentional
infliction of harm on the Corporation or the shareholders; (iii) a
violation of Section 10-2B-8.33 of the Alabama Business Corporation
Act as the same now exists or may hereafter be amended; (iv) an
intentional violation of criminal law; or (v) a breach of the
director's duty of loyalty to the Corporation or its shareholders. If
the Alabama Business Corporation Act, or any successor statute
thereto, is hereafter amended to authorize the further elimination or
limitation of the liability of a director of a corporation, then the
liability of a director of the Corporation, in addition to the
limitations on liability provided herein, shall be limited to the
fullest extent permitted by the Alabama Business Corporation Act, as
amended, or any successor statute thereto. No amendment to or repeal
of this Section 9.02 shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for
or with respect to any acts or omissions of such director occurring
prior to such amendment or repeal."

If adopted, the proposed Amendment would eliminate the liability of the
Company's directors for money damages for breach of their fiduciary duty to the
fullest extent provided under sec. 10-2B-2.02(b)(3) as described above. The
proposed Amendment would have the effect of eliminating directors' liability for
money damages arising from breaches of their fiduciary duty of care. If adopted
by the Company's shareholders, the proposed Amendment would absolve directors of
liability for money damages for negligence in the performance of their duties.
The amendment also provides that if the Alabama Business Corporation Act is
subsequently amended so as to permit the further limitation on or elimination of
the personal liability of directors, then the liability of the Company's
directors will be limited or eliminated to the fullest extent

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permitted by law, without further approval of the Company's shareholders. The
Company is not aware of any proposed or anticipated changes to the Alabama
Business Corporation Act which would affect the personal liability of directors.
Furthermore, an amendment to or repeal of the proposed Amendment would not
affect the protection afforded a director for acts or omissions occurring prior
to the time of such amendment or repeal.

While the Board of Directors believes that the proposed Amendment is in the
best interests of the Company and its shareholders, the shareholders should note
that adoption of the proposed Amendment will abrogate certain rights and
remedies of shareholders that might otherwise exist under Alabama law. The
proposed Amendment will not, however, eliminate or change the duty of care. It
will only eliminate monetary damage awards occasioned by a breach of such duty.
Thus, adoption of the proposed Amendment will not eliminate or limit the right
of the Company or any shareholder to seek an injunction or any other non-
monetary relief in the event of a breach of a director's fiduciary duty,
although in some circumstances injunctive relief may not be available as a
practical matter. The proposed Amendment will apply only to claims against a
director arising out of his or her role as a director and not in any other
capacity and will not apply to any liability which such director might incur
under the federal securities laws. The proposed Amendment does not eliminate or
limit liability of the Company's directors for breach of such directors' duty of
loyalty, intentional infliction of harm on the Company or its shareholders, a
knowing violation of law, an illegal dividend, distribution or stock repurchase,
or an improper personal benefit.

Because Ala. Code sec. 10-2B-2.02 has been so recently enacted, there has
not been any judicial interpretation regarding its precise scope or its
validity. As a result, the potential outcome of any litigation arising out of
interpretations of sec. 10-2B-2.02 cannot be predicted.

The directors of the Company acknowledge that they have a direct personal
interest in having the proposed Amendment adopted. If adopted, the proposed
Amendment may reduce the likelihood of derivative litigation against directors
and may discourage or deter shareholders or the Company from bringing a lawsuit
against directors for breach of their fiduciary duty even though such an action,
if successful, might otherwise have benefitted the Company or its shareholders.

VOTE REQUIRED

Adoption of the proposed Amendment requires the affirmative vote of a
majority of the votes cast by the holders of the common shares entitled to vote
on the proposed Amendment at the meeting, provided that a quorum is present when
the vote is taken. Abstentions and broker non-votes will have no impact on the
outcome of the vote.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE PROPOSED
AMENDMENT.

