As filed with the Securities and Exchange Commission on August 27, 1996.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
___________
Consolidated Natural Gas Company
(Exact name of registrant as specified in its charter)
Delaware 13-0596475
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
(412) 227-1000
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive office)
___________
David M. Westfall
Senior Vice President and Chief Financial Officer
Consolidated Natural Gas Company
CNG Tower, 625 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3199
(412) 227-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
___________
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes
effective when warranted by various factors.
___________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /x/
<PAGE>
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act Registration Statement number of the
earlier effective registration Statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities to be Price Per Offering Registration
to be Registered Registered Share (1)(2) Price (1) Fee (2)
Common Stock
($2.75 par value)..... 750,000 $55.125 $41,343,750 $14,256
- ---------------------------------------------------------------
(1) Estimated solely for the purposes of computing the registration
fee.
(2) Pursuant to Rule 457(c), the registration fee has been
calculated based on the average of the high and low sales prices
reported on August 20, 1996.
<PAGE>
750,000 Shares
CONSOLIDATED NATURAL GAS COMPANY
Common Stock
($2.75 par value)
To Be Offered For The Account Of
The Consolidated Natural Gas Company Grantor Trust
This Prospectus may be used in connection with the
distribution of up to 750,000 shares (the "Shares") of Common Stock,
$2.75 par value (the "Common Stock"), of Consolidated Natural Gas
Company (the "Company") proposed to be offered for sale by and for
the account of the Consolidated Natural Gas Company Grantor Trust
(the "Trust"), which Trust serves as a funding medium for and holds
the assets of various non-qualified pension and retirement plans
maintained by the Company and its subsidiaries (the "Plans"). Any
sales of the Shares will be at market prices (plus customary or
negotiated brokerage commissions) prevailing at the time of sale in
the case of transactions on The New York Stock Exchange (the "NYSE"),
on which the Common Stock is traded, and at negotiated prices related
to prevailing market prices in the case of transactions off the floor
of the NYSE.
The outstanding shares of Common Stock (including the
Shares) are listed on the NYSE under the symbol "CNG". On August 26,
1996, the last reported sales price of the Common Stock on The New
York Stock Exchange Composite Transactions Tape was $56.625 per
share.
_______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_______________________
No dealer, salesman or other person has been authorized to give
any information or to make any representations, other than those
contained in this Prospectus, in connection with the offering made
hereby, and, if given or made, such other information or
representations must not be relied upon as having been authorized by
the Company, the Trust or the Plans. This Prospectus does not
constitute an offer to sell securities in any jurisdiction to any
person to whom it would be unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus nor any sale
made hereunder shall under any circumstances create any implication
that there has been no change in the affairs of the Company since the
date hereof or that the information contained or incorporated by
reference herein is correct at any time subsequent to the date of
this Prospectus.
______________________________
The date of this Prospectus is August 27, 1996.
<PAGE>
<PAGE>
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and information with the Securities and
Exchange Commission, Washington, D.C. (the "Commission"). Certain
information, as of particular dates, concerning the directors and officers
of the Company, their remuneration and any material interests of such
persons in transactions with the Company, is disclosed in proxy statements
distributed to shareholders and filed with the Commission. The Company has
filed with the Commission a Registration Statement on Form S-3 (together
with all amendments and exhibits, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities offered hereby. As permitted by the rules and regulations of
the Commission, this Prospectus omits certain information contained in the
Registration Statement. For such information, reference is made to the
Registration Statement and the exhibits thereto. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to herein are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
to be qualified in its entirety by such reference.
The Registration Statement, as well as the reports, proxy
statements and other information filed by the Company with the Commission in
accordance with the Exchange Act, may be inspected without charge at the
principal office of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 and is also available for inspection and copying at the regional
offices of the Commission located at Seven World Trade Center, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The Commission maintains a Web Site
(http:/www.sec.gov) that contains such reports, proxy statements and other
information. Such reports, proxy statements and other information also may
be inspected at the office of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005, on which certain of the Company's securities are
listed.
<PAGE>
-3-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which were filed by the Company with
the Commission, are incorporated in this Prospectus by reference:
(1) the Company's Annual Report on Form 10-K for the year
ended December 31, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996;
(3) the Company's Current Report on Form 8-K dated January 23,
1996; and
(4) the description of the Company's Common Stock as set forth
in the Company's Registration Statement No. 33-48881 on Form S-3.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering shall
be deemed to be incorporated by reference into this Prospectus and to be
part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein
or in another subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, on the
written or oral request of any such person, a copy of any or all of the
foregoing documents incorporated herein by reference (not including exhibits
to such documents unless exhibits are specifically incorporated by reference
into such documents). Requests should be directed to the Corporate
Secretary, Consolidated Natural Gas Company, CNG Tower, 625 Liberty Avenue,
Pittsburgh, PA 15222-3199, Telephone No. (412) 227-1183.
<PAGE>
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THE COMPANY
The Company is a Delaware corporation organized on July 21,
1942. Its principal executive offices are located at CNG Tower, 625 Liberty
Avenue, Pittsburgh, Pennsylvania 15222-3199, and its telephone number is
(412) 227-1000.
USE OF PROCEEDS
The Trust will use the proceeds from the sale of any of the
Shares to meet its obligations with respect to the Plans providing benefits
to participating employees and retirees and their beneficiaries and to help
ensure that it will be able to meet future obligations under the Plans.
Proceeds from the sale of any of the Shares will remain in the Trust until
such time as they are used to meet its obligations with respect to the Plans
providing benefits to participating employees and retirees and their
beneficiaries. The Company will not receive any of the proceeds from the
sale of any of the Shares, except under certain circumstances in which all
of the benefits to be funded by the Trust are paid or adequate provision for
such payment is made in accordance with the terms of the Trust.
THE TRUST
The Company may contribute up to 750,000 Shares of Common Stock
to the Trust and such Shares may be offered for sale, from time to time, by
and for the account of the Trust. The Trust was established pursuant to a
Trust Agreement, dated June 1, 1995, by and between the Company and Mellon
Bank. The Trust serves as a funding medium for and holds the assets of
various non-qualified pension and retirement plans maintained by the
Company and its subsidiaries (the "Plans"). As of August 26, 1996, the
Trust owned no shares of Common Stock.
The Company has filed with the Commission the Registration
Statement of which this Prospectus is a part, and is paying all expenses in
connection with such registration.
PLAN OF DISTRIBUTION
The Shares will not be sold by the Trust pursuant to any
prearranged plan of distribution; the price and manner of sale, if any,
will be determined by the Trustee in accordance with written investment
guidelines provided to the Trustee by the Company or by an investment
committee appointed by the Board of Directors of the Company. The proceeds
of any such sales will be for the benefit of the Trust and used to meet its
<PAGE>
-5-
obligations with respect to the Plans providing benefits to participating
employees and retirees and their beneficiaries. Any sales will be at
market prices prevailing at the time of sale in the case of transactions on
the NYSE and at negotiated prices related to prevailing market prices in
the case of transactions off the floor of the NYSE. The Trust, and any
brokers or dealers effecting sales on its behalf, may be deemed to be
"underwriters" within the meaning of the Securities Act. No payment of any
underwriting commissions or discounts in connection with the sale of any of
the Shares is expected other than customary brokerage commissions which
will be paid by the Trust and the purchasers of the Shares. All other
expenses of the offering made hereby will be borne by the Company. Neither
the Company, the Trust (including the Investment Committee) nor the Plans
has, to date, made any arrangement with any particular broker or dealer to
sell any of the Shares.
LEGAL OPINIONS
The legality of the common stock has been passed upon for the
Company by Stephen E. Williams, Senior Vice President and General Counsel
of the Company and of its subsidiary, Consolidated Natural Gas Service
Company, Inc., ("Service Company") and Norbert F. Chandler, counsel for the
Company and a General Attorney of Service Company. At August 26, 1996,
Mr. Williams owned directly and/or beneficially 32,614 shares of the
Company's common stock and has been granted pursuant and subject to the
terms of the Company's long-term incentive plans, restricted stock awards
of 23,652 shares and options on 125,181 shares. As of the same date, Mr.
Chandler directly and/or beneficially owned 3,570 shares of the Company's
common stock and options on 17,666 shares under such long-term incentive
plans.
EXPERTS
The consolidated financial statements of Consolidated Natural
Gas Company and its Subsidiaries incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The estimates of gas and oil reserves included in the aforesaid
1995 Annual Report are incorporated in this Prospectus by reference thereto
in reliance upon the report of
<PAGE>
-6-
Ralph E. Davis Associates, Inc., independent geologists, as experts.
<PAGE>
_______________________________ ____________________________
CONSOLIDATED
NATURAL GAS COMPANY
Consolidated
Natural Gas Company
CNG Tower
625 Liberty Avenue
Pittsburgh, PA 15222-3199
Phone: (412) 227-1000 ______________
44 Wall Street 750,000 Shares
New York, New York 10005 Common Stock
Phone: (212) 509-6900
PROSPECTUS
Dated August 27, 1996
_____________ ______________
CONTENTS FOR PROSPECTUS
Page
Available Information.... 2
Incorporation of
Certain Documents
by Reference........... 3
The Company.............. 4
Use of Proceeds.......... 4
The Trust................ 4
Plan of Distribution..... 4
Legal Opinions........... 5
Experts.................. 5
______________________________ _____________________________
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC registration fee .................... $14,256
Legal fees and expenses ................. 15,000
Accounting fees and expenses ............ --
Blue Sky fees and expenses
(including counsel fees) .............. 2,000
Total ................................... $31,256
=======
Item 15. Indemnification of Directors and Officers
Article Fourteenth of the Company Certificate of Incorporation
reads as follows:
"FOURTEENTH. To the full extent that the General Corporation
Law of the State of Delaware, as the same now exists, permits elimination
or limitation of the liability of directors, no director of the Corporation
shall be liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
To the full extent permitted by law, all directors of the
Corporation shall be afforded any exemption from liability or limitation of
liability permitted by any subsequent enactment, modification or amendment
of the General Corporation Law of the State of Delaware.
Any repeal or modification of either or both of the foregoing
paragraphs by the stockholders of the Corporation shall not adversely
affect any exemption from liability, limitation of liability, or other
right of a director of the Corporation with respect to any matter occurring
prior to such repeal or modification."
