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Exhibit 2.2
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of October 1,
2000 (this "Amendment") is made by and among AGL Resources Inc., a Georgia
Corporation ("Buyer"), Consolidated Natural Gas Company, a Delaware corporation
("Seller"), Virginia Natural Gas, Inc., a Virginia corporation ("VNG") and
Dominion Resources, Inc., a Virginia corporation ("DRI").
RECITALS
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A. Buyer, Seller, VNG and CNG are parties to a Stock Purchase Agreement
dated as of May 8, 2000 (the "Agreement").
B. The parties have previously entered into letter agreements dated June
22, 2000 and August 15, 2000 amending the Stock Purchase Agreement. This
Amendment is intended to supercede all such amendments.
C. The parties hereto wish to amend certain provisions of the Agreement to
provide for an effective date of the transaction as of October 1, 2000 for
accounting and other related purposes and make other amendments as herein
provided.
NOW THEREFORE, the parties hereby agree as follows:
A. AMENDMENTS
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1. Article I of the Agreement is amended by inserting the following
definition:
"Effective Date" means October 1, 2000
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and deleting the definition of "Claim" in its entirety.
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2. Section 2.1.2 of the Agreement is amended to read in its entirety as
follows:
2.1.2 Purchase Price. The consideration to be paid for the VNG
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Stock (the "Purchase Price") shall be $ 550,000,000 plus the amount
by which the book value of the Working Capital of VNG on the
Effective Date exceeds $21,888,000, or minus the amount by which the
book value of such Working Capital is less than $21,888,000. The
term "Working Capital" as used herein shall mean current assets less
current liabilities determined in accordance with U.S. GAAP;
provided, however, that for the purposes of this definition, current
liabilities as of any date shall not include any payables to any
Affiliates of VNG including amounts borrowed as of such date by VNG
from the "System Money Pool" described in Note 13 to the 1999
audited VNG financial statements, and current assets shall not
include receivables from any Affiliates of VNG.
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The computation of Working Capital as of December 31, 1999 is set
forth on Schedule 2.1.2. At the Closing, Buyer will pay Seller an
amount (the "Estimated Purchase Price") determined by Seller's
Auditors on the basis hereinabove set forth using the unaudited
balance sheet of VNG for the end of August, 2000, subject to such
adjustments to reflect known variances in Working Capital as may be
mutually agreeable to the parties. The Estimated Purchase Price
shall be paid by wire transfer of immediately available funds to an
account designated by Seller.
3. Section 2.1.3(a) is amended by deleting the reference to "Closing Date"
and inserting in its place, "Effective Date".
4. The first two sentences of Section 2.1.4 are amended to read in their
entirety as follows:
In the event that a Section 338(h)(10) Election is made pursuant to
Section 5.4.8, Buyer and Seller agree that the Purchase Price and
the liabilities of VNG (plus other relevant items) as of the
Effective Date will be allocated to the assets of VNG as of the
Effective Date for federal income tax purposes in accordance with
the Final Allocation. Buyer shall deliver to Seller at Closing a
preliminary allocation of the Purchase Price and liabilities (plus
other relevant items) as of the Effective Date among the assets of
VNG as of the Effective Date, and, as soon as possible following the
Closing (but in any event within 90 days following the completion of
the adjustments to the Purchase Price contemplated by Section
2.1.3), Buyer shall prepare and deliver to Seller a final allocation
of the Purchase Price and liabilities (plus other relevant items),
reflecting all adjustments to the Purchase Price contemplated by
Section 2.1.3, among the assets of VNG (the "Allocation").
5. Section 3.9 is amended to read it its entirety as follows:
Section 3.9 Material Contracts. The Contracts listed in Schedule 3.9
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include all of the Material Contracts; provided, however, that no
Contract shall be deemed a Material Contract solely by reason of the
fact that it is listed on Schedule 3.9. Seller has provided to Buyer
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true, correct and complete copies of all contracts listed on
Schedule 3.9. Except as otherwise set forth in Schedule 3.9, (i)
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each Material Contract is valid, binding and in full force and
effect, and is enforceable by VNG in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter
in effect relating to creditors' rights generally, and general
equitable principles (whether considered in a proceeding in equity
or at law), (ii) VNG has performed the material obligations required
to be performed by it to date under each Material Contract, and
(iii) to the Knowledge of Seller, there has not occurred any
material default by any
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other party under any Material Contract nor any event that with or
without the giving of notice or lapse or time, or both, would
constitute a material default under any Material Contract. For the
purposes of the immediately preceding sentence but not for any other
purposes hereunder, "Material Contract" shall be deemed to include
each of the transition services agreement and the software license
agreement executed by Seller and VNG as contemplated by Sections
5.11.1 and 5.11.2 hereof.
