As filed with the Securities and Exchange Commission on April 17, 1997
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 Number)
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 offices)
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)
With a copy to:
Stephen E. Williams, Esq. Gary W. Wolf, Esq.
Senior Vice President and General Counsel Cahill Gordon & Reindel
Consolidated Natural Gas Company Eighty Pine Street
CNG Tower New York, New York 10005
625 Liberty Avenue (212) 701-3000
Pittsburgh, Pennsylvania 15222-3199
(412) 227-1000
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective
when warranted by market conditions and other 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|
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. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
<S> <C> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered(1) Per Unit(2) Offering Price(2)(3) Registration Fee
- --------------------------------------------------------------------------------------------------------------------------------
Debt Securities...........................
- ------------------------------------------
Preferred Stock, $100.00 par value........ $950,000,000 100% $950,000,000 $287,879
- ------------------------------------------
Common Stock, $2.75 par value(4)..........
================================================================================================================================
</TABLE>
(1) There are being registered hereunder a presently indeterminate number of
shares of Common Stock, including shares of Common Stock into which certain
series of Debt Securities and Preferred Stock may be converted and for
which no separate consideration will be received.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended (3)
Exclusive of accrued interest or dividends, if any. (4) Includes
registration of the related Common Stock purchase rights attached thereto,
for which no additional consideration is paid.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Pursuant to Rule 429 under the Securities Act of 1933, this
Registration Statement contains a combined prospectus that also relates to
$50,000,000 of other securities registered on Form S-3, File No. 33-52585 (the
"Previously Registered Securities"), which have not been offered or sold as of
the date of the filing of this Registration Statement. This Registration
Statement constitutes Post-Effective Amendment No. 2 to Registration Statement
File No. 33-52585, pursuant to which the total amount of unsold Previously
Registered Securities registered on Registration Statement File No. 33-52585 may
be offered and sold as Debt Securities. In the event the Previously Registered
Securities are offered and sold prior to the effective date of this Registration
Statement, the amount of Previously Registered Securities so sold will not be
included in the prospectus hereunder.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Prospectus Subject to Completion, Dated April 17, 1997
$1,000,000,000
CONSOLIDATED NATURAL GAS COMPANY
Debt Securities
Preferred Stock
Common Stock
Consolidated Natural Gas Company (the "Company") may offer from time to
time (i) its debt securities (the "Debt Securities"), which may be convertible
into shares of common stock, par value $2.75 per share, of the Company (the
"Common Stock"), (ii) shares of its preferred stock, par value $100.00 per share
(the "Preferred Stock"), which may be convertible into shares of Common Stock or
exchangeable for Debt Securities, and (iii) shares of its Common Stock. The
Preferred Stock and the Common Stock are collectively referred to as the "Equity
Securities," and the Debt Securities and the Equity Securities are collectively
referred to as the "Securities." The Securities offered pursuant to this
Prospectus may be offered separately or together in one or more series up to an
aggregate public offering price of $1,000,000,000 (or the equivalent thereof in
foreign currency or currency units) at individual prices and on terms to be
determined in light of market conditions at the time of the offering and in
conformity with the requirements of the Public Utility Holding Company Act of
1935 (the "Holding Company Act") and set forth in one or more supplements to
this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and, among other things, will include, where applicable, (i) in the
case of Debt Securities, the specific designation, aggregate principal amount
offered, ranking, rate or rates of interest or the provisions for determining
such rate or rates and the time of payment thereof, maturity, currency of
payment, terms relating to redemption (whether mandatory, at the option of the
Company or the holder), terms for sinking fund payments, terms for conversion or
exchange, additional covenants and the initial public offering price, (ii) in
the case of shares of Preferred Stock, the number of shares, specific title and
stated value, any dividend, liquidation, redemption, conversion, exchange,
voting and other rights and restrictions and the initial public offering price
and (iii) in the case of shares of Common Stock, the number of shares of Common
Stock and the terms of the offering and sale thereof.
The applicable Prospectus Supplement will also contain information,
where applicable, about certain U.S. Federal income taxes, accounting and other
considerations relating to, and any listing on a securities exchange of, the
Securities covered by such Prospectus Supplement.
The Securities may be sold directly by the Company, through agents
designated by the Company from time to time or through underwriters or dealers
designated by the Company from time to time. If any agents of the Company or any
dealers or underwriters are involved in the sale of the Securities in respect of
which this Prospectus is being delivered, the names of such agents, dealers or
underwriters and any applicable agent's commission, dealer's purchase price or
underwriter's discount will be as set forth in or may be calculated from the
applicable Prospectus Supplement. The net proceeds to the Company from such sale
will be the purchase price of such Securities less such commission in the case
of an agent, the purchase price of such Securities in the case of a dealer or
the public offering price of such Securities less such discount in the case of
an underwriter and less, in each case, other attributable issuance expenses. See
"Plan of Distribution" for indemnification arrangements for agents, dealers and
underwriters.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document, which was filed by the Company with the
Commission, is incorporated in this Prospectus by reference:
(1) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
All reports and other documents filed by the Company pursuant to
Section 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.
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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.
THE COMPANY AND ITS SUBSIDIARIES
The Company is engaged solely in the business of owning and holding the
outstanding securities of fifteen directly owned subsidiary companies. The
Company is a public utility holding company regulated under the Holding Company
Act.
The Company and its subsidiaries ("Consolidated System" or "System")
are engaged in all phases of the natural gas business -- distribution,
transmission and exploration and production. The Company's principal
subsidiaries are described below.
Public utility subsidiaries of the Company are The East Ohio Gas
Company, The Peoples Natural Gas Company, Virginia Natural Gas, Inc. and Hope
Gas, Inc. Principal cities served at retail are: Cleveland, Akron, Youngstown,
Canton, Warren, Lima, Ashtabula and Marietta in Ohio; Pittsburgh (a portion),
Altoona and Johnstown in Pennsylvania; Norfolk, Newport News, Virginia Beach,
Chesapeake, Hampton and Williamsburg in Virginia; and Clarksburg and Parkersburg
in West Virginia.
CNG Transmission Corporation operates a regional interstate pipeline
system and provides gas transportation and storage services to each of the
Company's public utility subsidiaries and to non-affiliated utilities, end-users
and others in the Midwest, the Mid-Atlantic states and the Northeast. CNG
Transmission Corporation is subject to regulation by the Federal Energy
Regulatory Commission.
CNG Producing Company is the Company's exploration and production
subsidiary. It explores for and produces gas and oil primarily in the Gulf of
Mexico, the southern and western United States, the Appalachian region and
Canada.
CNG Energy Services Corporation conducts activities in the unregulated
energy area, including gas and electric power marketing, and invests in power
generation facilities.
CNG International Corporation was formed by the Company in 1996 to
invest in foreign energy activities. It currently holds interests in companies
owning and operating gas pipelines in Australia.
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 proceeds from the sale of the Securities will be added to the
treasury funds of the Company and subsequently used to finance System capital
expenditures, for general corporate purposes, to purchase the Company's common
stock in the open market and/or to acquire, retire or redeem debt securities
issued by the Company as authorized by the Commission under the Holding Company
Act. The balance of funds
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required for these purposes is expected to be obtained principally from internal
cash generation and the issuance of other debt or equity securities. Reference
is made to the documents incorporated by reference herein for information
relating to estimated capital expenditures.
CERTAIN TERMS AND DESCRIPTIONS OF
DEBT SECURITIES AND INDENTURE
The Debt Securities will be issued in one or more series under an
Indenture dated as of April 1, 1995 ("Indenture") between the Company and United
States Trust Company of New York, as Trustee ("Trustee"), the form of which is
filed as an exhibit to the Registration Statement. The following summaries of
certain provisions of the Indenture do not purport to be complete and are
qualified in their entirety by express reference to the Indenture and the
Securities Resolutions (as defined in the Indenture). Certain terms defined in
the Indenture are used in this summary without definition.
The Indenture will not limit the amount of Debt Securities that can be
issued thereunder and provides that the Debt Securities may be issued from time
to time in one or more series pursuant to the terms of one or more Securities
Resolutions establishing such series. As of the date of this Prospectus, there
were Debt Securities aggregating $450 million outstanding under the Indenture.
The Debt Securities will be unsecured and will rank on a parity with all other
unsecured and unsubordinated debt of the Company. Although the Indenture
provides for the possible issuance of Debt Securities in other forms or
currencies, the only Debt Securities covered by this Prospectus will be Debt
Securities denominated in U.S. dollars in registered form without coupons.
Consequently, information contained in the Indenture relating to the offer and
sale of Debt Securities in other forms or currencies is not provided in this
Prospectus.
