<PAGE>
As filed with the Securities and Exchange Commission on May 31,
1996
Registration No.333-_____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________________
THE BROOKLYN UNION GAS COMPANY
(Exact Name of Registrant as Specified in its Charter)
New York 11-0584613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One MetroTech Center, Brooklyn, New York 11201-3850
(718) 403-2000
(Address of principal executive offices)
THE BROOKLYN UNION GAS COMPANY
EMPLOYEE SAVINGS PLAN
(Full Title of the Plan)
R.R. Wieczorek, Vice President, Secretary & Treasurer
One MetroTech Center, Brooklyn, New York 11201-3851
(718) 403-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Securities to be Registered
Common Stock ($.33 1/3 par value)
Amount to be Registered
1,225,000 Shares
Proposed Maximum Offering Price Per Share*
$ 26.6875
Proposed Maximum Aggregate Offering Price*
$ 32,692,187.50
Amount of Registration Fee
$ 11,273.17
*Estimated solely for the purpose of calculating the Registration
Fee pursuant to Rule 457, based on the average high and low prices
for shares of the Company's Common Stock on the New York Stock
Exchange - Composite Transactions Tape on May 24, 1996.
<PAGE>
P R O S P E C T U S
T H E B R O O K L Y N U N I O N G A S C O M P A N Y
EMPLOYEE SAVINGS PLAN
1,361,302 SHARES OF COMMON STOCK
($.33 1/3 Par Value)
_______________
This Prospectus covers interests in The Brooklyn Union Gas
Company Employee Savings Plan for Non-Bargaining Employees, Local
101 Employees and Local 3 Employees (the "Plan") and 1,361,302
shares of Common Stock ($.33 1/3 par value) of The Brooklyn Union
Gas Company (the "Company") to be sold under the Plan. Under the
Plan, eligible employees of the Company may purchase shares of
Common Stock of the Company at a discount, if provided for, and may
save and invest a portion of their income on a tax deferred basis
at regular intervals.
The issuance of additional shares of Common Stock under the
Plan covered by this Prospectus is subject to shareholder approval
and the approval of the Public Service Commission of the State of
New York, which approvals have been obtained.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
________________
The date of this Prospectus is May 31, 1996.
This document constitutes part of a prospectus covering
securities that have been registered under the Securities Act of
1933. This Prospectus relates to the 1,225,000 shares of Common
Stock of the Company registered for purchase under the Plan
pursuant to the Registration Statement of which this Prospectus is
a part and 136,302 shares of Common Stock previously registered.
It is suggested that this document be retained for future
reference.
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AVAILABLE INFORMATION
Additional supplementary information with respect to the
Common Stock and the Plan may be provided in the future to Plan
participants by means of Appendices or Supplements to this
Prospectus and documents incorporated herein by reference.
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 and in accordance therewith
files or will file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following Regional Offices:
7 World Trade Center, Suite 1300, New York, New York 10048; and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, at prescribed rates. Such reports, proxy
statements and other information concerning the Company can also be
inspected (at prescribed rates) at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005,
where shares of the Company's Common Stock are listed.
This Prospectus does not contain all information set forth in
the Registration Statement and Exhibits thereto which the Company
has filed with the Commission under the Securities Act of 1933, and
to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates in this Prospectus by reference the
following documents which have heretofore been filed with the
Securities and Exchange Commission (File No. 1-722):
(a) Annual Report on Form 10-K for the year ended September
30, 1995;
(b) Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995;
(c) Quarterly Report on From 10-Q for the quarter ended March
31, 1996; and
(d) Proxy Statement dated December 28, 1995 for the Annual
Meeting of Shareholders held on February 1, 1996.
The Plan incorporates in this Prospectus by reference its
Annual Report on Form 11-K for the year ended December 31, 1994
heretofore filed with the Securities and Exchange Commission (File
No. 1-722) pursuant to Section 15 of the Securities Exchange Act of
1934.
The Company incorporates all documents subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, prior to the termination of the
offering covered by this Prospectus, and such documents shall be
deemed to be incorporated herein by reference and to be part
<PAGE>
hereof from the date of filing thereof.
The Company hereby undertakes to provide without charge to
each person to whom a copy of this Prospectus has been delivered,
upon the written or oral request of any such person, a copy of any
or all of the documents incorporated herein by reference in the
Registration Statement of which this Prospectus is a part, other
than exhibits to such documents unless they are specifically
incorporated by reference into such documents. The Company also
undertakes to provide, without charge, to each employee to whom
this Prospectus is sent or given, upon such employee's written
request, a copy of its annual report to shareholders for its last
fiscal year. Requests for such information should be directed to
The Brooklyn Union Gas Company, Employee Savings Plan Services, One
MetroTech Center, 22nd Floor, Brooklyn, New York 11201-3850.
<PAGE>
The Brooklyn Union Gas Company
Employee Savings Plan
DESCRIPTION OF THE PLAN
Summary
The Brooklyn Union Gas Company Employee Savings Plan (the
"Plan") was approved by the shareholders of The Brooklyn Union Gas
Company (the "Company") at its annual meeting of shareholders on
February 3, 1983 to provide eligible employees of the Company with
an opportunity to acquire shares of the Company's Common Stock
($.33 1/3 par value) ("Company Common Stock") under the Plan at a
discount, if provided for, and to provide them with a mechanism
through which they can save and invest part of their income on a
tax deferred basis at regular intervals. The discount on Company
Common Stock will be up to 10% which includes up to a 5% matching
contribution by the Company. Additional employer contributions
will also be available to those Members who invest in Company
Common Stock (see "Description of the Plan - Company
Contributions"). In addition to Company Common Stock, employees
may invest in other investment options (collectively, the "Funds").
The principal executive offices of the Company are located at
One MetroTech Center, Brooklyn, New York 11201-3850 and its
telephone number is (718) 403-2000. The Plan is administered by
the Employee Savings Plan Committee (the "Committee") (see
"Administration of the Plan"). The record keeper for the Plan is
Coopers & Lybrand L.L.P. (the "Record Keeper" or "Coopers").
The Plan is a qualified profit sharing plan under Section
401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and provides for salary reduction contributions under
Section 401(k) of the Code. In general, plans established pursuant
to Section 401(k) of the Code permit eligible employees to defer a
portion of their current compensation and thus avoid current
Federal and, subject to applicable law, state and local income
taxes. The amounts elected to be deferred by employees are
contributed to the Plan by the Company and are deductible by it for
corporate income tax purposes.
The Plan is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), but not Title IV
of ERISA because it is an "individual account plan." The
protective provisions of Title IV which relate to insuring pension
benefits by the Pension Benefit Guarantee Corporation are not
applicable to individual account plans.
The material features of the Plan are outlined below. All
transactions with regard to an employee's account will be handled
by Coopers via the ESP InfoLine at 1-800-305-5252. Copies of the
Plan may be obtained upon request from the Company's Employee
Savings Plan Services, located at One MetroTech Center, Brooklyn,
New York 11201-3850 or by telephoning (718) 403-3383 or 403-5148.
<PAGE>
Eligibility
Every non-bargaining full-time employee of the Company is
eligible to become a member of the Plan (a "Member") when he or she
has completed 90 days of eligible service. Every part-time
employee of the Company is eligible to become a Member after
completing one year of eligible service, and working at least 1,000
hours in the previous one year period. All bargaining unit full-
time employees of the Company are eligible after completing one
year of eligible service, provided that provision for Plan
membership is included in the applicable labor agreement.
Member Contributions
Membership: An eligible employee may become a Member by
contacting Coopers via the ESP InfoLine (1-800-305-5252). The
Member will be able to make all determinations via the ESP InfoLine
as to:
(a) election of amount of contributions to be made on his or
her behalf; and
(b) selection of the Fund or Funds to which the contributions
are to be allocated.
