<PAGE> 1 File Number 70-7170
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 6
to
FORM U-1
DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
By
CONSOLIDATED NATURAL GAS COMPANY
CNG Tower
Pittsburgh, Pennsylvania 15222-3199
Names and addresses of agents for service:
S. E. WILLIAMS, Senior Vice President
and General Counsel
Consolidated Natural Gas Company
CNG Tower
Pittsburgh, Pennsylvania 15222-3199
H. P. PAYNE, Jr., Senior Attorney
Consolidated Natural Gas Service
Company, Inc.
CNG Tower
Pittsburgh, Pennsylvania 15222-3199
<PAGE> 2 File Number 70-7170
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 6
to
FORM U-1
DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Item 1. Description of Proposed Transaction
___________________________________
(a) Furnish a reasonably detailed and precise description of the
proposed transaction, including a statement of the reason why it is desired to
consummate the transaction and the anticipated effect thereof. If the
transaction is part of a general program, describe the program and its
relation to the proposed transaction.
Consolidated Natural Gas Company (the "Company" or "Consolidated"), is a
public utility holding company registered under the Public Utility Holding
Company Act of 1935 ("Act"). It is engaged solely in the business of owning
and holding all of the outstanding securities of fifteen subsidiary companies,
most of which are principally engaged in natural gas exploration, production,
purchasing, gathering, transmission, storage, distribution and by-product
operations.
By prior Commission orders in this proceeding dated November 27, 1985,
March 20, 1986 and December 18, 1989 (HCAR Nos. 23926, 24052 and 25002,
respectively), Consolidated was authorized to issue 1,500,000 shares of its
common stock, $2.75 par value ("Common Stock"), from time to time through
December 31, 1994, to the agent for participants in Consolidated's Dividend
Reinvestment Plan ("DRP"). 84,097 shares of Common Stock have been issued
through September 8, 1994, pursuant to the authorization under this
proceeding, and it is anticipated that 1,415,903 shares of Common Stock
allocated to the DRP will remain unissued as of December 31, 1994.
<PAGE> 3
Consolidated proposes to continue the DRP and, at the option of its Board
of Directors, offer participants either authorized and unissued Common Stock
or outstanding Common Stock purchased in the open market. Authorized and
unissued shares of Common Stock will be issued whenever additional equity
capital is needed by Consolidated. The per share price of original issue
Common Stock purchase from Consolidated will be the closing price of
Consolidated's Common Stock on the New York Stock Exchange Consolidated tape
on the dividend payment date. Consolidated will use the proceeds from the
sale of such shares for general corporate purposes. Whenever additional
equity capital is not needed by Consolidated, DRP shares will be acquired
through open market purchases by Society National Bank ("Society") in
Cleveland, Ohio, which will continue to act as agent for stockholders
participating in the DRP. In either event, stockholders participating in the
DRP would benefit inasmuch as the Company will absorb all brokerage
commissions and administrative charges, such as agent fees.
No one has the right to vote any shares acquired through the DRP other
than the respective participants in the DRP who own such shares. The Board of
Directors has the right to adjust the number of shares reserved under the DRP
which may be issued in order to prevent dilution or enlargement of
participants' rights under the DRP in the event of a stock split, reverse
stock split, organization or similar event with respect to which the Board
determines that an equitable adjustment is appropriate. Consolidated requests
authority to issue said 1,415,903 shares of Commmon Stock, or such shares as
may actually remain unissued at December 31, 1994, to Society as agent for the
DRP until such number shall be exhausted, but not beyond December 31, 1999.
Consolidated further requests authority to adjust the number and par value (if
<PAGE> 4
appropriate) of shares of Common Stock that may be issued under the DRP in the
implementation of the antidilution or anti-enlargement of rights provisions of
the DRP.
(b) Describe briefly, and where practicable state the approximate amount
of, any material interest in the proposed transaction, direct or indirect, of
any associate company or affiliate of the applicant or any affiliate of any
such associate company.
None.
(c) If the proposed transaction involves the acquisition of securities
not issued by a registered holding company or a subsidiary thereof, describe
briefly the business and property, present or proposed, of the issuer of such
securities.
Not applicable.
(d) If the proposed transaction involves the acquisition or disposition
of assets, describe briefly such assets, setting forth original cost, vendor's
book cost (including the basis of determination) and applicable valuation and
qualifying reserves.
Not applicable.