The Bylaws of the Company provide as follows:
<PAGE>
"A. Each person who at any time is, or shall have been a
director, officer, or employee of the Corporation, or serves or has served
as a director, officer, employee, fiduciary or other representative of
another company, partnership, joint venture, trust, association or other
enterprise (including any employee benefit plan), where such service was
specifically requested by the Corporation in accordance with (E) below, or
the established guidelines for participation in outside positions (such
service hereinafter being referred to as "Outside Service"), and is
threatened to be or is made a party to any threatened, pending or completed
claim, action, suit or proceeding, whether civil, criminal, administrative
or investigative ("Proceeding"), by reason of the fact that he is, or was,
a director, officer, or employee of the Corporation or a director, officer,
employee, fiduciary or other representative of such enterprise, shall be
indemnified against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement ("Loss") actually and reasonably incurred by
him in connection with any such Proceeding to the full extent permitted
under the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said Law permitted the Corporation to
provide prior to such amendment). The Corporation shall indemnify any
person seeking indemnity in connection with any Proceeding (or part
thereof) initiated by such person only if such Proceeding (or part thereof)
initiated by such person was authorized by the Board of Directors of the
Corporation. With respect to any Loss arising from Outside Service, the
Corporation shall provide such indemnification only if and to the extent
that (i) such other company, partnership, joint venture, trust, association
or enterprise is not legally permitted or financially able to provide such
indemnification, and (ii) such Loss is not paid pursuant to any insurance
policy other than any insurance policy maintained by the Corporation.
B. The right to be indemnified pursuant to the Bylaws shall
include the right to be paid by the Corporation for expenses, including
attorneys' fees, incurred in defending any such Proceeding in advance of
its final disposition; provided, however, that the payment of such expenses
in advance of the final disposition of such Proceeding shall be made only
upon delivery to the Corporation of an undertaking, by or on behalf of such
director, officer, or employee, in which such director, officer or employee
agrees to repay all amounts so advanced if it should be determined
ultimately that such
II-2
<PAGE>
director, officer or employee is not entitled to be indemnified under
applicable law.
C. The right of any director or officer (but not employee)
to be indemnified or to the reimbursement or advancement of expenses
pursuant to the Bylaws (i) is a contract right based upon good and valuable
consideration, pursuant to which the person entitled thereto may bring suit
as if the provisions hereof were set forth in a separate written contract
between the Corporation and the director or officer, and (ii) shall
continue to exist after the rescission or restrictive modification hereof
with respect to events occurring prior thereto.
D. The right to be indemnified or to the reimbursement or
advancement of expenses pursuant to the Bylaws shall in no way be exclusive
of any other rights of indemnification or advancement to which any such
director, officer or employee may be entitled, under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be
a director, officer or employee and shall inure to the benefit of the
heirs, executors and administrators of such person.
E. Any person who is serving or has served as a director,
officer, employee or fiduciary of (i) another corporation of which a
majority of the shares entitled to vote in the election of its directors is
held by the Corporation at the time of such service, or (ii) any employee
benefit plan of the Corporation or any other such corporation, shall be
deemed to be doing or have done so at the request of the Corporation."
The Delaware General Corporation Law, Section 145, provides
that a Delaware corporation has power to indemnify its officers, directors,
employees and agents.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrants pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in said Act and is, therefore, unenforceable.
The Company purchases directors' and officers' liability
insurance.
II-3
<PAGE>
Item 16. Exhibits
________
4(A) - Certificate of Incorporation of Consolidated
Natural Gas Company (incorporated by reference to
Exhibit A-1 to the Application-Declaration of the
Registrant on Form U-1, File No. 70-7811).
*4(B) - Certificate of Amendment to the Certificate of
Incorporation.
*5 - Opinion of Counsel for Consolidated Natural Gas
Company as to the legality of the securities being
registered.
10 - Trust Agreement dated June 1, 1995 between
Consolidated Natural Gas Company and Mellon Bank
*23(A) - Consent of Independent Accountants.
*23(B) - Consent of Independent Geologists.
*23(C) - Consents of Stephen E. Williams and/or Norbert F.
Chandler (included in opinion filed as Exhibit 5).
*24 Power of Attorney.
__________
* Filed herewith.
Item 17. Undertakings
____________
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in
II-4
<PAGE>
the information set forth in the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do
not apply if the information required to be included in a post-
effective amendment is contained in periodic reports filed by
the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offer of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) That for the purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers or
controlling persons of the Company, pursuant to the provisions
described under Item 15 above, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in said Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Company of expenses
II-5
<PAGE>
incurred or paid by a director or officer of the Company in the
successful defense of any action, suit or proceeding) is asserted by
such director or officer in connection with the securities being
registered hereby and the Securities Exchange Commission is still of
the same opinion, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in said
Act and will be governed by the final adjudication of such issue.
II-6
<PAGE>
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filings on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pittsburgh, Commonwealth of
Pennsylvania, on the 27th day of August, 1996.
CONSOLIDATED NATURAL GAS COMPANY
(Registrant)
David M. Westfall
Senior Vice President and
Chief Financial Officer
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
D.M. WESTFALL Senior Vice President and August 27, 1996
Chief Financial Officer
and Director (Principal
Financial Officer)
G.A. DAVIDSON, JR. Chairman of the Board, )
Chief Executive Officer )
and Director (Principal )
Executive Officer) )
)
S.R. McGREEVY Vice President, Accounting )
and Financial Control )
(Principal Accounting )
Officer) )
)
W.S. BARRACK, JR. Director )
)
J.W. CONNOLLY Director )
)
R.J. GROVES Director )
)
P.E. LEGO Director )
) D.M. WESTFALL
) August 27, 1996
M.A. McKENNA Director ) As Attorney-in-Fact
)
S.A. MINTER Director )
)
W.R. PEIRSON Director )
)
R.P. SIMMONS Director )
)
L. WYSE Director )
II-8
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
CONSOLIDATED NATURAL GAS COMPANY
It is hereby certified that:
1. The name of the corporation is Consolidated Natural
Gas Company (hereinafter the "Company").
2. Article FOURTH of the Restated Certificate of Incor-
poration 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) shares of all classes of capi-
tal stock, of which Four Hundred Million
(400,000,000) shall be shares of Common
Stock, Two Dollars and Seventy-Five Cents
($2.75) par value ("Common Stock"), and Five
Million (5,000,000) shall be shares of Pre-
ferred 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 Dela-
ware (hereinafter referred to as a "Pre-
ferred 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:
<PAGE>
-2-
(A) the maximum number of shares to consti-
tute such series, which may subse-
quently be increased or decreased (but
not below the number of shares of such
series then outstanding) by resolution
of the Board of Directors, the distinc-
tive 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 pay-
able, 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 capi-
tal stock and whether such dividends
shall be cumulative or noncumulative;
(D) whether the shares of such series shall
be subject to redemption by the corpo-
ration, and, if made subject to redemp-
tion, 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 pay-
ment in respect of shares of such
series which the holders of shares of
such series shall be entitled to
receive upon the liquidation, dissolu-
tion or winding-up of the corporation;
(F) whether or not the shares of such
series shall be subject to the opera-
tion 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
<PAGE>
-3-
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 acquisi-
tion 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, dis-
solution 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 addi-
tional 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, par-
ticipating, optional or other special
rights, and the qualifications, limita-
tions or restrictions thereof, as shall
not be inconsistent with law, this
<PAGE>
-4-
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 Pre-
ferred Stock and any series thereof.
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 Com-
mon 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 stock-
holders 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 pur-
poses, 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 cor-
poration 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
<PAGE>
-5-
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 Pre-
ferred 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 para-
graph 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 Pre-
ferred 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 sub-
ject to amendment, alteration, change or
repeal without the consent (given in writing
or by vote at a meeting called for that pur-
pose 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.
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 pur-
pose 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
<PAGE>
-6-
the Board of Directors of the corporation
for the purpose of determining the stock-
holders 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 para-
graph 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 Des-
ignation 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 corpora-
tion, 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 convert-
ible into Common Stock, for such considera-
tion as may be fixed by the Board of Direc-
tors; 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 what-
soever, whether now or hereafter authorized,
or securities convertible into such stock,
and whether issued for cash, property, ser-
vices, by way of dividends or otherwise."
<PAGE>
-7-
3. 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 corporation or by
other subsidiaries of the corporation."
4. 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:
"When and as authorized by the affirmative vote
of the holders of majority of the outstanding
Common Stock of the corporation entitled to vote
thereon at a meeting duly called for that pur-
pose, or when authorized by the written consent
of the stockholders in accordance with the pro-
visions 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 fran-
chises, 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."
5. The phrase "Except as provided in subparagraph (B) of
paragraph 10 of Article FOURTH hereof, the" in the eighth para-
graph of Article TENTH of the Restated Certificate of Incorpo-
ration of the Company is hereby deleted and replaced by the
word "The."
6. The reference to "Section 10(A) of Article FOURTH" in
the second paragraph of Article THIRTEENTH of the Restated Cer-
tificate of Incorporation of the Company is hereby amended to
refer to "Section 4 of Article FOURTH."
7. The amendments of the Restated Certificate of Incor-
poration herein certified have been duly adopted in accordance
<PAGE>
-8-
with the provisions of Section 242 of the General Corporation
Law of the State of Delaware.
Signed on May 30, 1996.
David M. Westfall
Senior Vice President and Chief
Financial Officer
Exhibit 5
August 27, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Consolidated Natural Gas Company
Common Stock, $2.75 Par Value
Dear Sirs:
This opinion is rendered in connection with the proposed sale
from time to time, by the Consolidated Natural Gas Company Grantor Trust
(the "Trust") of 750,000 shares of common stock ("Common Stock"), as
described in Consolidated's registration statement on Form S-3
("Registration Statement"), including the prospectus constituting a part
thereof, filed under the Securities Act of 1933 with the Securities and
Exchange Commission ("SEC") this date. The Trust serves as a funding
medium for and holds the assets of various non-qualified pension and
retirement plans maintained by Consolidated and its subsidiaries (the
"Plans").
As counsel for Consolidated, we have examined, among other
things, the following: the certificate of incorporation and by-laws of
Consolidated; the SEC Order dated March 28, 1996 (HCAR 26500) ("1996
Order"), File No. 70-8667, issued pursuant to the Public Utility Holding
Company Act of 1935 ("1935 Act"); the Registration Statement to which this
opinion is an exhibit; the exhibits to the Declaration and Registration
Statement; and the corporate records and proceedings relating to the
issuance of such common stock under the Plans.