6. Section 5.4 is amended by deleting all references to "Closing Date" or
"Closing" and inserting in their place the following: "Effective Date".
7. Section 5.7.2 is amended to read in its entirety as follows:
5.7.2 From the Closing Date through January 28, 2006, Buyer shall
cause to be maintained in effect a policy of officers' and
directors' liability insurance with respect to the officers and
directors of VNG with an aggregate policy limit of $100 million and,
except for the aggregate policy limit, containing terms and
conditions that are not materially less advantageous than the policy
maintained on behalf of VNG immediately prior to Closing (the "Buyer
D&O Policy"). The Buyer D&O Policy shall cover claims arising from
facts or events that occurred after January 28, 2000 and prior to
Closing. Prior to January 28, 2006, Seller shall not in bad faith
terminate the directors' and officers' coverage maintained by Seller
in effect for VNG as of the Closing.
8. Section 5.8 of the Agreement is amended to read in its entirety as
follows:
Section 5.8 Employee Matters.
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5.8.1 Certain Employees.
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(a) Related Company Employees. Schedule 5.8.1 lists those
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employees (including employees who are absent from work on account of
vacation, disability, layoff, leave of absence or for any other
reason on the Effective Date) of one or more Affiliates of VNG
(including Seller) whom Seller deems to be principally associated
with the assets or operations of VNG. At least 30 days prior to
Closing, Buyer shall notify Seller of those employees listed on
Schedule 5.8.1 to whom Buyer elects to offer employment with VNG. If
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Buyer fails to so notify Seller, Buyer shall be deemed to have
elected not to offer employment to any employee listed on Schedule
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5.8.1. Neither VNG nor Buyer shall be liable for the benefits or
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payments described in Section 3.13.7 with respect to such individuals
listed in Schedule 5.8.1. Those employees to whom Buyer notifies
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Seller that it elects to offer employment are referred to as the
"Related Company Employees." Buyer agrees to offer employment,
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effective as of the Effective Date, to the Related Company Employees
at salaries that are
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initially equal to those salaries in effect for such Related Company
Employees immediately prior to the Effective Date. Neither Buyer nor
VNG shall have any liability for employee benefits or severance,
change in control, retention or other payments due to any individual
listed on Schedule 5.8.1 who does not become a Related Company
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Employee.
(b) Union Employees. VNG shall recognize the Local 50 of
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the International Brotherhood of Electrical Workers as the bargaining
representative for VNG Employees currently represented, acknowledging
the continuation of the applicable Collective Bargaining Agreement
through its term and the continuation of the employment of all union
employees as of the Effective Date.
5.8.2 Employee Benefits. Buyer agrees to provide non-union VNG
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Employees from the Effective Date until the later of December 31, 2001 or
one year from the Effective Date, benefits that are substantially
comparable in the aggregate to the benefits available to non-union VNG
Employees. For purposes of this Section 5.8.2, "benefits" shall mean any
broad-based Employee Plans as of May 8, 2000 (excluding non-qualified or
deferred compensation plans as well as the employee stock ownership plan)
that are governed by ERISA other than any benefits conferred by or promised
under an agreement with an individual. Notwithstanding the foregoing, Buyer
agrees to provide non-union VNG Employees who have retired prior to the
Effective Date, benefits that are equivalent to those benefits that would
have been available to those employees had they remained covered under the
System Retiree Medical Insurance Plan of Consolidated Natural Gas and its
Participating Subsidiaries for Employees Who Are Not Represented by a
Recognized Union (the "CNG Retiree Medical Plan") (or under a successor
plan) for a period of 5 years from the Effective Date; provided, to the
extent the benefits under the CNG Retiree Medical Plan or its successor
plan are reduced, Buyer's plan may similarly be reduced, but Buyer is not
required to increase benefits above the level available under the CNG
Retiree Medical Plan as in effect on May 8, 2000. Unless the existing
coverages are continued pursuant to the Transition Services Agreement, as
of the Effective Date, Buyer shall, and shall cause VNG to (i) waive all
pre-existing conditions, exclusions, actively-at-work provisions, waiting
periods and any other similar conditions or requirements with respect to
participation and coverage of non-union VNG Employees and their covered
dependents under any group health plan in which VNG Employees may be
eligible to participate after the Effective Date; (ii) provide each non-
union VNG Employee with credit for payments made by such non-union VNG
Employee or his covered dependents prior to the Effective Date for purposes
of satisfying any applicable deductible, coinsurance or out-of-pocket
requirements under any health insurance plan in which non-union
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VNG Employees or covered dependents may be eligible to participate after
the Effective Date; and (iii) provide credit to non-union VNG Employees for
purposes of determining eligibility to participate, vesting and benefit
accrual under any employee benefit plan, program or arrangement in which
non-union VNG Employees may be eligible to participate after the Effective
Date, for service prior to the Effective Date with VNG, its Affiliates and
predecessors (but only to the extent recognized by VNG and its Affiliates
for such purposes immediately preceding the Effective Date); provided, that
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the foregoing shall not apply to the extent it would result in duplication
of benefits. As of the Effective Date, VNG shall cease to be a
participating employer in any and all Employee Plans, except the Employee
Plans that are solely sponsored by VNG prior to the Effective Date.
