As filed with the Securities and Exchange Commission on July 15, 1996
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
The Coastal Corporation
(Exact name of registrant as specified in its charter)
Delaware 74-1734212
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
(713) 877-1400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------------
Austin M. O'Toole, Esq.
Senior Vice President and Secretary
The Coastal Corporation
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
(713) 877-1400
(Name, address, including zip code, and telephone number including area code,
of agent for service)
---------------------------
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the followng
box. X
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. _
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. _
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of earlier effective registration statement for
the same offering. _
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. _
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Amount maximum Proposed Amount of
Title of each class of to be offering price maximum registration
securities to be registered registered per unit (1) offering price <F1> fee
--------------------------- ---------------- ---------------- ----------------- -------------
<S> <C> <C> <C> <C>
Common Stock of The Coastal Corporation,
par value 331/3(cent)per share............... 1,000,000 shares $43.19 $43,190,000 $14,893.10
================ ================ ================= =============
<FN>
<F1>
Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 (c) under the Securities Act of 1933, as amended. Such
estimate is based on the average of the high and low sales prices in the daily
composite list for transactions on the New York Stock Exchange and other markets
on July 12, 1996 ($43.19 per share).
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1993 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Coastal Corporation ("Coastal" or the "Company") hereby offers
participation in its Dividend Reinvestment and Stock Purchase Plan (the "Plan").
The Plan is designed to provide investors with a convenient and economical way
to purchase shares of Common Stock ("Common Stock") of the Company and to
reinvest their cash dividends in additional shares of Common Stock.
Under the Plan investors may:
o Automatically reinvest, in shares of Common Stock, all or a portion of
the cash dividends paid on shares of Common Stock, Class A Common Stock
or Preferred Stock, Series A, B, C or H ("Eligible Securities")
registered in their name or shares of Common Stock credited to their
Plan account.
o Make an initial investment in shares of Common Stock of at least $250
or, if already a holder of Eligible Securities, invest in additional
shares of Common Stock by making optional cash payments at any time of
at least $50 per single investment.
o Deposit certificates representing shares of Common Stock with the Plan
Administrator for safekeeping.
o Sell shares of Common Stock credited to their Plan account through the
Plan Administrator.
o Withdraw, upon written request, certificates for whole shares of Common
Stock credited to their Plan account.
At the option of the Company, shares of Common Stock may be purchased for
the Plan from newly issued shares, treasury shares or shares purchased in the
open market. Open market purchases will be through an independent agent selected
by the Company. Coastal Common Stock is listed on the New York Stock Exchange
under the trading symbol CGP. The closing price of the shares of Common Stock on
July 12, 1996, as reflected on the New York Stock Exchange listing of composite
transactions was $43.19 per share.
The price of newly issued or treasury shares purchased under the Plan will
be the average of the high and low sales prices reported on the New York Stock
Exchange listing of composite transactions for the trading day preceding the
investment date. The price of shares of Common Stock purchased or sold in the
open market will be the weighted average price per share (adjusted for brokerage
commissions and applicable taxes, if any) of the aggregate number of shares
purchased or sold, respectively, for the relevant investment date. The Company
will pay the costs of administration of the Plan, except that Plan participants
will bear the cost of brokerage commissions and transfer taxes, if any, relating
to shares purchased or sold in the open market.
To the extent required by applicable law in certain jurisdictions, shares
of Common Stock offered under the Plan to persons not presently record holders
of Common Stock are offered only through a registered broker/dealer in such
jurisdictions.
This Prospectus should be retained by participants in the Plan for future
reference.
------------------------------------
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 July 15, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549-1004, and at regional offices of the
Commission at the following addresses: 7 World Trade Center, Suite 1300, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549-1004. In addition, similar
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005.
This Prospectus does not contain all the information set forth in the
Registration Statement (the "Registration Statement"), of which this Prospectus
is a part, and exhibits relating thereto, which Coastal has filed with the
Commission in Washington, D.C. Statements contained herein concerning the
provisions of documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission. Copies of the Registration
Statement and the exhibits are on file at the offices of the Commission and may
be obtained, upon payment of the fee prescribed by the Commission, or may be
examined without charge at the public reference facilities of the Commission
described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Coastal hereby incorporates in this Prospectus by reference the following
documents which have been filed with the Commission pursuant to the Exchange
Act:
Coastal's Annual Report on Form 10-K for the year ended December 31,
1995 (the "1995 Annual Report"); and
Coastal's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1996.
All documents filed by Coastal pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon request, a copy of any of the documents incorporated by reference herein,
except for the exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Such requests should be directed
to The Coastal Corporation, Coastal Tower, Nine Greenway Plaza, Houston, Texas
77046-0995, Attention: Corporate Secretary, telephone number:
(713) 877-1400.
THE COMPANY
Coastal, acting through its subsidiaries, is a diversified energy holding
company with operations in natural gas marketing, processing, storage and
transmission; petroleum refining, marketing and distribution and chemicals; gas
and oil exploration and production; coal mining; and power. The Company was
incorporated under the laws of Delaware in 1972 to become the successor parent,
through a corporate restructuring, of a corporate enterprise founded in 1955.
The Company's principal office is located at Coastal Tower, Nine Greenway Plaza,
Houston, Texas 77046-0995 (telephone number (713) 877-1400).
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<PAGE>
USE OF PROCEEDS
At present, it is intended that the Plan will acquire shares of Common
Stock through open market purchases, in which case the Company will not receive
the proceeds from such purchases. In the event that newly issued or treasury
shares of Common Stock are purchased under the Plan, the proceeds from such
sales will be used for general corporate purposes.
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN
Purpose
The Plan offers stockholders of the Company, employees of the Company and
its subsidiaries and other investors a convenient and economical way to purchase
shares of the Company's Common Stock.
Principal Features
Some of the features of the Plan which are described in this Prospectus
are:
o A registered holder of Eligible Securities may become a
participant ("Participant") by electing to have cash dividends on
all or a portion of his or her Eligible Securities reinvested in
shares of Common Stock, depositing certificates representing
shares of Common Stock into the Plan for safekeeping or making an
optional investment of at least $50 to purchase shares of Common
Stock through the Plan.
o Interested investors, not already registered stockholders of the
Company, may become Participants by making an initial investment
of at least $250 to purchase shares of Common Stock through the
Plan.
o Participants may invest additional funds in shares of Common Stock
through optional investments of at least $50 for any single
investment up to $120,000 per calendar year.
o Employees of the Company and its subsidiaries may participate in
the Plan through automatic payroll deductions (minimum
contribution of $5 per week), or through the other features of the
Plan.
o Shares of Common Stock are held by the Plan for safekeeping at no
charge. In addition, a Participant may submit certificates for
shares of Common Stock registered in the Participant's name to the
Plan Administrator for deposit into the Participant's account.
o Participants may direct the Company to transfer all or a portion
of their Plan shares to another person or entity.
o Personal record keeping is simplified by the Company's issuance of
quarterly statements and confirmations of transactions in a
Participant's account.
o Participants may request that their Plan shares be sold, subject
to certain restrictions.
Plan Administration
The Company, as administrator of the Plan ("Administrator"), is responsible
for receiving cash investments, forwarding funds and purchase/sale instructions
to be used to purchase/sell shares of Common Stock in the open market to an
agent selected by the Company (an "Independent Agent"), maintaining records of
Participant account transactions, issuing statements ("Statement of Account")
and performing certain other duties required by the Plan. The Administrator, or
its nominee, will hold a balance certificate registered in its name representing
the aggregate number of shares of Common Stock in the Plan and credited to
Participants' accounts. The Independent Agent is responsible for purchasing
3
<PAGE>
and selling shares of Common Stock in the open market for Participants' accounts
in accordance with provisions of the Plan.
The Administrator may be contacted by writing to:
The Coastal Corporation
Shareholder Relations Department
Nine Greenway Plaza
Houston, Texas 77046-0995
or by calling toll free (800) 788-2500, or in Houston (713) 877-6821. Facsimile
messages are received 24 hours a day at (713) 877-7071.
Eligibility
Any person or entity, whether or not a registered holder of Eligible
Securities, may participate in the Plan, provided that (i) such person or entity
fulfills the prerequisites for participation described below under "Plan
Enrollment" and (ii) in the case of citizens or residents of a country other
than the United States, its territories and possessions, participation would not
violate local laws applicable to the Company, the Plan or the Participant.