Consolidated's 1935 Act authorization for financing of the Plans
in File No. 70-8667 extends through March 31, 2001.
In our opinion,
(1) as long as the financing of the Plans is authorized by the
1996 Order and the shares of Common Stock have been issued
pursuant to such authorization and
(2) as long as the Common Stock is issued for consideration
not less than par value, and
<PAGE>
-2-
(3) as long as the Common Stock is executed, issued and
delivered in accordance with the Plans
then such Common Stock will be legally issued, fully paid and
nonassessable.
We hereby consent to the use of our names under the heading
"Legal Opinions" in the prospectus constituting a part of the Registration
Statement, and any amendments or supplements thereto, and to the use of
this opinion as an exhibit to the Registration Statement. We also hereby
consent to the statement in Note 16 of the Notes to the Financial
Statements in Consolidated's Annual Report on Form 10-K for the year ended
December 31, 1995, to the effect that the ultimate liability arising from
the claims and suits pending against Consolidated's subsidiary companies
will not have a material effect on Consolidated's financial position or
results of operations.
Very truly yours,
Stephen E. Williams
Senior Vice President and
General Counsel
N. F. Chandler
General Attorney
TRUST AGREEMENT
between
CONSOLIDATED NATURAL GAS COMPANY
and
MELLON BANK
Effective
June 1, 1995
<PAGE>
CONSOLIDATED NATURAL GAS COMPANY
MELLON BANK
TRUST AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE I: ESTABLISHMENT OF TRUST....................................
1.1 Trust................................................
1.2 Description of Trust.................................
1.3 Acceptance by the Trustee............................
ARTICLE II: CLAIMS OF COMPANY'S CREDITORS............................
2.1 No Security Interest.................................
2.2 Suspension of Payments...............................
2.3 Resumption of Payments...............................
2.4 Notice of Insolvency.................................
2.5 Insolvency...........................................
ARTICLE III: POWERS OF TRUSTEE........................................
3.1 Investment of the Trust..............................
3.2 Investment Powers of Trustee.........................
3.3 Administrative Powers of Trustee.....................
3.4 Summary of Plan and Trust
Responsibilities..................................
ARTICLE IV: TRUST OBLIGATION TO PAY PLAN BENEFITS....................
4.1 Nature of Trust Beneficiaries'
Interest..........................................
4.2 Obligations..........................................
4.3 Individual Bookkeeping Accounts......................
4.4 Determination of Benefits Payable to
Participants or Beneficiaries.....................
4.5 Payment upon Constructive Receipt....................
ARTICLE V: CONTRIBUTIONS AND WITHDRAWALS............................
5.1 Contributions........................................
5.2 Application of Contributions.........................
5.3 Recovery of Trust Assets by the
Company...........................................
5.4 Transfer of Excess Assets to the
Company...........................................
5.5 Company as Owner of Assets...........................
ARTICLE VI: TAXES, EXPENSES AND COMPENSATION.........................
6.1 Taxes on Trust.......................................
6.2 Withholding Taxes; Employment Taxes..................
6.3 Expenses and Compensation............................
ARTICLE VII: ADMINISTRATION AND RECORDS...............................
-i-
<PAGE>
Page
7.1 Records..............................................
7.2 Settlement of Accounts...............................
7.3 Audit................................................
7.4 Judicial Settlement..................................
7.5 Delivery of Records to Successor.....................
7.6 Tax Filings..........................................
ARTICLE VIII: REMOVAL OR REGISTRATION OF THE TRUS-
TEE AND DESIGNATION OF SUCCESSOR
TRUSTEE...........................................
8.1 Resignation..........................................
8.2 Removal..............................................
8.3 Successor Trustee....................................
8.4 Transfer of Trust Fund to Successor..................
ARTICLE IX: ENFORCEMENT OF TRUST AGREEMENT AND
LEGAL PROCEEDINGS.................................
ARTICLE X: TERMINATION..............................................
10.1 Terminations.........................................
10.2 No Further Liability.................................
ARTICLE XI: AMENDMENT................................................
11.1 Amendment............................................
11.2 Compliance with ERISA, the Code and
other Laws........................................
11.3 Execution of Amendments..............................
ARTICLE XII: MISCELLANEOUS............................................
12.1 Nonalienation........................................
12.2 Communications.......................................
12.3 Authority to Act.....................................
12.4 Authenticity of Instruments..........................
12.5 Binding Effect.......................................
12.6 Inquiry as to Authority..............................
12.7 Responsibility for Company Action....................
12.8 Successor to Trustee.................................
12.9 Laws of Pennsylvania to Govern.......................
12.10 Reports..............................................
12.11 Counterparts.........................................
12.12 Participant to Include Beneficiary...................
SCHEDULE A
-ii-
<PAGE>
Schedule A
to
Trust Agreement between
Consolidated Natural Gas Company
and
Mellon Bank
Contents:
1. Consolidated Natural Gas Company Rabbi Trust Administra-
tive Guidelines
2. Information on Accrued Benefits as of December 31, 1994
3. Information regarding Accounts in Trust:
Assets in Account A shall be available to pay bene-
fits solely to Participants who accrued benefits payable
under the Executive Incentive Deferral Plan pursuant to
their employment by CNG Producing Company or CNG Energy
Services Company.
Assets in Account B shall be available to pay bene-
fits solely to Participants who accrued benefits payable
under the Executive Incentive Deferral Plan or the
Non-Employee Directors Deferred Compensation Plan pursuant
to their employment by Consolidated Natural Gas Company or
any subsidiary other than CNG Producing Company or CNG
Energy Services Company.
Additional Accounts may be established by the Company in
the future.
<PAGE>
TRUST AGREEMENT
THIS AGREEMENT, made as of the 1st day of June, 1995,
between CONSOLIDATED NATURAL GAS COMPANY, a corporation
organized and existing under the laws of the State of Delaware
(the "Company"), and MELLON BANK, a banking institution orga-
nized and doing business under the laws of the United States
with an office in Pittsburgh, Pennsylvania (the "Trustee").
WITNESSETH:
WHEREAS, the Company and certain of its subsidiaries
have established and maintain certain unfunded employee benefit
plans, agreements and arrangements for the benefit of a select
group of highly compensated management employees of the Company
and its subsidiaries (which plans, agreements and arrangements
are each referred to herein individually as the "Plan" and
collectively as the "Plans"). The Plans are identified in
Schedule A hereto, which includes, inter alia, "Administrative
Guidelines" for the determination of Benefits under the Plans
and payment thereof from the Trust, and which will be supple-
mented annually as provided in Section 4.4(b). Each of the
management employees entitled to benefits under one or more of
the Plans is hereinafter referred to individually as a "Par-
ticipant" and collectively as the "Participants." Each Plan
<PAGE>
-2-
provides for the payment of certain benefits (the "Benefits")
to certain of the Participants and their beneficiaries, if any,
designated by the respective Participants (or by the Plan) as
being entitled to any payments due under the terms of the Plan
in the event of a Participant's death ("Beneficiary" or "Bene-
ficiaries"). The Company and its subsidiaries have incurred
and expect to continue to incur liabilities pursuant to the
terms of the Plans; and the Company wishes to establish the
trust provided for herein (the "Trust") to aid the Company and
its subsidiaries in meeting their obligations under the Plans.
Moreover, and as provided in detail in the Administrative
Guidelines in Schedule A, the Company intends the assets of
each account established under the Trust ("Account" or
"Accounts") to be available to pay benefits solely to Partici-
pants who accrued benefits payable under a Plan or Plans pursu-
ant to their employment by the Company and/or those subsidiar-
ies identified in Schedule A. Except as otherwise provided in
the immediately preceding sentence, the Company intends the
assets of the Trust to constitute a unitary, nonsegmented
source of funds from which to pay benefits under all of the
Plans as if they were a single plan, with no benefit under any
particular Plan having any priority over any other benefit
<PAGE>
-3-
under that Plan or under any other Plan and with no assets of
the Trust designated to pay any particular benefit.
The Trust is intended to be a "grantor trust" with
the corpus and income of the Trust treated as assets and income
of the Company for federal income tax purposes pursuant to Sec-
tions 671-677 of the Internal Revenue Code of 1986, as amended
(the "Code"). The Company intends that the assets of the Trust
will be subject to the claims of creditors of the Company and
its subsidiaries as provided in Article II hereof. Amounts
transferred to the Trust and the earnings thereon shall be used
by the Trustee to satisfy the liabilities of the Company and
its subsidiaries in accordance with the provisions hereof.
Upon satisfaction of all liabilities of the Company and its
subsidiaries with respect to all Participants and Beneficia-
ries, the Trust shall terminate and the remaining assets, if
any, of the Trust shall revert to the Company.
The Company and its subsidiaries intend that the
existence of the Trust shall not alter the characteristics of
the Plans as unfunded plans maintained primarily for the pur-
pose of providing deferred compensation for a select group of
management or highly compensated employees for purposes of the
Employee Retirement Income Security Act of 1974, as amended
<PAGE>
-4-
("ERISA"), and shall not be construed to provide income for
income tax purposes to any Participant or Beneficiary under the
Plans prior to the actual payment of benefits thereunder.
NOW, THEREFORE, in consideration of the mutual cove-
nants contained herein, the Company and the Trustee agree as
follows:
ARTICLE I: ESTABLISHMENT OF TRUST
1.1 Trust. The Company hereby establishes a Trust
with the Trustee, consisting of such sums of money and other
property acceptable to the Trustee as from time to time shall
be paid or delivered to the Trustee, which property may include
life insurance contracts (the "Policies" or "Policy"). All
such money and other property, all investments and reinvest-
ments made therewith, or proceeds thereof, and all earnings and
profits thereon, less all payments and charges as authorized
herein shall constitute the "Trust Fund" or "Fund." The Trust
Funds shall be held by the Trustee in Trust and shall be dealt
with in accordance with the provisions of this Trust Agreement.
1.2 Description of Trust. The Company represents
and agrees that the Trust established under this Agreement is,
and is intended to be, a depository arrangement with the
<PAGE>
-5-
Trustee for the setting aside of cash and other assets of the
Company as and when the Company so determines in its sole
discretion for the meeting of part or all of its future retire-
ment and death benefit obligations to some or all of the
Participants and their Beneficiaries under the Plans. Contri-
butions by the Company to the Trust shall be in amounts deter-
mined solely by the Company. The Trustee has no obligation to
determine the amount of any contribution and, except as pro-
vided in Section 5.1, with respect to drawing upon letters of
credit, has no duty to enforce payment of any contribution.