5.8.3 Section 401(k) Plan.
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(i) As soon as practicable following the Closing, Buyer shall
establish a defined contribution plan and trust (or amend an existing
defined contribution plan) for non-union VNG Employees, which shall be
qualified under Sections 401 and 501 of the Internal Revenue Code and
which shall provide for salary reduction contributions pursuant to
Section 401(k) of the Code ("Buyer's 401(k) Plan").
(ii) Buyer's 401(k) Plan shall provide that each non-union VNG
Employee be given credit for the VNG Employee's service with VNG, its
Affiliates and its predecessor companies for purposes of determining
the non-union VNG Employee's eligibility to participate, eligibility
for benefits and vesting under Buyer's 401(k) Plan. Buyer shall
ensure that all "section 411(d)(6) protected benefits" (as defined in
Treasury Regulation 1.411(d) (4)) provided by the System Thrift Plan
of Consolidated Natural Gas Company and Its Participating Subsidiaries
for Employees Who Are Not Represented By A Recognized Union (the
"Seller's 401(k) Plan") are preserved in Buyer's 401(k) Plan. VNG
Employees will not accrue additional benefits after the Effective Date
under defined contribution plans maintained by Seller or any of its
Affiliates.
(iii) VNG shall cease to participate in Seller's 401(k) Plan as
of the Effective Date. Assets of Seller's 401(k) Plan equal to the
account balances of non-union VNG Employees under Seller's 401(k) Plan
(whether or not vested) will be transferred to Buyer's 401(k) Plan as
soon as practicable after the Closing. Any outstanding plan loans to
non-union VNG Employees shall be transferred with the underlying
accounts. Assets shall be transferred in cash unless otherwise
determined by the Buyer.
(iv) The account balances of non-union VNG Employees in Seller's
401(k) Plan will be valued as of the date on which the transfer is
made. The account balances of VNG Employees in Seller's 401(k) Plan
shall share in the earnings, appreciation and depreciation of Seller's
401(k) Plan for the period between the Closing and the date on which
the transfer is made. Any benefits that are payable to non-union VNG
Employees from Seller's 401(k) Plan after the Closing and before the
assets are
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transferred shall be paid from Seller's 401(k) Plan in the ordinary
course. The amount to be transferred to Buyer's 401(k) Plan shall be
reduced by the amount of such payments. The account balances to be
credited for non-union VNG Employees under Buyer's 401(k) Plan shall
not be less than the account balances of non-union VNG Employees under
Seller's 401(k) Plan as of the date on which the transfer is made.
(v) Effective on the date of the transfer of Seller's 401(k) Plan
assets, (i) Buyer and Buyer's 401(k) Plan shall assume all liabilities
in connection with the account balances of non-union VNG Employees
under Seller's 401(k) Plan, and (ii) Seller, its Affiliates and
Seller's 401(k) Plan shall have no further liability with respect to
the account balances of non-union VNG Employees. Seller and its
Affiliates shall have no liability with respect to Buyer's 401(k)
Plan.
(vi) Buyer shall request that the Internal Revenue Service issue
a favorable determination letter with respect to the qualification
under Sections 401 and 501 of the Internal Revenue Code of Buyer's
401(k) Plan and its related trust. Buyer shall make such changes to
Buyer's 401(k) Plan as may be required by the Internal Revenue Service
in order for the Internal Revenue Service to issue a favorable
determination letter. Buyer shall provide Seller with a copy of the
determination letter received from the Internal Revenue Service with
respect to Buyer's 401(k) Plan as soon as the determination letter is
received.