Item 2. Fees, Commissions and Expenses
______________________________
(a) State (1) the fees, commissions and expenses paid or incurred, or to
be paid or incurred, directly or indirectly, in connection with the proposed
transaction by the applicant or declarant or any associate company thereof,
and (2) if the proposed transaction involves the sale of securities at
competitive bidding, the fees and expenses to be paid to counsel selected by
applicant or declarant to act for the successful bidder.
It is estimated that the expenses to be incurred by the Company in
connection with the herein proposed transactions are as follows:
Form U-1 Amendment Filing Fee $2,000
Charges of Consolidated Natural Gas
Service Company, Inc. for services
in connection with the preparation
of this declaration, and related
documents and papers $1,000
Miscellaneous out-of-pocket expenses 500
______
$3,500
======
<PAGE> 5
(b) If any person to whom fees or commissions have been or are to be
paid in connection with the proposed transaction is an associate Company or an
affiliate of the applicant or declarant, or is an affiliate of an associate
company, set forth the facts with respect thereto.
The charges of Consolidated Natural Gas Service Company, Inc., a
subsidiary service company, for services on a cost basis (including regularly
employed counsel) in connection with the preparation of this declaration on
Form U-1, and other related documents and papers required to consummate the
proposed transactions are included in the above table.
Item 3. Applicable Statutory Provisions
_______________________________
(a) State the sections of the Act and the rules thereunder believed to
be applicable to the proposed transaction. If any section or rule would be
applicable in the absence of a specific exemption, state the basis of
exemption.
Sections 6(a), 7 and 12(c) and Rule 42 are deemed to be applicable to the
proposed issuance of shares of common stock in connection with the DRP.
To the extent that the proposed transactions are considered by the
Commission to require authorization, approval or exemption under any section
of the Act or provision of the rules or regulations other than those
specifically referred to herein, request for such authorization, approval or
exemption is hereby made.
(b) If an applicant is not a registered holding company or a subsidiary
thereof, state the name of each public utility company of which it is an
affiliate, or of which it will become an affiliate as a result of the proposed
transactions, and the reasons why it is or will become such an affiliate.
Not applicable.
Item 4. Regulatory Approval
___________________
(a) State the nature and extent of the jurisdiction of any State
commission or any Federal commission (other than the Securities and Exchange
Commission) over the proposed transaction.
<PAGE> 6
No State commission and no other Federal commission has jurisdiction
over the proposed transactions.
(b) Describe the action taken or proposed to be taken before any
commission named in answer to paragraph (a) of this item in connection with
the proposed transaction.
None.
Item 5. Procedure
_________
(a) State the date when Commission action is requested. If the date is
less than 40 days from the date of the original filing, set forth the reasons
for acceleration.
It is requested that an order in these proceedings be issued not later
than October 31, 1994.
(b) State (i) whether there should be a recommended decision by a
hearing officer, (ii) whether there should be a recommended decision by any
other responsible officer of the Commission, (iii) whether the Division of
Corporate Regulation may assist in the preparation of the Commission's
decision, and (iv) whether there should be a 30-day waiting period between the
issuance of the Commission's order and the date on which it is to become
effective.
It is submitted that a recommended decision by a hearing or other
responsible officer of the Commission is not needed with respect to the
proposed transactions. The Office of Public Utility Regulation of the
Division of Investment Management may assist in the preparation of the
Commission's decision. There should be no waiting period between the issuance
of the Commission's order and the date on which it is to become effective.
Item 6. Exhibits and Financial Statements
_________________________________
The following exhibits are made a part of this statement:
<PAGE> 7
(a) Exhibits
________
A-1 Composite copy of Certificate of Incorporation of the Company,
as amended to date. (Incorporated by reference to Exhibit A-1
filed with the Application/Declaration of the Company as Form
U-1, File No. 70-7811).
A-2 Composite copy of Bylaws of the Company, as amended to
March 1, 1993. (Incorporated by reference to Exhibit B to Form
U5S, File No. 30-203, for the year ended December 31, 1992).
B-1 Prospectus dated August 2, 1993 Containing Description of
Dividend Reinvestment Plan.
