Rule 424(b)(3)
Registration No. 33-38807
PROSPECTUS
(LOGO)
CONNECTICUT NATURAL GAS CORPORATION
DIVIDEND REINVESTMENT PLAN
_____________
The Dividend Reinvestment Plan (the "Plan") of Connecticut Natural
Gas Corporation (the "Company" or "CNG") provides holders of record of its
common stock and preferred stock with a convenient and economical method of
investing cash dividends in shares of the Company's common stock, $3.125
par value per share ("common stock"), without payment of any brokerage
commission or service charge. While holders of record of all classes of the
Company's stock may participate, the Plan provides for the purchase of
common stock only.
- DIVIDEND REINVESTMENT PROGRAM. Holders of record of common and
preferred stock may elect to have some or all of the cash
dividends paid on their shares reinvested in shares of the
Company's common stock.
- OPTIONAL STOCK PURCHASE PROGRAM. Record holders of common and
preferred stock who participate in the Plan may also
voluntarily contribute cash for the purchase of shares of
common stock. No commission or other fee is charged in
connection with such purchases. The maximum amount which may be
contributed in each calendar quarter is $5,000 and the minimum
amount is $25.
- SAFEKEEPING PROGRAM. All shares acquired through the Plan
shall, and any or all other shares owned by record holders can
(but are not required to), be deposited with the Company's
transfer agent, Chemical Bank (the "Agent"), for safekeeping,
whether or not dividends on the shares are reinvested.
This Prospectus relates to the shares of the Company's common stock,
par value $3.125 per share, previously registered for sale under the Plan.
Such shares may be authorized but unissued shares, shares reacquired and
held in the Company's treasury or shares purchased in the open market.
Shares of the Company's common stock may be acquired by Plan
participants through the reinvestment of cash dividends and through
optional purchases. The price of any shares purchased directly from the
Company will be the average of the high and low market prices on the
dividend payment date (the "Fair Market Value"). The price of any shares
purchased on the open market by the Agent will be determined by the
weighted average of the actual price paid to acquire the shares (the
"Current Market Value").
The proceeds from the sale of any and all shares of common stock sold
pursuant to the Plan will be used for general corporate purposes. These
purposes include the continuing requirements of both the Company's
regulated and non-regulated operations for equity capital. The Company
cannot estimate with certainty either the number of shares which will be
sold pursuant to the Plan or the prices at which such shares will be sold.
_____________
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 September ___, 1995.
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. 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.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN
ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports
and other information with the Securities and Exchange Commission.
Information, as of particular dates, concerning directors and officers,
their remuneration, and any material interest of such persons in
transactions with the Company is disclosed in proxy statements distributed
to shareholders of the Company and filed with the Commission. Such reports,
proxy statements and other information may be inspected and copies made at
the offices of the Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, 13th
Floor, 26 Federal Plaza, New York, New York 10048; and copies of such
materials can be obtained from the principal office of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Company's common stock is listed on the New York
Stock Exchange, and such reports, proxy statements and other information
may also be inspected at the offices of that exchange. Additional updating
information with respect to the securities and Plan covered herein may be
provided in the future to Plan participants by means of appendices to the
Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (File No.
1-7727) are incorporated in this Prospectus by reference and shall be
deemed to be a part hereof;
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1994.
2<PAGE>
(b) The Company's definitive proxy statement, dated December 19, 1994
in connection with its Annual Meeting of Shareholders held on January 24,
1995.
(c) The Company's Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1994, March 31, 1995, and June 30, 1995.
(d) The description of the Company's common stock set forth in Item 1
of the Company's Form 8-A dated January 27, 1978.
(e) Information which may be included in the future in appendices to
this Prospectus.
All documents filed by the Company pursuant to Sections 13, 14 and
15(d) of the Securities Exchange Act of 1934 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.
The Company will furnish without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the documents referred to above which have
been or may be incorporated in this Prospectus by reference other than
exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents. Such requests should be
directed to the Office of the Secretary, 100 Columbus Boulevard, Hartford,
Connecticut 06103 (telephone (860) 727-3203). The information relating to
the Company contained in this Prospectus does not purport to be
comprehensive and should be read together with the information contained in
the documents incorporated by reference.