5.8.4 Employee Plans. The Employee Plans for which VNG shall have
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responsibility as of the Effective Date are set forth on Schedule 5.8.4.
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5.8.5 Retirement Plan Transfer.
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(i) As soon as practicable after the Closing, Buyer shall
establish a defined benefit pension plan and trust (or amend an
existing defined benefit plan) for the non-union VNG Employees,
which shall be qualified under Sections 401 and 501 of the
Internal Revenue Code ("Buyer's Retirement Plan").
(ii) Buyer's Retirement Plan shall provide that each non-
union VNG Employee be given credit for the VNG Employee's service
with VNG, its Affiliates and its predecessor companies, for
purpose of determining the VNG Employee's eligibility to
participate, eligibility for benefits, vesting and accrual of
benefits. VNG Employees will not accrue additional benefits
after the Effective Date under pension plans maintained by Seller
or any of its Affiliates.
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(iii) VNG shall cease to participate in the System Pension
Plan of Consolidated Natural Gas Company and Its Participating
Subsidiaries for Employees Who Are Not Represented By A
Recognized Union (the "Seller's Retirement Plan") as of the
Effective Date. Assets of the Seller's Retirement Plan equal to
the accrued benefit values (as described below) of the non-union
VNG Employees will be transferred to Buyer's Retirement Plan as
soon as practicable after the accrued benefit values have been
determined pursuant to this Section 5.8.5. Buyer shall ensure
that all "section 411(d)(6) protected benefits" (as defined in
Treasury Regulation 1.411(d)-4) provided by the Seller's
Retirement Plan are preserved with respect to transferred
benefits in Buyer's Retirement Plan. The term "accrued benefit
values" means the present value of the accrued benefits of VNG
Employees as of the Effective Date under the Seller's Retirement
Plan, computed as if Seller's Retirement Plan had terminated on
the Effective Date and based on benefits accrued before the
Effective Date. Accrued benefit values shall be calculated as if
all affected participants ceased accruing any additional benefits
under Seller's Retirement Plan immediately prior to the Effective
Date, and for purposes of calculating accrued benefit values, the
1983 Group Annuity Mortality Table and the then applicable PBGC
interest rates (including the immediate and deferred rates) shall
be used to value benefits upon plan termination, and otherwise
actuarial assumptions stated in the last plan actuarial valuation
shall be used.
(iv) The calculations referred to in Section 5.8.5(iii) will
be made by Seller's actuary as soon as practicable following the
Closing (but not later than 120 days), subject to review by
Buyer's actuary within 60 days following receipt from Seller's
actuary of a copy of its valuation together with all other
information reasonably necessary for Buyer's actuary to complete
its review. In the event of significant, reasonable comment from
Buyer's actuary (other than a comment relating to the assumptions
described in 5.8.5(ii)) that cannot be resolved between the
Buyer's Actuary and Seller's Actuary within ten Business Days,
the question or questions in dispute shall then be promptly
submitted to any independent actuary of recognized standing to be
selected by agreement of Seller and Buyer and whose evaluations
shall be binding and final. The fees of any such independent
actuary shall be borne equally by Seller and Buyer. The assets
shall be transferred in cash.
(v) Seller will adjust the amount to be transferred from the
Seller's Retirement Plan to Buyer's Retirement Plan, as
calculated pursuant to Section 5.8.5(iii), by a pro rata share of
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the Seller Retirement Plan earnings, appreciation and
depreciation for the
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period between the Closing and the date on which the assets are
actually transferred.
(vi) Any benefits that are payable to non-union VNG
Employees from the Seller's Retirement Plan after the Closing and
before the plan assets are transferred shall be paid from the
Seller's Retirement Plan in the ordinary course to the extent
permitted by law. The amount to be transferred to Buyer's
Retirement Plan shall be reduced by the payments made.
(vii) The accrued benefits to be credited under Buyer's
Retirement Plan with respect to the non-union VNG Employees shall
not be less than the accrued benefits of the non-union VNG
Employees under the Seller's Retirement Plan as of the Effective
Date. Buyer shall ensure that Buyer's Retirement Plan provides
non-union VNG Employees with the benefits accrued prior to the
Effective Date under the Seller's Retirement Plan in accordance
with the terms of the Seller's Retirement Plan and applicable
law. Effective on the date of transfer of the Seller's
Retirement Plan assets, (i) Buyer and Buyer's Retirement Plan
shall assume all liabilities in connection with the accrued
benefits of non-union VNG Employees under the Seller's Retirement
Plan, and (ii) Seller, its Affiliates and the Seller's Retirement
Plan shall have no further liability with respect to the accrued
benefits of non-union VNG Employees. Seller and its Affiliates
shall have no liability whatsoever with respect to Buyer's
Retirement Plan.