Plan Enrollment
After receiving a copy of this Prospectus, eligible applicants may join the
Plan by completing and returning an enrollment form ("Enrollment Form") to the
Administrator. In order to participate in the Plan, an applicant must (1) elect
to have cash dividends on all or a portion of their Eligible Securities
registered in their name reinvested in shares of Common Stock, or (2) make an
initial investment (see "Initial and Optional Investments" below) or (3) deposit
one or more certificates for shares of Common Stock with the Administrator for
safekeeping. Registered stockholders should sign the Enrollment Form exactly as
their names appear on their stock certificates.
Eligible Securities held beneficially in street name (e.g., in the name of
their broker or other agent) may not participate in the Plan. However, by
following the procedure set forth under "Transfer of Eligible Securities From a
Brokerage Firm" below, these securities can become eligible to participate in
the Plan.
Employees currently participating in the Coastal Stock Purchase Plan, which
will be replaced by this Plan, will automatically be Participants in this Plan
without submitting a new Enrollment Form.
Participation in the Plan will begin after a properly executed Enrollment
Form has been accepted by the Administrator. A Participant, by completing an
Enrollment Form and as a condition of participation in the Plan, for himself,
his heirs, executors, administrators, legal representatives and assigns,
approves of, and agrees to be bound by, the terms and conditions of the Plan and
any subsequent amendments hereto. The Company reserves the right to reject any
Enrollment Form for any reason, including as may be required by any state
securities law.
Reinvestment of Cash Dividends
Participants may elect to reinvest all or a portion of cash dividends paid
on (1) Eligible Securities registered in their names, (2) shares of Common Stock
purchased through the Plan and credited to their accounts and (3) shares of
Common Stock deposited into the Plan for safekeeping, by designating such
election on their Enrollment Form. If a Participant does not make an election,
all cash dividends paid on shares of Common Stock credited to a Participant's
account that
4
<PAGE>
were purchased through the Plan or deposited into the Plan for safekeeping will
be reinvested. Amounts reinvested will be reduced by any amount which is
required to be withheld under any applicable tax or other statutes. If partial
reinvestment is specified, that portion of cash dividends not reinvested will be
paid to the Participant by check.
Dividends will be reinvested in shares of Common Stock beginning either on
the date of payment, if such date is an investment date (see "Investment Dates"
below), or on the first Investment Date following such payment. Dividends held
by the Administrator pending reinvestment pursuant to the Plan will be credited
to the Participant's account and held in a segregated escrow account at a bank
separate from Company funds. No interest will be paid on dividends held by the
Administrator pending reinvestment.
Initial and Optional Investments
A Person who is not a registered holder of Eligible Securities may become a
Participant by making a minimum cash payment of $250. A registered holder of
Eligible Securities may become a Participant by making a minimum cash payment of
$50 or by electing other options herein. Initial cash payment, for investment in
shares of Common Stock, must be made by check or money order, in U.S. funds
payable to The Coastal Corporation DRSPP, and accompanied by a completed
Enrollment Form returned to the Administrator. No initial investment is required
for eligible employees who initiate payroll deduction of at least $5 per week at
the time of enrollment. The Company or any of its subsidiaries may submit
optional payments for the account of any eligible employee pursuant to its
discretion.
Participants may make optional investments by check, money order or wire
transfer, in U.S. funds payable to The Coastal Corporation DRSPP, or by payroll
deduction for eligible employees. Optional investments must be at least $50 for
any single investment and may not exceed in the aggregate $120,000 per calendar
year including any initial investment.
Initial and optional investments must be received by the Administrator no
later than 1:00 p.m. Central time one business day prior to an Investment Date
to be invested beginning on that Investment Date. Otherwise, the payment will be
held by the Administrator and invested beginning on the next Investment Date.
Upon written request received by the Administrator no later than two business
days prior to the applicable Investment Date, an initial or optional investment
payment not already invested under the Plan will be returned to the sender.
However, no refund of a deposited check or money order will be made until the
funds have been credited to the Plan account. Accordingly, refunds may be
delayed pending such receipt of funds. Funds held by the Administrator pending
investment pursuant to the Plan will be credited to the Participant's account
and held in a segregated trust account at a bank separate from Company funds. No
interest will be paid on funds held by the Administrator pending investment.
Funds not invested in Common Stock within 30 days of receipt will be returned to
the sender.
Investment Date
Investment Dates are the 1st and 15th of each month, or, if any such date
is not a day on which the New York Stock Exchange is open, the next day on which
it is open.
Source and Price of Shares
At the option of the Company, shares purchased for the Plan may be from the
Company's authorized but unissued shares of Common Stock, shares held in the
Company treasury or shares purchased in the open market by the Independent
Agent. With regard to open market purchases by the Independent Agent, neither
the Participant nor the Company, as Administrator, have any control over the
time and price at which the shares are purchased.
5
<PAGE>
The price of newly issued or treasury shares purchased for the Plan will be
the average of the high and low sales prices reported on the New York Stock
Exchange listing of composite transactions for the trading day preceding the
Investment Date. The price of shares of Common Stock purchased in the open
market will be the weighted average price per share (plus brokerage commission
and applicable taxes, if any) of the aggregate number of shares purchased on the
Investment Date by the Independent Agent. The Administrator may commingle
Participants' funds for the purpose of executing purchases, and may offset
purchases of shares against sales of shares to be made for Participants under
the Plan with respect to the same Investment Date, resulting in a net purchase
or a net sale of shares.
Shares will be purchased or sold as soon as practicable beginning on the
relevant Investment Date and in no event later than 30 days after the relevant
Investment Date, except as otherwise necessary under any applicable federal
securities laws or other government or stock exchange regulations.
Dividend and voting rights on shares will commence upon settlement, which
is normally three business days after purchase.
Shares purchased within a period of three (3) business days prior to and
including a dividend record date are considered purchased "ex-dividend" and
therefore are not entitled to payment of that dividend.
Safekeeping Service
At the time of enrollment, or thereafter, a Participant may deposit
certificates for shares of Common Stock registered in the Participant's name
into the Plan, to be held by the Administrator or its nominee, by delivering a
completed Enrollment Form and such certificates to the Administrator. The
certificates should not be endorsed. Deposited shares will be transferred into
the name of the Administrator or its nominee and credited to the Participant's
account. Thereafter, such shares of Common Stock will be treated in the same
manner as shares purchased under the Plan. Cash dividends paid on shares
deposited into the Plan for safekeeping will be fully reinvested in shares of
Common Stock unless the Participant notifies the Administrator otherwise on the
Enrollment Form.
Transfer of Eligible Securities
From a Brokerage Firm
Owners of Eligible Securities held beneficially in street name may
participate in the Plan with respect to such securities by instructing the
record holder (e.g., their broker or other agent) to transfer those securities
into their own name and depositing shares of Common Stock into the Plan for
safekeeping and electing to reinvest the cash dividends on such Eligible
Securities.
To A Brokerage Firm
Participants may transfer all or part of their Plan shares to a brokerage
account by submitting written instructions and a properly executed stock power
to the Administrator. The stock power should include the number of shares to be
transferred, the complete name and address of the brokerage firm (transferee),
and the name and phone number of the broker handling the account. The stock
power must be signed as the Participant's name appears on the Plan account and
must include a Medallion Signature Guarantee (stock brokers and most banks are
familiar with the requirements of a Medallion Signature Guarantee). A stock
certificate will be issued and forwarded according to the Participant's
instructions within 72 hours of receipt of the request by the Administrator.
6
<PAGE>
Alternatively, a Participant may move Plan shares to a brokerage account by
requesting a certificate in the Participant's name and presenting that
certificate to their broker for deposit in a brokerage account for their benefit
(see "Certificates for Shares" below).
Transfer of Shares Within the Plan
Participants may transfer, whether by gift, private sale or otherwise,
ownership of all or part of their Plan shares to the account of another
Participant or establish, by such transfer, an account for a person or entity
not already a Participant by submitting written instructions and a properly
executed stock power to the Administrator. The stock power should include the
number of shares to be transferred and the complete name and address of the
transferee. The stock power must be signed as the Participant's name appears on
the Plan account and must include a Medallion Signature Guarantee.
If the transferee is not already a Participant, an account will be opened
in the transferee's name and full dividend reinvestment automatically
established. Unless otherwise requested by the transferor, the transferee will
be sent a confirmation showing the transfer of such shares into their account
along with an Enrollment Form which should be executed and returned to the
Administrator, and may be used to elect other Plan options. The transferor may
request that such confirmation and Enrollment Form be sent to the transferor for
personal delivery and/or that a gift certificate be provided. The transferor may
send the gift certificate directly or request that it be sent by the
Administrator to the transferee with the confirmation.