O Proposed notice pursuant to Rule 22(f)
F Legal Opinion
(b) Financial Statements
____________________
Not applicable
Item 7. Information as to Environmental Effects
_______________________________________
(a) Describe briefly the environmental effects of the proposed
transaction in terms of the standards set forth in Section 102(2)(C) of the
National Environmental Policy Act (42 U.S.C. 4232(2)(C)). If the response to
this item is a negative statement as to the applicability of Section 102(2)(C)
in connection with the proposed transaction, also briefly state the reasons
for that response.
As more fully described in Item 1(a), the proposed transactions subject
to the jurisdiction of this Commission relate only to issuance of stock
pursuant to the DRP and involve no major federal action significantly
affecting the human environment.
<PAGE> 8
(b) State whether any other federal agency has prepared or is preparing
an environmental impact statement ("EIS") with respect to the proposed
transaction. If any other Federal agency has prepared or is preparing an EIS,
state which agency or agencies and indicate the status of that EIS
preparation.
None.
SIGNATURES
__________
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this statement to be signed on
its behalf by the undersigned thereunto duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
By H. P. Payne, Jr., Its Attorney
Date: September 13, 1994
<PAGE> 1
EXHIBIT F
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Consolidated Natural Gas Company ("Consolidated")
File No. 70-7170
Dear Sirs:
Pursuant to the requirements of Paragraph F(1) of the instructions to
exhibits to Form U-1 this opinion is furnished in connection with the proposed
issuance of shares of Consolidated's common stock, $2.75 par value ("Common
Stock"), to Society National Bank as agent for common stockholders
participating in a dividend reinvestment plan all as more fully described in
Consolidated's Declaration filed under the above referenced file number, as
amended. Of the 1,500,000 shares of Common Stock initially authorized for
issuance by prior orders issued in the proceeding under File No. 70-7170,
84,091 shares have been previously issued and 1,415,903 shares (subject to
antidilution or anti-enlargement of rights provisions) remained available for
issuance as to the date of this opinion.
As counsel for Consolidated and at its request, I have examined and am
familiar with the said Declaration, all amendments thereto and prior orders
issued in this proceeding, Consolidated's Certificate of Incorporation and
Bylaws, and the corporate proceedings relative to the issuance of said shares.
In my opinion, in the event the proposed transactions are consummated in
accordance with the said Declaration, as amended to date, then:
(a) all state laws applicable to the proposed actions will have
been complied with;
(b) Consolidated, the issuer of said Common Stock, is validly
organized and duly existing;
(c) said Common Stock shall have been validly authorized and, upon
issuance and sale for not less than the par value thereof, will
be validly issued, full paid and nonassessable, and the holders
thereof will be entitled to the rights and privileges
appertaining thereto, as set forth in Consolidated's
Certificate of Incorporation, as amended; and
<PAGE> 2
EXHIBIT F
(d) the consummation of said transactions will not violate the
legal rights of the holders of any securities issued by
Consolidated or any associate company thereof.
I hereby consent the this opinion be included as an exhibit to the said
Declaration.
Very truly yours,
H. P. Payne, Jr.
<PAGE> 1 Exhibit O
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ; 70-7170)
Consolidated Natural Gas Company
Notice of Proposed Extension of Period to Issue Common Stock Under Dividend
Reinvestment Plan and Exception from Competitive Bidding
September , 1994
Consolidated Natural Gas Company ("Consolidated"), CNG Tower, Pittsburgh,
Pennsylvania 15222-3199, a registered holding company, has filed with this
Commission a further post-effective amendment to its declaration in this
proceeding pursuant to Sections 6(a), 7 and 12(c) of the Public Utility
Holding Company Act of 1935 ("Act") and Rules 42 and 50(a)(5) promulgated
thereunder.
By prior orders in this proceeding dated November 27, 1985, March 20,
1986 and December 18, 1989 (HCAR Nos. 23926, 24052 and 25002), Consolidated
was authorized to issue shares of its common stock, $2.75 par value, from time
to time through December 31, 1994, to the agent for participants in
Consolidated's Dividend Reinvestment Plan ("DRP"). It is anticipated that as
of December 31, 1994 none of the shares of comon stock authorized to be issued
pursuant to this proceeding will have been issued, and 1,415,903 shares of
common stock allocated to the dividend reinvestment plan will remain unissued.
By post-effective amendment, Consolidated now requests that the period
for the common stock issuance be extended to December 31, 1999, for the shares
remaining unissued as of December 31, 1994, and that the number and par value
of the common stock that may be issued under the DRP be adjusted to implement
the antidilution or anti-enlargement of rights provisions of the DRP.