Once an employee has become a Member, Coopers will mail him or
her a welcoming package. This package will include more detailed
information on the operation of the ESP InfoLine, the Member's PIN
number, an Electronic Signature Authorization Form and a
beneficiary designation card that is to be completed by the Member
(and the Member's spouse, if necessary) and returned to the
Company's Employee Savings Plan Services, One MetroTech Center,
Brooklyn, New York 11201-3850. Upon Coopers' receipt of a signed
Electronic Signature Authorization Form a Member will be able to
initiate all transactions for the Plan via the ESP InfoLine, except
for a change of beneficiary designation and/or waiver of spouse,
which may only by made through a re-execution of the beneficiary
designation card.
Deferred Cash Contributions: Each Member of the Plan may, by
contacting the ESP InfoLine described above, elect to have
subsequent compensation reduced by not less than 1% and not more
than 15% in multiples of 1%. Under the law, compensation for this
purpose is limited to $150,000 in 1996 (as adjusted for inflation).
In addition, there is an absolute dollar contribution limit which
is established annually by the Internal Revenue Service (the "IRS")
after an adjustment for inflation, which adjustment may be adopted
in the sole discretion of the Committee. The maximum contribution
for 1996 will be $9,500. These "Deferred Cash Contributions" are
made to the Plan on the Member's behalf by the Company. Such
contributions reduce the amount of a Member's salary which is
subject to Federal income tax and, subject to applicable law, state
and local income taxes.
Changing/Suspending Level of Contributions: A Member may
change the level of Deferred Cash Contributions once each month or
suspend Deferred Cash Contributions at any time by calling the ESP
InfoLine. The change or suspension shall be effective with the
next payroll period following the date of such notice.
<PAGE>
Rollover/Transfer Contributions: If an employee of the
Company (whether or not the employee is a Member) receives a
distribution from a qualified pension, savings or profit sharing
plan of a previous employer or, in limited cases, from an
Individual Retirement Account ("IRA"), a "rollover" contribution by
the employee or a direct transfer by the previous plan or IRA of
the taxable amount of the distribution may, under such conditions
as the Committee may require, be made to the Plan.
Company Contributions
In addition to contributing to the Plan the Members' Deferred
Cash Contributions on their behalf, the Company may contribute
directly a sufficient amount to provide a discount (see "Summary")
of up to 10% for the purchase of Company Common Stock with respect
to Deferred Cash Contributions invested in the Company Common Stock
Fund. The amount of the discount, if provided for, will not exceed
10%(which includes up to a 5% matching contribution) as set by the
Board of Directors of the Company. The actual amount of the
discount, if any, will be set from time to time by the Committee
(see "Summary"). The amount of the discount may also be subject to
approval by the Public Service Commission of the State of New York.
Members will be notified as soon as practicable and in a timely
manner of the effective date and amount of the discount, if any.
The Company shall also contribute the following:
1. For each Member who is a non-bargaining employee and who
elects to have all or a portion of the Deferred Cash Contributions
made on his or her behalf invested in the Company Common Stock
Fund, the Company shall make a matching contribution in an amount
equal to fifty percent of the first 6% of such Member's
compensation invested in the Company Common Stock Fund subject to
a maximum compensation for purposes of this calculation of $150,000
(as adjusted for inflation). This contribution shall be invested
in the Company Common Stock Fund, at a discount, if any.
2. For each Member who is a bargaining employee and who
elects to have all or a portion of the Deferred Cash Contributions
made on his or her behalf invested in the Company Common Stock
Fund, the Company shall make a matching contribution in an amount
equal to one-third (1/3) of the first $30.00 per week of such
Member's Deferred Cash Contributions invested in the Company Common
Stock Fund. This contribution shall be invested in the Company
Common Stock Fund, at a discount, if any.
The Company may also make additional contributions which will
be allocated among Members making Deferred Cash Contributions in
proportion to their compensation, and which will be invested in the
Company Common Stock Fund. All Company contributions, which are
made from the Company's current or accumulated earnings and
profits, may be made in the form of cash or stock.
<PAGE>
Company contributions in any Plan year (calendar year) may not
exceed the maximum amount deductible by the Company under the Code.
Vesting
A Member will be 100% vested immediately in his or her
Deferred Cash Contributions and Rollover/Transfer Contributions,
and earnings thereon, if any.
An employee who was a Member on September 30, 1993 will be
100% vested immediately in the matching contributions made on the
Member's behalf, including discounts on Company Common Stock and
discounts on dividends attributable to such stock. An employee who
became a Member on or after October 1, 1993 will not be 100% vested
in (a) matching contributions made on the Member's behalf,
including discounts on Company Common Stock and discounts on
dividends attributable to such stock, and (b) discounts on any
other Company Common Stock purchased for the Member under the Plan,
until the earlier to occur of (I) the Member's completion of three
(3) years of service with the Company, (ii) the Member's retirement
from the Company or (iii) the death of the Member.
Contribution Limitations
The Plan limits the Deferred Cash Contributions of each Member
to a maximum of 15% of total compensation, not to exceed $9,500 in
1996 (as may be adjusted for inflation in the sole discretion of
the Committee). However, as required by the Code, the Deferred
Cash Contributions by highly compensated and certain other
employees are subject to certain restrictions based on the
relationship of Deferred Cash Contributions made by other employees
in the aggregate. In addition, as required by the Code, amounts
contributed by the Company on behalf of highly compensated and
certain other employees are subject to certain restrictions and
adjustments based on the relationship of contributions by the
Company on behalf of other employees in the aggregate. Any Member
affected by these restrictions will be so advised by the Committee.
Maximum Annual Additions
The annual additions to any Member's account under the Plan
(and under any other defined contribution plan maintained by the
Company or its subsidiaries) cannot exceed the lesser of (1)
$30,000 (adjusted with reference to increases in the applicable
limit for tax qualified defined benefit plans) or (2) 25% of the
Member's compensation. For this purpose, "annual additions" means
the sum of all contributions to the Plan and such other plans made
by, or on behalf of, the Member. Furthermore, if a Member
participates in both a defined benefit plan (such as The Brooklyn
Union Gas Company Employee's Retirement Plan) as well as the Plan,
a combined overall limit set forth in the Code applies. In the
event that the combined overall limit is exceeded with respect to
any Member, the Plan provides that such Member's
<PAGE>
benefit under the defined benefit plan will be reduced first to
satisfy such overall limit. Currently, these limits affect only
highly compensated employees. Members may contact Employee Savings
Plan Services if they have any questions relating to these
limitations.
Investment of Contributions
All contributions under the Plan are currently held in trust
funds administered by Wallace P. Parker, Jr., Robert R. Wieczorek
and Lenore F. Puleo, as trustees (the "Trustees"). Ms. Puleo and
Messrs. Parker and Wieczorek are all members of the Committee.
The Plan makes available several Funds from which Members may
select. In addition to the Company Common Stock Fund, the Plan
provides for the Funds described below. Such Funds may be changed
from time to time through the addition or deletion by the Committee
of one or more Funds. Members may have contributions invested in
one or more of the Funds in any proportion. Dividends, interest
and other distributions received on the assets held by the Trustees
in respect of each of the Funds shall be reinvested in such Fund.
The Trustees may keep such amounts invested in cash as they, in
their sole discretion, shall deem necessary or advisable.
Members are directed to the current prospectus for each Fund
for particular information regarding such Fund, other than the
Company Common Stock Fund. Copies of the current prospectus for
each Fund will be furnished to each eligible employee receiving a
copy of this Prospectus and copies are available, without charge,
upon request to Vanguard Group, Valley Forge, Pennsylvania 19482,
telephone number (800) 523-8066.
THE FOLLOWING SUMMARIES ARE QUALIFIED IN ALL ASPECTS BY
REFERENCE TO THE THEN CURRENT PROSPECTUS FOR EACH FUND, OTHER THAN
THE COMPANY COMMON STOCK FUND, DESCRIBED IN THIS PROSPECTUS OR ANY
APPENDIX OR SUPPLEMENT HERETO. EXCEPT FOR INFORMATION CONCERNING
THE COMPANY COMMON STOCK FUND, THE COMPANY AND THE PLAN ARE NOT
RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY
INFORMATION CONTAINED IN ANY PROSPECTUS OF ANY SUCH FUND.