THE COMPANY AND ITS BUSINESS
The Company, a Connecticut corporation, began operations in 1848. It
is engaged primarily in the regulated distribution and sale of natural gas
at retail in Hartford and 20 other cities and towns in central Connecticut
and in Greenwich, Connecticut. The Company holds franchises, granted by the
General Assembly of the State of Connecticut, and other consents which it
considers to be valid and adequate to enable it to carry on its operations,
substantially as now carried on, in each of the communities which it
serves. The Company's gas business has contributed 91% of consolidated
revenues on average over the last three fiscal years. Most of the Company's
operations are subject to the jurisdiction of the Department of Public
Utility Control of the State of Connecticut (the "DPUC"), which has the
authority to regulate the Company's franchises, rates, issuance of
securities, and other matters.
3<PAGE>
The Company conducts non-regulated operations through six wholly
owned, non-regulated subsidiaries. Energy Networks, Inc. (ENI) and its
wholly-owned subsidiary, The Hartford Steam Company, primarily construct,
own and operate district heating and cooling systems in Hartford serving
commercial, industrial and institutional customers. ENServe Corporation, a
wholly-owned subsidiary of ENI, offers energy system operating and
maintenance services to district heating and cooling customers and
residential, commercial and industrial energy management services
throughout Connecticut, ENI Gas Services, Inc., a wholly-owned subsidiary
of ENI, owns the Company's 33 1/2% interest in the KBC Energy Services of
New England (KBC) joint venture. KBC markets natural gas supplies and
energy management related services to commercial and industrial end users,
primarily in New England. ENI Transmission Company owns a 2.4% share of the
Iroquois Gas Transmission System Partnership which owns and operates a
natural gas pipeline to deliver Canadian natural gas into New York State
and Southern New England. In addition, CNG Realty Corp. owns the Operating
and Administrative Center located in Hartford, Connecticut, and leases the
entire facility to the Company.
The Company's headquarters are located in its Operating and
Administrative Center, 100 Columbus Boulevard, Hartford, Connecticut 06103;
telephone number (860) 727-3000.
GENERAL DESCRIPTION OF THE PLAN
PURPOSE
The Plan is offered as a convenience to shareholders of the Company
who may wish to acquire shares of the Company's common stock, either by
systematically reinvesting some or all of their cash dividends, or by
making cash payments, all without payment of any brokerage commission,
service charge, or other expense.
The Plan is a continuation of an automatic dividend reinvestment and
optional stock purchase program which the Company has made available to its
shareholders for a number of years. As an additional service, the Company
also offers shareholders the opportunity to deposit their Company stock
with the Agent for safekeeping. Shareholders who use this service can avoid
the inconvenience of maintaining a safe deposit box or other location to
hold their share certificates.
The Company has obtained the approval of the Connecticut Department
of Public Utility Control for the distribution pursuant to the Plan. The
number of shares registered and offered for sale by this Prospectus are
subject to adjustment as determined by the Board of Directors of the
Company in the event of stock splits, stock dividends and other
transactions that may effect a recapitalization of the Company.
The Company reserves the right to amend, suspend or terminate the
Plan and the other services offered hereby, in whole or in part, at any
time. However, it is the Company's intention to continue to offer the Plan
and such other services as a convenience to its common and preferred
shareholders indefinitely into the future. In the event that the Company
should modify, suspend, or terminate the Plan or such services, notice of
such action will be mailed to all participants.
4<PAGE>
ADVANTAGES TO PARTICIPANTS
- Participants may reinvest all or a portion of their cash dividends in
common stock without payment of any brokerage commission or service
charge;
- Participants may enjoy full investment of funds because fractions of
shares, as well as whole shares, will be credited to their account;
- Participants take advantage of dollar cost averaging through regular
and consistent common stock purchases to produce long range benefits;
- The Plan offers a share "safekeeping" service described below whereby
participants may deposit their stock certificates with the Agent and
have their ownership of such stock maintained on the Agent's records
as part of their Plan account;
- Participants receive a statement of account at each calendar quarter,
simplifying personal record keeping;
- These services are provided on behalf of the Company by the Agent.
The Agent's fees and other expenses incurred in providing these
services will be paid by the Company, except that participants will
be required to pay brokerage commissions with respect to any shares
sold by the Agent on behalf of participants.