Certain Terms of the Debt Securities
Reference is made to the Prospectus Supplement for the following terms,
if applicable, of the Debt Securities offered thereby: (1) the designation,
aggregate principal amount and denominations; (2) the price at which such Debt
Securities will be issued and, if an index, formula or other method is used, the
method for determining amounts of principal or interest; (3) the maturity date
and other dates, if any, on which principal will be payable; (4) the interest
rate (which may be fixed or variable), if any; (5) the date or dates from which
interest will accrue and on which interest will be payable, and the record dates
for the payment of interest; (6) the manner of paying principal or interest; (7)
the place or places where principal and interest will be payable; (8) the terms
of any mandatory or optional redemption by the Company; (9) the terms of any
redemption at the option of Holders; (10) whether or not such Debt Securities
shall be convertible into, or exchangeable for, any 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; (11) whether such Debt Securities are to be represented
in whole or in part by a Debt Security in global form and, if so, the identity
of the depositary ("Depositary") for any global Security; (12) any tax indemnity
provisions; (13) the portion of principal payable upon acceleration of a
Discounted Security (as defined below); (14) whether and upon what terms Debt
Securities may be defeased; (15) any events of default or restrictive covenants
in addition to or in lieu of those set forth in the Indenture; (16) provisions
for electronic issuance of Debt Securities or for Debt Securities in
uncertificated form; and (17) any additional provisions or other special terms
not inconsistent with the provisions of the Indenture, including any terms that
may be required or advisable under United States or other applicable laws or
regulations, or advisable in connection with the marketing of the Debt
Securities. (Section 2.01)
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The Debt Securities of a series may be issued in whole or in part in
the form of one or more global Securities that will be deposited with, or on
behalf of, a Depositary identified in the Prospectus Supplement relating to the
series. Global Securities may be issued in registered or uncertificated form and
in either temporary or permanent form. Unless and until it is exchanged in whole
or in part for Debt Securities in definitive form, a global Security may not be
transferred except as a whole by the Depositary to a nominee or a successor
depositary. (Section 2.12) The specific terms of the depositary arrangement with
respect to any Debt Securities of a series will be described in the Prospectus
Supplement relating to the series.
Debt Securities of any series may be issued as Registered Securities or
uncertificated securities, as specified in the terms of the series. (Section
2.01) Unless otherwise indicated in the Prospectus Supplement, Registered
Securities will be issued in denominations of $1,000 and whole multiples
thereof. One or more global Securities will be issued in a denomination or
aggregate denominations equal to the aggregate principal amount of outstanding
Debt Securities of the series to be represented by such global Security or
Securities.
Debt Securities may be issued under the Indenture as Discounted
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other
considerations applicable thereto will be described in the Prospectus Supplement
relating to such Discounted Securities.
"Discounted Security" means a Debt Security where the amount of
principal due upon acceleration is less than the stated principal amount.
Certain Covenants
The Debt Securities will not be secured by any properties or assets and
will represent unsecured debt of the Company. The Indenture does not limit the
amount of unsecured debt that the Company can incur.
As discussed below, the Indenture includes certain limitations on the
Company's ability to create liens and to enter into sale and leaseback
transactions. However, such limitations will apply only to the extent the
Securities Resolution establishing the terms of a series so provides and, if
applicable, the limitations are subject to a number of qualifications and
exceptions. Accordingly, the covenants described below will apply unless
otherwise indicated in a Prospectus Supplement, and any obligations thereunder
are subject to termination upon defeasance. See "Legal Defeasance and Covenant
Defeasance" below. Also, unless otherwise indicated in a Prospectus Supplement,
the covenants contained in the Indenture, if applicable, do not afford holders
of the Debt Securities protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the Debt
Securities.
Limitation on Liens
Unless the Securities Resolution establishing the terms of a series
otherwise provides, the Debt Securities will be entitled to the benefit of a
covenant in the Indenture which provides that the Company shall not, and shall
not permit any Restricted Subsidiary to, incur any mortgage, pledge, security
interest or lien (collectively, "Lien") on Principal Property to secure a Debt
unless: (1) the Lien equally and ratably secures the Debt Securities and the
Debt provided that the Lien may not secure an obligation of the Company that is
subordinated to the Debt Securities; (2) the Lien secures Debt incurred to
finance all or
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some of the purchase price or the cost of construction or improvement of
property of the Company or a Restricted Subsidiary and does not extend to any
other Principal Property (other than to unimproved real property used for the
construction or improvement) owned by the Company or a Restricted Subsidiary at
the time the Lien is incurred and which Lien may not be incurred more than one
year after the later of the (a) acquisition, (b) completion of construction or
improvement, or (c) commencement of full operation, of the property subject to
the Lien; (3) the Lien is on property of a corporation at the time the
corporation merges into or consolidates with the Company or a Restricted
Subsidiary; (4) the Lien is on property at the time the Company or a Restricted
Subsidiary acquires the property; (5) the Lien is on property of a corporation
at the time the corporation becomes a Restricted Subsidiary; (6) the Lien
secures Debt of a Restricted Subsidiary owing to the Company or another
Restricted Subsidiary; (7) the Lien is in favor of a government or governmental
entity and secures (a) payments pursuant to a contract or statute, (b) the
ability of the Company to maintain self-insurance under or participate under any
State insurance fund under legislation designated to insure employees of the
Company against injury or occupational diseases, or (c) Debt incurred to finance
all or some of the purchase price or cost of construction or improvement of the
property subject to the Lien; (8) the Lien secures Debt which is payable, both
with respect to principal and interest, solely out of the proceeds of oil, gas,
coal or other minerals to be produced from the property subject thereto and to
be sold or delivered by the Company or a Subsidiary, including any interest of
the character commonly referred to as a "production payment"; (9) the Lien is
created or assumed by a Subsidiary on oil, gas, coal or other mineral property
owned or leased by a Subsidiary to secure Debt of such Subsidiary for the
purposes of developing such properties, including any interest of the character
commonly referred to as a "production payment"; provided, however, that neither
the Company nor any other Subsidiary shall assume or guarantee such Debt or
otherwise be liable in respect thereof; (10) the Lien extends, renews or
replaces in whole or in part a Lien ("existing Lien") permitted by any of
clauses (1) through (9) provided that the Debt secured by the Lien may not
exceed the Debt secured at the time by the existing Lien unless the existing
Lien or a predecessor Lien was incurred under clause (1) or (6) and the Lien may
not extend beyond (a) the property subject to the existing Lien (other than
property that at the time is not Principal Property) and (b) improvements and
construction on such property; (11) the Debt plus all other Debt secured by
Liens on Principal Property at the time does not exceed 10% of Consolidated Net
Tangible Assets (excluding from all other Debt in the determination: (a) Debt
secured by a Lien permitted by any of clauses (1) through (10) and (12) and (b)
Debt secured by a Lien incurred prior to the date of the Indenture that would
have been permitted by any of those clauses if the Indenture had been in effect
at the time the Lien was incurred), provided that Attributable Debt for any
lease permitted by clause (3) under "Limitation on Sale and Leaseback" below
must be included in the determination and treated as Debt secured by a Lien on
Principal Property not otherwise permitted by any of clauses (1) through (10) or
(12); or (12) the Lien is a Permitted Lien. (Section 4.04)
"Attributable Debt" for a lease means, as of the date of determination,
the present value of net rent for the remaining term of the lease. Rent shall be
discounted to present value at a discount rate that is compounded semiannually.
The discount rate shall be 10% per annum or, if the Company elects, the discount
rate shall be equal to the weighted average Yield to Maturity of the Debt
Securities. Such average shall be weighted by the principal amount of the Debt
Securities of each series or, in the case of Discounted Securities, the amount
of principal that would be due as of the date of determination if payment of the
Debt Securities were accelerated on that date. (Section 4.01)
"Consolidated Net Tangible Assets" means total assets less (a) total
current liabilities (excluding short-term Debt and payments due within one year
on Long-Term Debt) and deferred credits, (b) intangible assets, including,
without limitation, goodwill, copyrights, trademarks, trade names, patents and
unamortized debt discount and expense, (c) reserves, including reserves for
estimated rate refunds pending
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the outcome of a rate proceeding to the extent such refunds have not been
finally determined, but excluding reserves for deferred differences, (d)
advances to finance oil and natural gas exploration and development to the
extent that the Debt related thereto is excluded from Long-Term Debt, (e) an
amount equal to the amount excluded from Long-Term Debt representing "production
payment" financing of oil or natural gas exploration and development by the
Company or its consolidated Subsidiaries, and (f) minority interests in common
stocks and surplus in Subsidiaries, in each case as reflected in the Company's
most recent consolidated balance sheet preceding the date of a determination
under clause (11) of the first paragraph under "Limitation on Liens" above.
