<PAGE> 1
Consolidated Natural Gas Company NOTICE OF ANNUAL MEETING
CNG Tower AND PROXY STATEMENT
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199 1996
Distribution Group [CNG logo] Consolidated
The East Ohio Gas Company Natural Gas
Cleveland, Ohio Company
The Peoples Natural Gas Company
Pittsburgh, Pennsylvania
Virginia Natural Gas, Inc.
Norfolk, Virginia
Hope Gas, Inc.
Clarksburg, West Virginia
West Ohio Gas Company
Lima, Ohio
Gas Transmission
CNG Transmission Corporation
Clarksburg, West Virginia
Exploration and Production
CNG Producing Company
New Orleans, Louisiana
Energy Marketing Services
CNG Energy Services Corporation
Pittsburgh, Pennsylvania
CNG Power Company
Pittsburgh, Pennsylvania
Other
CNG International Corporation
Pittsburgh, Pennsylvania
[CNG logo]
<PAGE> 2
CONSOLIDATED NATURAL GAS COMPANY
March 22, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders to
be held on Tuesday, May 21, 1996, at 10:30 a.m. Eastern Time at the Newark
Marriott Airport Hotel, Newark International Airport, Newark, New Jersey
07114.
The business items to be acted on during the Meeting are listed in the Notice
of Meeting and are described more fully in the Proxy Statement. The Board of
Directors has given careful consideration to these proposals and believes that
Proposals 1, 2, 3 and 4 are in the best interests of the Company and that
Proposals 5, 6 and 7 are not in the best interests of the Company. The Board
recommends that you vote FOR Proposals 1, 2, 3 and 4 and AGAINST Proposals 5,
6 and 7.
It is important that you be represented at the Annual Meeting in person or by
proxy. Whether or not you plan to attend, we urge you to mark, sign, date and
return the enclosed proxy card promptly in the postage paid envelope provided.
If you plan to attend, please check the appropriate box on the proxy card.
Thank you for your cooperation.
Sincerely,
GEORGE A. DAVIDSON, JR.
George A. Davidson, Jr.
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
CONSOLIDATED NATURAL GAS COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Consolidated Natural Gas Company will be held on
Tuesday, May 21, 1996, at 10:30 a.m. Eastern Time at the Newark Marriott
Airport Hotel, Newark International Airport, Newark, New Jersey 07114.
Stockholders of record at the close of business on March 21, 1996, will be
entitled to vote at the Meeting and any adjournment thereof.
The agenda for the Meeting includes:
1. Election of three Directors.
2. Ratification of the appointment of Price Waterhouse as independent
accountants.
3. A proposal to amend article FOURTH of the Certificate of
Incorporation to increase the authorized number of shares of common
stock from 200,000,000 shares of $2.75 par value, to 400,000,000
shares of $2.75 par value.
4. A proposal to amend article FOURTH of the Certificate of
Incorporation to increase the authorized number of shares of
preferred stock from 2,500,000 shares of $100 par value, to
5,000,000 shares $100 par value and to amend certain provisions.
5. Action on a stockholder-proposed resolution regarding the shareholder
rights plan.
6. Action on a stockholder-proposed resolution regarding Director
compensation.
7. Action on a stockholder-proposed resolution regarding change of
control agreements.
8. Transaction of any other business which may properly be brought
before the Meeting.
In the event you cannot be present in person, please sign and promptly return
the enclosed proxy card in the accompanying postage paid envelope so that your
shares will be represented at the Meeting. Prompt return of proxies will save
the Company the expense of further requests for proxies to insure a quorum.
By order of the Board of Directors,
LAURA J. MCKEOWN
Laura J. McKeown
Secretary
Pittsburgh, Pennsylvania
March 22, 1996
ATTENTION: Stockholders Participating in the Dividend Reinvestment Plan
The accompanying proxy card reflects the total shares of Common Stock
registered in your name directly, as well as any full shares credited
to your Dividend Reinvestment Plan account.
<PAGE> 4
CONSOLIDATED NATURAL GAS COMPANY
PROXY STATEMENT
This statement and proxy card, mailed to stockholders commencing March 29,
1996, are furnished in connection with the solicitation by the Board of
Directors of Consolidated Natural Gas Company of proxies to be voted at the
Annual Meeting of Stockholders, and any adjournment thereof, for the purposes
stated in the Notice of the Annual Meeting. Any stockholder who cannot attend
is requested to sign and return the accompanying proxy card promptly. The
proxy reflects the number of shares registered in a stockholder's name
directly and, for participants in the Company's Dividend Reinvestment Plan,
includes full shares credited to a participant's Dividend Reinvestment Plan
account. Proxies so given will be voted on all matters brought before the
Meeting and, as to the matters with respect to which a choice is specified,
will be voted as directed. The cost of solicitation will be paid by the
Company. In addition to the use of the mails, proxies may be solicited
personally, or by telephone or telecopy, by employees of the Company and its
subsidiaries with no special compensation to these employees. Kissel-Blake
Inc., 110 Wall Street, New York, New York 10005, has been retained to assist
in the solicitation of proxies at an estimated cost of $11,000. The Company
will reimburse brokerage houses and other custodians, nominees and fiduciaries
for expenses incurred in sending proxy material to their principals.
Any proxy given pursuant to this solicitation may be revoked at any time
prior to exercise by written notice to the Corporate Secretary, by filing a
later dated executed proxy, or by attending and voting at the Annual Meeting.
The address of the principal executive offices of the Company is Consolidated
Natural Gas Company, CNG Tower, 625 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3199.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF. Holders of Common
Stock, $2.75 par value, of record on March 21, 1996, have one vote for each
share held. On March 1, 1996, 94,052,652 shares of Common Stock were
outstanding. A majority of the outstanding shares will constitute a quorum at
the Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders. Broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
The following table indicates the beneficial ownership, as of January 31,
1996, of the Company's Common Stock with respect to the only persons known to
the Company to be the beneficial owner of more than 5% of such Common Stock.
On January 31, 1996, 94,010,249 shares of Common Stock were outstanding.
<PAGE> 5
Amount and Nature Percent
Name and Address of Of Beneficial of Outstanding
Beneficial Owner Ownership Common Stock
_____________________________________________________________________________
Trustees, Alternate Thrift Trust of
Employees Thrift Plans
CNG Tower, 625 Liberty Avenue
Pittsburgh, PA 15222-3199 6,002,331(1) 6.4%
Trustees, Long-Term Thrift Trust of
Employees Thrift Plan
CNG Tower, 625 Liberty Avenue
Pittsburgh, PA 15222-3199 5,419,823(2) 5.8%
________________
(1) Such shares are beneficially owned in varying amounts by 3,825 employees,
no one of whom beneficially owned in excess of 12,000 shares in the Plans,
or 2/100ths of 1% of the shares outstanding. Such shares are voted
pursuant to confidential instructions of participating employees and in
the absence of instructions such shares are not voted. A Registration
Statement relating to various investment options available to participants
in the Plans has been made effective under the Securities Act of 1933 and
is on file with the Securities and Exchange Commission (SEC).
(2) Such shares are beneficially owned in varying amounts by 2,739 employees,
no one of whom beneficially owned in excess of 14,000 shares in the Plan,
or 2/100ths of 1% of the shares outstanding. Such shares are voted
pursuant to confidential instructions of participating employees and in
the absence of instructions such shares are not voted. A Registration
Statement relating to various investment options available to participants
in the Plan has been made effective under the Securities Act of 1933 and
is on file with the SEC.
_____________________________________________________________________________
The Board of Directors does not know of any other persons or groups who
beneficially own 5% or more of the outstanding shares of Common Stock.
ANNUAL REPORT. Commencing on or about March 15, 1996, the Company's
Annual Report for the year ended December 31, 1995, including financial
statements, was mailed to stockholders of record on March 1, 1996, and will be
mailed to any additional persons who were not stockholders on that date but
are stockholders of record on March 21, 1996. The Company will provide a copy
of the Annual Report to any stockholder of record after March 21, 1996, upon
request in writing to the Corporate Secretary, Consolidated Natural Gas
Company, CNG Tower, 625 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3199.
<PAGE> 6
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors consists of ten members divided into three classes.
Each class has a three-year term, and only one class is elected each year.
There are no family relationships among any of the nominees, continuing
Directors and Executive Officers of the Company nor any arrangement or
understanding between any Director or Executive Officer or any other person
pursuant to which any of the nominees has been nominated. During 1995, each
of the members of the Board of Directors attended more than 75% of the
aggregate of the Board meetings and meetings held by all committees of the
Board on which the Director served during the periods that the Director
served.
On recommendation of the Nominating Committee of the Board of Directors,
three incumbent Class III Directors have been designated nominees for
reelection; each has consented to be a nominee and to serve if elected. The
remaining Directors will continue to serve in accordance with their previous
elections. The names and other information concerning the three persons
nominated for a term of three years and the seven continuing Board members are
set forth by Class on pages 7 through 10 of this Proxy Statement. However,
since the bylaws of the Company state that the term of office of a Director
shall expire on the date of the Annual Meeting of Stockholders following his
or her 70th birthday, it is anticipated that Mr. Peirson will serve one year
of the three-year term to which he is nominated. The personal information has
been furnished to the Company by the nominees and other Directors. Unless you
specify otherwise on your signed proxy card, your shares will be voted FOR the
election of the three persons named below to three-year terms as Directors.
In the event of an unexpected vacancy on the slate of nominees, your shares
will be voted for the election of a substitute nominee if one shall be
designated by the Board. If any nominee for election as Director is unable to
serve, which the Board of Directors does not anticipate, the persons named in
the proxy may vote for another person in accordance with their judgment.
VOTE NEEDED FOR ELECTION OF DIRECTORS
Directors are elected by a plurality of the votes of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting. Any shares not voted (whether by abstention, broker non-vote
or votes withheld) are not counted as votes cast for such individuals and will
be excluded from the vote.
BOARD RECOMMENDATION
The Board recommends that stockholders vote FOR Proposal 1, and the
accompanying proxy will be so voted, unless a contrary specification is made.
<PAGE> 7
DIRECTORS NOMINATED FOR ELECTION TO THE BOARD WITH A TERM EXPIRING MAY 1999
(photo PAUL E. LEGO Member: Compensation and Benefits
omitted) Age 65 Committee
Director since 1991 Executive Committee
Financial Policy Committee
Nominating Committee
Mr. Lego served as Chairman and Chief Executive Officer of
Westinghouse Electric Corporation, an electronic products and
services, environmental systems, equipment and broadcasting
company, Pittsburgh, Pennsylvania, from 1990 to his retirement in January
1993. He served that company as President and Chief Operating Officer from
1988 to 1990 and as a Director from 1988 to 1993. He had been Senior
Executive Vice President, Corporate Resources from 1985 to 1988, Executive
Vice President, Westinghouse Industries & International Group from 1983 to
1985 and Executive Vice President, Westinghouse Industry Products from 1980
to 1983. Prior thereto, he served in various engineering and management
capacities with Westinghouse since 1956. Mr. Lego is the non-executive
Chairman of the Board of Commonwealth Aluminum Corporation and a Director of
the Lincoln Electric Company and USX Corporation. He is a member of the
Business Council and a Trustee of the University of Pittsburgh.
(photo MARGARET A. MCKENNA Member: Compensation and Benefits
omitted) Age 50 Committee
Director since 1994 Ethics Committee
Nominating Committee
Ms. McKenna has served as President of Lesley College,
Cambridge, Massachusetts, since 1985. She served as Vice
President, Program Planning, Radcliffe College from 1982 to 1985
and as Director of its Bunting Institute from 1981 to 1985. Prior thereto,
she had served as Deputy Under Secretary of the U.S. Department of Education,
Deputy Counsel to the President of the United States, and in posts with the
International Association of Human Rights agencies and U.S. Department of
Justice. Ms. McKenna is a Director of Best Products and The Stride Rite
Corporation.