All holders of record of shares of common and preferred stock of the
Company may participate in the dividend reinvestment program or the
safekeeping program, or in both. Shareholders enrolled in either program
may make additional, optional stock purchases under the Plan. Any
shareholder whose shares are held in a name other than his or her own, such
as the name of a broker, bank nominee or the like, must first have the
shares registered in his or her own name in order to take advantage of
these services.
DIVIDEND REINVESTMENT PROGRAM
PROCEDURE FOR PARTICIPATION
To participate in the dividend reinvestment program, you should sign
and return to the Agent an enrollment authorization card (enclosed with
this Prospectus) indicating thereon your intention to have the dividends
payable on all or a portion of your shares reinvested. The specific number
of shares as to which dividends are to be reinvested, if fewer than all
shares, must be indicated on the card. In order to participate in the
program with respect to a future dividend, an enrollment authorization card
must be received by the Agent no later than the record date for such
dividend. An enrollment authorization card and postage prepaid envelope
have been provided with this Prospectus. All current participants will
automatically continue in the Plan without sending in a new authorization
card.
5<PAGE>
SOURCE OF SHARES; TIMING OF PURCHASES
The Company reserves the right to purchase shares for the Plan
directly from the Company (either treasury shares or authorized but
unissued shares), on the open market, or by a combination of the foregoing.
The Company will instruct the Agent with respect to each dividend payment
whether to purchase shares for the Plan on the open market or directly from
the Company. If the shares are purchased directly from the Company, the
per share purchase price will be the Fair Market Value. If the shares are
purchased on the open market, the per share price will be the Current
Market Value.
If the shares are being purchased on the open market, the Agent may,
in its sole and absolute discretion, begin purchasing shares no earlier
than five business days prior to the dividend payment date and complete
purchasing shares no later than thirty days after such date, except where
beginning such purchases at an earlier time is permissible or where
completing such purchases at a later time is necessary or advisable under
applicable federal securities laws and regulations. Neither the Company
nor any participant shall have any authority or power to direct the time or
price at which shares maybe purchased or the selection of the broker or
dealer through whom such purchases are to be made. If the shares are being
purchased directly from the Company, the shares will be purchased as of the
dividend payment date.
INVESTMENT OF FUNDS
The Agent will credit the dividends which are to be reinvested to the
account of each participant in the form of shares of the Company's common
stock. Credit will be given for fractional shares. All dividends earned on
the full and fractional shares acquired for the participant under the
program will be similarly reinvested. The number of shares purchased with
reinvested dividends will depend on whether the shares are purchased
directly from the Company or on the open market. If the shares are
purchased directly from the Company the number of shares purchased will be
determined by dividing the total amount of the dividend to be reinvested by
the Fair Market Value on the dividend payment date. If the shares are
purchased on the open market the number of shares purchased will be
determined by dividing the total amount of the dividend to be reinvested by
the Current Market Value.
TERMINATION OF PARTICIPATION IN THE DIVIDEND REINVESTMENT PLAN
Participants may terminate their participation in the dividend
reinvestment program by so informing the Agent in writing. Written
notification of such termination must be received by the Agent at least 5
days prior to the record date for such dividend. Unless otherwise directed,
the Agent will continue to hold the participant's shares under the
safekeeping program.
6<PAGE>
OPTIONAL STOCK PURCHASE PROGRAM
OPTIONAL CASH PAYMENTS
Each participant in the Plan may make optional cash payments each
quarter, or less frequently if desired, in an amount ranging from a minimum
of $25.00 to a maximum of $5,000.00. Optional cash payments will be
invested in additional shares of the Company's common stock for the account
of the contributing participant. These optional cash payments may be made
regularly or from time to time and in varying amounts within the prescribed
limits.
SOURCE OF SHARES; TIMING OF PURCHASES
The Agent ordinarily will not make share purchases based on optional
cash payments more frequently than once a month, at which time the shares
will be purchased directly from the Company or on the open market, as
directed by the Company. If the shares are purchased directly from the
Company, the per share purchase price will be the Fair Market Value. If the
shares are purchased on the open market by the Agent, the price will be the
Current Market Value. However, the Agent reserves the right to defer to the
next month or the dividend payment date the investment of optional cash
payments for any reason including observance of any rules and regulations
of the Securities and Exchange Commission which may require temporary
curtailment or suspension of purchases. No interest will be paid with
respect to optional cash payments received by the Agent pending the
investment of such optional cash payments in shares of common stock.