(Section 4.01)
"Permitted Liens" includes, among other items, the pledge or assignment
in the ordinary course of business of gas inventory, accounts receivable or
customers' installment paper. (Section 4.01)
"Principal Property" means any property or asset used in connection
with or relating to the transmission, distribution, exploration or production of
natural gas whether now or hereafter owned, located in the United States
(excluding territories and possessions), the net depreciated book value of which
on the date as of which the determination is being made exceeds 3% of the
Consolidated Net Tangible Assets of the Company, except any such property or
asset that in the opinion of the Board or Company management (evidenced by a
certified Board resolution or an Officers' Certificate delivered to the Trustee)
is not of material importance to the total business conducted by the Company and
its consolidated Subsidiaries. (Section 4.01)
"Restricted Subsidiary" means a Wholly Owned Subsidiary that has
substantially all of its assets located in the United States (excluding
territories and possessions) and owns a Principal Property.
(Section 4.01)
Limitation on Sale and Leaseback
Unless the Securities Resolution establishing the terms of a series
otherwise provides, the Debt Securities will be entitled to the benefit of a
covenant in the Indenture which provides that the Company shall not, and shall
not permit any Restricted Subsidiary to, enter into a Sale-Leaseback Transaction
with respect to any Principal Property acquired or placed into service more than
180 days before the effective date of such lease unless: (1) the lease has a
term of three years or less; (2) the lease is between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries; (3) the Company or a
Restricted Subsidiary under any of clauses (2) through (11) under "Limitation on
Liens" above could create a Lien on the property to secure Debt at least equal
in amount to the Attributable Debt for the lease; or (4) the Company or a
Restricted Subsidiary within 180 days of the effective date of the lease retires
Long-Term Debt of the Company or a Restricted Subsidiary at least equal in
amount to the Attributable Debt for the lease. A Debt is retired when it is paid
or cancelled. However, the Company or a Restricted Subsidiary may not receive
credit for retirement of: (1) Debt of the Company that is subordinated to the
Debt Securities; or (2) Debt, if paid in cash, that is owned by the Company or a
Restricted Subsidiary. (Section 4.05)
"Sale-Leaseback Transaction" means an arrangement pursuant to which the
Company or a Restricted Subsidiary now owns or hereafter acquires a Principal
Property, transfers it to a person, and leases it back from the person. (Section
4.01)
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Successor Obligor
Unless the Securities Resolution establishing the terms of a series
otherwise provides, the Debt Securities will be entitled to the benefit of a
covenant in the Indenture which provides that the Company will not consolidate
with or merge into, or transfer all or substantially all of its assets to, any
person, unless: (1) the person is organized under the laws of the United States
or a State thereof; (2) the person assumes by supplemental indenture all the
obligations of the Company under the Indenture and the Debt Securities; (3)
immediately after the transaction no Default (as defined) exists; and (4) if as
a result of the transaction, a Principal Property would become subject to a Lien
not permitted by the provisions described under "Limitation on Liens" above, to
the extent applicable, the Company or such person secures the Debt Securities
equally and ratably with or prior to all obligations secured by the Lien. The
successor will be substituted for the Company, and thereafter all obligations of
the Company under the Indenture and the Debt Securities shall terminate.
(Section 5.01)
Exchange of Securities
Registered Securities may be exchanged for an equal aggregate principal
amount of Registered Securities of the same series and date of maturity in such
authorized denominations as may be requested upon surrender of the Registered
Securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of the Transfer Agent. (Section 2.07)
Defaults and Remedies
Unless the Securities Resolution establishing the terms of a series
otherwise provides, an "Event of Default" with respect to the series of Debt
Securities will occur if: (1) the Company defaults in any payment of interest on
any Debt Securities of the series when the same becomes due and payable and the
Default continues for a period of 60 days; (2) the Company defaults in the
payment of the principal of any Debt Securities of the series when the same
becomes due and payable at maturity or upon redemption, acceleration or
otherwise; (3) the Company defaults in the payment or satisfaction of any
sinking fund obligation with respect to any Debt Securities of a series as
required by the Securities Resolution establishing the terms of such series and
the Default continues for a period of 60 days; (4) the Company defaults in the
performance of any of its other agreements applicable to the series and the
Default continues for 120 days after the notice specified in the Indenture; (5)
the Company pursuant to or within the meaning of any Bankruptcy Law: (a)
commences a voluntary case, (b) consents to the entry of an order for relief
against it in an involuntary case, (c) consents to the appointment of a
Custodian for it or for all or substantially all of its property, or (d) makes a
general assignment for the benefit of its creditors; or (6) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for
relief against the Company in an involuntary case, (b) appoints a Custodian for
the Company or for all or substantially all of its property, or (c) orders the
liquidation of the Company; and the order or decree remains unstayed and in
effect for 60 days. (Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the Trustee
or the Holders of at least 25% in principal amount of the series notify the
Company of the Default and the Company does not cure the Default within the time
specified after receipt of the notice. The Trustee may require indemnity
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satisfactory to it before it enforces the Indenture or the Debt Securities of
the series. Subject to certain limitations, Holders of a majority in principal
amount of the Debt Securities of the series may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
series notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interest.
The failure to redeem any Debt Security subject to a Conditional
Redemption is not an Event of Default if any event on which such redemption is
so conditioned does not occur before the redemption date.
The Indenture does not have a cross-default provision. Thus, a default
by the Company on any other debt (including any other series of Debt Securities
outstanding under the Indenture) would not constitute an Event of Default.
Amendments and Waivers
The Indenture and the Debt Securities may be amended, and any default
may be waived as follows: The Debt Securities and the Indenture may be amended
with the consent of the Holders of a majority in principal amount of the Debt
Securities of all series affected voting as one class. (Section 9.02) A default
on a series may be waived with the consent of the holders of a majority in
principal amount of the Debt Securities of the series. (Section 6.04) However,
without the consent of each Holder affected, no amendment or waiver may (1)
reduce the amount of Debt Securities whose Holders must consent to an amendment
or waiver, (2) reduce the interest on or change the time for payment of interest
on any Debt Security, (3) change the fixed maturity of any Debt Security, (4)
reduce the principal of any Debt Security or reduce the amount of principal of
any Discounted Security that would be due on acceleration thereof, (5) change
the currency in which principal or interest on a Debt Security is payable or
(6), waive any default in payment of interest on or principal of a Debt
Security. (Section 9.02) Without the consent of any Holder, the Indenture or the
Debt Securities may be amended (1) to cure any ambiguity, omission, defect or
inconsistency, (2) to provide for assumption of Company obligations to Holders
in the event of a merger or consolidation requiring such assumption, (3) to
provide that specific provisions of the Indenture not apply to a series of Debt
Securities not previously issued, (4) to create a series and establish its
terms, (5) to provide for a separate Trustee for one or more series, or (6) to
make any change that does not materially adversely affect the rights of any
Holder. (Section 9.01)
Legal Defeasance and Covenant Defeasance
Debt Securities of a series may be defeased in accordance with their
terms and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth below. The Company at any time may terminate as
to a series all of its obligations (except for certain obligations with respect
to the defeasance trust and obligations to register the transfer or exchange of
a Debt Security, to replace destroyed, lost or stolen Debt Securities and to
maintain agents in respect of the Debt Securities) with respect to the Debt
Securities of the series and the Indenture ("legal defeasance"). The Company at
any time may terminate as to a series its obligations with respect to the Debt
Securities of the series under the covenants described under "Certain Covenants"
or other covenants which may be added for the benefit of a particular series of
Debt Securities ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, a series may not be
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accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option, a series may not be accelerated by reference to the
covenants described under "Certain Covenants" or other covenants which may be
added for the benefit of a particular series of Debt Securities. (Section 8.01)
To exercise its legal defeasance option as to a series, the Company
must deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal, premium, if any, and
interest on the Debt Securities of the series to redemption or maturity and must
comply with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition of any
gain or loss to Holders for Federal income tax purposes.