RATIFICATION OF APPOINTMENT OF AUDITORS

Subject to shareholder ratification, the Board of Directors, upon
recommendation of the Audit Committee, has appointed the firm of Arthur Andersen
LLP as independent accountants to audit the financial statements of the Company
for the year 1995. Arthur Andersen LLP has audited the Company's financial
statements for many years. A representative of Arthur Andersen LLP will attend
the annual meeting, will have an opportunity to make a statement, and will be
available to respond to appropriate questions. Ratification of the appointment
of auditors requires the affirmative vote of a majority of the votes cast by the
holders of the common shares entitled to vote on such proposal, provided that a
quorum is present when the vote is taken. Abstentions and broker non-votes will
have no impact on the outcome of the vote. If the shareholders do not ratify the
appointment of Arthur Andersen LLP, the selection of independent auditors will
be reconsidered by the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS TO AUDIT THE
FINANCIAL STATEMENTS OF THE COMPANY FOR THE YEAR 1995.

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INFORMATION REGARDING CERTAIN BENEFICIAL OWNERS OF COMMON SHARES

The following table sets forth information regarding the beneficial
ownership of common shares of the Company as of March 1, 1995 by the only
persons known by the Company to be the beneficial owners of more than 5% of the
outstanding common shares of the Company.

Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class (a)
---------------------------------- ------------------ ----------

Dimensional Fund Advisors Inc.(b) 118,800(b) 5.5%
1299 Ocean Avenue
Suite 650
Santa Monica, California 90401

T. Rowe Price Associates, Inc.(c) 120,000(c) 5.5%
100 E. Pratt Street
Baltimore, Maryland 21202

---------------

(a) For purposes of this table, the percentage of class beneficially owned has
been computed, in accordance with Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, on the basis of 2,115,484 common shares outstanding
on March 1, 1995, plus 55,750 common shares issuable pursuant to incentive
stock options exercisable on March 1, 1995 or within 60 days thereafter.

(b) Based upon a Schedule 13G filed with the Securities and Exchange Commission
and furnished to the Company by Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment adviser, reporting that
Dimensional is deemed to have beneficial ownership of said 118,800 common
shares of the Company and that all of said common shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of The DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. In said Schedule 13G,
Dimensional has reported that it has sole power to vote or direct the vote
of 77,600 common shares of the Company included in said 118,800 common
shares listed above, that persons who are officers of Dimensional also
serve as officers of DFA Investment Dimensions Group Inc. and The DFA
Investment Trust Company and, in such capacity, have the power to vote or
direct the vote of 41,200 common shares of the Company held by such
investment companies and included in the 118,800 common shares listed
above, and that Dimensional has the sole power to dispose or direct the
disposition of said 118,800 common shares of the Company. Dimensional has
disclaimed beneficial ownership of all such common shares of the Company.

(c) Based upon a Schedule 13G filed with the Securities and Exchange Commission
and furnished to the Company by T. Rowe Price Associates, Inc. ("Price
Associates") and T. Rowe Price Small Cap Value Fund, Inc. reporting that T.
Rowe Price Small Cap Value Fund, Inc. has sole power to vote or direct the
vote of such common shares and that Price Associates, which serves as
investment adviser for T. Rowe Price Small Cap Value Fund, Inc., has the
power to dispose or direct the disposition of such common shares. For
purposes of the reporting requirements of the Securities Exchange Act of
1934, Price Associates is deemed to be a beneficial owner of such common
shares; however, Price Associates has expressly disclaimed beneficial
ownership of all such common shares.

SHAREHOLDER PROPOSALS

Shareholder Proposals in the Company's Proxy Statement

In order for proposals by shareholders to be considered for inclusion in
the Company's proxy material relating to the 1996 annual meeting of
shareholders, such proposals must be received by the Company on or before
December 1, 1995.