SAFEKEEPING PROGRAM
Shareholders may deposit their Company stock with the Agent for
safekeeping. Shareholders who use this service can avoid the inconvenience
of maintaining a safe deposit box or other location to hold their share
certificates.
PROCEDURE FOR PARTICIPATION
All eligible shareholders who wish to avail themselves of the
safekeeping program for their shares should mail their certificates to
Chemical Bank, P.O. Box 750, Pittsburgh, PA 15230-9625. Certificates should
be sent by registered mail and should be accompanied by written
instructions specifying (i) that the shares are furnished for safekeeping
and (ii) that dividends are to be either reinvested pursuant to the Plan or
paid directly to the shareholder. A convenient authorization card
accompanies this Prospectus for this purpose.
TERMINATION OF PARTICIPATION IN THE PROGRAM
Participating shareholders may terminate their participation in the
safekeeping program without charge at any time by requesting in writing
that a certificate be issued for all of the shares held by the Agent. Upon
termination, the Agent will forward a certificate representing the full
shares of common stock in the participant's account and the cash equivalent
of any fractional shares credited to such account. The cash equivalent of
any fractional shares will be calculated on the basis of the average of the
high and low market prices of the Company's common stock on the New York
Stock Exchange on the date of receipt of such notice by the Agent.
7<PAGE>
ADDITIONAL INFORMATION
HANDLING OF ACCOUNTS
The Agent will maintain a separate account for each shareholder
participating in the Plan. Common stock purchased under the Plan or
delivered to the Agent for safekeeping will be registered in the name of
the Agent's nominee as agent for the participant until the distribution or
transfer of the shares at each participant's request. The Agent will issue
to a participating shareholder upon written request at any time a
certificate representing all full shares being held for the shareholder
pursuant to the Plan. No certificates will be issued to a participant
unless requested in writing or until the participant's account is
terminated. No certificates will be issued for fractional shares.
Any stock dividends or stock splits with respect to the Company's
common stock associated with the shares held for a participant in his or
her account will be credited to the participant's account and treated in
the same manner as other shares held in his or her account. In the event
that any rights to purchase additional shares of the Company's common stock
or other securities are received by the Agent with respect to shares held
in participants' accounts, the Agent will distribute such rights as soon as
practicable. In making purchases, the Agent may intermingle a participant's
funds with those of other participants.
STATEMENTS OF ACCOUNTS
The Agent will confirm by detailed statement all reinvested dividend
shares and all purchases of shares based on optional cash payments as soon
as practicable after such purchases are made. The Agent will also confirm
by detailed statement the receipt of any shares which are delivered for
safekeeping. In addition, the Agent will furnish a statement following each
dividend payment verifying the number of shares held in custody. Statements
mailed to participants will include information concerning share balance,
dividend rate, total dividends credited, full and fractional shares
credited and total shares in the account. In addition, the Agent each year
will provide each participant with a tax statement that will indicate the
total cash dividends reinvested pursuant to the Plan for the participant's
account and other relevant tax information. Each participant is
responsible for retaining these statements in order to establish the cost
basis of the shares purchased under the Plan for tax purposes.
Each participant will also receive the same communications that are
sent to all other registered holders of shares of the Company's common
stock, including the Company's quarterly reports, the annual report to
shareholders, a notice of the annual meeting and the accompanying proxy
statement.
All notices, statements and reports from the Agent to a participant
will be addressed to the participant at the last known address of the
participant on file with the Agent. Therefore, participants must promptly
notify the Agent of any change of address. The failure to do so for an
extended period of time may result in the escheatment of the participant's
account to the state of the last known address of the participant, in
accordance with applicable state laws.
8<PAGE>
COST TO PARTICIPANTS
The full cost of administering the Plan will be borne by the Company.
The Company also pays the brokerage fees and other expenses associates with
the purchase of any shares on the open market. There are no brokerage fees
for shares purchased directly from the Company. Participants are required
to pay the brokerage fees and handling charges on the sale of any shares
sold through the Plan at the participants' request.
SALE OF STOCK
The Agent will sell such full shares and deliver the proceeds, less
brokerage commissions, plus the cash equivalent of any fractional shares
credited to such account, to any participant requesting such a sale in
writing. If a participant disposes of all common and preferred stock of the
Company registered in his or her name, the Agent will attempt to determine
from the participant the disposition the participant wishes to make of the
shares in his or her account under the Plan. Should the Agent be unable to
obtain instructions regarding the disposition of such account, it may, in
its discretion, continue to hold shares in the participant's account and
reinvest dividends paid on such shares until it is otherwise notified.