(photo WALTER R. PEIRSON Chair: Nominating Committee
omitted) Age 69 Member: Audit Committee
Director since 1989 Financial Policy Committee
Mr. Peirson served as a Director of Amoco Corporation, Chicago,
Illinois, an integrated oil company and producer of natural gas,
from 1976 to 1989, and as an Executive Vice President of that
company from 1978 until his retirement in 1989. Mr. Peirson served as
President of Amoco Oil Company from 1974 to 1978, Executive Vice President
from 1971 to 1974 and Vice President-Marketing of that company from 1968 to
1971. He was President of Toloma Gas Products Co., subsidiary of Standard Oil
Company (Indiana), from 1964 to 1968. He served as President of General Gas
Corporation from 1962 to 1964 and Executive Vice President of that company
from 1961 to 1962. He was an attorney at Standard Oil Company of Indiana from
1955 to 1961. He is a Director of the Federal Signal Corporation and a
Trustee of the Museum of Science and Industry in Chicago, Illinois.
<PAGE> 8
CONTINUING DIRECTORS WITH A TERM EXPIRING MAY 1997
(photo WILLIAM S. BARRACK, JR. Member: Audit Committee
omitted) Age 66 Ethics Committee
Director since 1994 Nominating Committee
Mr. Barrack served as Senior Vice President of Texaco Inc.,
Harrison, New York, an integrated international oil company and
a producer of natural gas, from 1983 to his retirement in 1992.
He served as a Senior Director of Caltex Petroleum Corporation from 1982 to
1992, President of Texaco Oil Trading & Supply Company from 1983 to 1984, and
Chairman and Chief Executive Officer of Texaco Limited-London from 1980 to
1983. Prior thereto, he served in various marketing, producing and management
positions with Texaco Inc. since 1953. Mr. Barrack is a Director of Standard
Commercial Corporation and the International Executive Services Corp.
(photo RAY J. GROVES Member: Audit Committee
omitted) Age 60 Financial Policy Committee
Director since 1994 Nominating Committee
Mr. Groves served as Chairman and Chief Executive Officer of
Ernst & Young, New York, New York, a public accounting firm,
from 1991 to his retirement in 1994. He served as Co-Chief
Executive Officer of the firm from 1989 to 1991 and served as Chairman and
Chief Executive Officer of Ernst & Whinney from 1977 to 1989. Mr. Groves was
admitted as a Partner in the firm in 1966, having joined the firm in 1957.
Mr. Groves is the Chairman of Legg Mason Merchant Banking Inc., a Director of
Marsh & McLennan Companies, Inc. and RJR Nabisco, Inc. Mr. Groves serves as a
Trustee of The Business Council for the United Nations, the Public Policy
Institute, The Ohio State University Foundation and as a Managing Director and
Treasurer of the Metropolitan Opera Association.
(photo STEVEN A. MINTER Chair: Compensation and
omitted) Age 57 Benefits Committee
Director since 1988 Member: Ethics Committee
Nominating Committee
Mr. Minter has been the Executive Director and President of The
Cleveland Foundation, Cleveland, Ohio, since 1984, an
organization supporting health, human services, cultural and
educational programs in the greater Cleveland area. He had been Associate
Director and Program Officer of The Cleveland Foundation from 1975 to 1980 and
from 1981 to 1983. He served as Under Secretary of the U.S. Department of
Education, Washington, D.C., from 1980 to 1981. He was the Commissioner of
Public Welfare for the Commonwealth of Massachusetts from 1970 to 1975. Mr.
Minter is a Director of Goodyear Tire & Rubber Company, Rubbermaid Inc. and
KeyCorp. He is also a Trustee of the College of Wooster and of The Foundation
Center.
<PAGE> 9
CONTINUING DIRECTORS WITH A TERM EXPIRING MAY 1997
(photo LOIS WYSE Chair: Ethics Committee
omitted) Age 69 Member: Compensation and
Director since 1978 Benefits Committee
Nominating Committee
Ms. Wyse has been President of Wyse Advertising, Inc., a
Cleveland-based advertising agency with offices in New York, New
York, since February 1979, and prior thereto had been an
Executive Vice President of the same firm since 1970. She is a Contributing
Editor of Good Housekeeping magazine, a syndicated columnist for United
Features Syndicate, and a widely published author. She is a Trustee of Beth
Israel Medical Center.
CONTINUING DIRECTORS WITH A TERM EXPIRING MAY 1998
(photo J. W. CONNOLLY Chair: Financial Policy Committee
omitted) Age 62 Member: Compensation and
Director since 1984 Benefits Committee
Executive Committee
Nominating Committee
Mr. Connolly served as Senior Vice President and Director of
H. J. Heinz Company, Pittsburgh, Pennsylvania, a processed food
products manufacturer, from 1985 to his retirement in December
1993. He served as President and Chief Executive Officer of Heinz U.S.A., a
division of the H. J. Heinz Company, from 1980 to 1985, and served as
Executive Vice President of that company from 1979 to 1980. He was President
and Chief Executive Officer of The Hubinger Company, a Heinz Company
subsidiary, from 1976 to 1979, Treasurer of H. J. Heinz Company from 1973 to
1976, and a Vice President of Ore-Ida Foods, Inc., a Heinz Company subsidiary,
from 1967 to 1973. An attorney by profession, Mr. Connolly joined the Law
Department of the H. J. Heinz Company in 1961. He is a Director of Mellon
Bank Corporation, Mellon Bank, N.A., Presbyterian-University Health System and
the University of Pittsburgh Medical Center System. He is also Chairman,
Board of Trustees--University of Pittsburgh.
<PAGE> 10
CONTINUING DIRECTORS WITH A TERM EXPIRING MAY 1998
(photo GEORGE A. DAVIDSON, JR. Chair: Executive Committee
omitted) Age 57 Member: Financial Policy Committee
Director since 1985 Nominating Committee
Mr. Davidson has served as Chairman of the Board and Chief
Executive Officer of the Company since May 1987, and has been
employed by the Consolidated System since 1966. He served as
Vice Chairman and Chief Operating Officer of the Company from January 1987 to
May 1987, and Vice Chairman from October 1985 to January 1987. He served as
President of CNG Transmission Corporation(1) from 1984 through 1985. He had
been Vice President, System Gas Operations, for Consolidated Natural Gas
Service Company, Inc.,(1) from 1981 to 1984, and was Assistant Vice President,
Rates and Certificates, of that company from 1975 to 1981. Mr. Davidson held
various other positions in the Rates and Certificates Department from 1966 to
1975. Mr. Davidson serves on the National Petroleum Council and the Allegheny
Conference on Community Development. He is Chairman and a Director of the
American Gas Association, and a Director of PNC Bank Corp. and B. F. Goodrich
Company. He is also a Trustee of the University of Pittsburgh.
(photo RICHARD P. SIMMONS Chair: Audit Committee
omitted) Age 64 Member: Ethics Committee
Director since 1990 Executive Committee
Nominating Committee
Mr. Simmons has served as Chairman and Chairman of the Executive
Committee of Allegheny Ludlum Corporation, Pittsburgh,
Pennsylvania, a specialty steel manufacturer, since 1990. He
served as Chairman and Chief Executive Officer from 1980 to 1990, and as a
Director of that company since 1980. He had been a Director of Allegheny
Ludlum Industries from 1973 to 1980 and a member of the Executive Office of
that company from 1978 to 1980. Mr. Simmons is a Director of PNC Bank Corp.
He is a member of the Massachusetts Institute of Technology Corporation and
Development Committee, Director and Chairman of the Pittsburgh Symphony
Society, President and a member of the Executive Committee of the Allegheny
Conference on Community Development and a member of the Executive Committee
and Director of the Southwestern Pennsylvania United Way.
(1) Wholly owned subsidiary of the Company.
<PAGE> 11
THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES THEREOF
BOARD OF DIRECTORS
The Company is managed under the direction of the Board of Directors, which
met eight times in 1995. To assist it in various areas of responsibility, the
Board has established several standing committees that are briefly described
below.
AUDIT COMMITTEE
The Audit Committee is composed of four non-employee Directors. Among its
functions are: reviewing the scope and effectiveness of audits by the
independent accountants and the Company's internal auditing staff; selecting
and recommending to the Board of Directors the employment of independent
accountants, subject to ratification by the stockholders; receiving and acting
on comments and suggestions by the independent accountants and by the internal
auditors with respect to their audit activities; approving fees charged by the
independent accountants; and reviewing the Company's annual financial
statements before their release. The Committee met five times in 1995.
COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee is composed of five non-employee
Directors. The Committee approves the salary budgets for all non-union
employees and fixes the salaries of the Officers and other personnel on the
executive payroll of the Company and its subsidiaries.
The Committee also has general supervision over the administration of all
non-union employee pension, compensation and benefit plans of the Company and
its subsidiaries; reviews proposals with respect to the creation of and
changes in such plans; and makes appropriate recommendations with respect
thereto to the Board of Directors. The Committee met eight times in 1995.
ETHICS COMMITTEE
The Ethics Committee consists of five non-employee Directors. Its function is
to review and act on all situations subject to the provisions and procedures
of the Company's Business Ethics Policy and to monitor the Company's
environmental compliance activities. The Committee met three times in 1995.
FINANCIAL POLICY COMMITTEE
The Financial Policy Committee consists of four non-employee Directors and the
Chairman of the Board. Its function is to oversee the short-term and
long-term financial activities and planning of the Company, including dividend
actions. The Committee met two times in 1995.
NOMINATING COMMITTEE
The Nominating Committee consists of nine non-employee Directors and the
Chairman of the Board. It reviews the qualifications of Director candidates
on the basis of recognized achievements and their ability to bring skills and
experience to the deliberations of the Board. It also recommends qualified
candidates to the Board, including the slate of nominees submitted to the
stockholders at the Annual Meeting; reviews the size and composition of the
Board; and monitors the Company's management succession program. The
Committee met three times in 1995.
<PAGE> 12
Stockholders who wish to propose candidates to the Nominating Committee
for election to the Board at the 1997 Annual Meeting should write to the
Corporate Secretary, Consolidated Natural Gas Company, CNG Tower, 625 Liberty
Avenue, Pittsburgh, Pennsylvania 15222-3199, between March 21, 1997 and April
21, 1997, stating in detail the qualifications of such candidates for
consideration by the Committee. Any such recommendation should be accompanied
by a written statement from the candidate of his or her consent to be
considered as a candidate and, if nominated and elected, to serve as a
Director.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table lists the beneficial ownership, as of January 31, 1996, of
the Company's Common Stock by each current Director, named executive and all
current Directors and Officers as a group.
(a) (b) (a) + (b)
__________________________ ____________
Number of Number of Director's
Shares Shares Under Deferred Percent of
Name of Beneficially Exercisable Compensation Outstanding
Beneficial Owner Owned(1)(2) Options(3) Stock Credits(4) Common Stock
______________________________________________________________________________
W. S. Barrack, Jr. 641 361 .001
J. W. Connolly 900 3,488 .001
G. A. Davidson, Jr. 126,911 84,396 .225
W. F. Fritsche, Jr. 27,607 6,708 .037
R. R. Gifford 39,865 22,219 .066
R. J. Groves 1,112 1,458 .001
L. D. Johnson 17,013 41,632 .062
P. E. Lego 700 .001
M. A. McKenna 200 303 -(5)
<PAGE> 13
(a) (b) (a) + (b)
__________________________ ____________
Number of Number of Director's
Shares Shares Under Deferred Percent of
Name of Beneficially Exercisable Compensation Outstanding
Beneficial Owner Owned(1)(2) Options(3) Stock Credits(4) Common Stock
______________________________________________________________________________
S. A. Minter 1,230 .001
W. R. Peirson 2,200 7,552 .002
R. P. Simmons 1,200 3,618 .001
L. J. Timms, Jr. 17,415 32,376 .053
D. M. Westfall 41,336 8,821 .053
S. E. Williams 36,249 15,468 .055
L. Wyse 600 .001
Directors and Officers
of the Company as a
group (21 persons) 373,037 240,053 16,780 .652
______________
(1)Includes shares owned by spouses and, in the case of employees, shares
beneficially owned under the Long-Term Thrift Trust of the Employees Thrift
Plan, the Employee Stock Ownership Plan and the Virginia Natural Gas, Inc.