FUND E - Company Common Stock Fund: A Fund consisting
entirely of Company Common Stock. Company Common Stock will be
purchased by the Trustees either directly from the Company or on
the open market. INVESTMENTS IN THIS FUND CAN ONLY BE MADE THROUGH
DEFERRED CASH CONTRIBUTIONS OR COMPANY MATCHING CONTRIBUTIONS.
Furthermore, during the employment of the Member, transfers out of
the Company Common Stock Fund are limited to the Member's
contributions (and any earnings thereon), regardless of whether the
Company's matching contributions have vested (see "Vesting"). Such
vested matching contributions may only be transferred or sold upon
the Member's death, retirement or termination of employment. The
Common Stock purchased from
<PAGE>
the Company under the Plan may be either newly issued shares,
shares obtained on the open market and/or treasury shares. The
price of shares purchased from the Company will be between 100% and
90% of the closing price on the New York Stock Exchange on the day
Deferred Cash Contributions or Company matching contributions,
which are based upon Deferred Cash Contributions, are received by
the Trustees.
The following table shows the annual total returns for Fund E
on a total account basis for the last five fiscal years:
1991.............. 16.0%
1992.............. 16.6%
1993.............. 21.7%
1994.............. 1.7%
1995.............. 39.0%
FUND A - Vanguard Fixed Income Securities Fund - Short Term
Corporate Portfolio Fund: The current prospectus for the Short
Term Corporate Portfolio Fund indicates that the Fund seeks to
provide the highest level of current income consistent with minimum
fluctuations in principal value and current liquidity, by investing
in short-term investment grade bonds and other fixed income
obligations with an average maturity ranging from less than one
year to not more than four years. Any audited performance data for
the Fund would appear in its then current prospectus.
The following table shows the annual total returns (loss) for
Fund A, as disclosed in the current prospectus, on a total account
basis for the last five years:
1991.............. 13.08 %
1992.............. 7.19 %
1993.............. 7.07 %
1994.............. (0.08) %
1995.............. 12.74 %
FUND B - Windsor Fund: The current prospectus for the Windsor
Fund indicates that the Fund is seeking primarily long-term growth
of capital and income for its shareholders and, secondarily,
current income. Such prospectus states that the Fund emphasizes
common stock, but may also own bonds and preferred issues
convertible into common stock, and selects stock through a
valuation process which looks particularly at the relationship of
a company's underlying earning power and dividend payout to the
market price of its stock. A detailed table of per share income
and capital changes of the Fund's recent fiscal years appears in
the then current prospectus of the Fund.
The following table shows the annual total returns (loss) for Fund
B, as disclosed in the current prospectus, on a total account basis
for the last five years:
<PAGE>
1991................. 28.55 %
1992................. 16.50 %
1993................. 19.37 %
1994................. (0.15)%
1995................. 30.15 %
FUND D - Explorer Fund: The current prospectus for the
Explorer Fund indicates that the Fund seeks long-term growth of
capital for its shareholders by investing primarily in equity
securities of relatively small companies with favorable prospects
for above-average growth in market value.
THE FUND IS SUITABLE ONLY FOR INVESTORS WHO ARE WILLING TO
ASSUME HIGH INVESTMENT RISKS. A detailed table of per share income
and capital changes for the Fund's recent fiscal years appears in
the then current prospectus of the Fund.
The following table shows the annual total returns for Fund D,
as disclosed in the current prospectus, on a total account basis
for the last five years:
1991................. 55.90 %
1992................. 13.02 %
1993................. 15.41 %
1994................. 0.54 %
1995................. 26.60 %
FUND F - Vanguard Money Market Reserves - Prime Portfolio:
The current prospectus states that this Fund seeks to obtain the
maximum current income, consistent with the preservation of capital
and liquidity. The assets of the Fund will be invested in
securities maturing in less than one year, with an average weighted
maturity of less than 90 days. The Fund invests in: (1) negotiable
certificates of deposit and bankers' acceptances of U.S. banks
having total assets in excess of $1 billion; (2) repurchase
agreements that are collateralized by U.S. Treasury obligations,
including bills, notes, bonds and other debt obligations or
securities issued or guaranteed by agencies and instrumentalities
of the U.S. Government; (3) commercial paper rated A-1 by Standard
& Poor's Corporation ("S&P") or Prime-1 by Moody's Investor
Services, Inc. ("Moody's") or, if not rated, issued by a
corporation having an outstanding unsecured debt issue rated Aa or
better by Moody's or AA or better by S&P; (4) short-term corporate
obligations rated Aa or better by Moody's or AA or better by S&P;
(5) short-term Eurodollar and Yankee bank obligations; and (6)
securities issued by the United States Treasury or agencies of the
United States government. Such securities may also be purchased
subject to repurchase agreements.
The following table shows the annual total returns for Fund F,
as disclosed in the current prospectus, on a total account basis
for the last five years:
<PAGE>
1991................. 6.14%
1992................. 3.74%
1993................. 3.01%
1994................. 4.08%
1995................. 5.82%
FUND G - The Vanguard Investment Contract Trust: The Vanguard
Investment Contract Trust ("VIC Trust") was offered in July 1992 in
place of the traditional guaranteed investment contract trust ("GIC
Trust"). The VIC Trust is a commingled portfolio of investment
contracts offered by insurance companies and commercial banks which
seeks to maintain a relatively stable yield that will adjust
gradually as the interest rates of the underlying high quality
portfolio of investments change. The interest is a variable
blended rate credited on a monthly basis.
The VIC Trust accepts Plan contributions, loan repayments,
transfers from other Funds and permits certain transfers from the
VIC Trust (subject to the following limitations) on an ongoing
basis. Transfers from the VIC Trust to an equity Fund - i.e.
Windsor (Fund B), S&P 500 Index (Fund J), Wellington (Fund H),
Wellesley Income (Fund I) or Explorer (Fund D) are permitted only
once per quarter per Member. Furthermore, if a Member decides to
transfer all or a portion of the assets in his or her VIC Trust to
an equity Fund, the proceeds must remain in an equity Fund for a
minimum of 90 days. Transfers to a competing Vanguard Fund - i.e.,
Fixed Income Securities - Short Term Corporate Portfolio (Fund A)
or Money Market Reserves-Prime Portfolio (Fund F) are not
permitted.
The following table shows the average total return for the VIC
Trust, for the indicated periods ended December 31, 1995:
Average Annual Total Return
1 Year 6.23%
3 Years 6.06%
5 Years 6.57%
In addition, a GIC Trust may be established each year. A GIC
Trust is a tax-exempt collective investment trust fund that invests
exclusively in a guaranteed investment contract issued by an
insurance company. Such GIC Trust will accept Plan contributions
for up to one year, and will credit interest on the accumulated
funds for an additional two years. The interest rate that applies
to each GIC Trust will be determined in the calendar quarter prior
to its starting date. The "guaranteed" nature of this investment
and the ability of the insurance company to fulfill the contract
are directly related to the creditworthiness of the insurance
company issuing the contract. The Company has offered in the past
only GIC Trusts that invested in guaranteed investment contracts
issued by an insurance company rated A+ (SUPERIOR) by A.M. Best
Company and A or the equivalent thereof by another nationally
recognized rating agency.
<PAGE>
The annual rate of return of the 1994 GIC Trust currently
being offered by the Plan is 6.45%.
FUND H - Wellington Fund: The Wellington Fund seeks
conservation of principal, reasonable current income and profits
without undue risk by investing in a portfolio of high quality
stocks and bonds. This Fund follows a "balanced" investment plan,
with about 60-70% of its assets normally invested in common stocks
and 30-40% in fixed income securities. Common stocks are selected
principally on the basis of good quality, reasonable dividend
income, and reasonable prospects for long-term earnings and
dividend growth. The Fund's fixed income securities (corporate and
government bonds, and money market instruments) will be investment
grade consistent with attractive income yields. In addition, the
Fund may invest up to 10% of its assets in foreign securities and
may invest in stock and bond futures and options to a limited
extent.