Reports to Participants
Each Participant will receive a quarterly Statement of Account showing
current share balance; quarterly amount invested; purchase price per share;
number of shares purchased, deposited, sold, transferred, or withdrawn during
the quarter; and cash, if any, credited to their account pending investment. The
Participant should retain these statements to be able to determine the cost
basis of shares purchased under the Plan for income tax purposes.
A confirmation will be sent to each Participant promptly after an initial
investment; and after each optional investment, sale or transfer. Payroll
deductions and dividend reinvestments will not be individually confirmed, but
will appear on the quarterly Statement of Account.
In addition, each Participant will receive copies of the same
communications sent to other stockholders, including the Company's annual and
quarterly reports to stockholders, notices of annual meetings and proxy
statements, and IRS information returns for reporting dividend income.
Statements of Account, confirmations and stockholder reports will be mailed
to the Participant's address of record. Therefore, Participants should promptly
notify the Administrator of any change of address.
Changing Plan Options
A Participant may change his or her Plan options by delivering written
instructions or a new Enrollment Form to that effect to the Administrator. To be
effective with respect to a particular cash dividend, such instructions must be
received by the Administrator on or before the record date for such cash
dividend.
7
<PAGE>
Sale of Plan Shares
A Participant may request that all or a portion of their Plan shares be
sold by giving written instructions to the Administrator. The Administrator will
instruct the Independent Agent to make the sale beginning on the first
Investment Date following receipt of the request (see "Source and Price of
Shares" above). With regard to open market sales by the Independent Agent,
neither the Participant nor the Company, as Administrator, have any control over
the time and price at which the shares are sold. The Participant will receive
the proceeds from the sale, less brokerage commission and transfer taxes, if
any. As of the date of this Prospectus, the brokerage commission, which is
subject to change, is $.05 per share. Proceeds will be paid to the Participant
by check. A request to sell all shares in a Participant's account will be
treated as a termination of participation in the Plan (see "Termination of
Participation" below).
Certificates for Shares
A Participant may obtain, free of charge at any time, a certificate for all
or part of the whole shares of Common Stock credited to his or her Plan account
upon written request to the Administrator. Unless otherwise requested, such
certificate(s) will be mailed by First Class Mail-Insured within two business
days of the Administrator's receipt of the written request to the Participant's
address of record.
Termination of Participation
A Participant may terminate participation in the Plan at any time by giving
written instructions to the Administrator. Upon termination, a certificate for
any whole shares held in the Plan will be issued. Alternatively, a Participant
may specify in the termination instructions that all Plan shares be sold, or a
portion of the Plan shares be sold and the balance be issued in certificate
form, provided the certificated share balance is at least 100 shares. The shares
will be sold beginning on the next Investment Date after receipt of the
termination notice (see "Sale of Plan Shares" above), and the Participant will
receive a check for the proceeds, less brokerage commission and applicable stock
transfer taxes, if any.
Whether whole Plan shares are delivered in certificate form or sold,
Participants terminating participation in the Plan will receive a check for the
cash value of any fractional share plus any uninvested cash in their Plan
account. Fractional shares will be valued at the same price as whole shares sold
with respect to the relevant Investment Date.
The Company may automatically terminate a Participant's enrollment in the
Plan if their Plan balance is less than one full share. The Company may also
terminate any Participant's participation in the Plan after advance written
notice mailed to the Participant's address of record. Upon termination, the
Participant will receive a certificate for any whole shares in their account or,
upon request, the shares will be sold for the Participant's account on the next
Investment Date (see "Sale of Plan Shares" above). In any case, a cash payment
will be made for any fractional share plus any uninvested cash in their Plan
account. Fractional shares will be valued at the same price as whole shares sold
with respect to the relevant Investment Date.
For Participants who have elected dividend reinvestment, and termination
occurs after a dividend record date but before the related dividend payment
date, a separate check for the dividend will be mailed.
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<PAGE>
Miscellaneous Information
Stock Splits, Stock Dividends or Rights Offerings
Any stock dividend or stock split paid on the outstanding shares of Common
Stock in the form of shares of Common Stock attributable to Plan shares will be
added to the Participant's account. Any other distributions paid on the
outstanding Common Stock, but not in the form of shares of Common Stock, will be
distributed in certificate form and mailed to the Participant's address of
record. In the event of a rights offering, the Participant will receive rights
based on the total number of whole shares owned in the Plan.
Voting of Plan Shares
Shares held in a Plan account may be voted in person or by the proxy sent
to the Participant.
Limitation of Liability
Neither the Company nor the Administrator (nor any of their respective
agents, representatives, employees, officers or directors) will be liable in
administering the Plan for any act done in good faith nor for any good faith
omission to act, including, without limitation, any claim of liability arising
with respect to the prices or times at which shares are purchased or sold for
Participants, or any change in the market value of shares, or from failure to
terminate a Participant's account upon such Participant's death prior to receipt
of proper notification. The foregoing does not represent a waiver of any rights
a Participant may have under applicable securities laws.
Change or Termination of the Plan
The Company may suspend, modify or terminate the Plan at any time in whole,
in part, or in respect of Participants in one or more jurisdictions. Notice of
such suspension, modification or termination will be sent to all affected
Participants. No such event will affect any assets then credited to a
Participant's account. Upon any whole or partial termination of the Plan by the
Company, certificates for whole shares held in an affected Participant's account
under the Plan will be issued to the Participant or, upon request, the shares
will be sold for the Participant's account on the next Investment Date (see
"Sale of Plan Shares" above). In any case, a cash payment will be made for any
fractional share plus any uninvested cash in their Plan account. Fractional
shares will be valued at the same effective price as whole shares sold with
respect to the relevant Investment Date.
Tax Consequences
The cash dividend amount paid by the Company is considered taxable income,
even though reinvested under the Plan. The information return (Form 1099-DIV)
sent to you and the Internal Revenue Service ("IRS") after year-end will show as
dividend income the full amount of dividends reinvested under the Plan, as well
as any cash dividends paid directly to you. For federal income tax purposes, the
cost basis per share of Common Stock acquired through the Plan on any given
Investment Date is determined by dividing the total of the dividends reinvested,
net of any taxes withheld, plus any cash contributions by the number of shares,
including fractional shares, acquired on your behalf on that Investment Date.
In the case of Participants whose dividends are subject to federal income
tax withholding, or backup withholding, the Administrator will reinvest
dividends less the amount of tax required to be withheld.
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<PAGE>
The sale of shares through the Plan will be reported after year-end to you
and the IRS on Form 1099-B.
You should consult with your tax advisor for advice applicable to your
particular situation.
LEGAL MATTERS
Certain legal matters concerning the Plan and the validity of the shares of
Common Stock offered hereby have been passed upon for the Company by Austin M.
O'Toole, Esq., Senior Vice President and Secretary of the Company. As of May 1,
1996, Mr. O'Toole beneficially owned approximately 32,097 shares of Common Stock
and 655 shares of Class A Common Stock of Coastal, including exercisable stock
options.
EXPERTS
The annual consolidated financial statements of the Company incorporated in
this Prospectus by reference from the 1995 Annual Report on Form 10-K have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
10
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LOGO GRAPHIC
The Coastal
Corporation
DIVIDEND
REINVESTMENT
AND
STOCK PURCHASE PLAN
------------------------------------
PROSPECTUS
------------------------------------
July 15, 1996
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No dealer, salesman or other person has been authorized to give any
information or to make any representation not 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. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby to any person or by anyone in any jurisdiction in which such offer or
solicitation may not lawfully be made. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof.
------------------------------------
TABLE OF CONTENTS
Page
Available Information.......................... 2
Incorporation of Certain Documents
By Reference............................... 2
The Company.................................... 2
Use of Proceeds................................ 3
Description of the Dividend Reinvestment
and Stock Purchase Plan.................... 3
Purpose.................................... 3
Principal Features......................... 3
Plan Administration........................ 3
Eligibility................................ 4
Plan Enrollment............................ 4
Reinvestment of Cash Dividends............. 4
Initial and Optional Investments........... 5
Investment Date............................ 5
Source and Price of Shares................. 5
Safekeeping Service........................ 6
Transfer of Eligible Securities............ 6
Reports to Participants.................... 7
Changing Plan Options...................... 7
Sale of Plan Shares........................ 8
Certificates for Shares.................... 8
Termination of Participation............... 8
Miscellaneous Information.................. 9
Tax Consequences........................... 9
Legal Matters.................................. 10
Experts........................................ 10
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses, other than underwriting discounts and commissions,
in connection with the offering are as follows:
Securities and Exchange Commission filing fee......... $ 14,893.10
------------
*Printing and engraving expenses ..................... 20,000.00
------------
*Legal fees and expenses.............................. 5,000.00
------------
*Accounting fees and expenses......................... 10,000.00
------------
*Blue sky qualification fees and expenses............. 10,000.00
------------
*Miscellaneous........................................ 10,000.00
------------
*Total...................................... $ 69,893.10
============
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* Estimated
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware grants
each corporation organized thereunder, such as the Registrant, the power to
indemnify directors and officers under certain circumstances. Article FIFTH of
the Registrant's Restated Certificate of Incorporation and Article IX of the
Registrant's By-laws provide for indemnification of directors and officers to
the fullest extent permitted by law.