"U.S. Government Obligations" are direct obligations of the United
States of America which have the full faith and credit of the United States of
America pledged for payment and which are not callable at the issuer's option,
or certificates representing an ownership interest in such obligations. (Section
8.02)
Trustee
United States Trust Company of New York will act as Trustee and
Registrar for Debt Securities issued under the Indenture and, unless otherwise
indicated in a Prospectus Supplement, the Trustee will also act as Transfer
Agent and Paying Agent with respect to the Debt Securities. (Section 2.03) The
Company may remove the Trustee with or without cause if the Company so notifies
the Trustee six months in advance and if no Default occurs or is continuing
during the six-month period. (Section 7.07)
DESCRIPTION OF COMMON STOCK
The following outline of certain provisions of the Company's
Certificate of Incorporation, as amended (the "Certificate"), and the Company's
By-laws, as amended (the "Bylaws"), each of which is incorporated by reference
as an exhibit to the Registration Statement, does not purport to be complete and
is qualified in its entirety by express reference thereto. The Company is
authorized to issue 400,000,000 shares of Common Stock.
Dividends
All shares of Common Stock are entitled to participate equally with
other shares of Common Stock in dividends, subject to the express terms and
preferences of any outstanding series of Preferred Stock with respect to
dividends and other distributions.
The indentures and supplemental indentures pursuant to which the
Company's outstanding senior debentures have been issued contain restrictions on
dividends and the Company's acquisition of its capital stock. Such documents
provide that the Company cannot declare or pay any dividend or make any other
distribution upon any of its capital stock or purchase or redeem or otherwise
acquire for consideration any of its capital stock (excluding from such
restriction and from the calculation dividends paid in capital stock and capital
stock purchased, redeemed or otherwise acquired to the extent that it was so
acquired in exchange for or with the proceeds of the issue of other capital
stock) if, after giving effect to such dividend, distribution, purchase,
redemption or other acquisition, the cumulative aggregate amount of all
dividends and distributions declared or paid on its capital stock and the amount
paid for the purchase, redemption or acquisition of its capital stock subsequent
to a date specified in each such document by the Company exceeds the amount of
the consolidated net income available for dividends after such date, plus
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an additional amount specified in each such document plus such additional
amounts as shall, upon application by the Company, be authorized or approved by
the Commission, or by any successor commission or authority administering the
Holding Company Act. Under the most limiting of these provisions, $614 million
was available for the payment of cash dividends on, and acquisitions of, capital
stock at December 31, 1996.
Voting Rights
Each share of Common Stock has one vote. Holders of a series of
Preferred Stock possess those voting powers, if any, specified in the
certificate of designation which establishes the terms and conditions for such
series of Preferred Stock. In addition, in accordance with the General
Corporation Law for the State of Delaware, the consent of holders of a series of
Preferred Stock is required before certain corporate actions, particularly
certain amendments to the Certificate adversely affecting the rights of holders
of any such series of Preferred Stock, may be taken.
Preemptive Rights
The holders of the Common Stock have no preemptive rights of any kind.
Preferences on Liquidation, Dissolution or Winding-up
Upon liquidation, dissolution or winding-up of the Company, a series of
Preferred Stock shall have preference over the Common Stock as set forth in the
certificate of designation for such series of Preferred Stock. Generally, after
payment of creditors, holders of shares of a series of the Preferred Stock
outstanding shall be entitled to be paid the amounts fixed by the Board of
Directors of the Company in the resolutions creating such series, including full
cumulative dividends, before any payments are made to holders of Common Stock.
Other
The Company's Common Stock is listed on the New York Stock Exchange and
is also listed on the Basle, Geneva, Zurich and Lausanne stock exchanges. The
First Chicago Trust Company of New York ("First Chicago") is Transfer Agent and
Registrar for the Common Stock. The Shares of Common Stock offered, when issued,
will be validly issued, fully paid and nonassessable.
Provisions of the Certificate and Bylaws Which May Have
Anti-Takeover Effects
The Certificate requires certain conditions to be met for mergers and
other business combinations (collectively "Business Combinations") with any
beneficial holder of 5% or more of outstanding shares of the Common Stock (a
"Substantial Stockholder"). In consummating any Business Combination with a
Substantial Stockholder, the amount paid per share to holders of Common Stock by
a Substantial Stockholder must be no less than the highest per share price which
the Substantial Stockholder paid for any shares of the Common Stock acquired by
it after it acquired 5% of the outstanding Common Stock. Also, the consideration
paid in such Business Combination must be either cash or the same form as the
consideration paid by the Substantial Stockholder for any shares of the Common
Stock acquired by it after it acquired its 5% interest.
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The Certificate also provides for the Company's Board of Directors to
be divided into three classes as nearly equal in number as possible, with the
term of one class to expire each year.
The Certificate requires that holders of seventy-five percent or more
of outstanding shares of Common Stock must approve any action requiring a
stockholder vote when such action is to be taken upon written consent of
stockholders. The Company's Bylaws provide that, unless recommended by the Board
of Directors, no person shall be elected a director unless notice in writing of
such person's nomination by a stockholder is received by the Company not more
than sixty nor less than thirty calendar days before the date of the meeting at
which the election is to take place. The Bylaws require that a special meeting
of stockholders called at the request of stockholders must be so requested by
holders of at least seventy-five percent of the outstanding shares of Common
Stock. The provisions described under this caption may be amended or repealed
only with a two-thirds or greater vote of the Continuing Directors (generally
directors before the time a Substantial Stockholder becomes such) or by
affirmative vote of the holders of seventy-five percent or more of the
outstanding Common Stock.
Common Stock Purchase Rights
On January 23, 1996 the Board of Directors of the Company declared a
dividend distribution of one right ("Right") for each outstanding share of
Common Stock to stockholders of record at the close of business on February 28,
1996 (the "Rights Record Date"). The Rights were issued pursuant to a
shareholder rights plan which was approved by the Board of Directors on November
13, 1995. Each Right entitles the registered holder to purchase from the Company
one-half of one share of Common Stock at a price of $175 per share (the "Rights
Purchase Price"), being $87.50 per half share, subject to adjustment. The
description and terms of the Rights are set forth in a rights agreement (the
"Rights Agreement") between the Company and First Chicago, as rights agent (the
"Rights Agent") which is incorporated by reference as an exhibit to the
Registration Statement. The following outline of certain provisions with respect
to the Rights does not purport to be complete and is qualified in its entirety
by express reference to the Rights Agreement.
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten days following the date (the
"Shares Acquisition Date") of the public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of Common Stock or other
voting securities ("Voting Stock") that have 10% or more of the voting power of
the outstanding shares of Voting Stock or (ii) ten days following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in such person acquiring, or
obtaining the right to acquire, beneficial ownership of Voting Stock having 10%
or more of the voting power of the outstanding shares of Voting Stock (the
earlier of such dates being called the "Rights Distribution Date"), the Rights
will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Rights Record Date, by such Common Stock
certificate. The rights Agreement provides that, until the Rights Distribution
Date, the Rights will be transferred with and only with the Company's Common
Stock. Until the Rights Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after the Rights Record
Date upon transfer or new issuance of the Company's Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Rights
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Company's Common Stock certificates
outstanding as of the Rights Record Date will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
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As soon as practicable following the Rights Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of close of business on the
Rights Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Rights Distribution Date. The
Rights will expire at the close of business on February 28, 2006, unless earlier
redeemed or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person at any time
following the Rights Distribution Date, each holder of a Right will thereafter
have the right to receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the Rights Purchase Price of the Right then in effect.
Notwithstanding any of the foregoing, following the occurrence of such event set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction, or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, Common Stock of the acquiring company having a value equal to two
times the Rights Purchase Price of the Right then in effect.
Adjustments to Rights Purchase Price
The Rights Purchase Price payable, and the number of shares of Common
Stock (or other securities, as the case may be) issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification or, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for or purchase shares
of the Common Stock or convertible securities at less than the then current
market price of the Common Stock or (iii) upon the distribution to holders of
the Common Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in the Common Stock) or of
subscription rights or warrants (other than those referred to above). Prior to
the Rights Distribution Date, the Board of Directors of the Company may make
such equitable adjustments as it deems appropriate in the circumstances in lieu
of any adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Rights Purchase Price
will be required until the earlier of (i) three years from the date of the event
giving rise to such adjustment or (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Rights Purchase Price. No
fractional
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shares of Common Stock will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 P.M. New York City time on the tenth day
following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the Independent Directors.
Immediately upon the action of the Board of Directors of the Company electing to
redeem the Rights with, if required, the concurrence of the Independent
Directors, the Company shall make announcement thereof, and upon such action,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Rights Redemption Price.
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Common Stock of the Company" above, the Board of
Directors may exchange the Rights (other than Rights owned by an Acquiring
Person, which have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, and/or other securities, cash or other assets deemed
to have the same value as one share of Common Stock, per Right, subject to
adjustment.