(viii) The parties agree that the transfers described in
this Section 5.8.5 shall be made in accordance with Section
414(l) of the Internal Revenue Code. Buyer and Seller shall make
any appropriate filings required under the Internal Revenue Code
or ERISA in connection with the transfers described in this
Section 5.8.5 as soon as practicable after the Closing. Seller
shall be responsible for delivery to VNG Employees of any notice
required under Code Section 204(h) in connection with the
transactions contemplated by this Agreement.
(ix) Buyer will request that the Internal Revenue Service
issue a favorable determination letter with respect to the
qualification under Sections 401 and 501 of the Internal Revenue
Code of Buyer's Retirement Plan (and the related trust). Buyer
will file with the Internal Revenue Service application for a
determination letter for Buyer's Retirement Plan. Buyer will
make such changes to the plan as may be required by the Internal
Revenue Service in order for the Internal Revenue Service to
issue a favorable determination letter. Buyer will provide
Seller with a
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copy of the determination letter received from the Internal
Revenue Service with respect to Buyer's Retirement Plan within a
reasonable time after the determination letter is received.
(x) Seller will request that the Internal Revenue Service
issue a favorable determination letter with respect to the
qualification under Sections 401 and 501 of the Internal Revenue
Code of the Seller's Retirement Plan (and the related trust). If
necessary, Seller will file with the Internal Revenue Service an
application for determination letter for the Seller's Retirement
Plan. Seller will make such changes to the plan as may be
required by the Internal Revenue Service in order for the
Internal Revenue Service to issue a favorable determination
letter. Seller will provide Buyer with a copy of the favorable
determination letter received from the Internal Revenue Service
with respect to the Seller's Retirement Plan within a reasonable
time after the determination letter is received.
5.8.6 VNG Retirement Plan Funding. As soon as practicable following
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the Closing, Seller shall cause the VNG Retirement Plan to be fully funded
based on calculations as of the Effective Date, so that any such plan will
have assets equal to the "accrued benefit values" of the VNG Employees
under such plan. For this purpose, the term "accrued benefit values" means
the present value of the accrued benefits of VNG Employees as of the
Effective Date under the plan, computed as if the plan had terminated on
the Effective Date and based on benefits accrued before the Effective Date.
Accrued benefit values shall be calculated as if all affected participants
ceased accruing any additional benefits under the plan immediately prior to
the Effective Date and for purposes of calculating accrued benefit values,
the 1983 Group Annuity Mortality Table and then applicable PBGC interest
rates (including the immediate and deferred rates) shall be used to value
annuities upon plan termination, and otherwise actuarial assumptions stated
in the last plan actuarial valuation shall be used. All transfers of
assets or additional funding of plans shall be made in cash.
5.8.7 Transfer from CNG VEBA. VNG shall cease to participate in the
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Consolidated Natural Gas Voluntary Employees Beneficiary Association (the
"Seller's VEBA") as of the Effective Date. As soon as practicable after
Closing, the assets and liabilities of or associated with the VNG Non-
Union/Management subaccount of the CNG VEBA shall be transferred to Buyer's
VEBA. The assets shall be transferred in cash.
5.8.8 COBRA. Buyer shall be responsible for providing group health
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coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA")
for each non-union VNG Employee and each qualified beneficiary with respect
to a non-union VNG Employee who is entitled to COBRA coverage under an
Employee Plan of Seller as a result of a "qualifying event" (as defined
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under COBRA) that occurs on or after the Effective Date. Pursuant to the
Buyer's assumption of the group health plan maintained by VNG for union
employees, Buyer shall retain liability for COBRA coverage for each union
VNG employee and each qualified beneficiary with respect to a union VNG
Employee that experienced a "qualifying event" prior to, on or after the
Effective Date.
5.8.9 Flexible Spending Accounts. The parties have agreed to
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continue existing flexible spending accounts through December 31, 2000.
5.8.10 Administration. Buyer and Seller shall each make their
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appropriate employees available to the other at such reasonable times as
may be necessary for the proper administration by the other of any and all
matters relating to employee benefits affecting VNG Employees.