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Shareholder Proposals to be Presented at Meetings

The Company's Bylaws provide that a shareholder who desires to propose any
business at a meeting of shareholders must give the Company written notice,
which must be received by the Company not later than ten days following the date
on which the Company first gives written or printed notice to shareholders of
such meeting, or, if the meeting is adjourned and the Company is required by
Alabama law to give notice of the adjourned meeting date, within five days after
the date on which the Company first gives written or printed notice to
shareholders of such adjourned meeting, setting forth (a) a brief description of
the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting; (b) the name and address of the
shareholder who intends to propose such business; (c) a representation that the
shareholder is a holder of record of shares of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at such meeting to
propose such business; and (d) any material interest of the shareholder in such
business. The Chairman of the meeting may refuse to transact any business
presented at any meeting without compliance with the foregoing procedure. The
ten-day period referred to above will expire ten days after the date on which
the accompanying notice of annual meeting of shareholders is first mailed to
shareholders of the Company.

Shareholder Nominations for Directors

The Company's Bylaws provide that a shareholder who desires to nominate
directors at a meeting of shareholders must give the Company written notice,
which must be received by the Company not later than ten days following the date
on which the Company first gives written or printed notice to shareholders of
such meeting, or, if the meeting is adjourned and the Company is required by
Alabama law to give notice of the adjourned meeting date, within five days after
the date on which the Company first gives written or printed notice to
shareholders of such adjourned meeting, setting forth (a) the name and address
of the shareholder who intends to make the nomination and of the person or
persons to be nominated; (b) a representation that the shareholder is a holder
of record of shares of the Company entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings
between the shareholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are to
be made by the shareholder; (d) such other information regarding each nominee
proposed by such shareholder as would have been required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had each nominee been nominated, or intended to be nominated, by the
Board of Directors; and (e) the consent of each nominee to serve as a director
of the Company if so elected. The Chairman of the meeting may refuse to
acknowledge the nomination of any person if a shareholder has failed to comply
with the foregoing procedure. The ten-day period referred to above will expire
ten days after the date on which the accompanying notice of annual meeting of
shareholders is first mailed to shareholders of the Company.

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OTHER BUSINESS

The Board of Directors does not intend to bring any business before the
meeting other than that stated herein and is not aware of any other matters that
may be presented for action at the meeting. However, if any other matters should
properly come before the meeting, or any adjournments thereof, it is the
intention of the persons named in the accompanying proxy to vote on such matters
as they, in their discretion, may determine.

By Order of the Board of Directors

George G. Petty

Vice President -- Finance, Chief
Financial Officer and
Secretary-Treasurer

March 31, 1995

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APPENDIX A

ALATENN RESOURCES, INC. PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Emile
A. Battat, Jerome J. McGrath and J. Kenneth Smith, or any of them, proxies of
the undersigned, with full power of substitution, to represent and to vote all
common shares of AlaTenn Resources, Inc. which the undersigned would be entitled
to vote at the annual meeting of shareholders of AlaTenn Resources, Inc., to be
held at the offices of the Company, 100 East Second Street, Sheffield, Alabama,
on Monday, May 1, 1995 at 10:00 a.m., Central Time, and at any adjournment or
postponement thereof, in the following manner:

1. ELECTION OF DIRECTORS.

/ / FOR all nominees listed below (except as / / AUTHORITY WITHHELD to vote for all
otherwise instructed below) nominees

Jerry A. Howard, Roger F. Stebbing and John P. Stupp, Jr.

TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.

--------------------------------------------------------------------------------

2. PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION.

/ / FOR / / AGAINST / / ABSTAIN

(Continued and to be signed on other side)

(Continued from other side)

3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
ACCOUNTANTS OF THE COMPANY.

/ / FOR / / AGAINST / / ABSTAIN

4. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. IF THIS PROXY
IS PROPERLY SIGNED AND RETURNED, THE SHARES REPRESENTED WILL BE VOTED FOR ITEMS
1, 2 AND 3 UNLESS YOU OTHERWISE SPECIFY HEREIN.

DATED: , 1995

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SIGNATURE

Please sign this proxy exactly
as your name appears hereon.
When signing as executor,
administrator, trustee,
corporate officer, etc., please
give full title. In case of
joint owners, each joint owner
should sign.

Please Date, Sign and Return TODAY in the Enclosed Envelope.
No Postage Required if Mailed in the United States.