The Company further represents that the Plans are unfunded
deferred compensation plans for a select group of management or
highly compensated employees, and as such are exempt from the
application of ERISA except for the disclosure requirements
applicable to such plans, for which the Company bears full
responsibility as to compliance. The Company further repre-
sents that the Plans are not qualified under Section 401 of the
Code and therefore, are not subject to any of the Code require-
ments applicable to tax-qualified plans.
1.3 Acceptance by the Trustee. The Trustee accepts
the Trust established under this Trust Agreement on the terms
and subject to the provisions set forth herein, and agrees to
discharge and perform fully and faithfully all of the duties
<PAGE>
-6-
and obligations imposed upon it under this Trust Agreement.
The Trustee has no responsibility or duties regarding the
administration of the Plans, except for the duties specifically
described in this Agreement.
ARTICLE II: CLAIMS OF COMPANY'S CREDITORS
2.1 No Security Interest. It is the intent of the
parties hereto that the Trust Fund is and shall remain at all
time subject to the claims to the Company's general creditors
in the event of the Company's insolvency or bankruptcy and that
each Account established under the Trust shall remain at all
times subject to the claims of the general creditors of
subsidiary(ies) of the Company which is (are) identified in
Schedule A in the event of such subsidiary's or subsidiaries'
insolvency or bankruptcy. Accordingly, the Company shall not
create a security interest in the Trust Fund in favor of any
Participant or Beneficiary of the Plans or any creditor.
2.2 Suspension of Payments. Notwithstanding any
provisions in this Agreement to the contrary, if at any time
while the Trust is still in existence the Company or a subsid-
iary identified in Schedule A becomes insolvent or bankrupt (as
defined herein), the Trustee shall upon receipt of written
notice thereof under Section 2.4 suspend the payment of all
<PAGE>
-7-
Benefits from the Fund (in the event the Company becomes insol-
vent or bankrupt) or from the Account identified in Schedule A
as relating to such subsidiary (in the event a subsidiary
becomes insolvent or bankrupt) and shall hold the Fund or
Account for the benefit of the Company's or subsidiary's gen-
eral creditors, and shall deliver the entire amount of the
Trust Fund or Account only as a court of competent jurisdic-
tion, or duly appointed receiver or other person authorized to
act by such a court, may direct to make the Trust Fund or
Account available to satisfy the claims of the Company's or
subsidiary's general creditors. Unless the Trustee has actual
knowledge of the Company's insolvency or bankruptcy, the Trus-
tee shall have no duty to inquire whether the Company or sub-
sidiary is insolvent or bankrupt.
2.3 Resumption of Payments. The Trustee shall
resume all its duties and responsibilities under the Trust
Agreement including payments of Benefits to Participants and
Beneficiaries of the Plans within 30 days of the Trustee's
determination that the Company or subsidiary is not insolvent
or bankrupt (or is no longer insolvent or bankrupt). In making
such determination, the Trustee may retain outside experts com-
petent to advise the Trustee as to whether the Company or sub-
sidiary has or still is, in fact, insolvent or bankrupt. The
<PAGE>
-8-
expense of retaining such outside experts shall be deemed a
Trust expense within the meaning of Section 6.3. The first
payments to a Participant or Beneficiary, pursuant to a resump-
tion of payments, following such discontinuance shall include
the aggregate amount of all payments which would have been made
to the Participant or Beneficiary in accordance with the Plans
during the period of such discontinuance, less the aggregate
amount of payments of Benefits under the Plans made to the Par-
ticipant or Beneficiary by the Company or subsidiary during any
such period of discontinuance.
2.4 Notice of Insolvency. By its approval and exe-
cution of this Agreement, the Company represents and agrees
that its Board of Directors and Chief Executive Officer, as
from time to time acting, shall have the fiduciary duty and
responsibility on behalf of the Company's creditors to give to
the Trustee prompt written notice of any event of the Company's
or a subsidiary's insolvency or bankruptcy and the Trustee
shall be entitled to rely thereon to the exclusion of all
directions or claims to pay Benefits thereafter made.
2.5 Insolvency. The Company or subsidiary shall be
deemed to be insolvent or bankrupt upon the occurrence of any
of the following:
<PAGE>
-9-
(a) The Company or subsidiary is unable to pay
its debts as they fall due; or
(b) The Company or subsidiary shall make an
assignment for the benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal for the appoint-
ment of a custodian, receiver, liquidator, sequestrator, or any
trustee for its or a substantial part of its assets, or shall
commence any cause under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation
law or statute of any jurisdiction (federal or state), whether
now or hereafter in effect; or if there shall have been filed
any such petition or application, or any such case shall have
been commenced against it, in which an order for relief is
entered or which remains undismissed; or the Company or subsid-
iary by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application
or case or order for relief or to the appointment of a custo-
dian, receiver or any trustee for it or any substantial part of
any of its property, or shall suffer any custodianship, receiv-
ership, or trusteeship to continue undischarged.
<PAGE>
-10-
ARTICLE III: POWERS OF TRUSTEE
3.1 Investment of the Trust.
(a) The Trust Fund shall be invested by the
Trustee in accordance with the written investment guidelines
provided from time to time to the Trustee by the Company or by
an investment committee appointed by the Board of Directors of
the Company. If no such guidelines are received by the Trus-
tee, the assets of the Trust Fund, other than the Policies,
shall be invested in investments emphasizing safety of princi-
pal, such as short-term income fund maintained by the Trustee,
or in short-term debt securities issued or guaranteed by the
U.S. government, cash equivalents, and the like. Subject to
the foregoing, the Trustee shall have the power to invest or
reinvest assets in the Trust Fund in any personal or intangible
property, without restriction to securities or property of the
character authorized for investments by trustees under any
statute or other laws of any state, district of territory,
including without limitation any of the following: common or
preferred stocks or other evidences of ownership in any corpo-
ration, partnership, mutual fund, investment company, associa-
tion, joint venture or business trust; indebtedness issued by
corporations (including those convertible to common stock), or
<PAGE>
-11-
issued or guaranteed by the United States or any agency or
instrumentality thereof, or any state, municipality or agency
or instrumentality thereof; savings accounts, certificates of
deposits and other types of time deposits and other types of
time deposits with any financial institution under the super-
vision of the United States or any state, including the Trustee
in its corporate capacity or any affiliate, department or divi-
sion of the same; or individual or group insurance policies,
including annuity or investment contracts, where directed by
the Company; provided, that permitted investments shall not
include any interest, direct or indirect, in real estate. Per-
mitted investments shall also include units in any common, col-
lective or pooled trust fund operated or maintained exclusively
for the commingling and collective investment of monies or
other assets of plans like the Plan, including without limita-
tion any fund operated or maintained by the Trustee. Notwith-
standing any other provision of this Agreement, to the extent
trust assets are used to acquire units in any collective trust,
the terms and conditions of its trust indenture shall solely
govern the investment duties and responsibilities of the fund
trustee, and to the extent required by law, the terms and con-
ditions of such trust indenture shall be incorporated herein by
reference. For purposes of valuation, the value of the
<PAGE>
-12-
interest maintained by the Trust in such collective fund shall
be the fair market value of the collective fund units held,
determined in accordance with generally recognized valuation
procedures. The Company expressly understands and agrees that
any such collective fund may provide for the lending of its
securities by the fund trustee and that such fund's trustee
will receive compensation for the lending of securities that is
separate from any compensation of the Trustee hereunder, or any
compensation of the fund trustee for the management of such
fund.
(b) Notwithstanding anything in the Trust
Agreement to the contrary, (i) the Company shall have the right
and power at any time and from time to time to contribute one
or more Policies to the Trust Fund, and to direct the Trustee
to acquire one or more Policies and to pay premiums from the
Trust Fund in accordance with any such Policy, and (ii) except
as the Company shall otherwise direct, the Trustee shall hold
each Policy as part of the Trust Fund and shall neither trans-
fer any Policy, make or cause to be made any loans, withdraw-
als, surrenders or other distributions under any Policy, nor
surrender, assign, amend, modify or terminate any Policy; pro-
vided, however, the foregoing notwithstanding, if the Company
fails to contribute Qualified Assets to the Trust pursuant to
<PAGE>
-13-
Section 5.1(c), the Trustee will surrender any or all policies
to obtain cash to pay Benefits to Participants or Beneficia-
ries; and the Trustee may make or cause to be made loans, with-
drawals, surrenders or other distributions under any or all
Policies, or surrender any Policy, to the extent necessary to
obtain cash to pay administrative expenses.
(c) All Policies on the life of a Participant
(whether contributed by the Company or purchased by the Trustee
at the Company's direction pursuant to Section 3.1(b)) shall be
held by such Trustee until the death benefit proceeds of such
policy have been duly paid following the Participant's death;
or the Policy has been surrendered in whole or in part for its
cash value for the purpose of paying deferred compensation ben-
efits to the Participants; or surrendered in whole or in part
for its cash value following the Participant's forfeiture of
all or part of the Benefits under a Plan (of which whole or
partial forfeiture the Company shall notify the Participant and
the Trustee in writing).
3.2 Investment Powers of Trustee. Except as limited
by Section 3.1 or as otherwise provided in this Trust Agree-
ment, the Trustee shall have the following investment powers
<PAGE>
-14-
and authority with respect to all property constituting a part
of the Trust Fund in its discretion:
(a) To retain any property at any time received
by it.
(b) To participate in any plan or reorganiza-
tion, consolidation, merger, combination, liquidation, or other
similar plan relating to any such property, and to consent to
or oppose any such plan or any action thereunder, or any con-
tract, lease, mortgage, purchase, sale, or other action by any
corporation or other entity any of the securities of which may
at any time be held in the Trust Fund, and to do any act with
reference thereto.
(c) To be the owner of any individual life
insurance contracts or individual or group annuity contracts
and to take such action with respect to such contracts as nec-
essary to carry out the terms of this Trust Agreement, includ-
ing but not limited to payment of insurance premiums, repayment
of policy loans, and complete or partial surrender of such con-
tracts to pay Plan Benefits or Trust expenses (not otherwise
provided for).
<PAGE>
-15-
(d) Generally to do all acts, whether or not
expressly authorized, that the Trustee deems necessary or
desirable for the protection of the Fund and to carry out the
purposes of this Trust Agreement.