Employee Savings Plan. Unless otherwise noted, the Directors and Officers
have sole voting and investment power.
(2)Includes Performance Restricted Stock Awards and Restricted Stock Awards
granted on January 2, 1996, pursuant to the newly established Long Term
Strategic Incentive Program, the terms of which are further described in
the Compensation and Benefits Committee Report. Performance Restricted
Stock Awards were granted as follows: Messrs. Davidson, 70,000; Fritsche,
19,500; Gifford, 19,500; Westfall, 26,300; and Williams, 19,500.
Restricted Stock Awards were granted as follows: Messrs. Davidson, 14,000;
Fritsche, 3,800; Gifford, 3,800; Westfall, 5,100; and Williams, 3,800.
(3)Includes shares subject to options exercisable on January 31, 1996, and
options which will become exercisable within 60 days thereafter.
(4)Director's compensation deferred in the form of CNG stock credits, as
described under Non-Employee Directors' Compensation on page 23, is not
included in the percentage shown in the last column.
(5)Less than .001% of outstanding shares.
<PAGE> 14
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation of the named Executive
Officers for the last three completed fiscal years of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
____________________________ ___________________
Other Shares All
Annual Restricted Under- Other
Compen- Stock lying Compen-
Name and sation Award(s) Options sation
Principal Position Year Salary Bonus (1) (2) (3) (4)(5)
____________________ ____ ________ ________ ________ __________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
G. A. Davidson, Jr. 1995 $568,000 $213,600 $ 7,511 0 77,768 $ 42,853
(Chairman and 1994 564,400 0 9,119 0 29,607 42,617
Chief Executive 1993 511,100 280,400 3,012 0 27,310 38,654
Officer, Director)
W. F. Fritsche, Jr. 1995 203,500 96,300 4,735 0 20,828 20,602
(Sr. Vice President, 1994 162,800 0 13,739 1,924 4,076 16,278
Distribution) 1993 148,500 65,500 2,274 0 3,757 14,845
R. R. Gifford 1995 241,400 51,400 15,752 0 23,795 24,397
(President, CNG 1994 221,100 0 3,958 0 5,891 22,394
Energy Services) 1993 187,600 96,600 312 0 5,434 19,082
L. D. Johnson 1995 292,000 100,300 8,430 0 28,394 202,549
(Retired Vice Chairman, 1994 307,100 0 5,051 0 11,622 30,994
Chief Financial 1993 273,700 156,000 793 0 15,790 27,687
Officer, Director)
L. J. Timms, Jr. 1995 250,800 96,700 10,839 0 24,984 40,908
(Retired President, 1994 266,200 0 5,952 0 10,226 26,908
CNG Transmission) 1993 232,800 137,000 708 0 9,566 18,796
D. M. Westfall 1995 174,600 67,800 1,717 1,506 13,886 13,519
(Sr. Vice President and 1994 144,800 0 3,867 0 2,644 11,146
Chief Financial Officer) 1993 135,000 50,000 766 0 2,427 10,441
S. E. Williams 1995 227,400 68,300 3,504 0 22,085 17,307
(Sr. Vice President and 1994 219,500 0 1,561 0 8,546 14,270
General Counsel) 1993 166,800 113,500 972 0 5,434 8,659
____________________
</TABLE>
(1)Includes only tax reimbursements. No amounts are included in this column
for the Executive Split-Dollar Life Insurance Plan because the executives'
contributions to this plan are greater than or equal to the term life
insurance costs that apply to the underlying life insurance policies. No
amounts are included for perquisites or personal benefits because, for each
Executive Officer, the aggregate amount of such compensation was less than
$50,000 and less than 10% of that executive's base salary and bonus.
<PAGE> 15
(2)Restricted Stock Award Grants are reported at aggregate market value at the
date of grant. Restrictions on the awards granted in 1995 lapse in 25%
increments, beginning with the first anniversary and on each of the next
three anniversaries of the grant date. Dividends are paid on the shares
from the date of grant. Restricted Stock Award Grants are based on the
individual's level of performance and responsibility. At December 31,
1995, the number of restricted stock holdings for each of the named
Executive Officers was: Mr. Davidson, 0; Mr. Fritsche, 1,769; Mr. Gifford,
506; Mr. Westfall, 1,506; and Mr. Williams, 606. The aggregate values of
such holdings at December 31, 1995, at the year-end closing price of
$45.375 per share, for each of the named Executive Officers was: Mr.
Davidson, $0; Mr. Fritsche, $80,268; Mr. Gifford, $22,960; Mr. Westfall,
$68,335; and Mr. Williams, $27,497.
(3)Does not include Triannual Non-Qualified Stock Options granted pursuant to
the newly-established Long Term Strategic Incentive Program as described
in the Compensation and Benefits Committee Report. On January 2, 1996, the
Company granted the following number of Triannual Non-Qualified Stock
Options to each of the named executive officers: Messrs. Davidson, 280,000;
Fritsche, 78,000; Gifford, 78,000; Westfall, 105,000; and Williams, 78,000.
(4)Comprising annual employer matching thrift plan contributions and ESOP
allocations.
(5)Mr. Johnson received an additional lump sum payment at the time of his
retirement in the amount of $160,250 and his company car with a value of
$12,850. Mr. Timms received his company car with a value of $15,575 at the
time of his retirement.
The following table contains information concerning the grant of stock options
under the Company's 1991 Stock Incentive Plan to the named Executive Officers
as of the end of the last fiscal year of the Company. No SARs (stock
appreciation rights) have been granted.
<PAGE> 16
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
_________________________________
% of
Number Total Potential
of Options Exer- Realizable Value at
Shares Granted cise Assumed Annual
Under- to Em- or Rates of Stock
lying ployees Base Price Appreciation
Options in Price Expir- for Option Term (2)
Granted Fiscal Per ation ___________________________________
Name (1) Yr. Share Date 0% 5% 10%
___________________ _______ _______ _______ ______ ___ ______________ ______________
<S> <C> <C> <C> <C> <C> <C> <C>
G. A. Davidson, Jr. 77,768 7.21% $37.250 2005 0 $ 1,821,818 $ 4,616,846
W. F. Fritsche, Jr. 20,828 1.93 37.250 2005 0 487,923 1,236,494
R. R. Gifford 23,795 2.21 37.250 2005 0 557,429 1,412,636
L. D. Johnson 28,394 2.63 37.250 2005 0 665,167 1,685,664
L. J. Timms, Jr. 24,984 2.32 37.250 2005 0 585,283 1,483,223
D. M. Westfall 13,886 1.29 37.250 2005 0 325,298 824,369
S. E. Williams 22,085 2.05 37.250 2005 0 517,370 1,311,118
__________________________________________________________________________________________
All Shareholders N/A N/A N/A N/A 0 $2,192,507,881 $5,556,245,442
__________________________________________________________________________________________
All Optionees 1,078,302 100.00 37.250- 2005 0 $ 25,260,653 $ 64,015,454
45.375
__________________________________________________________________________________________
Optionee Gain as
% of All
Shareholder Gain N/A N/A N/A N/A N/A 1.15% 1.15%
__________________________________________________________________________________________
</TABLE>
(1)All material terms of the Non-Qualified Stock Options granted in 1995 are
as follows: Non-Qualified Stock Options are granted at the fair market
value of a share on the date of grant of the option. The option expires on
the tenth anniversary of the grant date and is exercisable in installments
of up to 25% of the shares on or after the second, third, fourth and fifth
anniversaries of the grant. If the employee retires from CNG, his or her
options expire the earlier of the option expiration date or three years
after he or she retires. If an employee otherwise leaves CNG, his or her
options expire the earlier of the option expiration date or three months
after he or she ceases to be employed by CNG. Subject to the vesting
schedule, options are exercisable from time to time up to the expiration
date. Non-Qualified Stock Option Award grants are based on the
individual's level of performance and responsibility.
<PAGE> 17
(2)Based on actual option term (10-year) and annual compounding at rates
shown. The dollar amounts under these columns are the result of
calculations at 0% and at the 5% and 10% rates set by the Securities and
Exchange Commission and therefore are not intended to forecast possible
future appreciation, if any, of the Company's stock price. No gain to the
optionees is possible without stock price appreciation, which will benefit
all shareholders commensurately. A 0% gain in stock price appreciation
will result in 0 dollars for the optionees. The Company did not use an
alternative formula for a grant date valuation, as the Company is not aware
of any formula which will determine with reasonable accuracy a present
value based on future unknown or volatile factors.
The following table sets forth information with respect to the named Executive
Officers concerning the exercise of options during the last fiscal year of the
Company and unexercised options held as of the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1995, YEAR-END OPTION VALUES
Number of Value of
Shares Underlying Unexercised,
Unexercised Options In-the-Money Options
Held at Year-End at Year-End (2)
Shares ___________________ ____________________
Acquired Value
On Realized Exercis- Unexercis- Exercis- Unexercis-
Name Exercise (1) able able able able
___________________ ________ ________ ________ __________ ________ __________
G. A. Davidson, Jr. 0 $ 0 54,715 152,061 $227,068 $864,922
W. F. Fritsche, Jr. 4,818 45,771 3,828 28,643 2,766 175,706
R. R. Gifford 0 0 16,314 38,575 70,368 239,692
L. D. Johnson 40,656 386,395 70,026 0 263,107 0
L. J. Timms, Jr. 37,246 318,531 57,360 0 234,429 0
D. M. Westfall 0 0 6,180 20,500 21,962 133,543
S. E. Williams 0 0 10,228 37,227 34,648 208,094
__________________
(1)Market value of underlying shares at time of exercise minus the exercise
price.
(2)Market value of underlying shares at year-end market price of $45.375 per
share minus the exercise price.
<PAGE> 18
LONG-TERM INCENTIVE PLAN AWARDS IN THE LAST FISCAL YEAR
In 1995, Mr. Westfall was granted a Restricted Stock Award of 1,506 shares.
Restrictions on this award lapse in 25% increments, beginning with the first
anniversary and on each of the next three anniversaries of the grant date.
Dividends are paid on the shares from the date of the grant. Restricted Stock
Awards are based on an individual's level of performance and responsibility.
No other Restricted Stock Awards were made to the named executives under the
Long-Term Incentive Plan in 1995.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AGREEMENTS
Messrs. Davidson, Fritsche, Gifford, Westfall and Williams entered into
agreements with the Company dated December 12, 1995, that have provisions
which become operative upon a defined change of control of the Company. Such
agreements preserve for three years following a change of control the annual
salary levels and employee benefits as are then in effect for these executives
and provide that, in the event of certain terminations of employment, these
executives shall receive severance payments equal to 2.99 times their
respective annual compensation prior to severance. The agreements also provide
for the payment by the Company of certain excise taxes, if any, payable in
connection with compensation paid under such agreement.
COMPENSATION AND BENEFITS COMMITTEE REPORT
The Company's executive compensation programs are administered by the
Compensation and Benefits Committee of the Board of Directors (the
"Committee"), which is composed of five non-employee Directors. The Committee
reviews and approves all issues pertaining to executive compensation. Total
compensation is designed in relationship to compensation paid by competitor
organizations. Base salary and long-term incentive compensation are targeted
to median market levels and short-term incentive compensation is goal-based
and structured to be comparable to that paid by competitor organizations. The
objective of the Company's three compensation programs (base salary,
short-term incentive and long-term incentive) is to provide a total
compensation package that will enable the Company to attract, motivate and
retain outstanding individuals and align their success with that of the
Company's shareholders.
Competitor organizations are defined annually as part of the compensation
administration process and include fully integrated natural gas companies as
well as broader industry comparatives, e.g., comparably-sized general
industrial companies and, where appropriate, specific energy companies.
The level of base salary paid to executives for 1995 was determined on
the basis of performance and experience. The Company measures or identifies
its base salary structure by range midpoints in comparison to base salaries
offered by competitors. Salary levels are targeted to, and in 1995,
correspond to the median range of compensation paid by competitor
organizations. These are not the same companies that comprise the Value Line
Diversified Natural Gas Companies Index or the American Gas Association
Diversified Gas Index shown on the shareholder return performance
presentation. The specific competitive marketplace that the Company and its
subsidiaries use in base salary analysis is determined based on the nature and
level of the positions being analyzed and the labor markets from which
individuals would be recruited. The Committee also considered the
competitiveness of the entire compensation package in its determination of
salary levels.