<PAGE> 2
The amended declaration and any further amendments thereto are available
for public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing should submit their
views in writing by October , 1994, to the Secretary, Securities and
Exchange Commission, Washington, D.C. 20549, and serve a copy on the
declarant at the address specified above. Proof of service (by affidavit or,
in case of an attorney at law, by certificate) should be filed with the
request. Any request for a hearing shall identify specifically the issues of
fact or law that are disputed. A person who so requests will be notified of
any hearing, if ordered, and will receive a copy of any notice or order issued
in this matter. After said date, the declaration, as now amended or as it may
be further amended, may be permitted to become effective.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
<PAGE> 1
Exhibit B-1
Consolidated Natural Gas Company
____________
Common Stock
____________
PROSPECTUS
Dated August 2, 1993
____________
DIVIDEND REINVESTMENT PLAN
____________
<PAGE> 2
CONSOLIDATED NATURAL GAS COMPANY
CNG Tower
625 Liberty Avenue
Pittsburgh, PA 15222-3199
Phone: (412) 227-1000
____________
44 Wall Street
New York, New York 10005
Phone: (212) 509-6900
____________
AGENT FOR PARTICIPANTS
Society National Bank
Corporate Trust Division
P.O.Box 6477
Cleveland, Ohio 44101
Phone: (216) 687-5745
____________
CONTENTS FOR PROSPECTUS
Page
Available Information
Incorporation of Certain Information by Reference
The Company
Description of Dividend Reinvestment Plan
Use of Proceeds
Miscellaneous
Legal Opinions
Experts
<PAGE> 3
CONSOLIDATED NATURAL GAS COMPANY
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
DIVIDEND REINVESTMENT PLAN
____________
To All Common Stockholders:
The Dividend Reinvestment Plan ("Plan") of Consolidated
Natural Gas Company ("Company"), as amended, provides each
registered holder of the Company's common stock ("common stock" or
"stock") with a simple and convenient method of reinvesting
dividends and/or making optional cash investments in additional
shares of common stock without payment of any brokerage commission
or service charge.
Participants in the Plan may acquire additional shares by:
-reinvesting all of their dividends; or
-reinvesting any part of their dividends and continuing to
receive a check for the uncommitted portion; or
-making optional cash investments of not less than $25 nor
more than $5,000 per quarter, whether they are reinvesting
all, a part, or none of their dividends.
Shares of common stock acquired by participants in the Plan
will consist of authorized and unissued shares sold to
participants through the Agent (as defined herein) by the Company,
or outstanding shares purchased by the Agent on behalf of
participants on the open market. The methods for determining the
prices of such shares are set forth in the answer to Question 10
of this Prospectus.
This Prospectus relates to 741,356 shares of the Company's
common stock, $2.75 par value (adjusted for stock splits),
registered and remaining for sale under the Plan.
It is suggested that this Prospectus be retained 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 August 2, 1993
<PAGE> 4
No 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 is not an offer to sell or a solicitation of an offer
to buy any securities other than those specifically offered
hereby, nor does it constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such
offer in such jurisdiction.
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 or its
subsidiaries since the date hereof.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission ("SEC"). Certain information,
as of particular dates, concerning the directors and officers of
the Company, their remuneration and any material interests of such
persons in transactions with the Company, is disclosed in proxy
statements distributed to shareholders and filed with the SEC.
Such reports, proxy statements and other information can be
inspected at the public reference facilities maintained by the SEC
in Washington, D.C. at 450 Fifth Street, N .W., Washington, D.C.
20549 and at the public reference facilities in the New York
Regional Office, Seven World Trade Center, New York, New York
10048, and Chicago Regional Office, Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60601, and copies of
such material can be obtained from the Public Reference Section of
the SEC at 450 Fifth Street, N .W., Washington, D.C. 20549 at
prescribed rates. In addition, reports, proxy material and other
information concerning the Company may be inspected at the New
York Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The Company
hereby incorporates herein by reference the following:
(1) the registrant's latest annual report on Form 10-K filed
pursuant to Sections 13(a) or 15(d) of the Exchange Act which
contains financial statements for the registrants latest fiscal
year for which a Form 10-K was required to have been filed;
<PAGE> 5
(2) all other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered
by the annual report referred to in (1) above; and
(3) the description of the Registrant's common stock as set
forth in the Registrant's Registration Statement No. 33-48881 on
Form 5-3.