<PAGE>
The following table shows the annual total returns (loss) for
Fund H, as disclosed in the current prospectus, on a total account
basis for the last five years:
1991................. 23.65 %
1992................. 7.93 %
1993................. 13.52 %
1994................. (0.49)%
1995................. 32.92 %
FUND I - Wellesley Income Fund: The Wellesley Income Fund
seeks current income consistent with reasonable risk by investing
in a portfolio of high quality bonds and stocks. The Fund also
offers the potential for moderate growth of capital. This Fund's
portfolio securities are selected primarily on the basis of current
yield and, secondarily, on their anticipated long-term total
return. The mix of stocks and bonds varies with the investment
environment, but bonds will constitute the majority of assets so
long as their current yield is well in excess of dividend yields on
stocks. Normally 60-65% of the Fund's assets are invested in fixed
income securities and 35-40% in common stocks.
The following table shows the annual total returns (loss) for
Fund I, as disclosed in the current prospectus, on a total account
basis for the last five years:
1991................. 21.57 %
1992................. 8.67 %
1993................. 14.65 %
1994................. (4.44)%
1995................. 28.91 %
FUND J - Vanguard Index Trust - 500 Portfolio: The Vanguard
Index Trust - 500 Portfolio, an "index fund", attempts to provide
investment results that correspond to the price and yield
performance of publicly traded stocks, in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price
Index (the "S&P Index"). This Fund invests in all of the stocks
included in the S&P Index in approximately the same proportions as
they are represented in the S&P Index. The S&P Index is a widely
accepted benchmark of the stock market's performance and represents
75% of the total market value of all U.S. common stocks. Fund J is
a growth and income stock fund, which seeks to provide long-term
capital growth and to provide dividend income by investing in
stocks that have a history of paying dividends. This Fund will be
effective on July 1, 1996.
<PAGE>
The following table shows the annual total returns for Fund J,
as disclosed in the current prospectus, on a total account basis
for the last five years:
1991.................. 30.22%
1992.................. 7.42%
1993.................. 9.89%
1994.................. 1.18%
1995.................. 37.45%
RESPONSIBILITY FOR INVESTMENTS: EACH MEMBER IS SOLELY
RESPONSIBLE FOR HIS OR HER INVESTMENT CHOICES. THE TRUSTEES, THE
COMMITTEE, THE COMPANY AND THE OFFICERS, DIRECTORS, SUPERVISORS AND
OTHER EMPLOYEES OF THE COMPANY ARE NOT EMPOWERED TO ADVISE A
MEMBER AS TO THE MANNER IN WHICH INVESTMENTS SHOULD BE MADE. THE
FACT THAT A FUND IS AVAILABLE TO MEMBERS FOR INVESTMENT UNDER THE
PLAN SHALL NOT BE CONSTRUED AS A RECOMMENDATION FOR INVESTMENT IN
THAT FUND.
NO EMPLOYEE SHOULD FEEL UNDER ANY PRESSURE TO PARTICIPATE IN
THE PLAN; PARTICIPATION IS COMPLETELY VOLUNTARY. IF AN EMPLOYEE
DOES PARTICIPATE, HE OR SHE SHOULD NOT ARRANGE FOR A PAYROLL
DEDUCTION OR MAKE ANY OTHER CONTRIBUTION FOR AN AMOUNT GREATER THAN
HE OR SHE CAN COMFORTABLY AFFORD. IT SHOULD BE BORNE IN MIND THAT
THE MARKET PRICE OF ANY INVESTMENT FLUCTUATES OVER TIME.
ACCORDINGLY, THE PROCEEDS REALIZED ON THE SALE OF ANY INVESTMENT
WILL DEPEND ON THE PREVAILING MARKET PRICE AT THE TIME OF SALE,
WHICH MAY BE MORE OR LESS THAN THE AMOUNT EXPENDED IN THE PURCHASE.
THERE IS NO ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE THEIR
AIMS.
Timing of Investment: Deferred Cash Contributions will be
accumulated by the Company and as soon as practicable thereafter
will forwarded to the Trustees for investment. No interest will be
earned on accumulated funds.
Change of Investment Election: A Member may change his or her
investment election once each calendar month by calling the ESP
InfoLine. Such election will be updated once per month and will be
effective with the next payroll period following the date of such
notice.
Transfer Between Funds: A Member may elect to transfer
(subject to certain restrictions) all or any portion of the balance
credited to his or her account between the Funds by calling the ESP
InfoLine. All transfers will be made as soon as practicable.
Transfers shall be subject to the following rules:
<PAGE>
(a) TRANSFERS MAY NOT BE MADE INTO THE GIC TRUST OR THE
COMPANY COMMON STOCK FUND.
(b) TRANSFERS OUT OF THE COMPANY COMMON STOCK FUND DURING THE
MEMBER'S EMPLOYMENT ARE LIMITED TO MEMBER CONTRIBUTIONS OR THE
EARNINGS THEREON. No matching or discount contributions may be
transferred or sold unless they have vested and only upon the
Member's retirement, termination of employment or the death of the
Member. (See "Fund E - Company Common Stock Fund" and "Vesting"
above).
(c) TRANSFERS OUT OF THE VIC TRUST OR THE GIC TRUST MAY BE
MADE ONLY INTO CERTAIN OF THE REMAINING FUNDS. Transfers out of
the VIC Trust and GIC Trust are limited and may be subject to a
penalty if transfer restrictions are not complied with. (See "Fund
G- The Vanguard Investment Contract Trust" above).
(d) TRANSFERRING THE INVESTMENTS, OR ANY PART THEREOF, IN ANY
FUND IS DONE VIA THE ESP INFOLINE.
(e) TRANSFERS FROM THE COMPANY COMMON STOCK FUND WILL BE NET
OF BROKERAGE EXPENSES AND SUBJECT TO THE RULES OF THE NEW YORK
STOCK EXCHANGE RELATING TO SALES OF LISTED SHARES.
Non-Hardship Withdrawals While Still Employed
Prior to 1987, a Member could make voluntary contributions of
after-tax dollars ("After-Tax Contributions") to the Plan. A
Member may, by calling the ESP InfoLine, withdraw from the Funds
all or a portion of his or her After-Tax Contributions, if any.
The minimum withdrawal is the lesser of $500 or the total value of
the Member's After-Tax Contributions. If a Member has attained
age 59 1/2 he or she may, by calling the ESP InfoLine, withdraw from
the Funds all or a portion of the remaining balance credited to his
or her account.
Hardship Withdrawals
Generally, a Member who has not attained age 59 1/2 and who has
withdrawn all of his or her After-Tax Contributions if any, may, in
the event of financial hardship, request a withdrawal from the
Funds of the balance credited to his or her account, excluding
earnings credited after December 31, 1988 and excluding any Company
matching contributions. Withdrawals may be subject to a 10%
Federal excise tax, in addition to the normal income tax liability
on these
<PAGE>
withdrawals as outlined below. In addition, the Company may be
required to withhold, for Federal income tax purposes 20% of the
amount withdrawn. "Financial hardship" means an immediate and
heavy financial need of a Member where such Member lacks other
available resources.
To be eligible for a hardship withdrawal, a Member must first
take the maximum loan available, or have, at that time, the maximum
number of loans outstanding, under the Plan and then may request a
withdrawal for the remaining balance necessary to satisfy the
financial need.
Immediate and Heavy Financial Needs for Hardship Withdrawal
Provided that the Member complies with the rules and
procedures set forth below, a Member may obtain from the Company a
hardship withdrawal only for the following purposes:
(a) Deductible medical expenses incurred or to be incurred by
the Member, the Member's spouse or any dependents of the Member;
(b) Purchase of a principal residence for the Member;
(c) Payment of tuition and related educational fees for post-
secondary education (but only for the next twelve months) for the
Member, the Member's spouse, or dependents of the Member; or
(d) Prevention of eviction from the Member's principal
residence or mortgage foreclosure on the Member's principal
residence.