Until a Right is exercised or exchanged for Common Stock, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Common Stock or other
consideration of the Company or for the stock of the Acquiring Person as set
forth above, or are exchanged as provided in the preceding paragraph.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights prior to the Rights Distribution Date. Thereafter, the provisions of the
Rights Agreement may be amended by the Board of Directors in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of any
Acquiring Person); provided, however, that no supplement or amendment may be
made on or after the Rights Distribution Date which changes those provisions
relating to the principal economic terms of the Rights. The Board of Directors
may also, with the concurrence of a majority of the Independent Directors,
extend the redemption period for up to an additional 20 days.
The term "Independent Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Independent
Directors, but shall not include an Acquiring Person or any representative
thereof.
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DESCRIPTION OF PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is authorized to create and provide by
resolution for the issuance of up to 5,000,000 shares of Preferred Stock in
series and, by filing a certificate of designation pursuant to the applicable
law of the State of Delaware, 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. Such terms of shares of Preferred Stock
offered hereby shall be more fully set forth in the Prospectus Supplement with
respect to such shares.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(a) the maximum number of shares to constitute such series, which may
subsequently be increased or decreased (but not below the number
of shares of such series then outstanding) by resolution of the
Board of Directors, the distinctive designation thereof and the
stated value thereof if different than the par value thereof;
(b) whether the shares of such series shall have voting powers and, if
any, the terms of such voting powers;
(c) the dividend rate or rates, if any, on the shares of such series
or the manner in which such rate or rates shall be determined, the
conditions and dates upon which such dividends shall be payable,
and the preference or relation which such dividends shall bear to
the dividends payable on any other class or classes or on any
other series of capital stock and whether such dividends shall be
cumulative or noncumulative;
(d) whether the shares of such series shall be subject to redemption
by the Company, and, if made subject to redemption, the times,
prices and other terms, limitations, restrictions or conditions of
such redemption;
(e) the relative amounts, and the relative rights or preferences, if
any, of payment in respect of shares of such series which the
holders of shares of such series shall be entitled to receive upon
the liquidation, dissolution or winding-up of the Company;
(f) whether or not the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent
to which and the manner in which any such retirement or sinking
fund shall be applied to the purchase or redemption of the shares
of such series for retirement or to other corporate purposes, and
the terms and provisions relative to the operation of such
retirement or sinking fund;
(g) whether or not the shares of such series shall be convertible
into, or exchangeable for, shares of any other class, classes or
series, or other securities, whether or not issued by the Company
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
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upon the purchase, redemption or other acquisition by the Company
of, the Common Stock or any other class or classes of stock of the
Company ranking junior to the shares of such series either as to
dividends or upon liquidation, dissolution or winding-up of the
Company;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Company or upon the issuance of any additional
stock (including additional shares of such series or of any other
class) ranking on a parity with or prior to the shares of such
series as to dividends or distribution of assets upon liquidation,
dissolution or winding-up of the Company; and
(j) any other preference, relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, as shall not be inconsistent with law, the
Certificate or any resolution of the Board of Directors pursuant
thereto.
Dividends
In addition to terms and conditions set forth in a certificate of
designation with respect to a series of Preferred Stock, the indentures and
supplemental indentures pursuant to which the Company's outstanding senior
debentures have been issued contain restrictions on dividends and the Company's
acquisition of its capital stock. See "Description of Common Stock-Dividends".
Voting Rights
Holders of a series of Preferred Stock possess those voting powers, if
any, specified in the certificate of designation which establishes the terms and
conditions for such series of Preferred Stock. In addition, in accordance with
the General Corporation Law for the State of Delaware, the consent of holders of
a series of Preferred Stock is required in varying proportions before certain
corporate actions, particularly certain amendments to the Certificates adversely
affecting the rights of holders of any such series of Preferred Stock, may be
taken.
Preemptive Rights
The holders of a series of Preferred Stock have no preemptive rights of
any kind unless otherwise provided under the certificate of designation for such
series of Preferred Stock.
Preferences on Liquidation, Dissolution or Winding-up
Upon liquidation, dissolution or winding-up of the Company, a series of
Preferred Stock shall have preference over the Common Stock as set forth in the
certificate of designation for such series of Preferred Stock. See "Description
of Common Stock-Preferences on Liquidation, Dissolution or Winding-up".
BOOK-ENTRY SECURITIES
The Securities may be issued in the form of one or more global
certificates (collectively, with respect to each series or issue of Securities,
the "Global Security") registered in the name of a depositary or a nominee of a
depositary. Unless otherwise specified in the applicable Prospectus Supplement,
the
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depositary will be The Depository Trust Company ("DTC"). The Company has been
informed by DTC that its nominee will be Cede & Co. ("Cede"). Accordingly, Cede
is expected to be the initial registered holder of the Securities that are
issued in global form. No person that acquires an interest in such Securities
will be entitled to receive a certificate representing such person's interest in
such Securities except as set forth herein or in the accompanying Prospectus
Supplement. Unless and until definitive Securities are issued under the limited
circumstances described herein, all references to actions by holders of
Securities issued in global form shall refer to actions taken by DTC upon
instructions from its Participants (as defined below), and all references herein
to payments and notices to such holders shall refer to payments and notices to
DTC or Cede, as the registered holder of such Securities.
DTC has informed the Company that it is a limited purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, that it is a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to Section 17A of
the Exchange Act, and that it was created to hold securities for its
participating organizations ("Participants") and to facilitate the clearance and
settlement of securities transactions among Participants through electronic
book-entry, thereby eliminating the need for physical movement of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations, and may include certain other organizations. Indirect
access to the DTC system also is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants").
Holders that are not Participants or Indirect Participants but that
desire to purchase, sell or otherwise transfer ownership of, or other interests
in, Securities may do so only through Participants and Indirect Participants.
Under a book-entry format, holders may experience some delay in their receipt of
payments, as such payments will be forwarded by the agent designated by the
Company to Cede, as nominee for DTC. DTC will forward such payments to its
Participants, which thereafter will forward them to Indirect Participants or
holders. Holders will not be recognized by the applicable Trustee or the Company
as registered holders of the Securities entitled to the benefits of the
applicable Indenture or the terms of the Securities. Holders that are not
Participants will be permitted to exercise their rights as such only indirectly
through and subject to the procedures of Participants and, if applicable,
Indirect Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations as currently in effect (the "Rules"), DTC will be required to
make book-entry transfers of Securities among Participants and to receive and
transmit payments to Participants. Participants and Indirect Participants with
which holders have accounts with respect to the Securities similarly are
required by the Rules to make book-entry transfers and receive and transmit such
payments on behalf of their respective holders.
Because DTC can act only on behalf of Participants, who in turn act
only on behalf of holders or Indirect Participants, and on behalf of certain
banks, trust companies and other persons approved by it, the ability of a holder
to pledge Securities to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such Securities, may be limited due
to the absence of physical certificates for such Securities.
DTC has advised the Company that DTC will take any action permitted to
be taken by a registered holder of any Securities under the applicable Indenture
or the terms of the Securities only at the direction of one or more Participants
to whose accounts with DTC such Securities are credited.
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A Global Security will be exchangeable for the relevant definitive
Securities registered in the names of persons other than DTC or its nominee only
if (i) DTC notifies the Company that it is unwilling or unable to continue as
depository for such Global Security or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act at a time when DTC is required
to be so registered in order to act as such depository, (ii) the Company
executes and delivers to the applicable Trustee an order complying with the
requirements of the applicable Indenture that such Global Security shall be so
exchangeable or (iii) in the case of Debt Securities, there has occurred and is
continuing a default in the payment of principal of, premium, if any, or
interest on, the Debt Securities or an Event of Default or an event that, with
the giving of notice or lapse of time, or both, would constitute an Event of
Default with respect to such Debt Securities. Any Global Security that is
exchangeable pursuant to the preceding sentence will be exchangeable for Debt
Securities or definitive Securities registered in such names as DTC directs.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC is generally required to notify all Participants of the
availability through DTC of definitive Securities. Upon surrender by DTC of the
Global Security representing the Securities and delivery of instructions for
re-registration, the Trustee or the applicable registrar, as the case may be,
will reissue the Securities as definitive Debt Securities, and thereafter such
Trustee or the applicable registrar will recognize the holders of such
definitive Securities as registered holders of Securities entitled to the
benefits of the applicable Indenture or the terms of the Securities, as the case
may be.
Except as described above, the Global Security may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or a successor depositary appointed by the Company.
Except as described above, DTC may not sell, assign, transfer or otherwise
convey any beneficial interest in a Global Security evidencing all or part of
the Securities unless such beneficial interest is in an amount equal to an
authorized denomination for the Securities.