<PAGE> 19
Short-term incentive compensation plans are used at both corporate and
subsidiary levels. The appropriateness of applying an incentive compensation
arrangement to any given position is determined based on the nature of the
position, its potential for contribution and the then-current competitive
environment. Short-term incentive opportunity is structured so that awards
are competitive at a level commensurate with the performance level achieved by
the employee with consideration for the employee's level of responsibility.
The short-term incentive plan has threshold, target and maximum bonus levels
for the various executive levels based on competitive data. For the named
Executive Officers, the threshold bonus level is 16% to 20% of base pay, the
target bonus level is 40% to 50% of base pay, and the maximum bonus level is
56% to 70% of base pay. At the executive level, the primary form of
short-term incentive compensation is a cash or stock bonus pool arrangement,
for which all employees on the Company's system executive payroll are
eligible.
Individual Operating Company Pools and a CNG System Pool are established
if the Operating Companies and the CNG System attain certain levels of
performance. The Operating Company Pools are calculated as a percent of the
eligible base payroll using the weighted differential between established
Operating Company goals and actual performance. The CNG System Company Pool
is calculated as a percent of eligible base payroll and the weighted
differential between CNG System goals and actual performance. Executives
participate in both pools with payout opportunities determined by actual
individual performance and the level of responsibility within their respective
Operating Companies and within the CNG System. At 85% of goal achievement,
the threshold bonus pools are created; at 100% of goal, the target bonus pools
are achieved; at 115% or greater of goal achievement, the maximum bonus pools
are achieved. At less than the threshold level, there are no bonus pools.
The performance measures for the CNG System Company Pool (weighted as
indicated) are based on the Company's return on equity vs. peers (40%), net
income (20%), fixed charge coverage ratio (20%), and cash flow (20%), with
performance goals established based on the Company's annual long-range
forecast, actual prior year performance and business plan reviews.
Performance targets are set to meet or exceed the performance of peer
companies. The performance measures for each Operating Company Pool (weighted
as indicated) are: for the Distribution Group companies, net income (20%),
return on average net plant (20%), net cash flow (20%), non-gas cost revenue
(20%), and controllable operations and maintenance expenses (20%); CNG
Transmission Corporation, net income (20%), return on average net plant (20%),
net cash flow (20%), throughput (20%), and controllable operations and
maintenance expenses (20%); for CNG Energy Services Corporation, net income
(40%), managed sales volumes (40%), and power marketing net income (20%); and
CNG Producing Company, net income (20%), net cash flow (15%), reserve
additions (20%), finding costs (20%), full cycle finding and development costs
(10%), and controllable operations and maintenance expenses (15%); and CNG
Corporate, total Operating Company net income (30%), controllable operations
and maintenance expense (30%), and System return on equity compared to peer
companies (40%). For the last fiscal year, before special charges, the System
overall goal achievement was 91.8% with return on equity achieving 84.4% of
goal, net income achieving 101.2% of goal, fixed charge coverage ratio
achieving 98.9% of goal, and cash flow achieving 90.2% of goal. Based on 1995
performance, a CNG System Pool of $1,748,400 was established and Operating
Company Pools of $1,206,500 for the Distribution Group companies, $550,400 for
CNG Transmission Corporation, $0 for CNG Energy Services Corporation, $226,600
for CNG Producing Company and $582,400 for CNG Corporate.
<PAGE> 20
Long-term incentive compensation plans are limited to only those
employees who are in positions which can affect the long-term success of the
Company, including both the establishment and execution of the Company's
business strategies. The 1991 Stock Incentive Plan is the principal method
for long-term incentive compensation, and compensation thereunder principally
takes the form of Non-Qualified Stock Option grants and Restricted Stock
Awards. The purposes of long-term incentive compensation are to: (i) focus
key executives' efforts on performance that will increase the value of the
Company to its shareholders; (ii) align the interests of management with those
of the shareholders; (iii) provide a competitive long-term incentive and
capital accumulation opportunity; and (iv) provide a retention incentive for
selected key executives. For 1995 awards, performance criteria used in
long-term incentives are tied directly to the individual participant's
performance over time and his or her impact on increasing the economic
performance of the Company. Previous awards of options or restricted stock
are not considered in the determination of an award. Executive performance
against stated position responsibilities and goals is evaluated annually.
Such performance rating is used with the level of responsibility in
determining the amount of the award. At expected levels of performance, the
long-term incentive award is structured at the median range; at levels of
performance that exceed expectations, the grant is structured at the 75th
percentile; if performance is outstanding, the grant is structured at the 90th
percentile.
The Committee's review in 1995 of the Company's total executive
compensation package indicated that the Company's long-term incentive
compensation program was significantly below that of comparable employers. In
addition, the Committee desired to strengthen the link between improvement in
shareholder return and the exercisability of stock options and the vesting of
restricted shares issued under the Company's long-term incentive programs. As
a result, the Committee has adopted the Long Term Strategic Incentive Program
and the Long Term Capital Accumulation Program.
Under the Long Term Strategic Incentive Program, executives who are
driving the strategy of the Company are granted Performance Restricted Stock
Awards ("Performance Shares") and Triannual Non-Qualified Stock Options
("Triannual Options") in amounts which are intended to be competitive with
comparable employers. Executives who are responsible for strategy
implementation are granted Triannual Options in amounts which are intended to
be competitive with comparable employers. Grants under the Long Term Strategic
Incentive Program are to be made every three years, with the first such grants
having been made on January 2, 1996.
Performance Shares granted under the Long Term Strategic Incentive
Program to an executive will vest or be forfeited after a three-year
performance period based upon attainment of return on equity targets for the
System. With respect to those executives employed within a business unit of
the Company, both the return on equity target and objective success goals for
the executive's business unit under an integrated three-year plan must be
achieved for vesting to occur. For Performance Shares granted on January 2,
1996 which are subject to achievement of the System return on equity targets,
if the average annual return on equity for the System for the three-year
period ended December 31, 1998 is (i) less than 11.3%, no Performance Shares
will vest, (ii) at least 11.3% but less than 11.7%, one-half of such
Performance Shares will vest on March 1, 1999, and (iii) is at least 11.7%,
all such Performance Shares will vest on March 1, 1999. The Performance
Shares that were granted on January 2, 1996 are also subject to the
achievement of business unit success goals and will be forfeited or will vest
all or in part on March 1, 1999, depending upon whether business unit success
goals have been met. The Committee reserves the right to reduce the number of
<PAGE> 21
Performance Shares that vest based on factors that it deems appropriate.
Executives will not receive dividends on Performance Shares until they have
vested, at which time, dividends otherwise payable prior to the vesting date
will be paid to the executive without interest. Executives may vote
Performance Shares until they are forfeited.
Triannual Options granted on January 2, 1996, pursuant to the newly
established Long Term Strategic Incentive Program are granted at the fair
market value of a share on the date of grant. If the annual return on equity
for the System for the three-year period ended December 31, 1998 is (i) less
than 11.3%, all of the Triannual Options will be exercisable on March 1, 1999,
after which they will expire, (ii) at least 11.3% but less than 11.7%,
one-half of the Triannual Options will be exercisable on March 1, 1999, after
which they will expire, and one-half of the Triannual Options will have an
exercise period extending from March 1, 1999 until January 2, 2006 and (iii)
at least 11.7%, all of the Triannual Options will have an exercise period
extending from March 1, 1999 until January 2, 2006. Options expire at the
earlier of (a) the expiration date of the option or (b) (1) three years
following separation from employment due to retirement, (2) one year after
separation from employment due to death or permanent disability or (3) three
months after separation from employment for any other reason. Grants of
Triannual Options are based upon an executive's level within the Company. The
Company generally intends to make grants under the Long Term Strategic
Incentive Program every three years; however, executives that are hired or
promoted during the three-year performance period will receive a pro-rated
grant of Triannual Options.
Restricted Stock was granted January 2, 1996, to the executives who are
driving the strategy of the Company under the Long Term Capital Accumulation
Program and such stock will vest March 1, 1999. Once vested, taxes will be
due by the executive and the executive must then hold the net shares, after
taxes are paid by withholding a portion of the shares, until March 1, 2001.
Restricted Stock Awards are based on an individual's level of responsibility.
Under the Long Term Capital Accumulation Program on January 2, 1996,
employees who are responsible for implementing the strategy were granted
Annual Non-Qualified Stock Options. These options are granted at the fair
market value of a share on the date of grant of the option. The option
expires on the tenth anniversary of the grant date and is exercisable in
installments of up to 25% of the shares on or after the second, third, fourth
and fifth anniversaries of the grant. If an employee retires, he or she has 3
years to exercise vested options. If an employee dies or becomes disabled, he
or she has 1 year to exercise vested options. If an employee leaves due to
involuntary separation, he or she has 3 months to exercise vested options.
Subject to the vesting schedule, options are exercisable from time to time up
to the expiration date. Annual Non-Qualified Stock Option grants are based
on an individual's level of responsibility.
The Committee utilizes the services of an independent compensation
consultant to assess market relativity of the executive compensation packages.
Consistent with the Company's compensation philosophy, adjustments are made to
any executive compensation components necessary to achieve levels of
compensation at the median market position.
<PAGE> 22
Effective for the tax-year ended December 31, 1994, Section 162(m) of the
Internal Revenue Code places certain limits on the deductibility of
non-performance based executive compensation. It is the policy of the Company
to preserve the tax deductibility of compensation to the extent that it is in
the best interest of the Company. Current and anticipated levels of executive
compensation do not subject the Company to the limitations under Section
162(m).
Mr. Davidson's compensation for 1995 was determined in the general
context of the programs described above. Mr. Davidson's 1995 incentive
compensation goals were based in part on the following measures of the
Company's performance before special items (weighted as shown): net income
(10%), cash flow (defined as net income plus depreciation plus deferred taxes
minus dividends) (5%), return on equity (compared to peer companies) (10%),
System controllable operations and maintenance expense (10%), credit rating of
the Company's long-term debt (10%), price to earnings ratio (compared to
published summary data) (10%), and the continued improvement in System
exploration and production financial performance (20%). In addition, Mr.
Davidson's 1995 incentive compensation goals were based upon his support of
CNG Energy Services Corporation to ensure its success in 1995 (20%) and
discretion of the Committee (5%). Mr. Davidson's threshold bonus level is 20%
of base pay, his target bonus level is 50% of base pay and his maximum bonus
level is 70% of base pay. The Committee awarded $213,600 in incentive
compensation to Mr. Davidson for 1995.
S. A. Minter, Chair
J. W. Connolly
P. E. Lego
M. A. McKenna
L. Wyse
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly cumulative total
shareholder return on CNG's Common Stock against the cumulative total return
of the S&P 500 Stock Index, the Value Line Natural Gas Diversified Industry
Index and the American Gas Association (AGA) Diversified Gas Index for the
period of five years commencing December 31, 1990, and ended December 31,
1995. Two industry indexes are shown in the performance graph, the Value Line
Index, which the Company will use beginning in 1996 as the comparative peer
company measurement for return on equity goal for 1996 short term incentive
compensation purposes, and the AGA Index, which was presented in this graph
last year.
The Value Line Investment Natural Gas Diversified Industry Data is
published weekly by Value Line Publishing. The Value Line Natural Gas
Diversified Industry Index was prepared in January 1996. The companies
contained in the index are: Burlington Resources, Cabot Oil & Gas, Coastal
Corporation, Columbia Gas System, Inc., Consolidated Natural Gas Company,
Eastern Enterprises, Enron Corp., ENSERCH Corporation, Equitable Resources,
Inc., KN Energy, Inc., Mitchell Energy & Development Corp. 'A' , National Fuel
Gas, NorAm Energy, PanEnergy Corp, Questar Corporation, Seagull Energy
Corporation, Sonat Inc., Southwestern Energy, Tenneco, Inc., Valero Energy
Corp. and Williams Companies.