Qualifying Amounts
All Deferred Cash Contributions and earnings (if any) on such
contributions, except earnings credited after December 31, 1988,
may be withdrawn.
Rules and Procedures for Hardship Withdrawal
A hardship withdrawal cannot exceed the amount needed and the
Member must present the Committee with evidence satisfactory of the
nature and amount of the need (e.g., mortgage commitment, medical
or tuition bills and the like). The amount needed may include the
amount necessary to pay any Federal, state or local income taxes or
penalties reasonably anticipated to result from this withdrawal.
<PAGE>
The Member must first exhaust other financial resources, such
as borrowing from the Plan itself or commercial sources, or
liquidating other assets. Also, the Member must sign a statement
certifying that the financial need cannot be relieved:
(a) through reimbursement or compensation by insurance or
otherwise;
(b) by reasonable liquidation of the Member's assets to the extent
such liquidation would not itself cause an immediate and heavy
financial need;
(c) by cessation of their 401(k) contributions to the Plan;
(d) by any other distributions or non-taxable loans from the Plan
or from any plan maintained by any other employer; or
(e) by borrowing from commercial sources on reasonable commercial
terms.
Restrictions Limiting Participation After a Hardship Withdrawal
The IRS has imposed certain restrictions limiting a Member's
contributions to the Plan following a hardship withdrawal:
(a) The Member's contributions must be suspended for twelve
months after the hardship withdrawal; and
(b) The dollar contribution limit for the year after the
hardship withdrawal must be reduced by the amount of the
contributions made during the year in which the hardship withdrawal
was made. For example, if a Member had contributed $7,000 before
making a hardship withdrawal in 1995, and was again eligible to
participate in the Plan in October 1996, the Member would be
eligible to contribute only $2,500 (the 1996 contribution limit of
$9,500 less $7,000).
Distributions
When a Member terminates employment, he or she shall receive
a lump sum distribution equal to his or her vested account balance
as soon as practicable on or immediately after the later of the
date the Member (i) attains age 65 or (ii) retires. However, a
Member may elect to receive his or her lump sum distribution as
soon as practicable on or immediately after the date of his or her
termination of employment, but not later than the 60th day after
the end of the Plan year in which the later of (i) or (ii) above
occurs. If the Member does not elect to receive his or her
distribution as soon as practicable on or immediately after his or
her termination of employment,
<PAGE>
the balance credited to his or her account will remain invested in
the Plan until he or she attains age 65 or dies, if earlier. In
this case, the Member shall make an election with respect to his
or her investments in the Funds (except that no amounts may be
invested in the Company Common Stock Fund). If a Member fails to
make this election within 90 days of his or her termination of
employment, his or her account will remain invested in the Funds in
accordance with the investment election in effect at the time he or
she left the Company (except that amounts in the Company Common
Stock Fund will be transferred to Fund F -Vanguard Money Market
Reserves - Prime Portfolio). However, if a Member has attained age
55 and his or her termination of employment is due to retirement
from the Company, the Member may elect not to receive a
distribution under the Plan and to make investment elections with
respect to the Funds (except that no amounts may be invested in the
Company Common Stock Fund). Within the 90-day period following the
Member's retirement, he or she will be required to make an
investment election concerning amounts in the Company Common Stock
Fund. If the Member fails to make an investment election with
respect to amounts invested in this Fund within 90 days, amounts
invested in this Fund will be transferred to Fund F -Vanguard Money
Market Reserves - Prime Portfolio.
Procedure at Retirement or Termination
When a Member retires or otherwise ceases to be employed by
the Company, the Member must call the ESP InfoLine to receive an
exit package. This package will contain all the materials and
forms required for a Member to receive a distribution from his or
her account and will explain to the Member the options available.
If the forms are not returned within 90 days, the Plan will be
forced to make certain decisions as described above relating to the
account for the Member.
If termination of employment is due to the Member's
retirement, he or she may elect to have the distribution made in
the form of a lump sum distribution, an annuity under one of
several options specified in the Plan, or in installments over a
period not to exceed 10 years.
Notwithstanding the foregoing: (i) generally, a lump sum
distribution may be made as soon as possible in lieu of all
benefits if the Member's account amounts to $3,500 or less, and
(ii) generally, distribution to a Member shall commence not later
than April 1 of the calendar year following the calendar year in
which he or she attains age 70 1/2.
A Member may request that some or all of the portion of his or
her account which is invested in the Company Common Stock Fund be
distributed as Company Common Stock.
Loans
The Plan permits Members to borrow from the Plan, subject to
approval by the Committee under uniform rules and regulations. The
amount which may be borrowed depends on the value
<PAGE>
of the Member's account.
A Member may apply for a loan by calling the ESP InfoLine and
following the loan instructions. The Member will receive the
Disclosure Statement and Promissory Note in the mail for review.
The loan will be deducted pro-rata from the Member's account and a
check for the proceeds of the loan, less any reasonable fees
relating to loan administration that may be assessed by the
Committee within the Committee's sole discretion, will be mailed
within two weeks. The Member will acknowledge receipt of the loan
Disclosure Statement by signing and cashing the check.
Members may only borrow up to 50% of their vested account
balance. The minimum principal amount of a loan is $1,000 and the
maximum principal amount of a loan is $50,000 less the highest
outstanding balance of loans under the Plan over the last twelve
months.
With certain exclusions, the Member's account serves as
collateral for the loan. The amount of collateral may not exceed
50% (measured at the time the loan is made) of the vested portion
of the Member's account. Such loans must be repaid in a systematic
manner (with payments at least quarterly) over a period not to
exceed (5) years. If the loan is not repaid in accordance with its
terms, the loan will, at the option of the Committee, become
immediately due and payable. Loans that are not paid will be
defaulted and reported to the IRS. The right to receive a loan
will be made available to all Members in a nondiscriminatory
manner. Up to four (4) loans may be outstanding at any time.
Although four (4) loans may be outstanding at one time, a Member
may not apply for a new fourth loan until three (3) months after
one (1) of the four (4) loans is paid off; that is, three (3)
months with only three (3) loans outstanding.
The interest rate charged on the loan will be determined from
time to time by the Committee in light of the interest rates
charged by persons in the business of lending money for loans which
would be made under similar circumstances on the date the loan is
made. Currently, the rate is the prime rate plus 1%. The prime
rate is the interest rate reported from time to time as the "prime
rate" in the "Money Rates" table appearing in The Wall Street
Journal. Interest payments on the loan will be credited to the
Member's account when paid. Interest paid on loans made after 1986
will, in general, not be deductible for Federal income tax
purposes.
A loan may be prepaid in full without penalty by calling the
ESP InfoLine for the proper forms.
<PAGE>
Administration of the Plan
The Board of Directors has appointed the Employee Savings Plan
Committee (the "Committee") consisting of three members who serve
at the discretion of the Board of Directors. These members serve
without compensation and at present are:
Name Address Position with Company
R.R. Wieczorek One MetroTech Center Vice President,
Chairman Brooklyn, NY 11201-3850 Secretary & Treasurer
W.P. Parker, Jr. One MetroTech Center Senior Vice
Brooklyn, NY 11201-3850 President
L.F. Puleo One MetroTech Center Senior Vice President
Brooklyn, NY 11201-3850
The Committee is the Plan administrator and has authority over
the operation and administration of the Plan. The Committee
presides over and makes all determinations regarding loans and
withdrawals of funds by reason of hardship. Among other things,
the Committee is responsible for interpreting the Plan, determining
any facts or resolving any questions relevant to the administration
of the Plan and, in connection therewith, correcting any
ambiguities, inconsistencies or omissions in the Plan. Any such
action taken by the Committee shall be conclusive and binding on
all persons. THE COMMITTEE AND THE COMPANY ASSUME NO
RESPONSIBILITY FOR MEMBERS' INVESTMENTS UNDER THE PLAN.
Reports to Members
Each Member will receive a periodic statement detailing the
activity by each Fund in which his or her account has been
invested. In addition, the statement will indicate the market
value of the Member's accounts. Each Member will be notified as
soon as practicable, by mail, of any changes in Funds authorized by
the Plan.