5.8.11 Non-solicitation of Employees. Seller covenants that it will
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refrain, and will use its best efforts to cause Affiliates of Seller to
refrain, from soliciting any of the existing employees of VNG or the
employees listed on Schedule 5.8.1 for employment with Seller or its
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Affiliates from the date of this Agreement through the period ending
twenty-four (24) months after the Closing Date; provided, however, that
Seller may solicit employees terminated by VNG and Schedule 5.8.1
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Associated Seller Employees who do not become Related Company Employees..
9. Section 5.10 of the Agreement is amended to read in its entirety as
follows:
Section 5.10 Satisfaction of Debt. At or immediately prior to
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Closing, Seller shall take, or cause VNG to take, such actions as are
necessary to (i) extinguish all intercompany debt obligations between
VNG, as borrower, and any of Seller or its Affiliates, as lender,
other than those listed on Schedule 5.10 attached hereto (ii)
terminate as to VNG the Supplemental Agreement, and (iii) extinguish
all intercompany payables and receivables between VNG and any of
Seller or its Affiliates, other than those listed on Schedule 5.10
attached hereto. Intercompany debt, payables and receivables listed on
Schedule 5.10 hereto shall be paid by the party owing such debt or
payable as promptly as possible after Closing but in any event not
later than the date on which the payments are due under Section 2.1.3.
10. Schedule 3.7 to the Agreement is amended to read in its entirety as
follows:
1. In Case No. PUE970617, Annual Informational Filing Based on the
12 months ended June 30, 1998, the Staff of the State Corporation
Commission entered a report that placed VNG's return on equity
(ROE) above the minimum ROE authorized by the Commission.
Consequently, the Staff recommended a write-down of the
unamortized balance of VNG's regulatory asset consisting of
approximately $1.4 million of deferred OPEB expenses that
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previously were not recovered through rates. The Commission
conducted a hearing during 1999 and on August 8, 2000 issued a
Final Order wherein the Commission adopted the findings and
recommendations of the July 13, 2000 Report of the Chief Hearing
Examiner, and ruled that VNG's regulatory asset for OPEB
implementation costs was not fully recovered during the test
period for the twelve months ended June 30, 1998. Following this
ruling, VNG caused accounting entries to be made consistent
therewith, reestablishing the unamortized balance of the
regulatory asset on its books of approximately $1.4 million.
2. Franchises for the use of the streets, alleys or public grounds
have expired in the following localities:
Virginia Beach (pre-1963 city limits)
Hampton
Williamsburg
Suffolk
11. Schedule 3.16 to the Agreement is amended to read in its entirety as
attached hereto.
12. Schedule 3.19 to the Agreement is amended to add under the heading "CNG
Proprietary Software (owned by Seller and licensed to VNG - no payment
obligations)," below "EDI Software," the following:
SAMS Software
Customizations developed by CNG for use with PeopleSoft HRMS software (as
more specifically identified in Exhibit 5.11.2.)
13. Exhibit 5.11.2 to the Agreement is amended as reflected in the
blackline attached hereto.
B. WAIVERS AND CONSENTS
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1. CNG and AGL have determined that a HSR Act filing is not necessary
for this transaction because the sale of VNG is being made pursuant to the terms
of a FTC divestiture order. FTC Rule 16 C.F.R. Section 802.70 provides that a
filing is not required where the voting securities are to be acquired from an
entity that is subject to a divestiture order. Therefore, the parties hereby
waive the obligations and closing conditions relating to the HSR Act in Sections
5.2.1, 6.4 and 7.4 of the Agreement.
2. The parties hereby waive the closing conditions relating to the
registration by Buyer under the Public Utility Holding Company Act of 1935, as
amended, in Sections 6.4 and 7.4 of the Agreement.
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3. The parties hereby ratify the June 22, 2000 letter agreement by which
Seller and Buyer agreed to extend the deadline to June 30, 2000 for submitting
to the appropriate agency/ies or third party/ies all declarations, filings and
registrations listed on Schedule 3.10 and 4.4.
4. Pursuant to Section 8.1 of the Agreement, the parties hereby agree that
the Closing shall take place on October 6, 2000 and waive any requirement for
the Closing to take place on any other date under the Agreement.