3.3 Administrative Powers of Trustee. Except as
limited by Section 3.1 or as otherwise provided in this Trust
Agreement, the Trustee shall have the following administrative
powers in its sole and absolute discretion:
(a) To register or hold any securities or other
property held by it in its own name or in the name of any cus-
todian of such property or of its nominee, including the nomi-
nee of any system for the central handling of securities, with
or without the addition of words indicating that such securi-
ties are held in a fiduciary capacity to deposit or arrange for
the deposit of any such securities with such a system and to
hold any securities in bearer form.
(b) To engage any legal counsel, including
counsel to the Company, or any other suitable agents (including
outside investment managers), accountants, actuaries, consult-
ants, and other providers of services, to consult with them
with respect to the implementation and construction of this
Trust Agreement, the duties of the Trustee hereunder, the
<PAGE>
-16-
transactions contemplated by this Trust Agreement or any act
which the Trustee proposes to take or omit, to rely upon the
advice of and services performed by such persons and to pay
their reasonable fees, expenses and compensation from the Trust
Fund.
(c) To exercise any right to draw cash pursuant
to a letter of credit on the Company's account which has been
issued in favor of the Trust, as described in Section 5.1.
(d) To determine whether the Company or a sub-
sidiary is insolvent as provided in Section 2.5 hereof.
(e) To transfer excess Trust assets to the Com-
pany as provided in Section 5.4 hereof.
(f) Generally to do all acts, whether or not
expressly authorized, that the Trustee deems necessary or
desirable for the protection of the Fund and to carry out the
purposes of this Trust Agreement.
3.4 Summary of Plan and Trust Responsibilities. The
Company intends the assets of each Account under the Trust to
be available to pay benefits solely to Participants who accrued
benefits payable under a Plan or Plans pursuant to their
employment by the Company and/or those subsidiaries identified
<PAGE>
-17-
in Schedule A. Except as otherwise provided in the immediately
preceding sentence, the Company intends the assets of the Trust
to constitute a unitary, nonsegmented source of funds from
which to pay all benefits under all of the Plans as if they
were a single plan, with no benefit under any particular Plan
having any priority over any other benefit under that Plan or
under any other Plan and with no assets of the Trust designated
to pay any particular benefit. The Company further intends
that no Plans be subject to the funding and design requirements
of ERISA. The Company and the Trustee agree that the Trustee
has no duty or obligation to:
a. determine the amount of any contribution to the
Trust;
b. except as specifically provided in Section 5.1,
with respect to drawing upon letters of credit,
enforce the payment of any contribution to the
Trust;
c. determine any benefit for any Participant or
Beneficiary under any Plan; and
d. except as otherwise provided in this Section
3.4, make any determination as to the allocation
<PAGE>
-18-
of any Trust asset to any particular Plan, its
Participants or their Beneficiaries.
It is understood that the Trustee's only fiduciary obligation
is to hold and manage assets contributed to the Trust in accor-
dance with the provisions of this Agreement and that the Trus-
tee has no duty or obligation to administer or manage any pro-
vision of any Plan. All Plan administrative duties are the
sole responsibility of the Company or its duly appointed Plan
administrators or consultants. In accordance herewith, the
Trustee has no duty or obligation to act except upon the writ-
ten direction of the Company or its duly appointed Plan admin-
istrators or consultants (which written directions to include
the information in Schedule A as delivered to the Trustee from
time to time), and the Company agrees to indemnify and hold the
Trustee unharmed against all loss or liability (including
expenses and reasonable attorneys' fees) to which it may be
subject by reason of any acts taken in accordance with any
directions, or acts omitted to be taken in good faith due to an
absence of directions, from the Company, and all loss or lia-
bility arising out of any other action or failure to act by the
Trustee in executing its duties under this Agreement unless
occasioned by the Trustee's own negligence or misconduct. No
Participant, beneficiary or third party shall have any cause of
<PAGE>
-19-
action against the Trustee for complying with such written
direction. Notwithstanding anything else in this Agreement to
the contrary: (1) the Trustee is not a party to, and has no
duties or responsibilities under, the Plan; (2) in any and all
cases where the Trustee is required by this Agreement to act
with reference to Plan terms, the Company shall have the
responsibility to certify the relevant provisions to the Trus-
tee in writing, and the Trustee shall be entitled to rely upon
such certification until notified otherwise in writing by the
Company; (3) absent written certification to the Trustee pursu-
ant to this paragraph, the Trustee shall be chargeable with no
knowledge of any Plan terms and shall be deemed to be in com-
pliance with the Plan; and (4) in any case in which a provision
of this Agreement conflicts with any provision in the Plan,
this Agreement shall control. Notwithstanding the preceding
sentence, the Trustee reserves the right to seek a judicial
and/or administrative determination as to its proper course of
action under this Agreement.
ARTICLE IV: TRUST OBLIGATION TO PAY PLAN BENEFITS
4.1 Nature of Trust Beneficiaries' Interest. The
establishment of the Trust and the payment or delivery to the
Trustee of assets shall not vest in any Participant or
<PAGE>
-20-
Beneficiary any right, title or interest in and to any assets
of the Trust. To the extent that any Participant or Benefi-
ciary acquires the right to receive payments under a Plan, such
right shall be no greater than the right of any unsecured gen-
eral creditor of the Company or relevant subsidiary and such
Participant or Beneficiary shall have only the unsecured prom-
ise of the Company or subsidiary that such payments will be
made.
4.2 Obligations.
(a) Obligation of Company. Notwithstanding anything
in this Trust Agreement to the contrary, the Company shall
remain primarily liable to pay Plan Benefits.
(b) Obligation of Trustee. The Trustee shall make
cash payments of benefits, or shall transfer ownership of Poli-
cies, to Participants and Beneficiaries at such times and in
such amounts as are required of the Company under the Plans as
determined by the Company, or its duly appointed Plan adminis-
trators or consultants, pursuant to Section 4.4 hereof. The
Trustee has no obligation to determine any Participant's or
Beneficiary's Benefits under any Plan, but, as provided in Sec-
tion 4.4, may rely on Schedule A for determination or instruc-
tions regarding the payment of Benefits. The Trustee does not
<PAGE>
-21-
guarantee the adequacy of the Trust Fund to meet and discharge
any or all of the Company's liabilities under the Plans, and,
except as specifically provided in Section 5.1 with respect to
drawing upon letters of credit, the Trustee has no obligation
to require the Company to provide any funding into the Trust to
discharge such liabilities under the Plans. The Trustee is not
liable for investment performance or other loss to the Trust
Fund except to the extent that is judicially determined that it
failed to discharge its duties hereunder.
4.3 Individual Bookkeeping Accounts. The Trustee
shall establish and maintain bookkeeping accounts on behalf of
the Trust for particular Participants or Beneficiaries only as
directed by the Company.
4.4 Determination of Benefits Payable to Partici-
pants or Beneficiaries.
(a) Determination of Benefits.
(1) Prior to a Change in Control (as defined in
Section 4.4(f)), the Company shall be responsible for determin-
ing a Participant's eligibility for benefits under the Plans
and the amount and duration thereof, and shall instruct the
Trustee accordingly. The Trustee shall observe the Company's
<PAGE>
-22-
instructions unless the Participant or Beneficiary objects
thereto and pursues resolution of the dispute through legal
proceedings or arbitration, in which case the Trustee shall
observe the court decree or arbitrator's award in paying bene-
fits (if any are awarded) to the Participant or Beneficiary.
(2) After the occurrence of a Change in Con-
trol, the Trustee shall pay benefits to each Participant based
on the last accrued benefit data provided to the Trustee by the
Company, pursuant to Section 4.4(b), prior to the Change in
Control, unless the Company and the Participant agree upon a
different benefit amount, or the Participant or the Company
objects thereto and pursues resolution of the dispute through
legal proceedings or arbitration, in which case the Trustee
shall observe the court decree or arbitrator's award in paying
benefits (if any are awarded) to the Participant or
Beneficiary.
(3) A Participant or Beneficiary may apply in
writing directly to the Trustee for payment of a Benefit that
(i) has been awarded to the Participant or Beneficiary by a
final court decree or arbitration award, and (ii) has not been
paid by the Company. Such application shall be accompanied by
a certified copy of such court decree or arbitration award.
<PAGE>
-23-
Subject to the provisions of Article II hereof, upon receiving
an application for payment of a Benefit accompanied by a certi-
fied copy of a court decree or arbitration award, the Trustee
shall notify the Company of the application, including the
amount of the Benefit payable, and the Trustee shall make such
payments as are required by the court decree or arbitration
award, after providing the Company with an opportunity to prove
to the satisfaction of the Trustee that the Company has paid
the Benefit to the Participant or Beneficiary.
(b) Provision of Accrued Benefit Data to Trustee.
At least annually, or more frequently, in the Company's sole
discretion as determined by the Company's Annuities and Bene-
fits Committee (the "Committee"), the Committee shall provide,
or cause to be provided, to the Trustee in writing the informa-
tion described below, which shall be added to and become a part
of Schedule A to this Agreement. Much of such information
depends upon definitions and other provisions of the Plan docu-
ments establishing the respective Plans, and the Company
acknowledges that it is solely responsible for interpreting the
Plan documents and determining the required information on the
basis thereof. Such written information, which shall be certi-
fied by the Committee or by the Company's Vice President, Human
Resources, shall set forth the identity of each Participant
<PAGE>
-24-
then participating in each Plan, together with all data neces-
sary to calculate and pay his or her benefit under each Plan in
which he or she participates, including, without limiting the
generality of the foregoing, the following:
` Name
` Social Security number
` Birth date
` Mailing address
` Direct bank deposit information
` Amount of benefit
` Payment date or dates
` Duration of benefit payments
` Name, Social Security number and birth
date of joint annultant or beneficiary
(c) In making payment of the Benefits from the
assets of the Trust, the Trustee may rely completely on the
information and benefit determinations provided to it pursuant
to Section 4.4(a) and (b) and shall be fully protected and
indemnified by the Company for so doing. Moreover, the Trustee
shall be under no obligation to commence any action seeking
judicial, arbitral or administrative relief in the event that
the Company or the Committee does not comply with its
<PAGE>
-25-
obligations under Sections 4.4(a) and (b) hereof or the respec-
tive Participants or Beneficiaries do not pursue appropriate
legal or other remedies to resolve any dispute.