<PAGE> 23
The AGA is the primary trade association for the natural gas industry.
The index was prepared in January 1996, under the direction of the AGA Finance
Committee. All companies contained in the index are members of the AGA.
Those companies are: Chesapeake Utilities Corp., Columbia Gas System, Inc.,
Consolidated Natural Gas Company, Eastern Enterprises, Energen Corporation,
ENSERCH Corporation, Equitable Resources, K N Energy, Inc., NICOR Inc., NorAm
Energy, ONEOK Inc., Pacific Enterprises, Pennsylvania Enterprises, Inc.,
Questar Corporation, South Jersey Industries, Inc., Southwest Gas Corporation,
Southwestern Energy, UGI Corporation, Valley Resources, Inc., Washington
Energy Company and WICOR, Inc.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
(line graph omitted)
1990 1991 1992 1993 1994 1995
_______________________________________________________
CNG $100 $102 $112 $121 $ 96 $128
S&P 500 100 130 140 154 156 215
AGA 100 87 92 104 91 123
Value Line 100 90 105 126 113 150
_______________________________________________________
*Assumes $100 investment on December 31, 1990, and
reinvestment of dividends.
NON-EMPLOYEE DIRECTORS' COMPENSATION
Non-employee Directors are currently paid a $24,000 annual retainer, a $2,000
per diem fee for attending each Board meeting including all Board Committee
meetings held in conjunction with such Board meeting, and a $1,000 per diem
fee for participating in telephonic Board or Board Committee meetings.
Committee Chairpersons receive an additional annual fee of $3,000. Such
Directors may elect to defer receipt of these payments until after retirement
from the Board. Such payments are deferred in the form of cash credits or
Consolidated Natural Gas Company Common Stock credits. Such stock credits are
valued as Common Stock equivalents equal to the number of shares that could
have been purchased at the closing price on the date the compensation was
earned. As of the date any dividend is paid on the Company's Common Stock, a
credit is made to each participant's deferred account equal to the number of
shares of Common Stock that could have been purchased on such date with the
dividend paid. Amounts deferred in the form of cash credits earn interest,
compounded quarterly, at a rate equal to the closing prime commercial rate at
The Chase Manhattan Bank N.A. on the last day of each quarter. The annual
retainer paid to non-employee Directors, as set by the Board of Directors from
time to time, shall continue to be paid for life to each non-employee Director
<PAGE> 24
retired at age 70, or at an earlier age due to disability, provided the
non-employee Director served a minimum of four years and agrees to be
generally available as a consultant. Employee Directors do not receive any
compensation for service as Directors.
As approved by the shareholders in May 1994 under the Non-Employee
Directors' Restricted Stock Plan, non-employee Directors receive an annual
grant of 100 shares of the Company's Common Stock, par value $2.75 per share,
subject to restrictions. Such grant is made on the date of the Annual Meeting
of Stockholders. The restrictions on such stock shall lapse in 25%
installments on the anniversary date of each grant or shall lapse in total
upon the Director's retirement at age 70 or the Director's ceasing to serve
due to death or disability.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the following Directors served as members of the Compensation and
Benefits Committee: S. A. Minter, Chair, J. W. Connolly, P. E. Lego, M. A.
McKenna and L. Wyse.
The Company has Credit Agreements totaling $775 million with a group of
banks. Each participating bank is compensated with a fee of .06% on its
respective commitment amounts.
Currently, PNC Bank, Pittsburgh, Pennsylvania, the subsidiary of PNC Bank
Corp., of which Messrs. Davidson and Simmons are Directors, provides a
commitment of $100 million under the Credit Agreements. Mellon Bank, N.A.,
Pittsburgh, Pennsylvania, of which Mr. Connolly is a Director, provides a
commitment of $100 million under the Credit Agreements. Society National
Bank, Cleveland, Ohio, the subsidiary of KeyCorp (formerly Society
Corporation), of which Mr. Minter is a Director, provides a commitment of $90
million under the Credit Agreements. There were no borrowings under these
agreements in 1995.
The Company has, since 1977, retained Wyse Advertising, Inc., of which
Ms. Wyse is the President and a principal stockholder. Wyse Advertising
plans, creates, writes and designs media communications at commission rates
and billing practices which are comparable to such rates and practices charged
by non-affiliated firms. During 1995, the Company paid aggregate commissions
of $196,927 to Wyse Advertising.
LIFE INSURANCE AND RELATED BENEFIT PLANS
The Company maintains a program composed of Split Dollar Life Insurance Plans
and Supplemental Death Benefit Plans for employees on the executive payroll of
the Company and its subsidiaries, as well as non-employee Directors, which
provides death benefits to beneficiaries of those individuals. There were 124
eligible employees on December 31, 1995, and 80 were participating. Five
non-employee Directors were also participating. The plans are under the
general supervision of the Compensation and Benefits Committee of the Board.
Continuation of the plans beyond retirement requires the Committee's approval.
The costs for the Split Dollar Life Insurance Plans are shared by the Company
and the participants. Each year an employee participant pays a premium based
on age and amount of individual coverage, which is approximately twice annual
salary. Each year Director participants pay a premium based on age and amount
of individual coverage. The Company pays all additional premiums and expects
to receive proceeds approximately equal to its investment in the policy
through the total coverage exceeding the participant's individual coverage.
The Supplemental Death Benefit Plans provide for payments to a deceased
participant's beneficiaries over a period of years.
<PAGE> 25
RETIREMENT PROGRAMS
A non-contributory Pension Plan is maintained for employees who are not
represented by a recognized union, including Officers of the Company and its
subsidiaries. On December 31, 1995, all 2,814 eligible employees of the
Company and its subsidiary companies were participating in the Pension Plan.
The Company also maintains an unfunded Short Service Supplemental
Retirement Plan for certain management employees whose commencement of service
with the Company occurred after the employee had acquired experience of
considerable value to the Company and who will have less than 32 years of
service at normal retirement.
The following table illustrates maximum annual benefits--including any
supplemental payment described above but before being reduced by the required
offset--at normal retirement date (age 65) on the individual life annuity
basis for the indicated levels of final average annual salary and various
periods of service.
PENSION PLAN TABLE
_______________________________________________________________________
Annual Pension Benefit
for Years of Service Indicated
_________________________________________________________
Average
Annual Salary 15 20 25 35 40
_______________________________________________________________________
$100,000 .... $ 34,000 $ 45,300 $ 55,000 $ 59,500 $ 68,000
150,000 .... 51,000 68,000 82,500 89,300 102,000
200,000 .... 68,000 90,700 110,000 119,000 136,000
250,000 .... 85,000 113,300 137,500 148,800 170,000
300,000 .... 102,000 136,000 165,000 178,500 204,000
350,000 .... 119,000 158,700 192,500 208,300 238,000
400,000 .... 136,000 181,300 220,000 238,000 272,000
450,000 .... 153,000 204,000 247,500 267,800 306,000
500,000 .... 170,000 226,700 275,000 297,500 340,000
550,000 .... 187,000 249,300 302,500 327,300 374,000
600,000 .... 204,000 272,000 330,000 357,000 408,000
650,000 .... 221,000 294,700 357,500 386,800 442,000
700,000 .... 238,000 317,300 385,000 416,500 476,000
The 1995 salaries, projected service to age 65, and estimated annual
retirement benefits on the individual life form of annuity, assuming
continuation of their December 1995 salaries until age 65 for each of the
individuals in the Summary Compensation table, are as follows:
<PAGE> 26
ESTIMATED ANNUAL RETIREMENT BENEFITS
Years of
Service at Years of Estimated Annual
1995 Year-End Service Retirement Benefits
Name(1) Salary 1995 at Age 65 at Age 65
__________________________________________________________________________
G. A. Davidson, Jr. .. $568,000 29 37 $354,065
W. F. Fritsche, Jr. .. 203,500 39 39 107,465
R. R. Gifford......... 241,400 33 42 167,595
D. M. Westfall........ 176,900 26 43 138,985
S. E. Williams........ 227,400 21 39 145,910
______________
(1) Messrs. Johnson and Timms retired from the Company December 1, 1995,
and are accordingly not mentioned in this table.
__________________________________________________________________________
The Company also maintains a Supplemental Retirement Benefit Plan under
which payments may be made, at the sole discretion of the Compensation and
Benefits Committee of the Board, to individuals comprising the executive
payroll. As of December 31, 1995, there were 124 potentially eligible
employees. The decision to grant a Supplemental Retirement Benefit is based
on a review of the retiring employee's total available benefits. Payments
under such plan during 1995 amounted to $357,200. The maximum annual
supplemental annuity under this plan is 10% of an individual's final average
annual salary. Assuming continuation of their December 1995 salaries until
age 65, the individuals named in the Summary Compensation table would be
eligible to receive the following maximum annual supplemental retirement
benefits: Mr. Davidson, $56,800; Mr. Gifford, $24,290; Mr. Westfall, $19,830;
and Mr. Williams, $22,850. Mr. Fritsche is not a participant in the
Supplemental Retirement Benefit Plan. Under a separate prior agreement, Mr.
Fritsche would receive an additional annual retirement benefit of $77,575
assuming his December 1995 salary was continued until age 65.
The benefits described above have not been reduced by the limitations
imposed on qualified plans by the Internal Revenue Code. As permitted by the
Internal Revenue Code, the Board of Directors has adopted a policy whereby
supplemental payments may be made, as necessary, to maintain the benefit
levels earned under the benefit plans.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Based on the Company's review of copies of all Section 16(a) forms filed by
the Officers and Directors of the Company, the Company believes that in 1995
there was compliance with all filing requirements applicable to its Officers
and Directors.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse has audited the accounts of the Company and its subsidiaries
since 1943. On recommendation of the Audit Committee, the Board of Directors
has, subject to ratification by the stockholders, appointed Price Waterhouse
to audit the accounts of the Company and its subsidiaries for the fiscal year
1996. Audit fees to Price Waterhouse in 1995 incurred by the Company and its
subsidiaries were approximately $1,173,800. A representative of Price
Waterhouse will be present at the Meeting to respond to appropriate questions
<PAGE> 27
and will have an opportunity to make a statement if he or she desires to do
so. Accordingly, the following resolutions will be offered at the Meeting:
RESOLVED, That the appointment, by the Board of Directors of the Company,
of Price Waterhouse to audit the accounts of the Company and its subsidiary
companies for the fiscal year 1996, effective upon ratification by the
stockholders be, and it hereby is, ratified; and
FURTHER RESOLVED, That a representative of Price Waterhouse shall attend
the next Annual Meeting and any special meetings of stockholders that may be
held in the interim.
VOTE NEEDED FOR APPOINTMENT OF INDEPENDENT ACCOUNTANTS
An affirmative vote of the holders of a majority of the Company's Common
Stock, represented in person or by proxy and entitled to vote at the Meeting,
is necessary for ratification. If the stockholders do not ratify the
appointment of Price Waterhouse, the selection of independent accountants will
be reconsidered by the Audit Committee and the Board of Directors.
BOARD RECOMMENDATION
The Board recommends that stockholders vote FOR Proposal 2, and the
accompanying proxy will be so voted, unless a contrary specification is made.
PROPOSAL 3
AMENDMENT OF CERTIFICATE OF INCORPORATION TO AUTHORIZE ADDITIONAL SHARES OF
COMMON STOCK
The Board of Directors has unanimously proposed and declared advisable an
amendment (the "Common Stock Amendment") to Article FOURTH of the Company's
Certificate of Incorporation (the "Certificate") to increase the number of
authorized shares of common stock, par value $2.75 per share (the "Common
Stock"), from Two Hundred Million (200,000,000) shares of Common Stock to Four
Hundred Million (400,000,000) shares of Common Stock (the "Common Stock
Proposal"). The Board of Directors recommends that the Company's stockholders
approve the Common Stock Amendment by voting FOR Proposal 3.