PLAN OF DISTRIBUTION
The Company may solicit offers from time to time to sell the Securities
to, for reoffer to the public through, underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone. The
Securities may be sold upon receipt of proposals pursuant to competitive
bidding, or as may otherwise be permitted, under the Holding Company Act. The
Company has also been authorized by the Commission acting under the Holding
Company Act to sell the Securities through negotiated transactions in public
offerings through underwriters and investment bankers, or to institutional
investors in private placements. The Company may also sell the Securities
through dealers or agents.
Any specific managing underwriter or underwriters with respect to the
offer and sale of the Securities and the members of the underwriting syndicate,
if any, will be named in a Prospectus Supplement. Underwriters will not be
obligated to make a market in any of the Securities. Unless otherwise set forth
in a Prospectus Supplement, underwriters will be obligated to purchase all of
the Securities offered, subject to certain conditions precedent.
The Prospectus Supplement will describe the discounts and commissions
to be allowed or paid to underwriters, if any, all other items constituting
underwriting compensation, the discounts and commissions to be allowed or paid
to dealers and agents, if any, and the exchanges, if any, on which the
Securities will be listed.
18
<PAGE>
Underwriters, dealers and agents may be entitled, under agreements to
be entered into with the Company, to indemnification against or to contribution
with respect to certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended.
LEGAL OPINIONS
The legality of the Securities will be 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 December 31, 1996, Mr. Williams owned directly
and/or beneficially 13,009 shares of Common Stock and has been granted pursuant
and subject to the terms of the Company's long-term incentive plans, restricted
stock awards of 23,554 shares and options on 125,181 shares of Common Stock. As
of the same date, Mr. Chandler directly and/or beneficially owned 2,809 shares
of Common Stock and options on 16,866 shares of Common Stock under such
long-term incentive plans. Certain legal matters in connection with the
Securities will be passed upon by Cahill Gordon & Reindel, a partnership
including a professional corporation, New York, New York, for the underwriters
or purchasers. Cahill Gordon & Reindel represents the Company in various other
legal matters.
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, 1996, 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 1996
Annual Report are incorporated in this Prospectus by reference thereto in
reliance upon the report of Ralph E. Davis Associates, Inc., independent
geologists, as experts.
19
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
No dealer, salesperson, or any person has
been authorized to give any information or to
make any representation not contained in this
Prospectus and, if given or made, such CONSOLIDATED NATURAL
information or representation must not be relied GAS COMPANY
upon as having been authorized by the Company
or by any underwriter. This Prospectus is not an
offer to sell, or a solicitation of an offer to buy, $1,000,000,000
in any jurisdiction in which it is unlawful to
make such an offer or solicitation. Neither the
delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create PROSPECTUS
any implication that there has been no change in
the affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
Available Information............................... 2
Incorporation of Certain Documents
by Reference....................................... 2 Debt Securities
The Company and its Subsidiaries.................... 3 Preferred Stock
Use of Proceeds..................................... 3 Common Stock
Certain Terms and Descriptions
of Debt Securities and Indenture.................. 4
Description of Common Stock......................... 10
Description of Preferred Stock...................... 15
Book-Entry Securities............................... 16
Plan of Distribution................................ 18
Legal Opinions...................................... 19
Experts............................................. 19 , 1997
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized statement of the estimated amounts of all
expenses for one offering in connection with the issuance and distribution of
the Securities. It is likely that an offering of the Securities will be made by
sales through more than one offering.
Filings Fees, Securities and Exchange Commission(1)............. $ 287,879
Printing or Processing of Registration Statement,
Prospectus, Indenture, Definitive Securities,
Purchase Agreement and other Miscellaneous Papers......... 100,000
Trustee's Acceptance and other Charges(2)....................... 10,000
Legal Fees of Counsel for the Trustee(2)........................ 5,000
Independent Accountants' Fees and Expenses...................... 70,000
Rating Fees (Moody's Investors Service, Inc.,
Standard & Poor's Corporation, Duff & Phelps,
Inc., Fitch Investors Service, Inc.)(2)................... 230,000
Blue Sky Legal Fees and Expenses................................ 12,000
Service Charges (including legal fees),
Consolidated Natural Gas Service Company,
Inc....................................................... 25,000
Other Miscellaneous Expenses.................................... 10,000
--------
Total Expenses............................................ $ 752,859
========
(1) To be prorated among the number of offerings by the aggregate amount
thereof if more than offering.
(2) Only applicable to an offering of Debt Securities.
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.
II-1
<PAGE>
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:
"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 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
II-2
<PAGE>
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.
Item 16. Exhibits
1(A) - Standard Purchase Agreement Provisions - Debt Securities
Including Form of Purchase Agreement (incorporated by reference
to Exhibit 1 to Post-Effective Amendment No. 1 to the Company's
Registration Statement on Form S-3 filed on March 14, 1995
(Registration No. 33-52585.))
1(B)* - Standard Purchase Agreement Provisions - Equity Securities
Including Form of Purchase Agreement.
4(A) - Certificate of Incorporation of Consolidated Natural Company
restated October 4, 1990 (incorporated by reference to Exhibit
A-1 to the Application-Declaration of the Registrant on Form
U-1, File No. 70-7811), and the Certificate of Amendment to the
Certificate of Incorporation, filed with the State of Delaware
May 31, 1996 (incorporated by reference to Exhibit 4(B) to the
Company's Registration Statement on Form S-3 filed on August
27, 1996 (Registration No. 333-10869).
4(B) - Bylaws of Consolidated Natural Gas Company, last amended
February 18, 1997 (incorporated by reference to Exhibit 3(B) to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 1-3196)).
4(C) - Rights Agreement dated January 23, 1996 between Consolidated
Natural Gas Company and Society National Bank (predecessor to
The First Chicago Trust Company of New York) (incorporated by
reference to Exhibit 1 to the Current Report on Form 8-K filed
on January 23, 1996).
II-3
<PAGE>
4(D) - Incorporated herein by reference is the following form of
Indenture between Consolidated Natural Gas Company and United
States Trust Company of New York, and securities resolutions
adopted pursuant thereto. Indenture dated as of April 1, 1995
(Exhibit 4 to Post-Effective Amendment No. 1 to Form S-3,
Registration No. 33-52585, filed on March 14, 1995); Securities
Resolution No. 1 effective as of April 12, 1995 (Exhibit 2 to
Form 8-A filed April 21, 1995 under File No. 1-3196);
Securities Resolution No. 2 effective as of October 16, 1996
(Exhibit 2 to Form 8-A filed October 18, 1996); and Securities
Resolution No. 3 effective as of December 10, 1996 (Exhibit 2
to Form 8-A filed December 12, 1996 under File No. 1-3196).
4(E) - Incorporated herein by reference is the following Indenture
and Supplemental Indentures between Consolidated Natural Gas
Company and Chemical Bank (successor by merger to Manufacturers
Hanover Trust Company), Indenture, dated as of May 1, 1971
(Exhibit (5) to Certificate of Notification at S.E.C. File No.
70-5012), Eleventh Supplemental Indenture thereto dated as of
December 1, 1986 (Exhibit (5) to Certificate of Notification
dated December 17, 1986 at S.E.C. File No. 70-7079), Thirteenth
Supplemental Indenture thereto dated as of February 1, 1989
(Exhibit (5) to Certificate of Notification No. 2 at S.E.C.
File No. 70-7336), Fourteenth Supplemental Indenture thereto
dated as of June 1, 1989 (Exhibit (5) to Certificate of
Notification No. 3 at S.E.C. File No. 70-7336), Fifteenth
Supplemental Indenture thereto dated as of October 1, 1989
(Exhibit (5) to Certificate of Notification No. 1 at S.E.C.
File No.70-7651), Sixteenth Supplemental Indenture thereto
dated as of October 1, 1992 (Exhibit (4) to Certificate of
Notification No. 2 at S.E.C. File No. 70-7651), Seventeenth
Supplemental Indenture thereto dated as of August 1, 1993
(Exhibit (1) to Form 8-A filed August 31, 1993, under File No.
1-3196), and Eighteenth Supplemental Indenture thereto dated as
of December 1, 1993 (Exhibit (1) to Form 8-A filed December 16,
1993, under File No. 1-3196).
5* - Opinion of Counsel for Consolidated Natural Gas Company as to
the legality of the Securities being registered.
12 - Computation of Ratio of Earnings to Fixed Charges for the
calendar years 1992- 1996, inclusive (incorporated herein by
reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 (File No. 1-3196), Exhibit 12).
23(A)*- Consent of Independent Accountants.
23(B)*- Consent of Independent Geologists.