(d) The Trustee, if so directed by the Company, may
also arrange for the payment of periodic Plan Benefits directly
by an insurance Company under the terms of a Policy (as, e.g.,
by the periodic partial surrender of insurance coverage under
the Policy to generate cash) or by surrendering the Policy in
exchange for an annuity contract, owned by the Trust, to pay
such Plan Benefits.
(e) Upon the death of a Participant to whom payment
of periodic benefits has begun, with the written agreement of
the Company, the Trustee shall have the right, in its sole dis-
cretion, to pay the Participant's Beneficiary the commuted
value of any remaining guaranteed periodic benefits under the
Plan in a single cash lump sum.
(f) For purposes of this Agreement, a "Change in
Control" means and shall be deemed to have occurred if:
(1) any person or entity, other than the Com-
pany or a Related Party, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Security Exchange Act of
<PAGE>
-26-
1934 ("Exchange Act")), directly or indirectly, of Voting Secu-
rities representing twenty percent (20%) or more of the total
voting power of all the then-outstanding Voting Securities,
except that there shall be excluded from the number of Voting
Securities deemed to be beneficially owned by a person or
entity a number of Voting Securities representing not more than
ten percent (10%) of the then-outstanding voting power if such
person or entity is (a) eligible to file a Schedule 13G pursu-
ant to Rule 13d-1(b)(1) under the Exchange Act with respect to
Voting Securities or (b) an underwriter who becomes the benefi-
cial owner of more than twenty percent (20%) of the
then-outstanding Voting Securities pursuant to a firm commit-
ment underwriting agreement with the Company; or
(2) the individuals who, as of the effective
date of the Plan, constitute the Board of Directors of the Com-
pany together with those who first become directors subsequent
to such date and whose recommendation, election or nomination
for election to the Board was approved by a vote of at least a
majority of the directors then still in office who either were
directors as of the effective date of the Plan or whose recom-
mendation, election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason
to constitute a majority of the members of the Board; or
<PAGE>
-27-
(3) the stockholders of the Company approve a
merger, consolidation, recapitalization or reorganization of
the Company, reverse split of any class of Voting Securities,
or an acquisition of securities or assets by the Company, or
consummation of any such transaction if stockholder approval is
not obtained, other than (a) any such transaction which would
result in at least seventy-five percent (75%) of the total vot-
ing power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being
beneficially owned by at least seventy-five percent (75%) of
the holders of outstanding Voting Securities immediately prior
to the transaction, with the voting power of each such continu-
ing holder relative to other such continuing holders not sub-
stantially altered in the transaction, or (b) any such transac-
tion which would result in a Related Party beneficially owning
more than fifty percent (50%) of the voting securities of the
surviving entity outstanding immediately after such transac-
tion; or
(4) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially
all of the Company's assets other than any such transaction
which would result in a Related Party owning or acquiring more
<PAGE>
-28-
than fifty percent (50%) of the assets owned by the Company
immediately prior to the transaction. For purposes of this
Section 4.4(f), (A) "Related Party" means (i) a majority-owned
subsidiary of the Company, (ii) an employee or group of employ-
ees of the Company or any majority-owned subsidiary of the Com-
pany, (iii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any
majority-owned subsidiary of the Company or (iv) a corporation
owned directly or indirectly by the stockholders of the Company
in substantially the same proportion as their ownership of Vot-
ing Securities and (B) "Voting Securities or Security" means
any securities of the Company which carry the right to vote
generally in the election of directors.
The Trustee shall be entitled, at any time and from
time to time, to demand written certification from the Secre-
tary of the Company regarding whether a Change in Control has
occurred. Pending the receipt of a response, satisfactory to
the Trustee in form and detail, to such demand, the Trustee
shall assume that a Change in Control has not occurred; pro-
vided, however, that in the event the Trustee, within the ten
day period following such demand by the Trustee, does not
receive a written certification from the Secretary of the Com-
pany, satisfactory to the Trustee in form and detail, that a
<PAGE>
-29-
Change in Control has not occurred, the Trustee shall assume
that a Change in Control has occurred.
4.5 Payment upon Constructive Receipt. Notwith-
standing any other provision of this Trust Agreement, if any
amounts held in the Trust are found in a "determination"
(within the meaning of Section 1313(a) of the Code) to have
been includable in gross income of a Participant or Beneficiary
prior to payment of such amounts from the Trust, the Trustee
shall, as soon as practicable, to the extent the Company has
not made such payment from its own assets, pay to such Partici-
pant or Beneficiary an amount equal to the product of (i) the
amount determined to have been includable in gross income in
such determination, and (ii) the sum of the maximum marginal
federal, state and local individual income tax rates, as deter-
mined by the Company, in effect with respect to such Partici-
pant or Beneficiary during the taxable year to which the
"determination" applies, and shall both reduce the Partici-
pant's or Beneficiary's future Benefits accordingly and charge
the applicable Participant Account of such Participant or Bene-
ficiary. The Trustee shall not make any distribution to a Par-
ticipant or Beneficiary pursuant to this Section 4.5 unless it
has received a copy of the "determination" described above.
<PAGE>
-30-
The Company shall be primarily liable for making the payment
described in this Section 4.5.
ARTICLE V: CONTRIBUTIONS AND WITHDRAWALS
5.1 Contributions.
(a) The Company shall deliver to the Trustee
such cash, Policies or other property, which may include let-
ters of credit on the Company's account issued in favor of the
Trust by a national bank (which may include the Commercial
Department of the Trustee), as the Company shall from time to
time determine.
(b) Notwithstanding the foregoing, the Trustee
shall not be liable for any failure by the Company to provide
contributions sufficient to pay Benefits under the Plans in
full or to cause required transfers of Qualified Assets to be
made as herein required.
(c) The term "Qualified Assets" when used in
this Trust Agreement shall refer to cash or cash equivalents;
letters of credit on the Company's account issued in favor of
the Trust by a national bank (which may include the Commercial
Department of the Trustee); shares of stock and other securi-
ties readily tradeable on an established national exchange; and
<PAGE>
-31-
such other assets which the Trustee, in its sole discretion,
agrees to accept.
(d) (1) If the Trustee is directed to pay ben-
efits under the Plans from the Trust or the Trustee is due com-
pensation or reimbursement for its expenses, the Trustee shall
for these purposes apply the assets then held in the Trust in
the following order of priority:
a. Cash, cash equivalents, stock and
other readily tradeable securities;
b. Cash available under any letter of
credit on the Company's account which
has been issued in favor of the Trust;
c. Policies, as described in
Section 5.1(d)(2).
(2) At any time or from time to time if
the Trustee (having applied assets in the priority stated in
Section 5.1(d)(1) determines that in order to generate cash to
pay current or future Plan Benefits, it is necessary to surren-
der any Policies; or the Trustee determines that in order to
generate cash to pay administrative expenses, it is necessary
to either borrow from, withdraw from, encumber in any manner or
<PAGE>
-32-
surrender all or part of any Policy, including without limita-
tion partial surrenders or distributions of policy values; the
Trustee shall notify the Company in writing of its intention to
so surrender such Policies, or to so borrow, withdraw, encumber
or surrender, as the case may be, and the amount thereof.
Thereupon, the Company shall have the option within 30 days to
contribute Qualified Assets to the Trust in the amount stated
in the notice, and the Trustee shall then refrain from making
such complete surrender, loan, withdrawal, encumbrance or par-
tial surrender until such subsequent time(s), if any, that the
Trustee again determines that it is necessary to either com-
pletely surrender, borrow from, withdraw from, encumber or par-
tially surrender one or more Policies, whereupon the Trustee
shall again give written notice of its intention to borrow,
withdraw, encumber or surrender and the Company shall again
have the option to contribute Qualified Assets, in the manner
set forth above in this Section 5.1(d)(1).
(3) Notwithstanding any other provision in this
Trust Agreement, in the event the Company, upon written notice
duly given by the Trustee, does not exercise its option to con-
tribute Qualified Assets to the Trust in the amount stated in
the Trustee's notice within the time period allowed, the Trus-
tee shall then be authorized to borrow from, withdraw from,
<PAGE>
-33-
encumber in any manner and/or surrender all or any of the Poli-
cies, in the manner described in 5.1(d)(1), even if the cash
raised therefrom is in excess of the amount stated in such
notice.
5.2 Application of Contributions. Contributions by
the Company as provided for herein shall be applied by the
Trustee first to the payment of its fees and expenses and sec-
ond to the payment of premiums on Policies held by the Trust.
5.3 Recovery of Trust Assets by the Company.
Except as provided in Sections 5.4 and 5.5 and
Articles II and XI hereof, the Trust Fund shall be held for the
exclusive purpose of providing Benefits to Participants and
their Beneficiaries and defraying expenses of the Trust in
accordance with the provisions hereof. Accordingly, except as
provided in Sections 5.4 and 5.5 and Articles II and X hereof,
no part of the income or corpus of the Trust Fund shall be
recoverable by or for the benefit of the Company.
5.4 Transfer of Excess Assets to the Company. The
Company may withdraw assets from the Trust, under the condi-
tions set forth below, if:
<PAGE>
-34-
(1) the Company shall deliver to the Trustee
the report of an enrolled actuary determining the present value
of all future benefits payable under the Plan with respect to
current Participants, based upon reasonable assumptions regard-
ing, inter alia, interest, future compensation increases, and
post-retirement mortality, but assuming no turnover or
pre-retirement mortality; and
(2) the assets of the Trust exceed such present
value of all future benefits by more than 25%.
Under such circumstances, the Trustee shall deliver assets of
the Trust to the Company equal to the amount or value requested
by the Company, provided, however, that the remaining assets of
each Account in the Trust after such withdrawal shall be not
less in value than 125% of such present value of all future
benefits in each such Account.
5.5 Company as Owner of Assets. All assets of the
Trust, including any allocated to a bookkeeping account for the
purpose of paying benefits, are intended by the Company to sat-
isfy the Company's legal liability under the Plans in respect
of the Participants and their Beneficiaries. If after payment
of or provision for all Benefits due a Participant or Benefi-
ciary, there is any balance remaining in a bookkeeping account
<PAGE>
-35-
or there are otherwise excess proceeds from a Policy, such
excess shall revert to the Company in accordance with this
Trust Agreement. The Company agrees that all income, deduc-
tions, and credits of each such bookkeeping account belong to
it as owner for income tax purposes and will be included on the
Company's income tax returns or any other required tax returns
and will be the sole obligation of and paid by the Company.