5. AGL hereby consents to and ratifies the following actions taken by VNG
between May 8, 2000 and the Closing Date:
(i) VNG included the Related Company Employees in its performance
based incentive program for the first nine months of 2000 and
accrued approximately $38,000 therefor;
(ii) the execution of the transition services agreement between VNG
and Seller as contemplated in Section 5.11.1 of the Agreement;
and
(iii) the execution of the software license agreement between VNG and
Seller as contemplated in Section 5.11.2 of the Agreement.
C. MISCELLANEOUS
1. Effect of Amendment. From and after the effective date of this
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Amendment, all references to the Agreement set forth in any other agreement or
instrument shall, unless otherwise specifically provided, be references to the
Agreement as amended by this Amendment and as may be further amended, modified,
restated or supplemented from time to time. This Amendment is limited as
specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Agreement except as expressly set
forth herein. Except as expressly amended hereby, the Agreement shall remain in
full force and effect in accordance with its terms.
2. Governing Law. This Amendment shall be governed by and construed and
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enforced in accordance with the laws of the Commonwealth of Virginia (without
regard to the conflicts of law provisions thereof).
3. Severability. To the extent any provision of this Amendment is
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prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.
4. Successors and Assigns. This Amendment shall be binding upon, inure to
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the benefit of and be enforceable by the respective successors and assigns of
the parties hereto.
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5. Construction. The headings of the various sections and subsections of
------------
this Amendment have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof.
6. Counterparts. This Amendment may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
[Balance of page intentionally left blank]
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed on the day and year first above written.
CONSOLIDATED NATURAL GAS COMPANY
By: /s/ James F. Stutts
--------------------------------
Name: James F. Stutts
Title: VP & General Counsel
DOMINION RESOURCES, INC.
By: /s/ James F. Stutts
--------------------------------
Name: James F. Stutts
Title: VP & General Counsel
VIRGINIA NATURAL GAS, INC.
By: /s/ Francis J. Corbett
--------------------------------
Name: Francis J. Corbett
Title: Acting President and CEO
AGL RESOURCES INC.
By: /s/ Paul R. Shlanta
--------------------------------
Name: Paul R. Shlanta
Title: Senior Vice President
14
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.16 VIRGINIA NATURAL GAS - Insurance In-Force
------------------------------------------------------------------------------------------------------------------------------------
Coverage Policy Policy Amt. of
Policyholder Description Broker/Consultant Insurer Number Period Coverage Deductible Comments
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidated
Natural Gas Directors & McGriff, Seibels $50 Insured
Company Officers - "Run-Off" & Williams Chubb 8142-04-02B 28-Jan-00 $25,000,000 Persons
$500,000
28-Jan-06 Corporate
AEGIS DOO17A1A58 28-Jan-00 $36,000,000 NA
28-Jan-00
EIM 9D046O-DBDQ 28-Jan-00 $85,000,000 NA
28-Jan-00
St. Paul BDODC0246 28-Jan-00 $25,000,000
28-Jan-00
Consolidated
Natural Gas Fiduciary Liability- McGriff, Seibels
Company "Run-Off" & Williams Chubb 8142-04-02B 28-Jan-00 $25,000,000 $25,000
28-Jan-00
AEGIS FOG17ALA5Q 28-Jan-00 $36,000,000 NA
Dominion $0 Insured
Resources, Inc. Directors & McGriff, Seibels Chubb 8152-85-62 01-Sep-98 $25,000,000 Persons
Officers & Williams $1,000,000
01-Sep-01 Corporate
AEGIS D086A1A98 01-Sep-98 $25,000,000 NA
01-Sep-01
EIM 900474-bboo 01-Sep-98 $50,000,000 NA
01-Sep-01
Zurich DOC272567300 01-Sep-98 $25,000,000
01-Sep-01
Chubb 8152-85-83 01-Sep-00 $25,000,000
01-Sep-01
CNA 171473660 01-Sep-98 $25,000,000
01-Sep-01
ERMA 752-142248-96 01-Sep-98 $25,000,000
01-Sep-01
XL
Insurance ELUB103400 28-Jan-00 $50,000,000
Co. 01-Sep-01
$25,000
Dominion Idemnifiable
Resources, Inc. Fiduciary Liability McGriff, Seibels Chubb 8152-85-84 01-Sep-98 $25,000,000 Losses
& Williams $0
Unindemnifiable
01-Sep-01 Losses
Travelers 76FF101080834BCM 01-Sep-98 $25,000,000
01-Sep-01
AEGIS FD568A1A97 01-Sep-98 $25,000,000 NA
01-Sep-01
Dominion
Resources, Inc. Blarkel Crime McGriff, Seibels Chubb 8152-85-84 01-Sep-98 $25,000,000 $250,000
& Williams 01-Sep-01
Royal &
SunAlFance PSF001748 28-Jan-00 $25,000,000 NA
01-Sep-01
Dominion
Resources, Inc. Special Crime McGriff, Seibels Chubb 8160-94-51 01-Jul-00 $25,000,000 None
& Williams 01-Jul-02
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dominion
Resources, Inc. Excess Liability McGriff, Seibels & Williams AEGIS XD06A1A00 26-Jan-00 $ 35,000,000
Willis Corroon 01-Sep-00
Consolidated
Natural Gas Co Punitive Damages AEGIS B0017A1A88 01-Sep-99 $ 35,000,000
01-Sep-00
EIM 500828-58GL 01-Sep-98 $100,000,000
Dominion 01-Sep-01
Resources, Inc
Primary PKG 01-Apr-00 $215,000,000
Section III 01-Sep-01
Excess PKG 01-Apr-00 $250,000,000
01-Sep-01
<CAPTION>
<S> <C> <C>
$2,000,000 per
occ., ($1,000,000
Dominion Employers
Resources, Inc. Liability Renewed 9/1/00-01
$4,000,000 agg.