Amendment of the Plan
The Board of Directors reserves the right at any time and from
time to time to amend in whole or in part the provisions of the
Plan. In addition, the Committee is empowered to amend the Plan to
provide for the Plan's efficient administration and to promote its
underlying purposes. No amendment shall make it possible for any
part of the Funds to be used for, or diverted to, purposes other
than for the exclusive benefit of persons entitled to benefits
under the Plan. No amendment shall be made which has the effect of
decreasing the balance of any account of any Member.
<PAGE>
Merger or Consolidation
The Plan may not be merged or consolidated with, and its
assets or liabilities may not be transferred to, any other plan
unless each person entitled to benefits under the Plan would, if
the resulting plan were then terminated, receive a benefit
immediately after the merger, consolidation, or transfer which is
equal to or greater than the benefit he or she would have been
entitled to immediately before the merger, consolidation, or
transfer had the Plan then terminated.
Termination of the Plan
The Board of Directors may terminate the Plan or completely
discontinue contributions under the Plan for any reason at any
time. In case of termination of the Plan, the total amount in each
affected Member's account shall be distributed to the Member.
Voting, Stock Splits and Other Information
Pursuant to the Trust Agreement, the Trustees will vote the
shares of Company Common Stock and the other Funds in that manner
which they determine to be in the best interests of the Plan. The
Trustees, however, may have Members assume voting control of some
or all of these shares in the future if they determine that this
would best serve the interests of the Plan and its Members. Since
the inception of the Plan in 1983, each year the Trustees have
permitted the Members to vote their shares of Company Common Stock.
Since the inception of the Plan, the Trustees have voted the shares
of the other Funds.
Any stock dividends or split shares distributed by the Company
with respect to shares held in the Plan for the Member's account
will be credited to that Member's account.
No preemptive rights attach to the Company Common Stock. If
the Company should, nevertheless, determine to offer securities
through the issuance of rights to subscribe, warrants representing
the rights on all shares held under the Plan and registered in the
name of the Trustees (or their nominee) will be issued to the
Trustees. The Trustees, after consulting with the Committee if
such are not the same persons, may exercise, sell or otherwise
dispose of such rights or warrants as they may, in their
discretion, determine. Securities or other proceeds received by
the Trustees pursuant to any such action shall be credited to the
Member's account on the basis of his or her proportional holdings
of Company Common Stock under the Plan.
Assignment
Except as required by any applicable law, no benefit under the
Plan shall in any manner be anticipated, assigned or alienated, and
any attempt to do so shall be void. The foregoing shall not
prohibit the payment of benefits in accordance with the applicable
requirements of a qualified
<PAGE>
domestic relations order as defined in Section 414(p) of the Code.
CONCERNING THE TRUSTEES
Wallace P. Parker, Jr., Robert R. Wieczorek and Lenore F.
Puleo, members of the Committee, currently act as Trustees under
the Plan to receive and hold Company Common Stock and the
investment of contributions in other Funds as described herein and
in the Plan. Pursuant to a trust document executed by the
Trustees, the Trustees are subject to the same fiduciary
responsibility to the Plan's Members as an independent trustee.
Vanguard Group is jointly owned by associated member
investment funds, including the Funds described herein (other than
the Company Common Stock Fund and any GIC Trust). Vanguard Group
furnishes, at cost, corporate management, administrative and
shareholder accounting services to the member Funds. Vanguard
Group also provides all marketing and distribution services as well
as participant education to the member Funds pursuant to an order
issued by the Securities and Exchange Commission on February 25,
1981. Each Fund in the group bears a share of the net costs of
operations which are allocated among the members of the group.
The Trustees may be replaced at any time by action of the
Company's Board of Directors.
TAX CONSIDERATIONS
The Company has received from the Internal Revenue Service
(the "IRS") a determination letter confirming the qualification of
the Plan under Section 401(a) of the Code.
In general, contributions by the Company to the Plan are
deductible by the Company in the year made. The amount of
contributions credited to each Member's account, together with the
earnings thereon, in general, are not subject to any Federal income
tax or, subject to applicable laws, state and local income taxes,
until distributed.
The Federal income tax treatment of distributions from the
Plan depends upon when they are made and their form. The
withdrawal of the amount of a Member's After-Tax Contributions
(excluding earnings thereon), if any, is not subject to taxation.
In the case of withdrawals by a Member prior to attaining age
59 1/2, the excess of the value of the withdrawals over the total
amount of the Member's After-Tax Contributions, if any, less prior
withdrawals, is taxable at ordinary income tax rates. In addition,
a 10% excise tax may be imposed. The value of any Company Common
Stock withdrawn is considered to be its fair market value on the
date it is withdrawn. In the case of loans, any loans not paid off
will be considered in default and reported to the IRS. In
addition, a 10% Federal excise tax may be imposed.
<PAGE>
The Plan is required to withhold for Federal income taxes 20%
of all lump-sum distributions, including hardship withdrawals,
unless the withdrawal is transferred directly into another
qualified plan or an IRA selected by the Member. The transfer must
be arranged by the Member, who will be issued a check made payable
to the trustee of the recipient qualified plan or IRA.
In the case of a distribution to a Member that qualifies as a
lump-sum distribution under the Code, the excess of the value of
the distribution over his or her After-Tax Contributions, if any,
(less prior withdrawals) will be taxed at ordinary income rates
unless the Member is eligible for and elects 5-year averaging if he
or she has attained age 59 1/2 and participated in the Plan for
each of five taxable years prior to the year the distribution is
made. A Member is eligible for 10-year averaging if he or she
attained age 50 before January 1, 1986 and participated in the Plan
for each of five taxable years prior to the year the distribution
is made. If Company Common Stock is received as part of a lump-sum
distribution, the difference between the cost to the Trustees and
the market value of the Common Stock when distributed (the "net
unrealized appreciation") is not taxed until the Common Stock is
sold. The net unrealized appreciation is then taxed at long-term
capital gains rates. Any additional appreciation on the Common
Stock after distribution is taxed at ordinary or long-term capital
gains rates depending on how long the Common Stock is held. Under
rules established by the IRS, the Member may elect to include the
net unrealized appreciation in income at ordinary tax rates upon
distribution of the Common Stock. In this case, the net unrealized
appreciation may be subject to 5-year averaging or 10-year
averaging if the Member is eligible for that treatment.
Prior to 1987, Members could make contributions to an IRA
account ("IRA Contributions") through the Plan. The earnings on
Members' IRA Contributions are not subject to any Federal, state or
local income taxes until distributed. Upon distribution, the
entire amount received which is attributable to a Member's IRA
Contributions (the sum of his or her IRA Contributions and the
earnings thereon) is taxable at ordinary income tax rates. If a
distribution is made prior to attaining age 59 1/2 an additional
tax will be imposed in an amount equal to 10 percent of the amount
received unless the distribution is transferred to another IRA
established by the Member. In such event, no part of the
distribution will be taxable until distributed from the new IRA.
IN VIEW OF THE COMPLEXITY OF THE FOREGOING RULES, THE COMPANY
AND THE COMMITTEE RECOMMEND THAT EACH MEMBER CONSULT HIS OR HER OWN
TAX ADVISOR PRIOR TO MAKING WITHDRAWALS FROM THE PLAN AND IN
DETERMINING THE TAX TREATMENT OF DISTRIBUTIONS FROM THE PLAN. THE
COMPANY AND ITS EMPLOYEES AND THE COMMITTEE MAY NOT RENDER
INDIVIDUAL TAX ADVICE.
<PAGE>
DESCRIPTION OF COMMON STOCK
The following statements with respect to the Common Stock
are based on certain provisions of the Company's Restated
Certificate of Incorporation, as amended, and the Company's By-Laws
currently in effect.
Dividend Limitation
After dividends on all outstanding classes of Preferred Stock
have been paid or declared and after all sinking fund requirements
have been met or funds set apart for their payment, the Common
Stock is entitled to such dividends as may be declared by the Board
of Directors and the Company may purchase or otherwise acquire
Common Stock out of funds legally available for either of such
purposes.