FEDERAL INCOME TAX CONSIDERATIONS
TAXABLE INCOME AND TAX BASIS
For federal income tax purposes, cash distributions that are
reinvested in additional shares of common stock purchased from the Company
are treated as a taxable dividend to the extent the Company has earnings
and profits. When shares are purchased from the Company, the amount of the
dividend, for federal income tax purposes, is an amount equal to the Fair
Market Value of the shares on the dividend payment date. When shares are
purchased on the open market, the amount of the dividend, for federal
income tax purposes, is an amount equal to the Current Market Value of the
stock purchased by the Agent plus the participant's allocable share of any
brokerage commissions paid by the Company.
In the opinion of the Company, the amount of the taxable distribution
would not be increased as a result of the Company's payment of
administrative fees or expenses of the Plan. Should the Internal Revenue
Service determine that the Company's payment of such administrative
expenses increases the amount of the taxable distribution, it is the
Company's belief that the amount thereby includable in income would be
deductible by corporations, and by individuals who itemize deductions as an
expense incurred for the production of income subject to certain
limitations on the deduction of so called miscellaneous itemized
deductions. As noted above, participants who reinvest dividends will have
taxable income to the extent of their allocable share of any brokerage
commissions paid by the Company.
9<PAGE>
Participants in the Plan do not realize taxable income upon receiving
certificates for whole shares of common stock credited to their accounts,
either upon their request for such certificates or their withdrawal from or
termination of their participation in the Plan. Participants do, however,
recognize gain or loss (which, for most participants, will be capital gain
or loss) when shares acquired under the Plan are sold or exchanged, either
by the Agent at the request of participants or by the participants
themselves after their receipt of share certificates from the Agent.
Generally, the amount of such gain or loss is equal to the difference
between the amount which participants receive for their shares or
fractional shares and the tax basis thereof.
The tax basis of shares of common stock purchased directly from the
Company with reinvested dividends is equal to the Fair Market Value of the
shares on the relevant dividend payment date. The tax basis of shares
purchased on the open market is equal to the Current Market Value of the
shares purchased by the Agent plus the participant's allocable share of
any brokerage commissions paid by the Company. The tax basis of shares
purchased directly from the Company with optional cash payments is equal to
the amount of such cash payment. The tax basis of any shares acquired
through the Plan may be adjusted as a result of subsequent events, such as
distributions that constitute a return of capital, stock splits and stock
dividends.
WITHHOLDING PROVISIONS
Federal law requires the Agent to withhold an amount (currently 31%)
from the amount of dividends and the proceeds of any sale of shares for a
participant if (i) the participant fails to certify to the Agent that the
participant is not subject to backup withholding, (ii) the participant
fails to certify that the taxpayer identification number provided is
correct, or (iii) the Internal Revenue Service notifies the Company that
the participant is subject to backup withholding. The withheld amounts
will be deducted from the cash dividends paid and the remaining amount will
be reinvested in shares of Company common stock. The withheld amounts also
will be deducted from the proceeds of any sale of shares and the remaining
amount will be sent to the participant.
In the case of those foreign shareholders whose dividends are subject
to United States income tax withholding, the amount of tax to be withheld
will be deducted from the cash dividends paid and the remaining amount of
the dividends will be reinvested in shares of Company common stock. In the
case of those foreign shareholders whose sale proceeds are subject to
withholding, the amount of tax to be withheld will be deducted from the
proceeds of the sale of shares.
The foregoing description of the federal income tax consequences of
participation in the Plan is included only for the information of
participants in the Plan and does not purport to be a complete description
of all the relevant tax provisions or of all the tax consequences as they
may apply to any participant's individual situation. Neither the Company
nor its counsel have hereby undertaken to advise any shareholder in his or
her individual capacity. Tax questions regarding participation in the Plan
should be discussed by each participant with his or her own tax advisor.
10<PAGE>
USE OF PROCEEDS
The proceeds from the issuance and sale of shares of common stock
sold pursuant to the Plan will be used for general corporate purposes.