ARTICLE VI: TAXES, EXPENSES AND COMPENSATION
6.1 Taxes on Trust. The Company shall from time to
time pay taxes of any and all kinds whatsoever which at any
time are levied or assessed upon or become payable in respect
of the Trust Fund, the income or any property forming a part
thereof, or any security transaction pertaining thereto. The
Trustee shall, at Company expense, contest the validity of such
taxes in any manner deemed appropriate by the Company or its
counsel, but only if the Trustee has received an indemnity bond
or other security satisfactory to it to pay any expenses of
such contest. Alternatively, the Company may itself contest
the validity of any such taxes.
6.2 Withholding Taxes; Employment Taxes. Any
amounts paid to a Participant or Beneficiary pursuant to
Article IV shall be reduced by the amount of taxes required by
<PAGE>
-36-
law to be withheld, and the Company shall calculate the amounts
to be withheld and shall direct the Trustee with respect
thereto. The Trustee, in its sole discretion, may either pay
such taxes required to be withheld to the Company, whereupon
the Company shall have full responsibility for the payment of
all withholding taxes to the appropriate tax authorities, or
pay such taxes directly for the benefit of the Company; in
either such event, the Company shall timely furnish each Par-
ticipant or Beneficiary with the appropriate tax information
form evidencing such payment and the amount thereof. The Com-
pany shall be solely responsible for calculating and paying
employment taxes (e.g., employer FICA, FUTA, state unemploy-
ment), if any, attributable to Trust payments to Plan
Beneficiaries.
6.3 Expenses and Compensation. The Trustee shall be
paid compensation by the Company (or, in the event the Company
fails to make such payments, from the Trust Fund), in accor-
dance with the Trustee's regular schedule or fees for trust
services and applicable investment management services for
similar trusts, as in effect from time to time, unless the Com-
pany and the Trustee otherwise agree. The Trustee shall be
reimbursed by the Company (or in the event the Company fails to
make such reimbursement, from the Trust Fund), for the
<PAGE>
-37-
Trustee's reasonable expenses of management and administration
of the Trust, including reasonable compensation of counsel and
any actuary, consultant or other agent engaged by the Trustee
to assist it in such management and administration. The Trus-
tee shall submit to the Company a statement for its compensa-
tion and expense reimbursement, setting forth adequate detail
to establish the basis therefor. The Trustee shall claim
expenses and compensation to be paid from the Accounts estab-
lished in the Trust Fund based on the relative value of assets
held in each such Account in the Trust Fund, first from assets
not allocated to separate bookkeeping accounts established
under Section 4.3 for the payment of Benefits; and if such
unallocated assets are insufficient, then from assets which
have been allocated under Section 4.3.
ARTICLE VII: ADMINISTRATION AND RECORDS
7.1 Records. The Trustee shall keep or cause to be
kept accurate and detailed accounts of any investments,
receipts, disbursements and other transactions hereunder, and
all accounts, books, and records relating thereto shall be open
to inspection and audit at all reasonable times by any person
designated by the Company. All such accounts, books, and
records shall be preserved (in original form, or on microfilm,
<PAGE>
-38-
magnetic tape, or any other similar process) for such period as
the Trustee may determine, but the Trustee may only destroy
such accounts, books, and records after first notifying the
Company in writing of its intention to do so and transferring
to the Company any of such accounts, books, and records
requested.
7.2 Settlement of Accounts. Within 60 days after
the close of each calendar year, and within 60 days after the
removal or resignation of the Trustee or the termination of the
Trust, the Trustee shall file with the Company a written
account setting forth all investments, receipts, disbursements
and other transactions effected by it during the preceding cal-
endar year, or during such period from the close of the prior
calendar year, to the date of such removal, resignation, or
termination, including a description of all investments and
securities purchased and sold, with the cost or net proceeds of
such purchases or sales, and showing all cash, securities, and
other property held at the end of such calendar year or other
period. Each account so filed shall be open to inspection at
the office of the Trustee during normal business hours by the
Company and by any person appointed in writing by a majority of
the Participants identified in the last preceding annual
accrued benefit information provided to the Trustee pursuant to
<PAGE>
-39-
Section 4.4(c). For purposes of any such appointment, each
Participant shall have one "vote", irrespective of how many of
the Plans he participates in, and multiple beneficiaries of a
single deceased Participant shall share one vote. (Herein-
after, such person, if any is so appointed, is referred to as
"the Participant's representative".)
If within 90 days after the filing of such account
neither the Company nor the Participants' representative, if
any, has filed with the Trustee notice of any objection to any
act or transaction of the Trustee, the initial account shall
become an account stated as between the Trustee, the Company,
and all persons having or claiming to have an interest in the
Trust Fund. If any objection has been filed, and if the Com-
pany or the Participants' representative who filed such objec-
tion is satisfied that it should be withdrawn, the objecting
party shall in writing filed with the Trustee signify its
approval of the account, and it shall become an account stated
as between the Trustee, the Company, and all persons having or
claiming to have an interest in the Trust Fund. If the account
is adjusted following an objection thereto, the Trustee shall
file with the Company and make available for inspection by the
Participants' representative the adjusted account, and if
within 30 days after such filing of an adjusted account neither
<PAGE>
-40-
the Company nor the Participants' representative, if any, has
filed with the Trustee notice of any objection to the transac-
tions as so adjusted, the adjusted account shall become an
account stated as between the Trustee, the Company, and all
persons having or claiming to have an interest in the Trust
Fund.
When an account is stated it shall be finally set-
tled, and the Trustee shall, to the maximum extent permitted by
applicable law, be forever released and discharged from all
liability and accountability with respect to the propriety of
its acts and transactions shown in such account.
7.3 Audit. The Trustee shall from time to time per-
mit an independent certified public accountant selected by the
Company to have access during ordinary business hours to such
records as may be necessary to audit the Trustee's accounts.
7.4 Judicial Settlement. Nothing contained in this
Trust Agreement shall be construed as depriving the Trustee or
the Company of the right to have a judicial settlement of the
Trustee's account.
7.5 Delivery of Records to Successor. In the event
of removal or resignation of the Trustee, the Trustee shall
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deliver to the successor Trustee all records which shall be
required by the successor Trustee to enable it to carry out the
provisions of this Trust Agreement.
7.6 Tax Filings. In addition to any returns
required of the Trustee by law, the Trustee shall prepare and
file such tax reports and other returns as the Company and the
Trustee may from time to time agree.
ARTICLE VIII: REMOVAL OR RESIGNATION OF THE
TRUSTEE AND DESIGNATION OF SUCCESSOR TRUSTEE
8.1 Resignation.
(a) The Trustee may resign at any time upon 90
days prior written notice. If such resignation occurs prior to
a Change in Control, the Trustee's notice thereof shall be to
the Company, and the Company shall make a good faith effort,
following receipt of notice of resignation from the Trustee, to
find and to appoint a successor trustee which is a bank or
trust Company with assets in excess of $2 billion and net worth
in excess of $100 million, and which shall adhere to the obli-
gations imposed on the Trustee under the terms of the Trust
Agreement. If such resignation occurs after a Change in Con-
trol, the Trustee's written notice thereof shall be to both the
Company and to each Plan Participant whose home address is
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identified on the last written data on Plan Participants pro-
vided to the Trustee by the Company prior to the Change in Con-
trol. In such case, a successor Trustee may be appointed pur-
suant to the written agreement of at least 25% of the Partici-
pants (including Beneficiaries of deceased Participants) in the
Plans. (For purposes of Section 8.1, multiple Beneficiaries of
a single Participant shall count as one vote.)
(b) In the event that the Company or at least
25% of Plan Participants, as the case may be, shall fail to
appoint a successor trustee within 90 days of the Trustee's
notice of resignation, the Trustee shall be entitled to seek
judicial removal and appointment of a successor trustee which
is a bank or trust Company with assets in excess of $2 billion
and a net worth in excess of $100 million.
(c) In any event, the Trustee shall continue to
be custodian of the Trust Fund until the new trustee is in
place, and the Trustee shall be entitled to expenses and fees
through the later of the effective date of its resignation as
Trustee or the end of its custodianship of the Trust Fund.
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8.2 Removal.
(a) Prior to a Change in Control, the Company
may remove any Trustee with or without cause at any time upon
at least 90 days notice in writing to the Trustee. Such
removal of the Trustee by the Company shall not be effective
until the Company has appointed, in writing, a successor Trus-
tee, which must be a bank or trust Company with assets in
excess of $2 billion and a net worth in excess of $100 million,
and such successor has accepted the appointment in writing.
(b) After a Change in Control shall have
occurred, a Trustee may be removed with or without cause at any
time upon at least ninety (90) days notice in writing to the
Trustee pursuant to the written agreement of at least 25% of
the Participants in the Plans as of the date preceding the
effective date of a Change in Control, who shall appoint a suc-
cessor Trustee satisfying the requirements set forth in Section
8.2(a). Alternatively, at least 25% of the Participants in the
Plans as of the date preceding the effective date of a Change
in Control may petition the Orphans Court Division, Court of
Common Pleas, Allegheny County, Pennsylvania, for appointment
of a successor Trustee.
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8.3 Successor Trustee. All of the provisions
set forth herein with respect to the Trustee shall relate to
each successor trustee with the same force and effect as if
such successor had been originally named as the Trustee
hereunder.
8.4 Transfer of Trust Fund to Successor. Upon
the resignation or removal of the Trustee and appointment of a
successor, the Trustee shall promptly transfer and deliver the
Trust Fund to such successor, the Trustee's responsibility
hereunder shall be limited to managing the assets in its
possession and transferring such assets to the successor, and
settling its final account. Neither the Trustee nor the suc-
cessor shall be liable for the acts of the other.
ARTICLE IX: ENFORCEMENT OF TRUST
AGREEMENT AND LEGAL PROCEEDINGS
9.1 The Company shall have the right to enforce any
provision of this Trust Agreement and either the Trustee on
behalf of Participants and Beneficiaries or any Participant (or
the Participant's designated beneficiary or, absent such desig-
nation, the legal representative of the Participant's estate)
as a Beneficiary of the Trust shall have the right to enforce
any provision of this Trust Agreement that affects the right,
<PAGE>
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title, and interest of such Participant (or other person) in
the Trust. In any action or proceeding affecting the Trust the
only necessary parties shall be the Company, the Trustee, and
the Participants and, except as otherwise required by appli-
cable law, no other person shall be entitled to any notice or
service of process. Any judgment entered in such an action or
proceeding shall, to the maximum extent permitted by applicable
law, be binding and conclusive on all persons having or claim-
ing to have any interest in the Trust. Time is of the essence
of this Agreement and in case any provision of this Agreement
is enforced by the Trustee or by any Participant or Beneficiary
by law or through an attorney-at-law, or under advice there-
from, then the Company shall pay all costs of such enforcement
of collection, including reasonable attorney's fees.