Liquidation Rights
Upon liquidation of the Company, any net assets remaining
after payment to creditors and payment to the holders of the
Preferred Stock of the full amounts to which they are entitled to
receive are distributable pro rata to the holders of the Common
Stock.
Voting Rights; Other
The Common Stock entitles the holder to one vote per share.
There are no cumulative voting rights. The Company's Board of
Directors is divided into three classes, as nearly equal in number
as possible, with directors elected generally to serve for terms of
three years.
If dividends on any shares of any class of Preferred Stock
shall be in arrears in an amount equivalent to four full quarterly
dividends on all shares then outstanding, the holders thereof
voting as a class are entitled to elect two directors. Such right
shall terminate upon payment or declaration of all dividends
accumulated on the Preferred Stock of the particular class. In
addition, the holders of each class of Preferred Stock are entitled
to vote as a class on matters involving the sale, lease or transfer
of substantially all of the property or business of the Company,
the merger or consolidation of the Company with any other
corporation, and in certain other instances where the rights of the
holders thereof may be adversely affected.
Holders of Common Stock are not entitled to preemptive rights.
When purchased and paid for as contemplated hereby, the
additional Common Stock will be fully paid and nonassessable.
<PAGE>
_____________________
LEGAL OPINIONS
The validity of the securities offered hereby has been passed
upon for the Company by Messrs. Cullen and Dykman, 177 Montague
Street, Brooklyn, New York 11201.
All legal matters pertaining to regulation, franchises,
permits and titles referred to in any Annual Report on Form 10-K of
the Company and incorporated by reference in this Prospectus also
have been or will be passed upon by Messrs. Cullen and Dykman. The
statements made as to matters of law and legal conclusions under
the caption "Description of Common Stock" in this Prospectus have
been reviewed by Messrs. Cullen and Dykman and are set forth herein
in reliance upon the opinion of such firm as counsel.
_____________________
EXPERTS
The consolidated financial statements and supplemental
schedules incorporated by reference in this Prospectus, and
elsewhere in the Registration Statement, except for the unaudited
interim financial information of the Company and subsidiaries for
the quarters ended December 31, 1995 and March 31, 1996, have been
audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in
giving said reports.
______________________
INDEMNIFICATION
Sections 721 through 726 of the Business Corporation Law of
the State of New York ("BCL") provide for indemnification of
directors and officers under certain conditions and subject to
specific limitations. The law has been liberalized to permit New
York corporations, among other things, to supplement the statutory
indemnification with additional "nonstatutory" indemnification for
directors and officers meeting a specified standard of conduct and
to advance to officers and directors litigation expenses under
certain circumstances. The Company's Board of Directors has
adopted an indemnification By-Law provision in order to afford
directors and officers the additional indemnification and
litigation expense protection permitted under New York law.
Article VII of the Company's By-Laws provides for indemnification
of, and advancement of litigation expenses incurred by, directors
and officers of the Company to the fullest extent permitted by law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of
<PAGE>
the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933
and is therefore unenforceable.
In addition, the Company's Restated Certificate of
Incorporation, as amended, provides for the elimination and
limitation of personal liability of directors for damages for any
breach of duty in such capacity to the fullest extent permitted by
the BCL.
<PAGE>
THE BROOKLYN UNION
TABLE OF CONTENTS Page GAS COMPANY
Available Information.........2
Incorporation of Certain
Documents by Reference......2
Description of the Plan.......4 The Brooklyn Union
Gas Company
Summary.....................4
Eligibility.................5 Employee Savings Plan
Member Contributions........5
Company Contributions.......6
Vesting.....................7
Contribution Limitations....7
Maximum Annual Additions....7
Investment of 1,361,302 Shares
Contributions.............8
Non-Hardship Withdrawals
While Still Employed......15 Common Stock
Hardship Withdrawals........15
Distributions...............17 ($.33 1/3 Par Value)
Loans.......................18
Administration of
the Plan..................20
Assignment..................21
Concerning the Trustees.......22 PROSPECTUS
Tax Considerations............22
Description of Common Stock...24 May 31, 1996
Legal Opinions................25
Experts.......................25
Indemnification...............25
No person has been authorized to give any information or to
make any representation other than those contained in this
Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by
the Company, the Committee or the Plan. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy,
any securities other than those to which it relates, or an offer or
solicitation with respect to those securities to which it relates
to any person in any jurisdiction where such offer or solicitation
would be unlawful.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed on (a) and (b) below are
incorporated herein by reference.
(a) Annual Report of The Brooklyn Union Gas Company (the
"Company" or the "Registrant") on Form 10-K for the year ended
September 30, 1995 filed pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Registrant's Quarterly Reports on Form 10-Q for
the quarterly periods ended December 31, 1995 and March 31, 1996
filed pursuant to Section 13 of the Exchange Act.
In addition, all documents subsequently file by the
Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and
to be part thereof from the date of filing of such documents.
Item 4. Description of Securities
The following statements with respect to the Company's
Common Stock, par value $.33 1/3 per share (the "Common Stock), are
based on certain provision of the Company's Restated Certificate of
Incorporation, as amended, and the Company's By-Laws currently in
effect.
The Company is authorized to issue seventy million
(70,000,000) shares of Common Stock, and two classes of preferred
stock ("Preferred Stock) as follows: nine hundred thousand
(900,000) shares of Cumulative Preferred Stock, $100 par value per
share, and two million (2,000,000) shares of Cumulative Preferred
Stock, $25 par value per share. The Preferred Stock may be issued
from time to time in series as the Board of Directors of the
Company may determine, and the respective series dividend rates,
redemption terms, amounts payable on certain liquidations and other
terms not inconsistent with the Restated Certificate of
Incorporation are fixed by the Board of Directors with respect to
any such series prior to its issuance.
When purchased and paid for as contemplated hereby, the
Common Stock offered hereby will be fully paid and non-assessable
by the Company, and will be listed on the New York Stock Exchange.
Holders of Common Stock are not entitled to preemptive
rights.
<PAGE>
Dividends
After dividends on all outstanding classes of Preferred
stock have been paid or declared and all sinking fund requirements
on the Preferred Stock have been met or funds set apart for their
payment, the Common Stock is entitled to such dividends as may be
declared by the Board of Directors and the Company may purchase or
otherwise acquire Common Stock out of funds legally available for
either of such purposes.
Liquidation Rights
Upon liquidation of the Company, any net assets remaining
after payment to creditors and payment to the holders of the
Preferred Stock of the full amounts to which they are entitled to
receive are distributable pro rata to the holders of the Common
Stock.
Voting Rights
The Common Stock entitled the holder to one vote per
share. There are no cumulative voting rights. The Company's Board
of Directors is divided into three classes, as nearly equal in
number as possible, with directors elected generally to serve for
term of three years.
If dividends on any shares of any class of Preferred
Stock are in arrears in an amount equivalent to four full quarterly
dividends on all shares then outstanding, the holders thereof
voting as a class are entitled to elect two directors. Such right
shall terminate upon payment or declaration of all dividends
accumulated on the Preferred Stock of the particular class. In
addition, the holders of each class of Preferred Stock are entitled
to vote as a class on matters involving the sale, lease or transfer
of substantially all of the property of business of the Company,
the merger or consolidation of the Company wit any other
corporation, and in certain other instances where the rights of the
holders thereof may be adversely affected.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Officers and Directors.
Sections 721 through 726 of the Business Corporation Law of
the State of New York ("BCL") provide for indemnification of
directors and officers under certain conditions and subject to
specific limitations. The law has been liberalized to permit New
York corporations, among other things, to supplement the statutory
indemnification with additional "nonstatutory" indemnification for
directors and officers meeting a specified standard of conduct and
to advance to officers and directors litigation expenses under
certain circumstances. The Company's Board of Directors has
adopted an indemnification By-Law provision in order to afford
directors and officers the additional indemnification and
litigation expense protection permitted under New York law.