An Indemnity Agreement was approved on May 27, 1981, at the annual meeting
of the holders of the common and convertible preferred stocks of Coastal and is
incorporated herein by reference to the definitive Proxy Statement of Coastal
(Exhibit A) dated April 15, 1981. In April of 1988, the Board of Directors of
Coastal approved a revised and updated Indemnity Agreement which is incorporated
herein by reference to the 1990 Annual Report (Exhibit 28).
Item 16. Exhibits.
3 -- Restated Certificate of Incorporation of The Coastal
Corporation, as restated on March 22, 1994 (filed as
Module TCC-Art1-Incorp on March 28, 1994).
5* -- Opinion of Austin M. O'Toole, Esq., Senior Vice
President, Secretary and Senior Counsel of the
Registrant, as to the legality of the securities to be
registered.
10* -- The Coastal Corporation Dividend Reinvestment and
Stock Purchase Plan dated July 9, 1996.
23.1* -- Independent Auditors' Consent
23.2* -- Consent of Austin M. O'Toole, Esq. (included in Exhibit
5).
24* -- Powers of Attorney (included on the signature pages
hereof).
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* Filed herewith. All other Exhibits are incorporated by reference.
II-1
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Item 17. Undertakings.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 and each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions described under Item 15
above, 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 of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
The undersigned 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
of 1933; (ii) to reflect in the prospectus any fact or events arising
after the effective date of the 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 the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement; (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that
paragraphs (1)(i) and (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 filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, 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.
II-2
<PAGE>
POWERS OF ATTORNEY
Each person whose signature appears below hereby appoints David A.
Arledge, Coby C. Hesse and Austin M. O'Toole and each of them, any one of whom
may act without the joinder of the others, as his attorney-in-fact to sign on
his behalf and in the capacity stated below and to file all amendments and
post-effective amendments to this Registration Statement, which amendment or
amendments may make such changes and additions in this Registration Statement as
such attorney-in-fact may deem necessary or appropriate.
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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas on July 12, 1996.
THE COASTAL CORPORATION
(Registrant)
By DAVID A. ARLEDGE
---------------------------------------------
David A. Arledge
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
O. S. WYATT, JR. Chairman of the Board July 12, 1996
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O. S. Wyatt, Jr.
DAVID A. ARLEDGE President, and Chief July 12, 1996
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David A. Arledge Executive Officer
COBY C. HESSE Principal Accounting Officer July 12, 1996
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Coby C. Hesse
JOHN M. BISSELL Director July 12, 1996
John M. Bissell
GEORGE L. BRUNDRETT, JR. Director July 12, 1996
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George L. Brundrett, Jr.
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<PAGE>
Signature Title Date
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HAROLD BURROW Director July 12, 1996
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Harold Burrow
ROY D. CHAPIN, JR. Director July 12, 1996
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Roy D. Chapin, Jr.
JAMES F. CORDES Director July 12, 1996
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James F. Cordes
ROY L. GATES Director July 12, 1996
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Roy L. Gates
KENNETH O. JOHNSON Director July 12, 1996
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Kenneth O. Johnson
JEROME S. KATZIN Director July 12, 1996
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Jerome S. Katzin
THOMAS R. MCDADE Director July 12, 1996
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Thomas R. McDade
L. D. WOODDY, JR. Director July 12, 1996
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L. D. Wooddy, Jr.
II-4
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INDEX TO EXHIBITS
Exhibit No. Documents
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3 -- Restated Certificate of Incorporation of The Coastal
Corporation, as restated on March 22, 1994 (filed as
Module TCC-Art1-Incorp on March 28, 1994).
5* -- Opinion of Austin M. O'Toole, Esq., Senior Vice President,
Secretary and Senior Counsel of the Registrant, as to the
legality of the securities to be registered.
10* -- The Coastal Corporation Dividend Reinvestment and Stock
Purchase Plan dated July 9, 1996.
23.1* -- Independent Auditors' Consent
23.2* -- Consent of Austin M. O'Toole, Esq. (included in Exhibit
5).
24* -- Powers of Attorney (included on the signature pages of
this Registration Statement).
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* Filed herewith. All other Exhibits are incorporated by reference.
EXHIBIT 5
July 15, 1996
The Coastal Corporation
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
Gentlemen:
I have acted as counsel to The Coastal Corporation, a Delaware corporation
(the "Company"), in connection with the registration of shares of Common Stock,
par value 331/3(cent) per share, of the Company (the "Common Stock"), purchased
or issued under The Coastal Corporation Dividend Reinvestment and Stock Purchase
Plan dated July 9, 1996 (the "Plan") pursuant to a registration statement on
Form S-3 (the "Registration Statement"), filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
In this connection, I have examined the corporate proceedings of the
Company relating to the authorization and issuance of the Common Stock. I have
also examined all statutes, corporate records and other instruments and
documents which I have deemed it necessary to examine for the purposes of this
opinion.
Based on the foregoing, I am of the opinion that:
1. The Company has been duly organized and is validly existing under the
laws of the State of Delaware.
2. The Plan has been duly authorized and executed by the Company and is
a legal and binding agreement of the Company in accordance with its
terms.
3. The shares of Common Stock when purchased or issued in accordance
with the terms of the Plan, will be legally and validly issued, fully
paid and non-assessable shares of stock of the Company.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to the undersigned under the caption
therein entitled "Legal Matters." I further consent to all references to me in
the Registration Statement, any amendments thereto or in any Prospectus.
Very truly yours,
AUSTIN M. O'TOOLE
-------------------------------------------
Austin M. O'Toole
Senior Vice President and Secretary
EXHIBIT 10
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
July 9, 1996
<PAGE>
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
TABLE OF CONTENTS
Article Page
1. Name, Effective Date and Purpose 1
2. Definitions 1
3. Participation 3
4. Dividend Reinvestment and Stock Purchase 3
5. Safekeeping of Deposited Common Stock 5
6. Sale, Gift or Transfer of Plan Shares 5
7. Eligible Securities 6
8. Participant Options and Handling of Accounts 6
9. Certificates and Fractional Shares 7
10. Plan Rules and Regulations 8
11. Administration of the Plan 8
12. Trust Agreement 9
13. Miscellaneous Provisions 10
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<PAGE>
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
ARTICLE 1
Name, Effective Date and Purpose
The name of this Plan is The Coastal Corporation Dividend Reinvestment and
Stock Purchase Plan (the "Plan") which Plan became effective as of July 9, 1996.
The purpose of the Plan is to provide stockholders and employees of The
Coastal Corporation (the "Company") and other interested investors a convenient
and economical means of investing in shares of Common Stock of the Company
through (i) initial cash investments; (ii) optional cash investments and/or
(iii) reinvestment of cash dividends.
ARTICLE 2
Definitions
The terms defined in this Article shall for all purposes of the Plan, have
the following meanings. The singular shall include the plural, and the masculine
gender shall include the feminine, and vice versa, as the context requires.
"Account" shall mean the Account maintained by the Administrator
evidencing (i) shares of Common Stock (a) purchased through the Plan and/or (b)
deposited by the Participant into the Plan pursuant to Section 5.1 and (ii) cash
held in the Plan pending investment in Common Stock.
"Administrator" shall mean the individual (who may be an employee of the
Company), bank, trust company or other entity (including the Company) appointed
by the Company to act as Administrator.
"Common Stock" shall mean The Coastal Corporation Common Stock, $.331/3
par value.
"Company" shall mean The Coastal Corporation, a Delaware Corporation, and
its subsidiaries.