ARTICLE X: TERMINATION
10.1 Terminations. The Trust shall continue until
(i) all Benefit payments required by Article VI or other provi-
sions of this Trust Agreement have been made or (ii) the Trust
Fund contains no assets and retains no claims to recover assets
from the Company pursuant to any provision hereof, whichever
shall occur first. If the Trust terminates pursuant to this
Section 10.1, the Trustee, after its final account has been
<PAGE>
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settled as provided in Section 8.2, shall distribute to the
Company the net balance of any assets of the Trust remaining
after all Benefits and expenses have been paid.
10.2 No Further Liability. Upon making distribution
of the Trust Fund pursuant to the preceding paragraphs of this
Article X, the Trustee shall be relieved from all further lia-
bility. The powers of the Trustee hereunder shall continue so
long as any assets of the Trust Fund remain in its hands.
ARTICLE XI: AMENDMENT
11.1 Amendment. Except as provided in Section 11.2,
this Trust Agreement may be amended, by agreement of the Com-
pany and the Trustee, only to make nonsubstantive changes which
do not have a material adverse effect on the rights of Partici-
pants and Beneficiaries under the Plans.
11.2 Compliance with ERISA, the Code and other Laws.
Notwithstanding anything in this Article XI to the contrary,
this Trust Agreement and the Plan shall be amended from time to
time (without the consent of any Participant) to maintain the
Plan as an unfunded plan maintained primarily for the purpose
of providing deferred compensation for select group of manage-
ment or highly compensated employees for purposes of ERISA, the
<PAGE>
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Code, or any other applicable law; to maintain the Trust as a
"grantor trust", and insure that contributions to the Trust by
the Company will not constitute a taxable event and income and
gains of the Trust Fund will not be taxable as income and gains
to the Trust or to Participants under the Plan and that Bene-
fits paid to Participants from the Trust Fund will be deduct-
ible by the Company in the year of payment; and to effectuate
compliance with any other applicable legal requirements.
11.3 Execution of Amendments. The Company and the
Trustee shall execute such amendments of this Trust Agreement
as shall be necessary to give effect to any amendment made pur-
suant to this Article XI.
ARTICLE XII: MISCELLANEOUS
12.1 Nonalienation. No amount payable to or in
respect of any Participant at any time under the Trust shall be
subject in any manner to alienation by anticipation, sale,
transfer, assignment, bankruptcy, pledge, attachment, charge,
or encumbrance of any kind, and (i) any attempt to so alienate,
sell, transfer, assign, pledge, attach, charge or otherwise
encumber any such amount, whether presently or thereafter pay-
able, shall be void, and (ii) the Trust Fund shall in no manner
be liable for or subject to the debts or liabilities of any
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Participant. Notwithstanding the foregoing, the Fund shall at
all times remain subject to the claims of creditors of the Com-
pany in the event the Company becomes insolvent as provided in
Article II.
12.2 Communications.
(a) Communications to the Company shall be
addressed to the Company at Consolidated Natural Gas Company,
20th Floor, CNG Tower, 825 Liberty Avenue, Pittsburgh, PA
15222-3199, Attn: Plan Administrator, provided, however, that
upon the Company's written request, such communications shall
be sent to such other address as the Company may specify.
(b) Communications to the Trustee shall be
addressed to the Trustee at Mellon Bank, Attention: Earl G.
Kleckner, Vice President, One Mellon Bank Center, Room
151-3346, Pittsburgh, PA 15258-0001, provided, however, that
upon the Trustee's written request, such communications shall
be sent to such other address as the Trustee may specify.
(c) No communication shall be binding on the
Trustee until it is received by the Trustee, and no communica-
tion shall be binding on the Company until it is received by
the Company.
<PAGE>
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12.3 Authority to Act. The Secretary of the Company
shall from time to time certify to the Trustee the person or
persons authorized to act for the Company and provide the Trus-
tee with such information regarding the Company as the Trustee
may reasonably request. The Trustee may continue to rely on
any such certification until notified to the contrary.
12.4 Authenticity of Instruments. The Trustee shall
be fully protected in acting upon any instrument, certificate,
or paper believed by it to be genuine and to be signed or pre-
sented by the proper person or persons, and the Trustee shall
be under no duty to make any investigation or inquiry as to any
statement contained in such writing but may accept the same as
conclusive evidence of the truth and accuracy of the statements
therein contained.
12.5 Binding Effect. This Trust Agreement shall be
binding upon the Company and the Trustee and their respective
successors and assigns.
12.6 Inquiry as to Authority. A third party dealing
with the Trustee shall not be required to make inquiry as to
the authority of the Trustee to take any action or be under any
obligation to follow the proper application by the Trustee of
the proceeds of sale of any property sold by the Trustee or to
<PAGE>
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inquire into the validity or propriety of any act of the
Trustee.
12.7 Responsibility for Company Action. The Trustee
assumes no obligation or responsibility with respect to any
action required by this Trust Agreement on the part of the
Company.
12.8 Successor to Trustee. Any corporation into
which the Trustee may be merged or with which it may be consol-
idated, or any corporation resulting from any merger, reorgani-
zation, or consolidation to which the Trustee may be a party,
or any corporation to which all or substantially all the Trust
business of the Trustee may be transferred shall be the succes-
sor of the Trustee hereunder without the execution or filing of
any instrument or the performance of any act.
12.9 Laws of Pennsylvania to Govern. This Trust
Agreement and the Trust established hereunder shall be governed
by and construed, enforced, and administered in accordance with
the laws of the Commonwealth of Pennsylvania and the Trustee
shall be liable to account only in the courts of that
Commonwealth.
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12.10 Reports. The Trustee shall not be required to
file any annual or other returns or reports to any court, or to
give any bond, or to secure any order or consent of any court,
to carry out any of the powers conferred on the Trustee or to
make any other reports to any court.
12.11 Counterparts. This Trust Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be the original although the others shall not be
produced.
12.12 Participant to Include Beneficiary. The term
Participant when used herein shall be deemed to include the
Beneficiary of any Participant who becomes entitled to receive
or is receiving Benefits under any of the Plans on account of
the death of such Participant.
<PAGE>
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IN WITNESS WHEREOF, this Trust Agreement has been
duly executed by the parties hereto as of the day and year
first above written.
CONSOLIDATED NATURAL GAS COMPANY
By: /s/ L.D. Johnson
-----------------------------
L.D. Johnson
Vice Chairman and Chief
Financial Officer
(Corporate Seal)
Attest:/s/ Laura J. McKeown
-----------------------------
Secretary
MELLON BANK, TRUSTEE
By: /s/ Earl G. Kleckner
-------------------------------
Vice President
(Corporate Seal)
Attest:/s/ James Miller
-----------------------------
Assistant Vice President
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on Form S-3 of
our report dated February 20, 1996 appearing on page 40 of Consolidated
Natural Gas Company's Annual Report on Form 10-K for the year ended
December 31, 1995. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania 15219-9954
August 26, 1996
EXHIBIT 23(B)
RALPH E. DAVIS ASSOCIATES, INC.
Consultants - Petroleum and Natural Gas
3555 Timmons Lane - Suite 1105
Houston, Texas 77027
(713) 622-8955
CONSENT OF INDEPENDENT GEOLOGISTS
We hereby consent to the incorporation by reference in the
Prospectus constituting a part of the Registration Statement on Form S-3
about to be filed with the Securities and Exchange Commission, registering
shares of Consolidated Natural Gas Company's Common Stock to be sold from
time to time by the Consolidated Natural Gas Company Trust, of our
estimates of Company-owned oil and gas reserves in the United States and
Canada contained in Consolidated Natural Gas Company's Annual Report on
Form 10-K for the year ended December 31, 1995. We also consent to any
reference to us under the heading "EXPERTS" in such Prospectus and in
Part II of the Registration Statement and to the filing of this Consent as
an exhibit to the Registration Statement.
We further wish to advise that we were not employed on a
contingent basis and that at the time of the preparation of our report, as
well as at present, neither Ralph E. Davis Associates, Inc., nor any of
its employees had, or now has, a substantial interest in Consolidated
Natural Gas Company, or any of its subsidiaries, as a holder of its
securities, promoter, underwriter, voting trustee, director, officer, or
employee of the registrant, Consolidated Natural Gas Company.
RALPH E. DAVIS ASSOCIATES, INC.
Larry A. Barnett, P.E.
Senior Vice-President
Exhibit 24
POWER OF ATTORNEY
For Registration Statement of
Consolidated Natural Gas Company
________________________________
KNOW ALL MEN BY THESE PRESENTS, That each of the undersigned
directors and officers of CONSOLIDATED NATURAL GAS COMPANY, a Delaware
corporation (the "Company"), which proposes to file with the Securities
and Exchange Commission, Washington, DC, ("SEC") under the provisions of
the Securities Act of 1933, as amended (the "Act"), a new S-3 Registration
Statement and one or more post-effective amendments ("Registration
Documents"), to register under said Act 750,000 shares of the Common Stock
of the Company which may be used in connection with the Company's funding
of various non-qualified benefit plans, through one or more trusts, hereby
constitutes and appoints G. A. Davidson, Jr., L.D. Johnson and D.M.
Westfall, his or her true and lawful attorneys-in-fact and agents, and
each of them with full power to act without the other his or her true and
lawful attorney-in-fact and agent, for him or her and in his or her name,
place and stead, in any and all capacities, to sign the Registration
Documents and to file the same with all exhibits thereto and any and all
other documents in connection therewith, with the SEC, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises as fully and to all intents
and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hand and seals this 27th day of August, 1996.
W.S. Barrack, Jr., Director S.R. McGreevy, Vice President,
Accounting and Financial Control
J.W. Connolly, Director M.A. McKenna, Director
G.A. Davidson, Jr., Chairman S.A. Minter, Director
of the Board, Chief Executive
Officer and Director
R.J. Groves, Director W.R. Peirson, Director
<PAGE>
R.P. Simmons, Director
P.E. Lego, Director L. Wyse, Director