($250,000
Maintenance
Deductible)
Consolidated Same as AEGIS
Natural Gas Co Excess Liability Renewed 9/1/00-01
NA Renewed 9/1/00-01
NA
NA
Dominion
Resources, Inc
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Policyholder Coverage Broker Insurer Policy Policy
Description Number Period
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consolidated
Natural Gas
Company Excess Workers' McGriff, Seibels & Williams AEGIS C0017A199 01-Sep-99
Compensation Wills Camoon 01-Sep-00
Consolidated
Natural Gas
Company Automobile Liability McGriff, Seibels & Williams Liberty Mutual A52-681-004097-160 01-Sep-99
(Fronting Policy) 01-Sep-00
Dominion
Resources, Inc. Property & Operations Wills Camoon Primary Pkg. 01-Apr-00
Extra Expense McGriff, Seibels & Williams Section I & II 01-Sep-01
Excess Pkg. 01-Apr-00
01-Sep-01
Dominion
Resources, Inc. Employers Liability McGriff, Seibels & Williams Liberty Mutual WC2-681-D04097-059 01-Mar-99
All States 01-May-00
Consolidated
Natural Gas
Company OAD&D NON Employee Benefits Zurich Insurance GTU0013661 01-May-00
Consulting Group 01-May-01
Dominion Professional Liberty - Employed
Resources, Inc. Lawyers McGriff, Seibels & Williams AEGIS E0008A1A00 01-Feb-00
01-Feb-01
Consolidated Nuclear Liability
Natural Gas Nuclear Liability - Suppliers & Insurance
Company Transporters Association AIS-153 01-Jan-00
01-Jan-01
Consolidated
Natural Gas Mutual Business Program- Energy Insurance
Company ??????? Bermuda Ltd. P16-90-01 01-Sep-00
Self Funded Package Policy 01-Sep-00
------------------------------------------------------------
Policyholder Amt. of Deductible
Coverage
--------------------------------------------------------------
Consolidated $ 35,000,000 $250,000 Renewed 9/1/00-01
Natural Gas
Company
Consolidated
Natural Gas
Company None N/A Renewed 0/1/00-01
$2,000,000 per
Dominion $ 350,000,000 occ.
Resources, Inc. $4,000,000 agg.
$250,000
maintenance
$ 250,000,000 N/A
Dominion $ 1,000,000 None Renewed 5/1/00-01
Resources, Inc.
Consolidated
Natural Gas
Company Various None
Dominion
Resources, Inc. $ 35,000,000 $0 individual
$50,000
Corporate
Consolidated
Natural Gas
Company $100,000,000
Excess
Consolidated Liability
Natural Gas $1,500,000 $500,00
Company Auto Liability
$2,000,000 $0
Onshore
Property
$1,500,000 $500,00
Offshore
Property
$1,000,000 $1,000,000
</TABLE>
<PAGE>
Schedule 5.10
1. 10/3/2000 ($158,000.00)
2. 10/4/2000 $21,000.00
3. Intercompany payables, receivables or debt incurred on or after October 1,
2000 for the purpose of making payments to third parties other than
Affiliates of Seller
( )- Indicates amount paid by VNG to Seller.