All documents filed by the registrant hereafter pursuant to
Sections 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 thereof from the date of filing of
such documents.
This Prospectus omits certain additional information
contained in the Registration Statement filed with the SEC under
the Securities Act of 1933, as amended, to which reference is
hereby made.
Upon written or oral request, the Company will provide
without charge to each person to whom this Prospectus is delivered
a copy of any or all of the documents incorporated herein by
reference, excluding the exhibits thereto. Requests for such
documents should be addressed to the Corporate Secretary,
Consolidated Natural Gas Company, CNG Tower, 625 Liberty Avenue,
Pittsburgh, PA 15222-3199, Telephone No. (412)227-1183.)
THE COMPANY
Consolidated Natural Gas Company is the issuer of the shares
of common stock offered hereby. The principal executive offices of
the Company are located at CNG Tower, 625 Liberty Avenue,
Pittsburgh, PA 15222-3199, and its telephone number is (412)
227-1000.
DESCRIPTION OF DIVIDEND REINVESTMENT PLAN
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of common stock
with a simple and convenient method of reinvesting dividends
and/or making optional cash investments in additional shares of
common stock without payment of any brokerage commission or
service charge.
<PAGE> 6
2. How is the Plan administered?
The Plan is administered by Society National Bank ("Agent")
for participating holders of the Company's common stock. All
communications regarding the Plan should refer to Consolidated
Natural Gas Company and be addressed to:
Society National Bank
Corporate Trust Division
P.O. Box 6477
Cleveland, Ohio 44101
Phone (216) 737-5745 or 1-(800) 542-7792
3. May the Plan be suspended, modified or terminated?
The Plan may be suspended, modified or terminated at any
time. Notice of any such suspension, modification or termination
will be sent to all participants.
4. What expenses are incurred by a participant in connection
with purchases under the Plan?
All administrative charges are paid by the Company. However,
if at the time of termination. a participant directs the Agent to
sell shares credited to the participant's Plan account. The
participant will have to pay any related brokerage commission and
applicable stock transfer tax and a $5.00 termination fee. (See
Question 13.)
5. Who is eligible to participate in the Plan?
All holders of the Company's common stock are eligible to
participate, including beneficial owners of common stock whose
shares are registered in street or nominee names.
6. How and when can a stockholder enroll in the Plan?
A registered stockholder may enroll in the Plan at any time
by completing an Authorization Card and returning it to the Agent.
Blank Authorization Cards will be furnished by the Company or the
Agent upon request.
The Company has made arrangements with the Agent to
facilitate participation in the Plan by record holders such as
brokers and nominees, on a per-dividend basis, on behalf of
beneficial owners. Brokers and nominees will be provided forms
and information about these arrangements upon request to the
Agent. (See Question 8(b).) Participation will start with the
next quarterly dividend payment after receipt of a properly
executed Authorization Card, provided it is received by the Agent
on or before the record date for that dividend; otherwise, it
<PAGE> 7
will be necessary to delay participation until the next quarterly
payment date. Dividend record dates ordinarily are the fifteenth
day of January, April, July and October. Dividend payment dates
ordinarily are the fifteenth day of February, May, August and
November.7. Is partial participation possible under the Plan?
Yes. A stockholder who desires that the dividends on less
than all of the shares registered in his or her name be reinvested
under the Plan may indicate such number of shares on the
Authorization Card under Partial Dividend Reinvestment. (See
Question 8(a).)
8.(a) What does the Authorization Card provide?
The Authorization Card provides for the purchase of
additional shares of the Company's common stock through the
following investment options:
A. Full Dividend Reinvestment directs the Company to pay to
the Agent all of the participant's dividends on all of the shares
then or subsequently registered in his or her name and permits the
participant to make optional cash investments for the purchase of
additional shares in accordance with the Plan; or
B. Partial Dividend Reinvestment directs the Company to pay
to the Agent the participant's dividends on that number of shares
designated in the appropriate space of the Authorization Card, and
permits the participant to continue to receive cash dividends on
the balance of the shares registered in his or her name and to
make optional cash investments for the purchase of additional
shares in accordance with the Plan; or
C. Optional Cash Investment permits the participant to make
optional cash investments for the purchase of additional shares
even if none of the participant's dividends on shares registered
in his or her name are being reinvested. Optional cash investments
cannot be less than $25 nor more than $5,000 per quarter.