<PAGE>
Article VII of the Company's By-Laws provides for indemnification
of, and advancement of litigation expenses incurred by, directors
and officers of the Company to the fullest extent permitted by law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of
the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933
(the "Securities Act") and is therefore unenforceable.
In addition, the Company's Restated Certificate of
Incorporation, as amended, provides for the elimination and
limitation of personal liability of directors for damages for any
breach of duty in such capacity to the fullest extent permitted by
the BCL.
Item 7. Exemption from Registration Claim.
Not applicable.
Item 8. Exhibits
The following exhibits are filed as part of this
Registration Statement:
<PAGE>
INDEX TO EXHIBITS PAGE
(4) Instruments defining the rights of security holders,
including indentures:
(a) Articles of incorporation and by-laws:
By-laws of the Company, dated June 28, 1995,
incorporated by reference from Exhibit 3(ii) to Form
8-K, dated September 5, 1995.
Restated Certificate of Incorporation of the Company,
filed August 1, 1989, and Certificates of Amendment
filed March 16, 1992 and July 2, 1993, incorporated by
reference from Exhibit 4(b) to Post-Effective Amendment
No. 2 to Form S-3 Registration Statement No. 33-50249.
(b) The Brooklyn Union Gas Company Employee Savings Plan
(401-K), as amended and restated as of January 1, 1993,
incorporated by reference from Exhibit 4(b) to Form S-8
Registration No. 33-51561.
(c) Form of The Brooklyn Union Gas Company Employee Savings
Plan Trust Agreement between The Brooklyn Union Gas
Company and the Trustees, being Wallace P. Parker, Jr.,
Robert R. Wieczorek and Lenore F. Puleo, dated as of
October 25, 1989, incorporated by reference from
Exhibit 4(d) to Post-Effective Amendment No. 1 to Form
S-8 Registration Statement No. 33-32856.
(5) Opinion re legality: Opinion of Messrs. Cullen and
Dykman II-5
(15) Letter re unaudited interim financial information II-7
(23) Consents of experts and counsel:
(a) Consent of Arthur Andersen LLP II-8
(b) Consent of Messrs. Cullen and Dykman II-9
(24) Powers of attorney - included on Signature Page of this
Registration Statement.
<PAGE>
Item 9. Undertakings
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in
periodic reports file by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act that are incorporate by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provision, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-
8 and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on May 31, 1996.
THE BROOKLYN UNION GAS COMPANY
By /s/ Robert B. Catell
Robert B. Catell, Chairman,
Chief Executive Officer and
Director
POWER OF ATTORNEY
Each of the undersigned does hereby appoint Robert B.
Catell, Vincent D. Enright and Richard M. Desmond, and each of them
severally, his true and lawful attorneys to execute on behalf of
the undersigned any and all amendments to this Registration
Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith with the Securities and
Exchange Commission; each of such attorneys shall have the power to
act hereunder with or without the others.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities indicated on May 31, 1996.
Signature
Title
/s/ Robert B. Catell
(Robert B. Catell)
Chairman, Chief Executive
Officer and Director
/s/ Vincent D. Enright
(Vincent D. Enright)
Senior Vice President and Chief Financial Officer
/s/ Richard M. Desmond
(Richard M. Desmond)
Vice President, Comptroller and Chief Accounting Officer
/s/ Kenneth I. Chenault
(Kenneth I. Chenault)
Director
/s/ Andrea S. Christensen
(Andrea S. Christensen)
Director
/s/ Donald H. Elliott
(Donald H. Elliott)
Director
/s/ Alan H. Fishman
(Alan H. Fishman)
Director
/s/ James L. Larocca
(James L. Larocca)
Director
/s/ Edward D. Miller
(Edward D. Miller)
Director
/s/ James Q. Riordan
(James Q. Riordan)
Director
<PAGE>
The Plan. Pursuant to the requirements of the Securities
Act of 1933, the administrator of the plan has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York,
State of New York, on May 31, 1996.
THE BROOKLYN UNION GAS COMPANY
EMPLOYEE SAVINGS PLAN
By /s/ Wallace P. Parker, Jr.
Wallace P. Parker, Jr.
Committee Member
By /s/ Robert R. Wieczorek
Robert R. Wieczorek
Committee Member
By /s/ Lenore F. Puleo
Lenore F. Puleo
Committee Member
Exhibit 5
Cullen and Dykman
177 Montague Street
Brooklyn, New York 11201-3633
Telephone (718) 855-9000
Telecopier (718) 855-4282
May 31, 1996
The Brooklyn Union Gas Company
One MetroTech Center
Brooklyn, New York 11201
Dear Sirs:
Reference is made to the Registration Statement on Form S-8
(the "Registration Statement") filed by your Company on the date
hereof with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), for the purpose of
registering 1,225,000 shares of Common Stock, par value $.33 1/3
per share (the "Additional Common Stock"), and setting forth, among
other things, the terms pursuant to which the Company plans to
offer the shares of Additional Common Stock pursuant to its
Employee Savings Plan (the "Plan"). We are acting as your counsel
and are supervising corporate proceedings in connection with the
authorization, issuance and sale of the Additional Common Stock.
In this connection, we have examined such corporate records,
certificates and other documents and reviewed such questions of law
as we have considered necessary or appropriate for the purposes of
this opinion.
Upon the basis of such examination and review, we advise you
that your Board of Directors has duly authorized the issuance and
sale of the Additional Common Stock and the Company has received
the approval of the Public Service Commission of the State of New
York relating to the issuance of the Additional Common Stock, and
when
(i) the above-mentioned Registration Statement becomes
effective under the Act;
(ii) the certificates representing the Additional Common Stock
have been duly signed on behalf of the Company, counter-signed by
a transfer agent of the Company's Common Stock and registered by a
registrar of the Company's Common Stock; and
(iii) the Additional Common Stock has been duly delivered
against payment received therefor from time to time, as
contemplated by such Registration Statement and the terms of the
Plan;
in our opinion, the Additional Common Stock will have been validly
issued, and will be fully paid and nonassessable.
In rendering the foregoing opinion, we have, with your
approval, relied as to certain matters on information obtained from
public officials, officers of the Company and other sources
believed by us to be responsible, and we have assumed that the
certificates for the Additional Common Stock will conform to the
specimen thereof examined by us, and that the signatures on all
documents examined by us are genuine, assumptions which we have not
independently verified.
Very truly yours,
CULLEN AND DYKMAN
EXHIBIT 15
May 31, 1996
The Brooklyn Union Gas Company
One MetroTech Center
Brooklyn, New York 11201
Gentlemen:
We are aware that The Brooklyn Union Gas Company has incorporated
by reference in its Registration Statement on Form S-8 dated May
31, 1996, its Forms 10-Q for the quarter ended December 31, 1995
and the quarter ended March 31, 1996, which includes our reports
dated January 24, 1996 and April 24, 1996, respectively, covering
the unaudited interim consolidated financial information contained
therein. Pursuant to Regulation C of the Securities Act of 1933,
these reports are not considered a part of the Registration
Statement prepared or certified by our firm or reports prepared or
certified by our firm within the meaning of Sections 7 and 11 of
the Act.
Very truly yours,
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
EXHIBIT 23 (a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the
incorporation by reference in this Registration Statement of our
report dated October 23, 1995, included in the Company's Form 10-K
for the year ended September 30, 1995 and to all references to our
firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
New York, New York
May 31, 1996
Exhibit 23(b)
CONSENT OF COUNSEL
We hereby consent to the reference to our firm under the
caption "Legal Opinions" in the Prospectus constituting a part of
this Registration Statement of The Brooklyn Union Gas Company
Employee Savings Plan, to be filed with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933, as
amended (the "Act"), for the registration of shares of Common
Stock, $.33 1/3 par value. In giving this consent, we do not admit
that we are experts with respect to any part of such Registration
Statement within the meaning of the term "expert" as used in the
rules and regulations of the Securities and Exchange Commission
under the Act or that we come within the category of persons whose
consent is required under Section 7 of the Act.
CULLEN AND DYKMAN
Brooklyn, New York
May 31, 1996