"Company Share Purchase Price", when used with respect to newly issued
shares of Common Stock or shares of Common Stock held in the Company's treasury,
shall mean the average of the high and low sales prices of Common Stock on an
applicable trading day as reported on the New York Stock Exchange listing of
composite transactions. Absent knowledge of inaccuracy, the Administrator may
rely upon such prices as published in The Wall Street Journal. In the event no
trading is reported for a trading day, the Company Share Purchase Price for such
shares may be determined by the Company on the basis of such market quotations
as it deems appropriate.
"Dividend" shall mean cash dividends paid on Eligible Securities.
"Dividend Payment Date" shall mean a date on which a cash dividend on
shares of Common Stock is paid.
"DRSPP" shall mean Dividend Reinvestment and Stock Purchase Plan.
"Eligible Securities" shall mean those equity securities of the Company as
set forth in Section 7.1, and such other equity or debt securities of the
Company and its subsidiaries as the Company may designate, in its discretion,
pursuant to Section 7.2.
"Enrollment Form" shall mean the documentation that the Administrator (i)
shall require to be completed and received prior to enrollment in the Plan
pursuant to Section 3.2 or 3.3, a Participant's changing his options under the
Plan pursuant to Section 8.1, or a Participant's depositing shares of Common
Stock into the Plan pursuant to Section 5.1 and (ii) may require to be completed
and received prior to an optional cash investment pursuant to Section 3.4.
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<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Foreign Person" shall mean a Person that is a citizen or resident of, or
is organized or incorporated under, or has its principal place of business in, a
country other than the United States, its territories and possessions.
"Independent Agent" shall mean an agent independent of the Company who
satisfies applicable legal requirements (including without limitation the
requirements of Rule 10b-6 and Rule 10b-18 promulgated under the Exchange Act)
and who has been selected by the Company, pursuant to Section 11.6 hereof, to
serve as an Independent Agent for purposes of making open market purchases and
sales of Common Stock under the Plan.
"Investment Date" shall mean the 1st and 15th of each month, or, if any
such date is not a day on which the New York Stock Exchange is open, the next
day on which it is open.
"Market Share Purchase Price," when used with respect to shares of Common
Stock purchased in the open market, shall mean the weighted average purchase
price per share (including brokerage commission and applicable taxes, if any) of
the aggregate number of shares purchased in the open market for an Investment
Date.
"Market Share Sales Price," when used with respect to shares of Common
Stock sold under the Plan, shall mean the weighted average sales price per share
(less brokerage commission and applicable taxes, if any) of the aggregate number
of shares sold in the open market for an Investment Date.
"Maximum Amount" shall mean as defined in Section 3.4.
"Participant" shall mean as defined in Section 3.1.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
estate or unincorporated organization.
"Plan" shall mean The Coastal Corporation Dividend Reinvestment and Stock
Purchase Plan.
"Plan Shares" shall mean all shares of Common Stock credited to a
Participant's Account by the Administrator, which shall include shares deposited
into the Plan pursuant to Section 5.1.
"Sales/Transfer Request Form" shall mean any documentation that the
Administrator shall require prior to a Participant's sale, transfer or gift of
Plan Shares pursuant to Sections 6.1, 6.2, 8.2 or 8.3.
"Statement of Account" shall mean a quarterly statement prepared by the
Administrator and sent to each Participant which reflects (i) all transactions
that occurred in the account during the current calendar quarter, (ii) the
number of Plan Shares credited to the Account at the date of such statement and
(iii) the amount of cash, if any, credited to the account pending investment at
the date of such statement.
"Subsidiary" shall mean a business entity (including a corporation,
partnership, joint venture or limited liability company) in which the Company
has, directly or indirectly, an ownership position.
"Trust Account" shall mean as defined in Section 12.1.
"Trustee" shall mean as defined in Section 12.2.
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<PAGE>
ARTICLE 3
Participation
Section 3.1. Participation. Any Person, whether or not a registered holder
of Eligible Securities may elect to participate in the Plan; provided, however,
that in the case of a Foreign Person, participation would not violate local laws
applicable to the Company, the Plan or the Participant.
An election by a Person to participate in the Plan shall be made by
completing and returning to the Administrator an Enrollment Form and (i)
electing to have Dividends on Eligible Securities of which such Person is the
registered holder reinvested in Common Stock pursuant to Section 3.2, (ii)
depositing certificates representing shares of Common Stock of which such person
is the registered holder into the Plan pursuant to Section 5.1 or (iii) making
an initial cash investment pursuant to Section 3.3.
Any person who has met such requirements and has made and not revoked such
election is referred to herein as a "Participant." Each current participant in
the Coastal Stock Purchase Plan (for employees and directors) on the date hereof
will automatically become a Participant in the Plan without submitting a new
Enrollment Form. A Participant who wishes to change his current participation
must submit a new Enrollment Form to the Administrator. A Participant may elect
to participate in any or all of the forms of investment provided in Section 3.2
through 3.4 and to utilize the Plan's safekeeping services provided in Section
5.1 by submitting an Enrollment Form designating such election to the
Administrator; provided, however, that a Participant may make optional cash
investments pursuant to Section 3.4 by submitting to the Administrator a
completed optional cash investment stub from a quarterly Statement of Account in
lieu of an Enrollment Form.
Section 3.2. Dividend Reinvestment. A Participant may elect to have all or
a portion of the Dividends on his Plan shares and/or Eligible Securities of
which such Participant is the registered holder reinvested in shares of Common
Stock to be credited to his Account in lieu of receiving such Dividend directly.
If a Participant elects to reinvest only a portion of the Dividends on his Plan
Shares and/or Eligible Securities, that portion not reinvested in Common Stock
will be sent to the Participant by check.
Section 3.3. Initial Cash Investment. A Person who is not a registered
holder of Eligible Securities may become a Participant by making an initial cash
payment of $250 to $120,000. A registered holder of Eligible Securities may
become a Participant by making an initial cash payment of $50 to $120,000, or by
electing the options pursuant to Section 3.1(i) or (ii). Initial cash payment,
for investment in Common Stock, must be made by check or money order, in U.S.
funds, payable to The Coastal Corporation DRSPP and accompanied by a completed
Enrollment Form.
Section 3.4. Optional Cash Investments. A Participant may elect to make
optional cash payments at any time or from time to time to the Plan by check,
money order or wire transfer in U.S. funds, payable to The Coastal Corporation
DRSPP, or by payroll deduction for eligible employees of the Company, for
investment in Common Stock; provided, however, that optional cash payments must
be at least $50 for any single investment ($5 per week for payroll deduction)
and may not exceed $120,000 per calendar year (the "Maximum Amount"). For
purposes of determining whether the Maximum Amount has been reached, an initial
cash investment shall be counted as an optional cash investment.
ARTICLE 4
Dividend Reinvestment and Stock Purchase
Section 4.1. Dividend Reinvestment. Dividends as to which reinvestment has
been elected by a Participant shall be paid to the Administrator or its nominee
on behalf of such Participant. Dividends shall be reinvested, at the Company's
election, in either (i) newly issued shares of Common Stock or shares of Common
Stock held in the Company's treasury purchased from the Company or (ii) shares
of Common Stock purchased by the Independent Agent in the open market.
Section 4.2. Dividend Reinvestment in Newly Issued or Treasury Shares. On
an Investment Date with respect to which the Company elects to issue new shares
or sell shares of Common Stock held in the Company's treasury to the Plan in
order to effect the reinvestment of Dividends, the Company shall issue to the
Administrator upon the Company's receipt of the funds described in (a) below,
for crediting by the Administrator to the Account of a Participant, a number
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<PAGE>
of shares (and/or fraction of a share rounded to three decimal places) of Common
Stock equal to (a) the amount of any Dividends paid to the Administrator on
behalf of such Participant since the preceding Investment Date divided by (b)
the Company Share Purchase Price on the trading day first preceding such
Investment Date. Such shares shall be issued to, and registered in the name of,
the Administrator or its nominee as custodian for the Participants. No interest
shall be paid on Dividends held pending reinvestment.
Section 4.3. Dividend Reinvestment in Shares Purchased in the Open Market.