A participant may select any one of the above options. In
all cases, dividends on shares credited to a participant's Plan
account will be reinvested in accordance with the Plan. A
participant may change his or her election by written notice to
the Agent at the address set forth in the answer to Question 2.
8.(b) What does the Broker and Nominee Authorization Form provide?
The Broker and Nominee Authorization Form provides that the
record holder may provide the Agent, not later than five business
days following the record date relating to a dividend payment
date, with written instructions on an appropriate form,
<PAGE> 8
identifying one or more beneficial owners and specifying as to
each owner the number of shares with respect to which the dividend
is to be reinvested. The Broker and Nominee Authorization Form,
therefore, unlike the Authorization Card, contemplates new
instructions to the Agent each time a dividend is declared. The
Broker and Nominee Authorization Form also provides that the
record holder may forward optional cash payments to the Agent, on
or before a dividend payment date, along with the written
instructions on an appropriate form, identifying the beneficial
owner(s) for whom the optional cash payment(s) is or are being
made and specifying the amounts of the payments which cannot be
less than $25 nor more than $5,000 per quarter per each beneficial
owner.
9. How does the Plan work?
Dividend Reinvestment
On each dividend payment date a participant's full or partial
dividend will be remitted to the Agent. The Agent will reinvest
that dividend, as well as the full dividend on shares credited to
the participant's Plan account, either, as determined by the
Company, in authorized and unissued shares of common stock
purchased directly from the Company by the Agent or in shares
purchased on the open market. Credit will be made in whole and
fractional shares to the participant's Plan account. A fractional
share will earn a proportionate share of future dividends.
Optional Cash Investment
An optional cash investment may be made by a participant when
joining the Plan by enclosing a check or money order (payable to
Society National Bank) with the Authorization Card. Thereafter,
optional cash investments should be accompanied by the form
provided with the quarterly statement of the participant's
account. The same amount of money need not be invested each
quarter and there is no obligation to make an optional cash
investment each quarter.
Provided that they are received by the Agent on or before a
dividend payment date, optional cash investments will be invested
as of the dividend payment date for the quarter. Under no
circumstances will interest be paid on optional cash investments.
An optional cash investment should be mailed in time to reach the
Agent just before a dividend payment date, but not more than
thirty days before such dividend payment date. Except for an
initial optional cash investment sent in when first becoming a
participant in the Plan, an optional cash investment received by
the Agent more than thirty days before a dividend payment date
will be returned to the participant. A participant may, without
terminating his participation in the Plan, recover any optional
cash investment held for investment upon written request received
by the Agent not later than two business days prior to a dividend
<PAGE> 9
payment date. Dividend payment dates ordinarily are the fifteenth
day of February, May, August and November.
Each optional cash investment made by a participant must be
at least $25, and cannot, in any one quarter, exceed $5,000. If
all or part of a participant's optional cash investment is not
enough to purchase a whole share of common stock, a fractional
share will be credited to the participant's Plan account and will
earn a proportionate share of future dividends.
10. What will be the per-share price of stock purchased through
the Plan?
The per-share pi.ice of original issue common stock purchased
from the Company with reinvested dividends or optional cash
investments will be the closing price of the Company's common
stock on the NYSE Consolidated Tape on the dividend payment date.
The per share price of open market purchases will be the
weighted average of the prices of the purchases made by the Agent
to satisfy the reinvestment requirements for a particular dividend
payment date.
The number of shares credited to a participant's Plan account
each quarter depends on the amount of the participant's dividend,
including the full dividend on shares credited to a participant's
Plan account, plus any optional cash investment, and the price of
a share of common stock as determined in the preceding paragraphs.
Each participant's Plan account will be credited with that number
of shares, including fractions computed to three decimal places.
11. Are stock certificates issued to participants?
Certificates for shares of stock purchased for a participant
will be registered in the name of the Agent or its nominee and,
except as provided in the next paragraph, will not be issued in
the participants name while he or she is enrolled in the Plan.
Quarterly purchases credited to a participant's Plan account will
be confirmed by the Agent as soon as practicable after such
purchases are completed.
A participant who desires to continue enrollment in the Plan,
but elects to have whole shares credited to his or her Plan
account reissued in his or her name, must do so upon written
request to the Agent. The Agent cannot have a standing order to
issue certificates for whole shares as they become available in a
participant's Plan account. Certificates for fractional shares
will not be issued under any circumstances.