If the proposed Common Stock Amendment is adopted by the affirmative vote
of a majority of all of the outstanding shares of the Company's Common Stock
entitled to vote at the Company's Annual Meeting, the proposed Common Stock
Amendment will become effective upon the filing of a certificate of amendment
with the Secretary of State of the State of Delaware, which is expected to
occur shortly after such stockholder approval.
As of January 31, 1996, there were 94,010,249 shares of Common Stock
outstanding. An additional 50,000,000 shares of Common Stock were reserved
for issuance under the Company's Shareholder Rights Plan, 2,071,547 shares of
Common Stock were reserved for issuance under the Dividend Reinvestment Plan,
4,559,353 shares of Common Stock were reserved for conversion of the Company's
convertible subordinated debentures, and 19,443,484 shares of Common Stock
were reserved for issuance under the Company's various benefit plans, leaving
29,872,964 shares of Common Stock available for general corporate purposes.
If the Common Stock Proposal is approved by the stockholders, the Company will
have 400,000,000 shares of authorized Common Stock.
The adoption of this Proposal will not result in the issuance of any
additional shares of Common Stock. The increase in the authorized number of
shares is intended to insure that there will be sufficient authorized but
unissued shares available for stock dividends, for use in connection with
acquisitions and for other corporate purposes.
Approval of this Proposal will permit the Board of Directors to issue
such additional shares without further approval of stockholders and upon such
terms and at such times as it may determine unless stockholder approval is
<PAGE> 28
required by applicable law or stock exchange requirements. Holders of the
Company's securities have no preemptive rights to subscribe to the Company's
securities.
The Board of Directors has no present plans to issue additional shares of
Common Stock, although the Company is continually reviewing various
transactions that could result in the issuance of shares of Common Stock.
The additional shares of Common Stock proposed to be authorized might be
issued to a holder who might vote against a proposed merger or sale of assets
or other corporate transaction and therefore might be available for use to
impede or discourage an attempted takeover of the Company.
The Company's Board of Directors believes that this Proposal is in the
best interests of the Company and its stockholders and recommends that the
stockholders approve the Common Stock Amendment.
VOTE NEEDED FOR APPROVAL OF ADDITIONAL SHARES OF COMMON STOCK
Approval of this proposal requires an affirmative vote by the holders of the
majority of the shares outstanding and entitled to vote. An abstention,
broker non-vote or vote withheld will have the same effect as a vote against
this proposal.
BOARD RECOMMENDATION
The Board recommends that stockholders vote FOR Proposal 3, and the
accompanying proxy will be so voted, unless a contrary specification is made.
PROPOSAL 4
AMENDMENT OF CERTIFICATE OF INCORPORATION TO AUTHORIZE A NEW CLASS OF
PREFERRED STOCK
The Board of Directors has unanimously proposed and declared advisable an
amendment (the "Preferred Stock Amendment") to Article FOURTH of the Company's
Certificate of Incorporation (the "Certificate") to authorize Five Million
(5,000,000) shares of a new class of preferred stock, par value $100 per share
(the "New Preferred Stock"). The Preferred Stock Amendment would also
eliminate the Company's existing authorized Two Million Five Hundred Thousand
(2,500,000) shares of preferred stock, par value $100 per share (the "Old
Preferred Stock"). In addition, the Preferred Stock Amendment makes certain
changes to references to Article FOURTH in other Articles in the Certificate.
A copy of the proposed Preferred Stock Amendment is attached as Appendix A
hereto and the following description is qualified in its entirety by reference
thereto. The Board of Directors recommends that the Company's stockholders
approve the Preferred Stock Amendment by voting FOR Proposal 4.
This proposal would add to Article FOURTH of the Restated Certificate of
Incorporation provisions authorizing the issuance of 5,000,000 shares of the
New Preferred Stock while eliminating provisions authorizing and concerning
the Old Preferred Stock. These new provisions would permit the Board of
Directors to issue the New Preferred Stock from time to time without the
necessity of further action or authorization by the Company's stockholders
(unless it is to be used for an anti-takeover purpose or it is required by
applicable law or stock exchange requirements) in one or more series and with
such voting powers, designations, preferences and relative, participating,
optional or other special rights and qualifications as the Board of Directors
may, in its discretion, determine, including, but not limited to (a) the
distinctive designation of such series and the number of shares to constitute
such series; (b) the dividends, if any, for such series; (c) the voting power,
if any, of shares of such series; (d) the terms and conditions (including
price), if any, upon which shares of such stock may be converted into or
exchanged for shares of stock of any other class or any other series of the
<PAGE> 29
same class or any other securities or assets; (e) the right, if any, of the
Company to redeem shares of such series and the terms and conditions of such
redemption; (f) the retirement or sinking fund provisions, if any, of shares
of such series and the terms and provisions relative to the operation thereof;
(g) the amount, if any, which the holders of the shares of such series shall
be entitled to receive in case of a liquidation, dissolution, or winding-up of
the Company; (h) the limitations and restrictions, if any, upon the payment of
dividends or the making of other distributions on, and upon the purchase,
redemption, or other acquisition by the Company of, the Company's Common
Stock; and (i) the conditions or restrictions, if any, upon the creation of
indebtedness or upon the issuance of any additional stock of the Company.
The Board of Directors believes that availability of the New Preferred
Stock will provide the Company with needed flexibility of action for possible
acquisitions, financing transactions and other general corporate purposes.
The Company anticipates using New Preferred Stock when it is not opportune to
sell common stock or debt due to prevailing market conditions or as may be
needed to meet Company capital structure requirements. In the past, the
Company has used the proceeds from the sale of preferred stock to satisfy the
long-term capital requirements of its subsidiaries. It is expected that
proceeds from the sale of New Preferred Stock would be used to satisfy similar
capital needs of the Company's operations and for other corporate purposes.
The Board is not considering the use of New Preferred Stock to discourage
attempts to acquire control of the Company (an "anti-takeover purpose") and
it is not aware of any present effort to accumulate the Company's securities
for the purpose of gaining control of the Company. The Board represents that
it will not issue, without prior stockholder approval, New Preferred Stock for
an anti-takeover purpose. No New Preferred Stock will be issued to any
individual or group for the purpose of creating a block of voting power to
support management on a controversial issue. The New Preferred Stock would be
available for issuance, on such terms as the Board of Directors determines,
without further action by the stockholders unless such action is required by
applicable law or stock exchange requirements or the New Preferred Stock is to
be used for an anti-takeover purpose. The Company is currently authorized to
issue 2,500,000 shares of Old Preferred Stock, none of which are issued and
outstanding. If this Proposal is approved by the stockholders, the Company
will no longer be authorized to issue Old Preferred Stock and will be
authorized to issue 5,000,000 shares of New Preferred Stock. The Company has
no present plans, agreements or commitments for the issuance of the New
Preferred Stock.
The actual effect of the authorization of the New Preferred Stock upon
the rights of the holders of Common Stock cannot be stated until the Board of
Directors determines the respective rights of the holders of one or more
series of the New Preferred Stock. Such effects, however, might include (a)
restrictions on dividends on Common Stock if dividends on the New Preferred
Stock are in arrears; (b) dilution of the voting power of the Common Stock;
and (c) restrictions on the rights of the holders of Common Stock to share in
the Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the New Preferred Stock. The terms of the Old Preferred
Stock, if issued, could have a similar effect upon the rights of the holders
of Common Stock.
Although the Company has no present plans, agreements or commitments for
the issuance of the New Preferred Stock, and the Board has undertaken to seek
prior shareholder approval if it wishes to issue New Preferred Stock to be
used for an anti-takeover purpose, the authorized but unissued shares of such
New Preferred Stock could be used to make a takeover or change in control in
the Company more difficult. Under certain circumstances, rights granted upon
issuance of shares of the New Preferred Stock could be used to create voting
<PAGE> 30
impediments or to discourage third parties seeking to effect a takeover or
otherwise gain control of the Company. For example, the shares could be
placed with purchasers who might support the Board of Directors in opposing a
hostile takeover bid or could be used in connection with adopting another
shareholder rights plan. The issuance of new shares could also be used to
dilute the stock ownership and voting power of a third party seeking to effect
a merger, sale of assets, or similar transaction. In the event and to the
extent the proposed amendment could facilitate such actions, it could serve to
perpetuate incumbent management. The Board of Directors is not aware,
however, of any specific effort or plan to accumulate the Company's securities
or to obtain control of the Company by means of a merger, tender offer,
solicitation in opposition to management, or otherwise.
The Company already has a number of defensive provisions in its Restated
Certificate of Incorporation, including a classified board of directors,
certain Fair Price and supermajority voting provisions for business
combinations with a 5% or greater stockholder, and a prohibition against
taking stockholder action in certain situations without the use of a mailed
proxy statement. The Company also currently has a shareholder rights plan,
the effect of which may be to discourage attempts to gain control of the
Company without the approval of the Board. This rights plan would not be
affected by the proposed authorization of shares of New Preferred Stock.
The Company's Board of Directors believes that adoption of this Proposal
is in the best interests of the Company and its stockholders and recommends
that the stockholders approve the Preferred Stock Amendment.
VOTE NEEDED FOR APPROVAL OF THE NEW CLASS OF PREFERRED STOCK
Approval of this proposal requires the affirmative vote by the holders of the
majority of the shares outstanding and entitled to vote. An abstention, broker
non-vote or vote withheld will have the same effect as a vote against this
proposal.
BOARD RECOMMENDATION
The Board recommends that stockholders vote FOR Proposal 4, and the
accompanying proxy will be so voted, unless a contrary specification is made.
PROPOSAL 5
STOCKHOLDER'S PROPOSAL CONCERNING RIGHTS PLAN
Amalgamated Bank of New York LongView Collective Investment Fund, 11-15 Union
Square West, New York, New York, which owns 19,900 shares of the Company's
Common Stock has submitted the resolution set forth below for inclusion in
this proxy statement for the Company's 1996 Annual Meeting of Shareholders.
THE STOCKHOLDER'S PROPOSAL
SHAREHOLDER RIGHTS PLAN RESOLUTION
"RESOLVED: That the shareholders of Consolidated Natural Gas Company ("CNG" or
the "Company") request the Board of Directors to redeem the shareholder rights
previously issued unless such issuance is approved by the affirmative vote of
shareholders, to be held as soon as may be practicable."
THE STOCKHOLDER'S SUPPORTING STATEMENT
Recently, the CNG Board of Directors issued, without shareholder approval,
certain shareholder rights (the "rights") pursuant to a shareholder rights
plan. We strongly believe that such rights are a type of anti-takeover
device, commonly known as a poison pill, which injures shareholders by
reducing management accountability and adversely affecting shareholder value.
<PAGE> 31
The shareholders of the Company believe the terms of the rights are
designed to discourage or thwart an unwanted takeover of the Company. While
management and the Board of Directors should have appropriate tools to ensure
that all shareholders benefit from any proposal to acquire the Company, the
Shareholders do not believe that the future possibility of a takeover
justifies the unilateral imposition of such a poison pill.
Rather, we believe that the shareholders should have the right to vote on
the necessity of such a powerful tool, which could be used to entrench
existing management. Rights plans like the Company's have become increasingly
unpopular in recent years.
The negative effects of poison pill rights plans on the trading value of
companies' stock have been the subject of extensive research. A 1986 study
(covering 245 companies adopting poison pills between 1983 and July 1986) was
prepared by the Office of the Chief Economist of the U.S. Securities and
Exchange Commission on the effect of poison pills on the wealth of target
shareholders. It states that "empirical tests, taken together, show that
poison pills are harmful to target shareholders, on net." A 1992 study by
Professor John Pound of Harvard's Corporate Research Project and Lilli A.
Gordon of the Gordon Group found a correlation between high corporate
performance and the absence of poison pills.
We believe that such an important corporate governance practice that can
have a significant adverse impact on shareholder value should be eliminated
or, at the very least, be voted on by shareholders.
We therefore submit this shareholder proposal based on our belief that
the unilateral and undeniable undemocratic adoption of the rights plan by the
Company is unjustified, that the continued existence of such a rights plan by
the Company is unjustified and not in the best interests of the shareholders.
We believe that the shareholder rights plan should either be redeemed or voted
on by shareholders.