These purposes include the continuing requirements of both the Company's
regulated and non-regulated operations for equity capital. The Company
cannot estimate with certainty either the number of shares which will be
sold pursuant to the Plan or the prices at which such shares will be sold.
DIVIDENDS
Except for certain restrictions relating to the Company's classes of
preferred stock as to which dividends must be paid prior to the payment of
common stock dividends and certain other restrictions under the Company's
open-end indenture, there are no other restrictions on the Company's
present or future ability to pay such dividends. The Company expects that
quarterly dividends will continue to be paid in the future, dependent upon
the Company's future earnings, financial requirements and other factors.
Quarterly dividends are also paid by the Company on its two classes
of preferred stock. These dividends are also eligible for reinvestment in
common stock pursuant to the Plan.
VOTING
The Agent will vote all full shares that it holds on behalf of each
participant in accordance with the proxy returned to the Company by such
participant. If a participant does not return a proxy to the Company, the
Agent will not vote the shares in such participant's account unless
otherwise required by law or judicial or administrative order.
LIABILITY
Neither the Company or the Agent shall be liable under the Plan or
with respect to services rendered to shareholders for any act done in good
faith or for any good faith omission to act, including without limitation
any claims of liability (1) 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, and (2) with respect to the prices at
which shares are purchased for the participant's account and the time such
purchases are made (3) with respect to the times at which purchases or
sales are made, (4) with respect to fluctuations in the market value of
Plan shares in a participant's account.
LEGAL OPINION
Legal matters in connection with the securities offered hereby will
be passed upon by Messrs. Murtha, Cullina, Richter and Pinney, Counsel for
the Company.
11<PAGE>
EXPERTS
The consolidated financial statements and related supporting
schedules in the Annual Report on Form 10-K of Connecticut Natural Gas
Corporation for the fiscal year ended September 30, 1994 incorporated by
reference in this Prospectus have been examined by Arthur Andersen LLP,
independent public accountants, as indicated by their report with respect
thereto, and are incorporated herein by reference in reliance upon the
authority of said Firm as experts in accounting and auditing in giving said
reports.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 33-320a of the Connecticut Stock Corporate Act and certain
provisions of the Company's By-Laws provide for the indemnification of the
Company's directors, officers, employees and agents in a variety of
circumstances, which may include liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"). In addition, the Company
has purchased liability insurance, as permitted by Connecticut law, on
behalf of its directors, officers, employees or agents, which also may
cover liabilities arising under the Securities Act.
Insofar as indemnification of liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
IT IS SUGGESTED THAT THIS PROSPECTUS BE RETAINED FOR FUTURE REFERENCE.
12<PAGE>
THIS IS NOT A PROXY
CONNECTICUT NATURAL GAS CORPORATION
DIVIDEND REINVESTMENT PLAN
ENROLLMENT AUTHORIZATION
__
|__| DIVIDEND REINVESTMENT. I hereby elect and authorize Connecticut
Natural Gas Corporation ("CNG") to pay to Chemical Bank or its
nominee ("the Agent") shares of CNG common stock in lieu of cash
dividends otherwise payable to me for my account on all or
____________ (indicate number of shares if less than all) of the
common or preferred shares of CNG registered in my name. I hereby
appoint Chemical as my Agent and authorize them to receive for my
account all reinvested dividend shares issued pursuant to the
foregoing election and to apply all cash received by the Agent to the
purchase of additional full and fractional shares of CNG common
stock.
__
|__| SAFEKEEPING. I hereby transmit to the Agent for safekeeping in my
name the following certificates representing shares of CNG. You need
not endorse the certificate for this purpose.
CERTIFICATE NUMBER NUMBER OF SHARES
------------------ ------------------
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
_______________________ _______________________
TO ENROLL IN THE PLAN, PLEASE SIGN THE REVERSE SIDE.
I understand that I may terminate any of these arrangements at any time by
notifying the Agent in writing. The actions I have elected are taken
pursuant to the Prospectus which fully describes the terms and conditions
of the Dividend Reinvestment Plan and Safekeeping Program.
<TABLE>
<C> <S> <C>
______________________ THIS AUTHORIZATION CARD SHOULD Date _______________, 19__
Shareholder BE SIGNED BY THOSE PERSONS
WHOSE NAMES APPEAR BELOW.
______________________
Shareholder
</TABLE>
13<PAGE>