<PAGE> 10
12. Is safekeeping available for issued stock certificates?
The Agent will provide certificate safekeeping. There is a
$5.00 charge for each transaction involving the putting of one or
more certificates into safekeeping.
13. How and when can a participant withdraw from the Plan?
A participant may withdraw from the Plan any time prior to a
dividend record date by writing to the Agent. As soon as
practicable following termination, the Agent will send the
participant a certificate for the whole shares in the
participant's Plan account. If the participant so requests, the
Agent will sell such shares and remit the proceeds, less any
related brokerage commission and applicable stock transfer tax. In
any event, there is a $5.00 termination fee. The Agent will sell
the shares on the open market as soon as practicable after receipt
of a request to terminate; such sale will normally occur on the
Monday next succeeding (or next NYSE trading date thereafter if
the NYSE is not open on such Monday) the date a participant's
request to sell is received. If the request to terminate is
received by the Agent on or after the record date for a dividend
payment, any dividend paid on the dividend payment date will be
invested for the participant's account. Any optional cash
investments which had been sent to the Agent prior to the request
to terminate will also be invested unless return of the amount is
expressly requested in the request for termination and the request
for termination is received at least two business days prior to
the dividend payment date. The request for termination will then
be processed as promptly as possible following such dividend
payment date. In every case of termination, the participant's
interest in a fractional share will be paid in cash at the closing
price of the Company's common stock on the NYSE Consolidated Tape
on the day the withdrawal notice is received by the Agent. If that
day is not a NYSE trading day, the next subsequent trading day
will be substituted.
14. What happens when a participant ceases to he a stockholder of
record?
If a participant disposes of all shares of stock registered
in his or her name, the Agent will continue to reinvest the
dividends on the shares credited to the participant's Plan account
until otherwise notified.
The Agent may terminate a participant's Plan account at any
time by written notice to the participant.
<PAGE> 11
15. Will a participant receive Company communications and
reports?
A participant will receive all Company communications and
reports, as well as quarterly statements of his or her Plan
account, which should be retained for income tax purposes. (See
Question 18.) A participant should notify the Agent immediately of
any address change in order to prevent Company mailings from
becoming undeliverable by the U.S. Post Office.
16. How will shares held in a participant's Plan account be voted
at meetings of stockholders?
For each meeting of stockholders, a participant will receive
proxy material that will enable the participant to vote both the
shares registered in his or her name and any whole shares credited
to his or her Plan account.
17. What happens in the event the Company declares a stock
dividend, a stock split, or issues subscription rights?
Stock dividends or split shares distributed by the Company on
shares held by the Agent for a participant will be credited to the
participant's Plan account. Certificates for stock dividends and
split shares distributed on shares registered in the name of a
participant will be mailed directly to the participant. In the
event of a rights offering. rights on shares of stock registered
in the name of a participant, as well as on any whole shares
credited to the participant's account under the Plan, will be
mailed directly to the participant in the same manner as to
holders of stock not participating in the Plan.
18. What is the federal income tax status of reinvested dividends
and shares of stock acquired through the Plan?
Cash dividends which are reinvested under the Plan at a
participant's direction are taxable to the participant in the same
manner as cash dividends actually received by the participant. The
reinvestment of such dividends does not enable the participant to
exclude any portion thereof. Where dividends are reinvested by the
Agent through open market purchases of Company common stock, the
amount of the dividend treated as received by the participant is
increased by the amount of brokerage commissions and service
charges paid by the Company on the participants behalf.
In the case of optional cash investments wherein the Agent
makes such investments through open market purchases, the
participant is treated as receiving a dividend in the amount of
the brokerage commission and service charges paid by the Company
on the participant's behalf.
<PAGE> 12
In the case of an individual participant, the service charges
paid on behalf of the participant, which are treated as dividends
to the participant under the above discussion, may be deductible
on the participant's income tax return if the participant itemizes
deductions. The deductibility of such charges is, however, subject
to the 2% floor on miscellaneous itemized deductions.
The tax basis of shares purchased for a participant pursuant
to the dividend reinvestment feature of the Plan is equal to the
amount of the reinvested dividend, plus, in the case of open
market purchases, the amount of brokerage commissions paid by the
Company on the participant's behalf in making such purchase. In
the case of optional cash investments, the participant's basis in
the shares acquired is equal to the amount of cash paid to the
Agent by the participant plus, in the case of open market
purchases, the amount of brokerage commissions paid by the Company
on the participant's behalf.