On an Investment Date with respect to which the Company elects to purchase
shares of Common Stock for the Plan in the open market, the Administrator shall
cause the Independent Agent to apply the amount of any Dividends paid to the
Administrator on behalf of the Participants since the preceding Investment Date
to the purchase of shares of Common Stock in the open market. Purchases in the
open market pursuant to this Section and Subsection 4.4.2 shall be made as soon
as practicable beginning on the applicable Investment Date and shall be
completed no later than 30 days from such date except as otherwise necessary
under any applicable federal securities laws or other government or stock
exchange regulations. Any Dividends, initial cash payments and optional cash
payments not reinvested in shares of Common Stock within 30 days of receipt by
the Administrator, shall be promptly delivered to the Participant at his address
of record by First Class Mail. With regard to open market purchases of shares of
Common Stock pursuant to this Section and Subsection 4.4.2, neither the
Participant nor the Company, as Administrator, shall have any control, authority
or power to direct the time or price at which shares of Common Stock may be
purchased, except that the timing of such purchases, by the Independent Agent,
must be in accordance with the terms of the Plan. For the purpose of instructing
the Independent Agent to make purchases of shares of Common Stock pursuant to
this Section and Subsection 4.4.2, and sales of Plan Shares pursuant to Section
6.1, the Administrator may commingle Participants' funds for the execution of
purchases, and may offset purchases of shares against sales of shares to be made
for Participants under the Plan with respect to the same Investment Date,
resulting in a net purchase or a net sale of shares. The number of shares
(and/or fraction of a share rounded to three decimal places) of Common Stock
that shall be credited to a Participant's Account shall be equal to the amount
of any Dividends paid to the Administrator on behalf of such Participant since
the preceding Investment Date divided by the Market Share Purchase Price with
respect to such Investment Date. Such shares shall be registered in the name of
the Administrator or its nominee as custodian for the Participants. No interest
shall be paid on Dividends held pending reinvestment.
Section 4.4. Investment of Initial Cash Payments and Optional Cash
Payments. Any initial cash payments and optional cash payments received by the
Administrator from Participants at least one business day prior to an Investment
Date shall be invested beginning on such Investment Date, in either (i) newly
issued shares or shares of Common Stock held in the Company's treasury in the
manner provided in Subsection 4.4.1 or (ii) Common Stock purchased in the open
market in the manner provided in Subsection 4.4.2. Initial cash payments and
optional cash payments not received by the Administrator at least one business
day prior to an Investment Date shall be invested beginning on the next
succeeding Investment Date. No interest shall be paid on initial cash payments
and optional cash payments held pending investment.
Subsection 4.4.1. Newly Issued or Treasury Shares. On an Investment Date
with respect to which the Company elects to issue new shares or sell shares of
Common Stock held in the Company's treasury to the Plan in order to effect the
investment of initial cash payments and optional cash payments, the Company
shall issue to the Administrator upon the Company's receipt of the funds
described in (a) below, for crediting by the Administrator to the Account of a
Participant, a number of shares (and/or fraction of a share rounded to three
decimal places) of Common Stock equal to (a) the amount of any initial cash
payment and/or optional cash payments received by the Administrator from such
Participant since the preceding Investment Date (excluding any amounts received
from such Participant within less than one business day of such Investment Date
but including any amounts received from such Participant that were not invested
on the preceding Investment Date as set forth in Section 4.4) divided by (b) the
Company Share Purchase Price on the trading day first preceding such Investment
Date. Such shares shall be issued and registered in the name of the
Administrator or its nominee as custodian for the Participants.
Subsection 4.4.2. Shares Purchased in the Open Market. On an Investment
Date with respect to which the Company elects to effect the investment of
initial cash payments and optional cash payments in shares of Common Stock
purchased in the open market, the Administrator shall cause the Independent
Agent to purchase, at such times and at such prices as shall be determined by
the Independent Agent, in its absolute discretion, for crediting by the
Administrator to the Account of a Participant a number of shares (and/or
fraction of a share rounded to three decimal places) of Common Stock in the open
market equal to (a)(i) the amount of any initial cash payment and/or optional
cash payments received
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<PAGE>
by the Administrator from such Participant since the preceding Investment Date
(excluding any amounts received from such Participant within less than one
business day of such Investment Date but including any amounts received from
such Participant that were not invested on the preceding Investment Date as set
forth in Section 4.4) divided by (b) the Market Share Purchase Price with
respect to such Investment Date. Such purchases shall be made in the manner set
forth in Section 4.3. Such shares shall be registered in the name of the
Administrator or its nominee as custodian for the Participants.
Subsection 4.4.3. Request to Stop Investment. If a written request to stop
investment of an initial cash payment or optional cash payments is received by
the Administrator from a Participant at least one business day before the next
Investment Date, any initial cash payment or optional cash payments from such
Participant then held by the Administrator shall not be invested in Common Stock
and shall be returned to such Participant.
ARTICLE 5
Safekeeping of Deposited Common Stock
Section 5.1. Deposited Common Stock. A Participant may elect to have
certificates representing shares of Common Stock of which the Participant is the
registered holder deposited into the Plan by delivering such certificates and a
completed Enrollment Form to the Administrator. Shares of Common Stock so
deposited shall be transferred into the name of the Administrator or its nominee
and credited to the Participant's Account. Dividends paid on shares of Common
Stock deposited into the Plan pursuant to this Section shall be fully reinvested
in shares of Common Stock pursuant to Article 4 unless the Participant notifies
the Administrator otherwise on the Enrollment Form. Shares of Common Stock
deposited pursuant to this Section may be withdrawn from the Plan pursuant to
Section 8.2.
ARTICLE 6
Sale, Gift or Transfer of Plan Shares
Section 6.1. Sale of Plan Shares. A Participant may request, at any time,
that all or a portion of his Plan Shares be sold by delivering to the
Administrator, at least one business day prior to an Investment Date, a
completed Sale/Transfer Request Form to that effect. The Administrator shall
instruct the Independent Agent to make such sale beginning on the first
Investment Date following receipt of the request. As soon as practicable
following the receipt of proceeds from such sale, the Administrator shall mail
to such Participant at his address of record a check in an amount equal to (a)
the Market Share Sales Price multiplied by (b) the number of his Plan Shares
sold. A request for sale of Plan Shares not received by the Administrator at
least one business day prior to an Investment Date shall be deferred to the next
succeeding Investment Date.
If all Plan Shares, designated for dividend reinvestment, are sold on or
after an ex-dividend date but before the related Dividend has been reinvested in
Common Stock, the Administrator shall mail a check to the Participant at his
address of record for the proceeds from the sale as specified in the preceding
paragraph and a separate check for the related Dividend as soon as practicable
after the Dividend Payment Date.
With regard to open market sales of Plan Shares, neither the Participant
nor the Company, as Administrator, shall have any control, authority or power to
direct the time or price at which shares of Common Stock are sold.
Section 6.2. Gift or Transfer of Account Shares. A Participant may elect
to transfer (whether by gift, private sale or otherwise) ownership of all or a
portion of his Plan Shares to the Account of another Participant or establish an
Account for a Person not already a Participant by delivering to the
Administrator a completed Sale/Transfer Request Form to that effect. No fraction
of a share shall be transferred unless the Participant's entire Account balance
is transferred.
Plan Shares transferred in accordance with the preceding paragraph shall
continue to be registered in the name of the Administrator, as custodian for the
Participants, and shall be credited to the transferee's Account. If the
transferee is not already a Participant, an Account (with full dividend
reinvestment) shall be opened in the name of the transferee and the
Administrator shall send the transferee a confirmation showing the transfer of
such shares into his Account along with an Enrollment Form which should be
executed and returned to the Administrator, and which may be used to elect
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other Plan options. Unless otherwise requested by a transferee who is already a
Participant, the reinvestment of Dividends on such transferred Plan Shares shall
be made in proportion to the reinvestment level (i.e., full, partial or none) of
the transferee's other Plan Shares. Unless otherwise requested by the
transferor, the Administrator shall send the confirmation and/or Enrollment Form
to such transferee showing the transfer of such Plan Shares into his Account.
The transferor may request that the Administrator deliver such confirmation
and/or Enrollment Form to the transferor for personal delivery. The transferor
may also request that the Administrator send a gift certificate directly to such
transferee following such transfer, or request that the Administrator deliver
such gift certificate to the transferor for personal delivery.
If Plan Shares, designated for reinvestment, are transferred on or after
an ex-dividend date but before the related Dividend has been reinvested in
Common Stock, the Administrator shall mail a check for the related Dividend to
the transferor Participant at his address of record as soon as practicable after
the Dividend Payment Date.
ARTICLE 7
Eligible Securities
Section 7.1. Eligible Securities. The following equity securities of the
Company shall be Eligible Securities:
(a) Common Stock ($.331/3 par value);
(b) Class A Common Stock ($.331/3 par value);
(c) $1.19 Cumulative Convertible Preferred Stock, Series A ($.331/3 par
value);
(d) $1.83 Cumulative Convertible Preferred Stock, Series B ($.331/3 par
value);
(e) $5.00 Cumulative Convertible Preferred Stock, Series C ($.331/3 par
value) and
(f) $2.125 Cumulative Preferred Stock, Series H ($.331/3 par value)
Section 7.2. Additional Eligible Securities. The Company may at any time
designate other equity or debt securities of the Company as Eligible Securities
by notifying the Administrator in writing of the designation of such securities
as Eligible Securities.