23(C) - Consents of Stephen E. Williams and Norbert F. Chandler
(included in opinion filed as Exhibit 5).
24* - Power of Attorney.
II-4
<PAGE>
25 - Statement of Eligibility of Trustee (incorporated by
reference to Exhibit 25 to Post Effective Amendment No. 1 to
the Company's Registration Statement on Form S-3 filed on March
14, 1995 (Registration No. 33-52585)).
- ----------
* 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 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.
II-5
<PAGE>
(5) In the event that the terms of any offers and sales of
the Securities are determined by competitive bidding (i) to use its best
efforts to distribute, prior to the opening of bids, to prospective
bidders, underwriters and dealers a reasonable number of copies of a
prospectus which at the time meets the requirements of section 10(a) of
the Securities Act of 1933, and relating to the securities offered at
competitive bidding, as contained in the registration statement together
with any supplements thereto and (ii) to file an amendment to the
registration statement reflecting the results of competitive bidding.
(6) 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
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 and 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
16th day of April, 1997.
CONSOLIDATED NATURAL GAS COMPANY
By: /s/ D. M. Westfall
--------------------------------
D. M. Westfall
Senior Vice President and
Chief Financial Officer
II-7
<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
- ---------- ----- ----
/s/ D. M. Westfall
- ----------------------
D.M. Westfall Senior Vice President and April 16, 1997
Chief Financial Officer
(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 ) /s/ D.M. Westfall
) -------------------
J.W. Connolly Director ) D.M. Westfall
) As Attorney-in-Fact
R.J. Groves Director ) April 16, 1997
)
P.E. Lego Director )
)
M.A. McKenna Director )
)
S.A. Minter Director )
)
W.R. Peirson Director )
)
R.P. Simmons Director )
)
L. Wyse Director )
II-8
CONSOLIDATED NATURAL GAS COMPANY
STANDARD PURCHASE AGREEMENT PROVISIONS - EQUITY SECURITIES
INCLUDING FORM OF PURCHASE AGREEMENT
<PAGE>
CONSOLIDATED NATURAL GAS COMPANY
STANDARD PURCHASE AGREEMENT PROVISIONS - EQUITY SECURITIES
From time to time, Consolidated Natural Gas Company, a Delaware
corporation (the "Company"), may enter into purchase agreements that provide for
the sale of designated equity securities to the purchaser or purchasers named
therein. The standard provisions set forth herein may be incorporated by
reference in any such purchase agreement (the "Purchase Agreement"). The
Purchase Agreement, including the provisions incorporated therein by reference,
is herein sometimes referred to as "this Agreement". Unless otherwise defined
herein, terms defined in the Purchase Agreement are used herein as therein
defined.
1. Introductory. The Company proposes to issue and sell from time to
time equity securities registered under the registration statement referred to
in Section 2(a) (the "Registered Securities"). The Registered Securities
referred to in Schedule I of the Purchase Agreement ("Schedule I") are
hereinafter referred to as the "Firm New Securities." The Purchase Agreement may
provide for an additional number of Registered Securities (the "Additional New
Securities") which the Purchasers may purchase on the terms and conditions set
forth in the Agreement for the sole purpose of covering over-allotments. The
Firm New Securities and the Additional New Securities, if any, are referred to
as the "New Securities." Such securities may be issued in one or more series,
may have varying dividend and liquidation preferences, voting rights, redemption
provisions and other terms, with all such terms for any particular series of the
New Securities being determined at the time of the sale. The purchaser or
purchasers, as the case may be, which agree to purchase the same are hereinafter
referred to as the "Purchasers" of such New Securities. The terms "you" and
"your" refer to those Purchasers who sign the Purchase Agreement either on
behalf of themselves only or on behalf of themselves and as representatives of
the several Purchasers named in Schedule I, as the case may be, unless one or
more of such Purchasers shall have been appointed representative
("Representative") of all of the Purchasers who sign the Purchase Agreement, in
which case, the terms "you" and "your" shall mean such Purchaser acting in its
capacity as Representative.
2. Representations and Warranties. The Company represents and warrants
to and agrees with each Purchaser that:
<PAGE>
2
(a) A registration statement on Form S-3 relating to the
Registered Securities including a prospectus and all documents
incorporated by reference therein has been filed with the Securities
and Exchange Commission (the "Commission") and has become effective.
Such registration statement, including the prospectus set forth
therein, as amended by a prospectus supplement with respect to the
offering of New Securities referred to in Section 1 and all prior
amendments and supplements thereto (other than supplements and
amendments relating to Securities that are not New Securities),
including all documents filed as a part thereof or incorporated
therein, is hereinafter referred to as the "Registration Statement" and
such prospectus, as so amended or supplemented (including all material
incorporated by reference therein) is hereinafter referred to as the
"Prospectus".
(b) The Registration Statement and the Prospectus in all
material respects comply with the provisions of the Securities Act of
1933, as amended (the "Act"), and the applicable published rules and
regulations of the Commission thereunder (the "Rules and Regulations");
the Registration Statement does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the Prospectus does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and all
documents incorporated therein by reference pursuant to Item 12 of Form
S-3 as of the respective dates on which they were filed complied in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the pertinent published
rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and, on said dates, and at the time of purchase, when
read together with the Prospectus, or the Prospectus as it may be
otherwise amended or supplemented, will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of circumstances under which they were made, not misleading,
except that the Company makes no warranty or representation to any
Purchaser with respect to any statement contained in or any matter
omitted from the Registration Statement or Prospectus, which
<PAGE>
3
statements were made, or matters omitted, in reliance upon and in
conformity with information furnished in writing to the Company by such
Purchaser or through you for use in the Registration Statement and
Prospectus.
(c) The Commission has issued an order under the Public
Utility Holding Company Act of 1935 ("PUHCA") permitting to become
effective the Form U-1 Declaration filed by the Company with respect to
the issue and sale of the Securities (including the New Securities),
such order being subject, however, to such supplemental orders, if any,
as the Commission may issue under PUHCA. A copy of such order
heretofore issued by the Commission has been or will be delivered to
the Purchasers.
(d) Except as otherwise contemplated herein, no approval,
authorization, consent, certificate or order of any State commission or
regulatory authority is necessary with respect to the issuance or the
sale of the New Securities by the Company.
(e) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has been no
material and unfavorable change in the condition of the Company and its
subsidiaries, on a consolidated basis, financial or otherwise, other
than as referred to in the Registration Statement and Prospectus.
(f) The consummation of the transactions herein contemplated
and the performance by the Company of the terms of this Agreement will
not result in the breach by the Company of any terms of, or constitute
a default under, any other agreement or undertaking of the Company.
3. Delivery and Payment. Payment for the Firm New Securities shall be
made to the Company or its order by electronic funds transfer (unless otherwise
specified in the Purchase Agreement, in which case payment shall be made as so
specified) against the delivery of the Firm New Securities at the office of the
Company, 44 Wall Street, New York, New York 10005 (unless another place is
specified in the Purchase Agreement, in which case such payment shall be made at
the place so specified), to the Purchasers or you for the respective accounts of
the Purchasers. Such payment and delivery shall be made at 10:00 A.M., New York
time, on the date set forth in the Purchase Agreement, unless another time shall
be agreed to by the Company and by you or unless postponed in ac-
<PAGE>
4
cordance with the provisions of Section 11 hereof. The time at which payment
and delivery are actually made is hereinafter sometimes called "time of
purchase." You shall specify the denominations of the Firm New Securities to be
delivered and the name and address in which each Firm New Security is to be
registered, by notice delivered to the Company not later than 10:00 A.M., New
York time, on the second business day preceding the time of purchase. For the
purpose of expediting the checking of the Firm New Securities by you, the
Company agrees to make the Firm New Securities available to you, at an office
designated by the Transfer Agent, not later than 2:00 P.M., New York time, on
the first business day preceding the time of purchase.
If there are any Additional New Securities, the Purchasers shall also
have the option to purchase, severally and not jointly, from the Company,
ratably in accordance with the number of shares of Firm New Securities to be
purchased by each of them (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of the Additional New Securities, if
any, as may be necessary to cover over-allotments made in connection with the
offering of the Firm New Securities, at the same purchase price per share to be
paid by the Purchasers to the Company for the Firm New Securities, all subject
to the terms and conditions set forth in this Agreement. This option may be
exercised at any time (but not more than once) on or before the thirtieth day
following the date hereof, by your written notice to the Company. Such notice
shall set forth the aggregate number of shares of Additional New Securities as
to which the option is being exercised, and the date when the Additional New
Securities are to be delivered, such date being herein referred to as the
"Additional Closing Date"; provided, however, that the Additional Closing Date
shall not be earlier than the date set forth in the Purchase Agreement nor
earlier than the business day after the date on which the option shall have been
exercised nor later than the eighth business day after the date on which the
option shall have been exercised. The number of shares of Additional New
Securities to be sold to each Purchaser shall be the number which bears the same
proportion to the aggregate number of shares of Additional New Securities being
purchased as the number of shares of Firm New Securities set forth opposite the
name of such Purchaser on Schedule I to the Purchase Agreement bears to the
total number of shares of Firm New Securities (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares.)