We urge you to vote FOR this resolution!
MANAGEMENT'S COMMENTS
In adopting a shareholder protection rights plan (the "Rights Plan"), the
Company's goal is to protect the interest of the Company and all shareholders.
The Rights Plan is designed to protect against attempts to acquire the Company
for an inadequate price and to protect against abusive practices that do not
treat all shareholders equally. Such practices can, and are often intended
to, pressure shareholders into tendering their investments prior to realizing
the full value or total potential of such investments. The Rights Plan is
intended to create an incentive for a potential acquiror to negotiate in good
faith with the Board. The Rights Plan strengthens the ability of the Board to
fulfill its fiduciary responsibilities with the opportunity to evaluate the
fairness of any unsolicited offer and the credibility of the bidder. Of
course, in deciding whether to redeem the rights in connection with any
unsolicited offer, the Board will be bound by its fiduciary obligations to act
in the best interests of the Company and its shareholders.
The Board of Directors adopted the Rights Plan in November 1995 following
its review of comprehensive analytical materials presented to the Board by
outside legal counsel and face-to-face presentations made by such legal
counsel to the Board. Based on such review and the advice of such firm, the
Board believes that the adoption and continuing existence of the Rights Plan
is in the best interests of the Company and shareholders and will not deter a
suitably financed offer that is made at a fair price to all shareholders. The
success of any such offer will of course depend on various factors, including
the source of the bidder's financing. More than 1,000 U.S. corporations,
including other companies engaged in businesses similar to the Company's have
adopted shareholder protection plans similar to the Rights Plan, including
<PAGE> 32
Western Atlas, Inc., Litton Industries Inc., McDermott International Inc.,
McDonnell Douglas Corp., Reebok International Ltd., Philip Morris Cos. Inc.,
Georgia-Pacific Corp. and Walt Disney Co.
Under Delaware law, the Board has the responsibility to manage and direct
the Company's business and affairs, and the Board believes that the adoption
of the Rights Plan was a valid exercise of that responsibility. The Board
believes that the decision to redeem the rights should be made in the context
of a specific acquisition proposal. To do so at this time would be to strip
the Company's shareholders of protection in the event of an unsolicited offer
and, in the Board's view, potentially reduce the long-term value for all
shareholders.
VOTE NEEDED FOR APPROVAL OF THE PROPOSAL
Approval of this proposal requires an affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled
to vote. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders. Broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
BOARD RECOMMENDATION
The Board recommends that stockholders vote AGAINST Proposal 5, and the
accompanying proxy will be so voted, unless a contrary specification is made.
PROPOSAL 6
STOCKHOLDER'S PROPOSAL CONCERNING NON-EMPLOYEE RETIREMENT PLANS
Mr. Paul Griffith of 4591 Columbia Road, North Olmsted, Ohio, who owns 792
shares of the Company's Common Stock has informed management that he will
propose the resolution set forth below at the Annual Meeting.
THE STOCKHOLDER'S PROPOSAL
NON-EMPLOYEE RETIREMENT PLANS RESOLUTION
"RESOLVED, That the shareholders of Consolidated Natural Gas ("Company")
hereby request that the Company's Board of Directors in the future refrain
from providing pension or other retirement benefits to non-employee or outside
directors unless such benefits are first submitted to the shareholders for
approval."
THE STOCKHOLDER'S SUPPORTING STATEMENT
The Company's Board of Directors should play a vital and independent role in
helping to determine corporate policy and strategy. It should actively
monitor senior management so they faithfully implement these policies and
strategies. In that, Directors owe their fundamental allegiance to the
shareholders of the corporation -- the owners who elect them -- and not to
management.
Certain business or financial relationships can negatively affect the
ability of Directors to oversee policy. This is especially true for so-called
outside or independent Directors who are not employee/Directors and who should
bring a degree of objectivity to Board deliberations.
According to the 1994 proxy statement, the company offers a retirement or
pension plan for non-employee Directors who had at least four years of
service. Under the plan they will receive an annual retirement benefit (for
life) equal to the annual Board retainer in effect at the time of the
Director's retirement from the Board. That retainer is now a generous
$24,000. The proxy also indicated that Director's are also entitled to
expense reimbursements and that Board committee chairs receive an additional
annual fee of $3,000.
<PAGE> 33
While non-employee or outside Directors should be entitled to reasonable
compensation for their time and expertise, additional compensation in the form
of retirement benefits (which are 100% of the Director's base compensation)
can compromise their independence and impartiality. Such generous and
unnecessary extra compensation for outside Directors of the Company can be
management's way to insure unquestionable loyalty. These types of retirement
benefits can become another device to enhance and entrench management's
control over corporate policy, instead of management being responsible to the
company's owners.
Because of our strong concern for maximizing the ability of Boards of
Directors to act in shareholder's interest, we feel that the long-term best
interests of the Company are not well served by current Board Policies. The
vast majority of Directors at various corporations are undoubtedly covered by
generous retirement policies at their principal place of employment. They
need not be "double-dipping" at this Company or any other!
We urge you to support this Proposal.
MANAGEMENT'S COMMENTS
The proponent is critical of retirement benefits being offered to outside
Directors and believes that these benefits may jeopardize the independence of
outside Directors in carrying out their duties on behalf of stockholders;
however, the proponent offers no substantiation for this belief. In addition,
the proponent states that outside Directors may be covered by other retirement
plans at other companies. This is not relevant in determining whether the
Company's overall compensation of outside Directors is reasonable, which the
proponent agrees is appropriate for the contribution that outside Directors
make to the Company.
To attract and retain these high caliber, talented and experienced
individuals to serve as outside Directors, the Company must provide a
competitive total compensation package for its outside Directors. Retirement
benefits are a common element of outside Director compensation packages at
large corporations. The Conference Board reports that for companies similar
in size to CNG by sales, 69% of the companies that it surveyed provided
retirement benefits for their outside Directors in 1995.
The Board has determined that payment of annual retainers to outside
Directors who have served a minimum of four years and who agree to remain
available to consult with management after their retirement from the Board is
appropriate; this is within the authority of the Board. This program, and
other programs which are described elsewhere in this Proxy Statement, provide
an incentive to the Board to remain in service to the Company long enough to
gain experience and knowledge of the Company's business, and to remain
available after retirement. The benefits to which outside Directors are
entitled recognize the ever-increasing time commitment, diligence and risks
associated with Board service. For these reasons, we recommend a vote against
this proposal.
VOTE NEEDED FOR APPROVAL OF THE PROPOSAL
Approval of this proposal requires an affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled
to vote. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders. Broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
BOARD RECOMMENDATION
The Board recommends that stockholders vote AGAINST Proposal 6, and the
accompanying proxy will be so voted, unless a contrary specification is made.
<PAGE> 34
PROPOSAL 7
STOCKHOLDER'S PROPOSAL CONCERNING CHANGE OF CONTROL AGREEMENTS
Mr. James J. Johnston of 5155 Logans Ferry Road, Murrysville, Pennsylvania,
who owns 1,708 shares of the Company's Common Stock has informed management
that he will propose the resolution set forth below at the Annual Meeting.
THE STOCKHOLDER'S PROPOSAL
CHANGE OF CONTROL AGREEMENTS RESOLUTION
"RESOLVED, That the stockholders of Consolidated Natural Gas ("Company")
request that the Board of Directors in the future abstain from entering into
agreements providing executive compensation contingent on a change in control
of the Company unless such agreements or arrangements are specifically
submitted to the stockholders for approval."
THE STOCKHOLDER'S SUPPORTING STATEMENT
The Company has contingency employment agreements with Messrs. Davidson, Chief
Executive Officer; Gifford, President, CNG Energy Services; Hunt, President,
CNG Producing; Johnson, Chief Financial Officer; and Timms, President, CNG
Transmission, dated November 14, 1989, which provide special severance
compensation if there is a change in control of the Company. These
agreements, commonly known as "golden parachutes," provide that if an officer
resigns or is fired under certain circumstances within three years after a
change in control of the Company, these executives shall receive severance
payments equal to 2.99 times their respective annual compensation prior to the
severance. However, the most recent Company proxy statement does not explain
what a "defined change of control of the Company" means.
These employment agreements with the "golden parachute" provisions were
adopted without consideration by the Company's shareholders. If the Company
were to become the target of a takeover, these golden parachutes would
introduce a personal consideration for managers that potentially conflicts
with their fiduciary responsibility to shareholders. We believe this may
cause managers to act in a manner that encourages a takeover, regardless of
whether it maximizes stockholder value.
We believe that the issue of whether the Company should, in the future,
provide management with golden parachutes is of such importance that
stockholders should approve this decision. We believe stockholder approval is
one of the best ways available to address potential conflicts of interest that
may arise between the board and top executives on one hand, and stockholders
on the other hand, when a change of control is threatened.
For the reasons stated above, we urge you to VOTE FOR this proposal.
MANAGEMENT'S COMMENTS
Contrary to the proponent's assertion that change-in-control severance
compensation provisions in employment contracts create a conflict of interest
between management's personal concerns and its responsibilities to the
Company, the Board of Directors believes that the security offered by such
severance provisions permits executives to remain focused and objective during
a threatening situation and to act promptly and decisively in the Company's
best interest. The Board recognizes that its officers may be involved in
evaluating or negotiating any offer or proposal which could result in a change
of control of the Company, and the Board believes such officers should be in a
position free from personal financial and employment considerations to
evaluate or negotiate any such change of control. Requiring stockholder
approval of severance agreements weakens the Board's flexibility to act
promptly and competitively within the industry in attracting and retaining
experienced executives, thereby potentially depriving the Company and its
<PAGE> 35
stockholders of the leadership necessary for the maximization of long-term
stockholder value. In addition, the existence of special severance
compensation provisions do not affect the legal responsibilities of the
Company's officers and directors to stockholders with regard to maximizing
stockholder value or any other duty or responsibility to stockholders. The
Board of Directors believes that severance agreements offered at its
discretion enhance the current value of the Company by positively influencing
its future value.
The Board of Directors believes that reasonable severance arrangements
related to a change of control also benefit the Company by enhancing its
ability to recruit, retain and motivate executives. The Board believes that
the severance provisions under the agreements are competitive with those of
the Company's competition; this is within the authority of the Board.
Adoption of the shareholder's proposal would adversely affect the Company's
ability to recruit top executives.
In summary, the Board of Directors believes that the limitations on the
Board's flexibility imposed by the implementation of this proposal would be an
unnecessary impediment to effective action by the Board and the goal of
maximizing stockholder value.
VOTE NEEDED FOR APPROVAL OF THE PROPOSAL
Approval of this proposal requires an affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled
to vote. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders. Broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
BOARD RECOMMENDATION
The Board recommends that stockholders vote AGAINST Proposal 7, and the
accompanying proxy will be so voted, unless a contrary specification is made.
PROCEDURE FOR SUBMISSION OF 1997 STOCKHOLDER PROPOSALS
Proposals by stockholders for inclusion in the 1997 Annual Meeting Proxy
Statement must be received by the Corporate Secretary, Consolidated Natural
Gas Company, CNG Tower, 625 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3199, prior to December 2, 1996. All such proposals are subject to the
applicable rules and requirements of the Securities and Exchange Commission.
OTHER BUSINESS
The Board of Directors does not intend to bring any business before the
Meeting other than that listed in the foregoing Notice and is not aware of any
business intended to be presented to the Meeting by any other person. Should
other matters properly come before the Meeting, the persons named in the
accompanying proxy will vote said proxy in such manner as they may, in their
discretion, determine.
LAURA J. MCKEOWN
Laura J. McKeown
Secretary
March 22, 1996
NOTE: YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN AND RETURN YOUR
PROXY CARD, OR ATTEND THE MEETING AND VOTE IN PERSON.
<PAGE> 36
Appendix A
(a) Article FOURTH of the Restated Certificate of Incorporation of the Company
is hereby amended in its entirety to read as follows:
"FOURTH. 1. The corporation shall be authorized to issue Four Hundred Five
Million (405,000,000)(1) shares of all classes of capital
stock, of which Four Hundred Million (400,000,000)(1) shall be
shares of Common Stock, Two Dollars and Seventy-Five Cents
($2.75) par value ("Common Stock"), and Five Million
(5,000,000)(1) shall be shares of Preferred Stock, One Hundred
Dollars ($100.00) par value ("Preferred Stock").