ARTICLE 8
Participant Options and Handling of Accounts
Section 8.1. Changing Plan Options. A Participant may elect to change his
Plan options, including (i) changing the Dividend reinvestment level (i.e.,
full, partial or none) of Dividends on Eligible Securities and (ii) changing
payroll deduction level (for eligible employees of the Company), by delivering
to the Administrator written instructions or a new Enrollment Form to that
effect. In the case of a change in Dividend reinvestment level, to be effective
with respect to any Dividend Payment Date, the instructions or Enrollment Form
must be received by the Administrator at least one business day prior to the
record date relating to such Dividend. In the case of an election to change
payroll deduction level, to be effective with respect to an Investment Date the
change must be processed by the Payroll Department and the effective result of
the change delivered or communicated to the Administrator at least one business
day prior to the Investment Date. If the instructions or Enrollment Form (or
effective result of a payroll deduction change) are not received by the
Administrator at least one business day prior to the record date (or Investment
Date), such instructions shall not become effective until after such Dividend
Payment Date (or Investment Date).
Section 8.2. Right of Withdrawal. A Participant may, at any time or from
time to time, withdraw from the Plan all or part of his whole Plan Shares by
delivering to the Administrator (i) withdrawal instructions, if such Participant
will be the registered holder of such Plan Shares after withdrawal or (ii) a
completed Sale/Transfer Request Form if the Participant will not be the
registered holder of such Plan Shares after withdrawal. Subject to the
limitations described in the following paragraph, within two business days
following the Administrator's receipt of (i) appropriate withdrawal instructions
or (ii) a completed Sale/Transfer Request Form, the Administrator shall mail by
First Class Mail - Insured,
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to the Participant's address of record, or to the address of any Person that the
Participant has designated, certificates representing such withdrawn Plan
Shares.
If a completed Sale/Transfer Request Form with regard to Plan Shares is
received by the Administrator on or after an ex-dividend date but before the
related dividend record date, the withdrawal shall be processed, as described
above, on the dividend record date. If withdrawal instructions or a completed
Sale/Transfer Request Form is received by the Administrator to withdraw all
whole Plan Shares, such withdrawal shall not be effected until after any pending
Dividend reinvestment and/or optional cash investment has been completed
pursuant to the Plan and the shares of Common Stock purchased therewith are
credited to the Participant's Account. As soon as practicable following the
relevant Investment Date, the Administrator shall mail by First Class Mail -
Insured to the Participant at his address of record, or to the address of any
Person that the Participant has designated, certificates representing the Plan
Shares withdrawn.
Withdrawal of Plan Shares shall not affect reinvestment of Dividends on
the Plan Shares withdrawn unless (i) the Participant is no longer the registered
holder of such Plan Shares, (ii) such reinvestment is changed by the Participant
by delivering to the Administrator written instructions or an Enrollment Form to
that effect pursuant to Section 8.1 or (iii) the Participant has terminated his
participation in the Plan.
Section 8.3. Right of Termination of Participation. If a Participant's
instructions or Sale/Transfer Request Form indicates the Participant's desire to
terminate his participation in the Plan, the Administrator shall treat such
request as a withdrawal of all of such Participant's whole Plan Shares pursuant
to Section 8.2 or, upon the Participant's request, the shares will be sold for
the Participant's Account pursuant to Section 6.1. The Administrator, in
addition to mailing certificates representing all whole Plan Shares, if any,
pursuant to Section 8.2, (or a check for proceeds from a sale pursuant to
Section 6.1) shall mail to the Participant at his address of record a check for
any cash credited to such Participant's Account pending investment in Common
Stock plus the proceeds from the sale, on the next Investment Date, of any
fraction of a share of Common Stock credited to his Account.
Section 8.4. Stock Splits, Stock Dividends or Rights Offerings. Any stock
dividend or stock split paid on the outstanding Common Stock in the form of
common shares attributable to Plan shares shall be added to the Participant's
account. Any other distributions paid on the outstanding Common Stock, but not
in the form of common shares, shall be distributed in certificate form and
mailed to the Participant's address of record.
In the event of a rights offering, the Participant shall receive rights
based on the total number of whole shares owned, including Plan Shares and
certificated shares held in their name.
Section 8.5. Shareholder Materials and Voting Rights. The Administrator
shall send to each Participant copies of the same communications sent to all
other stockholders, including the Company's annual and quarterly reports to
stockholders, notice of stockholder meeting, proxy statement and proxy, and IRS
information returns for reporting dividend income and share sales. Participants
shall have exclusive voting rights with respect to Plan Shares credited to their
respective Accounts. A Participant may vote his Plan Shares in person or by
proxy. A Participant's proxy card shall include his Plan Shares and any shares
of Eligible Securities of which he is the registered holder.
Section 8.6. Statement of Account. As soon as practicable after each
calendar quarter, the Administrator shall send to each Participant a quarterly
Statement of Account. Additionally, the Administrator shall send a confirmation
to each Participant promptly after an initial investment; and after each
optional investment, deposit of shares for safekeeping, sale or transfer.
Payroll deductions and Dividend reinvestments will not be individually
confirmed, but will appear on the quarterly Statement of Account.
ARTICLE 9
Certificates and Fractional Shares
Section 9.1. Certificates. A Participant may, at any time or from time to
time, request in writing to receive a certificate for all or a portion of his
whole Plan Shares, and upon receipt of such request the Administrator shall mail
such certificate within two business days by First Class Mail-Insured to the
Participant's address of record.
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Section 9.2. Fractional Shares. Any Fraction of a share of Common Stock
shall be credited to a Participant's Account as provided in Article 4. No
certificate for a fraction of a share shall be distributed. The Company shall
issue only whole shares of Common Stock to the Administrator for purchases made
by the Administrator of newly issued shares or shares of Common Stock held in
the Company's treasury.
ARTICLE 10
Plan Rules and Regulations
Section 10.1. Suspension, Modification and Termination. The Company may at
any time and from time to time, in its sole discretion, suspend, modify, amend
or terminate the Plan, in whole, in part or in respect of Participants in one or
more jurisdictions; provided, however, no such amendment shall affect or
decrease the assets in the Account of any Participant or result in a
distribution to the Company of any amount credited to the Account of any
Participant. Upon complete termination of the Plan, the Accounts of all
Participants (or in the case of partial termination of the Plan, the Accounts of
all affected Participants) shall be treated as if each such Participant had
elected to terminate his participation in the Plan pursuant to Section 8.3. The
Administrator shall promptly send each affected Participant notice of such
suspension, modification or termination.
Section 10.2. Rules and Regulations. The Company may from time to time
adopt such administrative rules and regulations concerning the Plan as it deems
necessary or desirable for the administration of the Plan. The Company shall
have the power and authority to interpret the terms and the provisions of the
Plan and shall interpret and construe the Plan and reconcile any inconsistency
or supply any omitted detail in a manner consistent with the general terms of
the Plan and applicable law.
Section 10.3. Costs. All costs of administration of the Plan shall be paid
by the Company; provided, however, that brokerage commissions and applicable
taxes, if any, incurred in connection with open market purchases and sales of
shares of Common Stock made under the Plan shall be borne by the Participants.
Section 10.4. Termination of a Participant. The Company may automatically
terminate a Participant's enrollment in the Plan if their Account balance is
less than one full share. The Company, in its sole discretion, may also
terminate any Participant's participation in the Plan after advance written
notice mailed to the Participant's address of record. Upon such termination, the
Account of such Participant shall be treated as if he had elected to terminate
his participation in the Plan pursuant to Section 8.3.
ARTICLE 11
Administration of the Plan
Section 11.1. Selection of an Administrator. The Administrator shall be
appointed by the Company. The Administrator's appointment to serve as such may
be revoked by the Company at any time. The Administrator may resign at any time
upon reasonable notice to the Company. In the event that no Administrator is
appointed, the Company shall be deemed to be the Administrator for purposes of
the Plan. The Company shall be the initial Administrator.
Section 11.2. Compensation. The officers of the Company shall make such
arrangements regarding compensation, reimbursement of expenses and
indemnification of the Administrator and the Independent Agent as they deem
reasonable and appropriate.