The holding period for newly issued shares purchased from the
Company for a participant will begin on the day following the
dividend payment date. The holding period for shares purchased on
the open market will begin on the day following the date of
purchase.
Upon withdrawal of shares from the Plan, a participant will
not realize taxable income when he or she receives certificates
for whole shares of stock acquired through the Plan. However, a
participant who receives a cash payment for a fractional share
credited to his or her Plan account may have a gain or loss
recognized with respect to such fraction. Gain or loss may also be
recognized by a participant when whole shares are sold, either by
the participant or pursuant to his or her request upon withdrawal
from the Plan. The amount of such gain or loss will be the
difference between the amount a participant receives for such
shares or fraction of a share, and the tax basis thereof.
THE AGENT'S QUARTERLY STATEMENTS OF A PARTICIPANT'S PLAN
ACCOUNT SHOULD BE RETAINED BY THE PARTICIPANT TO HELP DETERMINE
THE TAX BASIS OF SHARES ACQUIRED THROUGH THE PLAN.
Each year, the Agent will send a participant an information
return reporting dividend income received for tax purposes.
19. What provision is made for foreign stockholders whose
dividends are subject to income tax withholding?
In the case of foreign participating stockholders whose
dividends are subject to income tax withholding, an amount equal
to the dividends less the amount of tax required to be withheld
will be applied to the purchase of shares of stock.
<PAGE> 13
Optional cash investments by foreign stockholders must be
made in United States currency and will be invested in the same
manner as optional cash investments made by domestic stockholders.
20. Who interprets and regulates the Plan?
The Company reserves the right to interpret and regulate the
Plan as deemed desirable or necessary. Neither the Company nor the
Agent shall be liable for any act done in good faith, or for any
good faith omission to act, including, without limitation, any
claims of liability: (I) arising out of failure to terminate the
participant's Plan account upon such participant's death prior to
receipt of notice in writing of such death, and (2) with respect
to the price at which shares are purchased for the participant's
Plan account and the time such purchase is made.
NEITHER THE COMPANY NOR THE AGENT CAN ASSURE YOU OF A
PROFIT OR PROTECT YOU AGAINST A LOSS ON SHARES PURCHASED
UNDER THE PLAN.
USE OF PROCEEDS
The Company does not know the number of original issue shares
that will ultimately be offered to the Plan, the prices at which
they will be offered or the timing of offerings, this last being
at the sole discretion of the Company. Net proceeds received, when
authorized and unissued shares are sold to participants, will be
added to the treasury funds of the Company and will be used to
finance, in part, the capital expenditures of its subsidiaries.
MISCELLANEOUS
Society National Bank is both Transfer Agent and Registrar
for the common stock. The outstanding shares of common stock are
listed on the NYSE, and the shares offered hereby will have been
listed on that Exchange, subject to notice of issuance. All shares
of the common stock, when issued for not less than its par value,
will be fully paid and nonassessable by the Company. Each share of
common stock has one vote.
LEGAL OPINIONS
The legality of the common stock has been passed upon for the
Company by Henry P Sullivan, former Senior Vice President and
General Counsel of the Company and of its subsidiary, Consolidated
Natural Gas Service Company, Inc., ("Service Company") and Martin
F. Armstrong, Jr., former counsel for the Company and a former
employee and a General Attorney of Service Company. Mr. Sullivan
and Mr. Armstrong at the time of giving their opinions and at the
effective date of the Registration Statement beneficially owned
shares of the Company's common stock
<PAGE> 14
and had options to purchase, additional shares; Mr. Sullivan also
had a restricted stock award.
EXPERTS
The consolidated financial statements of Consolidated Natural
Gas Company and its Subsidiaries incorporated in this Prospectus
by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992, have been so incorporated in
reliance on the report of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
The estimates of gas and oil reserves included in the
aforesaid 1992 Annual Report are incorporated in this Prospectus
by reference thereto in reliance upon the report of Ralph E. Davis
Associates, Inc., independent geologists, as experts.
The estimates of recoverable raw coal reserves included in
the aforementioned 1992 Annual Report are incorporated in this
Prospectus by reference thereto in reliance upon the report of
John T. Boyd Company, mining and geological engineers, as experts.