2. Shares of Preferred Stock may be issued from time to time in
one or more series. The Board of Directors is hereby
authorized to create and provide by resolution for the
issuance of shares of Preferred Stock in series and, by filing
a certificate pursuant to the applicable law of the State of
Delaware (hereinafter referred to as a "Preferred Stock
Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the
designations, powers, preferences and rights of the shares of
each such series and the qualifications, limitations or
restrictions thereof.
The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of
the following:
(A) the maximum number of shares to constitute such series,
which may subsequently be increased or decreased (but not
below the number of shares of such series then
outstanding) by resolution of the Board of Directors, the
distinctive designation thereof and the stated value
thereof if different than the par value thereof;
(B) whether the shares of such series shall have voting powers
and, if any, the terms of such voting powers;
(C) the dividend rate or rates, if any, on the shares of such
series or the manner in which such rate or rates shall be
determined, the conditions and dates upon which such
dividends shall be payable, and the preference or relation
which such dividends shall bear to the dividends payable
on any other class or classes or on any other series of
capital stock and whether such dividends shall be
cumulative or noncumulative;
_______________
(1) Discrete Common Stock and Preferred Stock portions are subject to separate
approval by the stockholders. If only the Common Stock proposal is
approved, then the number of shares of capital stock authorized will be
402,500,000 and the number of shares of Preferred Stock will remain at
2,500,000; if only the Preferred Stock proposal is approved, then the
number of shares of capital stock authorized will be 205,000,000 and the
number of shares of Common Stock will remain at 200,000,000.
<PAGE> 37
(D) whether the shares of such series shall be subject to
redemption by the corporation, and, if made subject to
redemption, the times, prices and other terms,
limitations, restrictions or conditions of such
redemption;
(E) the relative amounts, and the relative rights or
preferences, if any, of payment in respect of shares of
such series which the holders of shares of such series
shall be entitled to receive upon the liquidation,
dissolution or winding-up of the corporation;
(F) whether or not the shares of such series shall be subject
to the operation of a retirement or sinking fund and, if
so, the extent to which and the manner in which any such
retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for
retirement or to other corporate purposes, and the terms
and provisions relative to the operation of such
retirement or sinking fund;
(G) whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of any other
class, classes or series, or other securities, whether or
not issued by the corporation, and if so convertible or
exchangeable, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of
adjusting the same;
(H) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the
payment of dividends or the making of other distributions
on, and upon the purchase, redemption or other acquisition
by the corporation of, the Common Stock or any other class
or classes of stock of the corporation ranking junior to
the shares of such series either as to dividends or upon
liquidation, dissolution or winding-up of the corporation;
(I) the conditions or restrictions, if any, upon the creation
of indebtedness of the corporation or upon the issuance of
any additional stock (including additional shares of such
series or of any other class) ranking on a parity with or
prior to the shares of such series as to dividends or
distribution of assets upon liquidation, dissolution or
winding-up of the corporation; and
(J) any other preference, relative, participating, optional or
other special rights, and the qualifications, limitations
or restrictions thereof, as shall not be inconsistent with
law, this Article FOURTH or any resolution of the Board of
Directors pursuant hereto.
3. Each share of the Common Stock shall be equal in all respects
to every other share of the Common Stock. The Common Stock
shall be subject to the express terms of the Preferred Stock
and any series thereof.
<PAGE> 38
4. Except as provided herein, at all meetings of the stockholders
of the corporation the holders of shares of Common Stock shall
be entitled to one vote for each share of Common Stock held by
them respectively except as herein otherwise expressly
provided. The holders of shares of the Preferred Stock shall
have no right to vote and shall not be entitled to notice of
any meeting of stockholders of the corporation or to
participate in any such meeting except as otherwise expressly
provided herein or in a Preferred Stock Designation, and
except for those purposes, if any, for which said rights
cannot be denied or waived under some mandatory provision of
law which shall be controlling.
Any action required to be taken or which may be taken at any
annual or special meeting of the stockholders of the
corporation may be taken without a meeting, without prior
notice and without a vote, if, in addition to any affirmative
consent otherwise required by applicable law, a consent in
writing, setting forth the action so taken, shall be signed by
the holders of seventy-five percent or more of the issued and
outstanding shares of stock of the corporation entitled to
vote thereon. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not
consented in writing.
5. From time to time, and without limitation of other rights and
powers of the corporation as provided by law, the corporation
may reclassify its capital stock and may create or authorize
one or more classes or kinds of stock ranking prior to or on a
parity with or subordinate to the Preferred Stock or may
increase the authorized amount of the Preferred Stock or of
the Common Stock or of any other class of stock of the
corporation or may amend, alter, change or repeal any of the
rights, privileges, terms and conditions of shares of the
Preferred Stock or of any series thereof then outstanding or
of shares of the Common Stock or of any other class of stock
of the corporation, upon the vote, given at a meeting called
for that purpose in accordance with the provisions of
paragraph 6 hereof, of the holders of a majority of the shares
of stock then entitled to vote thereon or upon such other vote
of its stockholders then entitled to vote thereon as may be
provided by law; provided that the consent of the holders of
shares of the Preferred Stock (or of any series thereof)
required by the provisions hereof or of any Preferred Stock
Designation, if any such consent be so required, shall have
been obtained, and provided further that the rights,
privileges, terms and conditions of shares of the Common Stock
shall not be subject to amendment, alteration, change or
repeal without the consent (given in writing or by vote at a
meeting called for that purpose in accordance with the
provisions of paragraph 6 hereof) of the holders of a majority
of the total number of shares of the Common Stock then
outstanding.
<PAGE> 39
6. Notice of any meeting of stockholders of the corporation, or
of the holders of any class or series of stock, required or
authorized hereunder or by law, setting forth the purpose or
purposes of such meeting, shall be mailed by the corporation,
not less than ten (10) days nor more than sixty (60) days
prior to such meeting, to all stockholders (at their
respective addresses appearing on the books of the
corporation) entitled to vote thereat of record as of a date
fixed by the Board of Directors of the corporation for the
purpose of determining the stockholders entitled to notice of
and to vote at such meeting, unless such notice shall have
been waived, either before or after the holding of such
meeting, by all stockholders entitled to notice thereof and to
vote thereat. Any action authorized to be taken at a meeting
called for that purpose in accordance with the provisions of
this paragraph 6 may be taken either at a special meeting or
at any regular or annual meeting, provided that notice of such
proposed action is included in the notice of such regular or
annual meeting. Except where some mandatory provision hereof,
of a Preferred Stock Designation or of law shall be
controlling, no other, longer or additional notice need be
given of any such meeting and all holders of shares of
Preferred Stock of the corporation, by becoming such, hereby
consent to the holding of any such meeting upon notice given
as hereinbefore provided and thereby waive, to the full extent
permitted by law, any right to require the giving of or to
receive any such other, longer or additional notice.
7. The corporation may, at any time, and from time to time, upon
order of the Board of Directors, issue and dispose of any of
its authorized and unissued shares of Preferred and Common
Stock, or any securities convertible into Common Stock, for
such consideration as may be fixed by the Board of Directors;
and no holder of Common Stock of the corporation, and no
holder of Preferred Stock of the corporation unless otherwise
expressly provided for in the Preferred Stock Designation with
respect to such series of Preferred Stock, shall have any
preemptive right to subscribe for any shares of stock of any
class, series or kind whatsoever, whether now or hereafter
authorized, or securities convertible into such stock, and
whether issued for cash, property, services, by way of
dividends or otherwise."
(b) Subsection (j) of Section 4 of Article FIFTH of the Restated Certificate
of Incorporation of the Company is hereby amended in its entirety to read
as follows:
"(j) "Subsidiary" shall mean any corporation, a majority of the voting
shares of which are at the time owned by the Company or by other
subsidiaries of the Company."
(c) The sixth paragraph of Article TENTH of the Restated Certificate of
Incorporation of the Company is hereby amended in its entirety to read as
follows:
<PAGE> 40
"When and as authorized by the affirmative vote of the holders of a
majority of the outstanding Common Stock of the corporation entitled to
vote thereon at a meeting duly called for that purpose, or when authorized
by the written consent of the stockholders in accordance with the
provisions set forth in Section 4 of Article FOURTH hereof, together with
such vote of the Preferred Stock as may be required by Article FOURTH
hereof or by any Preferred Stock Designation, to sell, lease or exchange
all or substantially all of the property and assets of the corporation,
including its good will and its corporate franchises, upon such terms and
conditions and for such consideration, which may consist in whole or in
part of money or other property, including shares of stock in, and/or
other securities of, any other corporation or corporations, as the Board
of Directors shall deem expedient and for the best interests of the
corporation."
(d) The phrase "Except as provided in subparagraph (B) of paragraph 10 of
Article FOURTH hereof, the" in the eighth paragraph of Article TENTH of
the Restated Certificate of Incorporation of the Company is hereby deleted
and replaced by the word "The."
(e) The reference to "Section 10(A) of Article FOURTH" in the second paragraph
of Article THIRTEENTH of the Restated Certificate of Incorporation of the
Company is hereby amended to refer to "Section 4 of Article FOURTH."
<PAGE> 41
(Form of Proxy - Side 1)
[CNG logo] CONSOLIDATED NATURAL GAS COMPANY
PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 21, 1996
P The undersigned hereby appoints G.A. Davidson, Jr., D.M. Westfall and
S.E. Williams, and each or any of them, proxies with full power of
R substitution to vote the stock of the undersigned, as directed
hereon, at the Annual Meeting of Stockholders of CONSOLIDATED NATURAL
O GAS COMPANY to be held at the Newark Marriott Airport Hotel, Newark
International Airport, Newark, New Jersey 07114, on Tuesday, May 21,
X 1996, at 10:30 a.m. (EDT), and at any adjournment thereof, and, in their
discretion, on any other matters that may properly come before the
Y meeting.
(change of address)
ELECTION OF DIRECTORS
_____________________________
Nominees: P.E. Lego, M.A. McKenna
and W.R. Peirson
_____________________________
_____________________________
_____________________________
(If you have written in the
above space, please mark the
"Change of Address" box on
the reverse side of this
card.)
PLEASE SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH YOUR INSTRUCTIONS, OR, IF YOU GIVE NO INSTRUCTIONS, THIS PROXY WILL
BE VOTED FOR ITEMS 1, 2, 3 and 4 AND AGAINST ITEMS 5, 6 and 7.
- - - - - - - -
[cards are sequentially / SEE REVERSE /
numbered here] / SIDE /
- - - - - - - -
<PAGE> 42
(Form of Proxy - Side 2)
Please mark your SHARES IN YOUR NAME REINVESTMENT SHARES
/x/ votes as in this
example.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratification
Directors / / / / of Price / / / / / /
(see reverse) Waterhouse
as indepen-
dent account-
ants.
For, except vote withheld
from the following nominee(s):
______________________________
FOR AGAINST ABSTAIN
3. Increase the
Company's Auth-
orized Common / / / / / /
Stock
THE BOARD OF DIRECTORS 4. Amend and Increase
RECOMMENDS A VOTE FOR the Company's
ITEMS 1, 2, 3 AND 4 AND Authorized / / / / / /
AGAINST ITEMS 5, 6 AND 7. Preferred Stock
5. Adoption of a
shareholder-
proposed reso- / / / / / /
lution regarding
the rights plan.
Change 6. Adoption of a
of / / shareholder-
Address proposed reso- / / / / / /
lution regarding
director retire-
ment plans.
Attend 7. Adoption of a
Meeting / / shareholder-
(no ticket proposed reso- / / / / / /
required) lution regarding
change of control
agreements.
SIGNATURE(S) ______________________________________ DATE _______________
SIGNATURE(S) ______________________________________ DATE _______________
<PAGE> 43
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such. If signing on behalf of a
corporation, please sign the full corporate name by authorized officer.