Section 11.3. Authority and Duties of Administrator. The Administrator
shall have the authority to undertake any act necessary to fulfill its duties as
set forth in the various provisions of the Plan. Upon receipt, the Administrator
shall deposit all Dividends, initial cash payments and optional cash payments in
the Escrow Account.
Section 11.4. Liability of the Company, the Administrator and the
Independent Agent. The Company, the Administrator and the Independent Agent
shall not be liable for any act done in good faith, or for the good faith
omission to act in administering or performing their duties with respect to the
Plan, including, without limitation, any claim of liability arising out of
failure to terminate a Participant's Account upon such Participant's death prior
to receipt of notice in writing of such death, or with respect to the prices at
which shares are purchased or sold for a Participant's Account
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and the times when such purchases and sales are made, or with respect to any
loss or fluctuation in the market value after the purchase or sale of such
shares.
Section 11.5. Records and Reports. The Administrator shall maintain
appropriate records concerning the Plan, Accounts of Participants, purchases and
sales of Common Stock made under the Plan and Participants' addresses of record
and shall send Statements of Account and confirmations to each Participant in
accordance with the provisions of Section 8.6.
Section 11.6. Selection of Independent Agent. An Independent Agent serving
in such capacity pursuant to the Plan shall be selected by the Company, and the
Company and the Administrator, or either of them, shall, subject to the
provisions of Section 4.3, make such arrangements and enter into such agreements
with the Independent Agent in connection with the activities contemplated by the
Plan as the Company and the Administrator, or either of them, deem reasonable
and appropriate.
Section 11.7. Source of Shares of Common Stock. The Company shall not
change its determination that shares purchased for the Plan will be purchased
from the Issuer or in the open market more than once in any 3 month period. The
Company shall not exercise such right absent a documented determination by the
Board of Directors or Chief Financial Officer that the Company's need to raise
additional capital has changed, or that there is another valid reason for such
change.
ARTICLE 12
Trust Agreement
Section 12.1. Creation of Trust Account. The Company hereby creates with
the Trustees a trust consisting of all Dividends, optional cash investments and
initial cash investments deposited by the Administrator in that certain
non-interest bearing trust account (together with all Dividends, optional cash
investments and initial cash investments deposited therein from time to time,
the "Trust Account") established by the Company at Texas Commerce Bank National
Association ("TCB"), Account No. 00100533091, or such other non-interest bearing
accounts the Company may establish from time to time hereunder with any
commercial bank organized under the laws of the United States or any state,
which commercial bank must have assets in excess of $500,000,000.
Section 12.2 Acceptance of Trust. Austin M. O'Toole, Donald H. Gullquist
and Ronald D. Matthews, Trustees (the "Trustees") hereby accept the trust
created hereby and covenant that they will hold the Trust Account, IN TRUST, for
the exclusive purposes provided in the Plan.
Section 12.3 General Duties of the Company. The Company shall provide the
Trustees with a true and correct copy of the Plan and true and correct copies of
any amendments to the Plan promptly upon their adoption and shall certify to the
Trustees the names and specimen signatures of any person who shall have
authority to control and manage the operation and administration of the Plan on
behalf of the Administrator.
Section 12.4 General Duties and Powers of the Trustees. The Trustees shall
keep accurate and detailed records of receipts and disbursements and other
transactions affecting the Trust Account, and shall make disbursements from the
Trust Account at such times, to such persons (including the Administrator) and
in such amounts as the Administrator shall direct in writing. All such
disbursements shall comply with the provisions of the Plan and no disbursement
shall be made which would cause any property in the Trust Account to be used or
diverted for purposes not consistent with the provisions of the Plan.
The Trustees shall, in their sole and absolute discretion, perform such
other acts as they may deem necessary or proper for the protection of the Trust
Account and, except to the extent inconsistent with the provisions of the Plan,
may exercise all such further rights and powers as may be granted to trustees
generally under the Texas Trust Code.
Section 12.5 Liability of Trustees. The Trustees shall use ordinary care,
skill, prudence and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with like aims. The
Trustees shall not be liable or responsible for any loss sustained by the Trust
Account by reason of the insolvency of the financial institution holding such
account or
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for acting without question on the direction of, or failing to act in the
absence of any direction from, the Administrator or any person with authority to
act on behalf of the Administrator, unless the Trustees know that such action or
failure to act they will be in breach of their fiduciary duty. The Trustees
shall not be responsible in any respect for the administration of the Plan.
The duties and obligations of the Trustee hereunder shall be governed
solely by the terms of this Article 12, and no implied covenants or obligations
shall be read into this Article 12 against the Trustees. The Trustees shall
serve without bond or other security.
Section 12.6 Resignation of Trustee. A Trustee may resign his duties
hereunder by delivering his written resignation to the Company. Such resignation
shall take effect upon the appointment of a successor Trustee, as provided
below.
Section 12.7 Removal of Trustee. A Trustee may be removed by the Company
at any time, with or without cause, upon sixty (60) days notice to the Trustee,
but such notice may be waived by the Trustee. Such removal shall be effected by
delivering to the Trustee a written notice of removal executed by the Company
and by giving notice to the Trustee of the appointment of a successor trustee in
the manner hereinafter set forth. Notwithstanding the foregoing, if a Trustee
shall cease to be an officer of the Company, he shall immediately cease to serve
as a Trustee hereunder and shall immediately be deemed removed hereunder.
Section 12.8 Appointment of Successor Trustee. The appointment of a
successor Trustee hereunder shall be accomplished by and shall take effect upon
the delivery to the resigning or removed Trustee, as the case may be, of (i) an
instrument in writing appointing such successor Trustee, executed by the
Company, together with a certified copy of resolutions of the Board of Directors
of the Company to such effect and (ii) an acceptance in writing of the office of
the successor Trustee hereunder executed by the successor so appointed. The
Company shall send notice of such appointment to the Administrator.
Any successor Trustee hereunder may be either a corporation authorized and
empowered to exercise trust powers or one or more individuals. All of the
provisions set forth herein with respect to the Trustees shall relate to each
successor Trustee so appointed with the same force and effect as if such
successor Trustee had been originally named herein as a Trustee hereunder.
If within sixty (60) days after notice of resignation or removal shall
have been given under the provisions of the Article 12 a successor Trustee shall
not have been appointed, the resigning or removed Trustee or the Administrator
may apply to any court of competent jurisdiction for the appointment of a
successor Trustee.
Section 12.9 Transfer of Trust Account to Successor. Upon the appointment
of a successor Trustee, the resigning or removed Trustee shall transfer and
deliver control over the Trust Account and all records relating to the Trust
Account to such successor Trustee.
Section 12.10 Trustee's Compensation. The officers of the Company shall
make such arrangements regarding compensation, reimbursement of expenses and
indemnification of the Trustees as they from time to time deem reasonable and
appropriate.
ARTICLE 13
Miscellaneous Provisions
13.1. Controlling Law. The Plan shall be construed, regulated and
administered in accordance with the laws of the State of Texas.
13.2. Participant's Acceptance of Terms and Conditions of the Plan. Each
Participant, by completing an Enrollment Form and as a condition of
participation herein, for himself, his heirs, executors, administrators, legal
representatives and assigns, approves of, and agrees to be bound by, the terms
and conditions of the Plan and any subsequent amendments hereto, and all actions
of the Company and the Administrator hereunder.
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IN WITNESS WHEREOF, the Company has caused this Dividend Reinvestment and
Stock Purchase Plan to be executed by its duly authorized officer and the
Trustees have signed this instrument for the purposes of Article 12 hereof this
9th day of July, 1996.
THE COASTAL CORPORATION
By: COBY C. HESSE
----------------------------
Coby C. Hesse
Senior Vice President
AUSTIN M. O'TOOLE
- - -------------------------------------------
Austin M. O'Toole, Trustee
DONALD H. GULLQUIST
- - -------------------------------------------
Donald H. Gullquist, Trustee
RONALD D. MATTHEWS
- - -------------------------------------------
Ronald D. Matthews, Trustee
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of The Coastal Corporation on Form S-3 of our report dated February 1, 1996,
appearing in the Annual Report on Form 10-K of The Coastal Corporation for the
year ended December 31, 1995 and to the reference to us under the heading
"Experts" in the Prospectus, which is a part of this Registration Statement.
DELOITTE & TOUCHE LLP
Houston, Texas
July 12, 1996
Exhibit 23.2
CONSENT OF AUSTIN M. O'TOOLE, ESQ.
The consent of Austin M. O'Toole, Esq. is contained in his opinion filed
herewith as Exhibit 5.