<PAGE>
5
Payment of the purchase price for the Additional New Securities, if any, shall
be made on the Additional Closing Date in the same manner and at the same time
as the payment for the Firm New Securities. You shall specify the denominations
of the Additional New Securities to be delivered and the name and address in
which each Additional New Security is to be registered, by notice delivered to
the Company not later than 10:00 A.M., New York time, on the second business day
preceding the additional time of purchase. For the purpose of expediting the
checking of the Additional New Securities by you, the Company agrees to make the
Additional New Securities available to you, at an office in New York City
designated by the Transfer Agent, not later than 2:00 P.M., New York time, on
the first business day preceding the time of purchase.
4. Covenants of the Company. The Company agrees with the several
Purchasers:
(a) To advise you promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus with respect to
any New Securities at any time when a prospectus relating to such New
Securities is required to be delivered under the Act and will furnish
to you a copy of each such proposed amendment or supplement prior to
the filing thereof;
(b) If at any time when a Prospectus relating to the New
Securities is required to be delivered under the Act any event occurs
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact, or omit to state
any material fact necessary to make the statements therein, in the
light of circumstances under which they were made, not misleading, or
if it is necessary at any time to amend or supplement the Registration
Statement or the Prospectus to comply with the Act, to promptly prepare
and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect
such compliance;
(c) To furnish to you copies of the registration statement
relating to the Registered Securities (including the New Securities) as
originally filed and all amendments thereto (at least one of which will
be as filed with the Commission via EDGAR and will include all exhibits
except those incorporated by reference to previous filings with the
Commission), a copy of each consent and certificate of
<PAGE>
6
independent accountants and of each other person whose profession gives
authority to statements made by him and who is named in the
Registration Statement as having prepared, certified or reviewed any
part thereof, each related prospectus, the Prospectus, and all
amendments and supplements to such documents (except supplements
relating to Registered Securities that are not New Securities) as filed
with the Commission via EDGAR, in each case as soon as available and in
such quantities as you may reasonably request for the purpose
contemplated by the Act and to furnish to you sufficient copies of the
foregoing (including copies of the Registration Statement (other than
exhibits and consents filed as exhibits to the Registration Statement))
for distribution of two copies of the Registration Statement and a
sufficient number of copies of the Prospectus to each of the other
Purchasers;
(d) To furnish such proper information as may be required and
otherwise to cooperate in qualifying the New Securities for sale and in
determining their eligibility for investment under the laws of such
jurisdictions as you may designate and to pay or reimburse you for
expenses and reasonable legal fees incurred in connection therewith,
provided, that the Company shall not be required to qualify as a
foreign corporation or to file a consent to service of process in any
state;
(e) To advise you promptly (confirming such advice in writing)
of any request made by the Commission for amendments to the
Registration Statement or Prospectus or for additional information with
respect thereto or of notice of institution of proceedings for, or the
entry of, a stop order suspending the effectiveness of the Registration
Statement, and if such a stop order should be entered by the
Commission, to make every reasonable effort to obtain the lifting or
removal thereof as soon as possible;
(f) For a period of five years from the date hereof to furnish
to you and to each other Purchaser who may so request (i) as soon as
practicable after the close of each fiscal year a copy of the Company's
annual report to stockholders for such year and (ii) as soon as
available, a copy of each report or definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
stockholders;
<PAGE>
7
(g) During such period of time after the effective date of the
Registration Statement as the Purchasers are required by law to deliver
a prospectus in connection with any sale of the New Securities
contemplated by the Prospectus, if any event relating to or affecting
the Company or of which the Company shall be advised in writing by you
shall occur which in the Company's opinion should be set forth in a
supplement or amendment to the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances when it is
delivered to a Purchaser, to amend or supplement the Prospectus by
either (i) preparing and filing with the Commission and furnishing to
you at the Company's expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the
Prospectus or (ii) making an appropriate filing pursuant to Section 13
or 14 of the Exchange Act, which will supplement or amend the
Prospectus so that, as supplemented or amended, it will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a Purchaser, not misleading; provided that
should such event relate solely to the activities of any of the
Purchasers, then the Purchasers shall assume the expense of preparing
any such amendment or supplement;
(h) During such period of time after the date hereof as a
prospectus relating to the New Securities is required to be delivered
under the Act, to file promptly all documents required to be filed with
the Commission pursuant to Section 13 or 14 of the Exchange Act;
(i) To make generally available to its securityholders (as
contemplated by Rule 158 of the Rules and Regulations or otherwise) a
consolidated earnings statement of the Company and its subsidiaries
covering a twelve-month period beginning the first day of the first
fiscal quarter occurring after the effective date of the Registration
Statement, as soon as reasonably practicable after the termination of
such twelve-month period;
(j) To pay all expenses, fees and taxes, other than transfer
taxes, in connection with (i) the preparation and filing of the
Registration Statement and Prospectus, any documents incorporated by
reference therein at or after the date thereof and any amendments or
supplements
<PAGE>
8
thereto, (ii) the issue, sale and delivery of the New Securities to the
Purchasers, (iii) the qualification of the New Securities for sale and
the determination of their eligibility for investment under laws as
aforesaid, and (iv) the furnishing of the opinions (other than the
opinion of Counsel for the Purchasers) and certificates referred to in
Section 6 hereof, (v) the registration of the New Securities with the
National Association of Securities Dealers, Inc., and (vi) any listing
of the New Securities on any securities exchange;
(k) To pay the fees and expenses of the designated counsel to
the Purchasers (herein called "Counsel for the Purchasers") and to
reimburse the Purchasers for their reasonable out-of-pocket expenses
incurred in contemplation of the performance of this Agreement, in the
event that the New Securities are not delivered to and taken up and
paid for by the Purchasers hereunder for any reason whatsoever except
the failure or refusal of any Purchaser to take up and pay for the New
Securities for some reason not permitted by the terms of this
Agreement. The Purchasers agree to pay the fees and expenses of Counsel
for the Purchasers in any other event;
(l) To apply the net proceeds from the sale of New Securities,
together with other funds of the Company, as set forth under the
heading "Use of Proceeds" in the Prospectus;
(m) If a public offering of the New Securities which is common
stock is to be made (unless the Purchase Agreement shall provide
otherwise), to use its best efforts to list the New Securities on the
New York Stock Exchange; and
(n) If a public offering of the New Securities which is common
stock or is convertible into or exchangeable for common stock is to be
made, not to offer or sell any of the Company's common stock prior to
ten business days after the time of purchase without your consent;
provided, however, that the Company may issue equity securities (i)
pursuant to this Agreement and (ii) pursuant to any stock option,
retirement savings or other benefit or incentive plans maintained for
the Company's officers, directors or employees, or any dividend
reinvestment plan, in effect at the time of purchase.
<PAGE>
9
5. Conditions of Purchasers' Obligations. The several obligations of
the Purchasers hereunder to purchase New Securities are subject to the following
conditions:
(a) That at the time of purchase and additional time of
purchase you shall be furnished with signed copies of the following,
addressed to the Purchasers and with photostatic copies or signed or
conformed counterparts thereof for each of the other Purchasers:
(i) An opinion of counsel to the Company, stating in
substance:
(A) That the Company has been duly
incorporated and is at the time of purchase or
additional time of purchase validly existing as a
corporation in good standing under the laws of the
State of Delaware, with charter power to carry on the
business in which it is not engaged;
(B) That the subsidiaries of the Company
named in the Prospectus are validly organized and
existing under the laws of the respective
jurisdictions in which they are incorporated;
(C) That this Agreement has been duly
authorized, executed and delivered by the Company;
(D) All the outstanding shares of capital
stock of the subsidiaries have been duly and validly
authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in
the Prospectus and Prospectus Supplement, all
outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly
or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the
knowledge of such counsel, any other security
interests, claims, liens or encumbrances;
(E) That the capital stock of the Company
conforms to the description thereof contained in the
Prospectus and Prospectus Supplement;
<PAGE>
10
(F) That the New Securities have been duly
authorized, and, when issued and delivered to and
paid for by the Purchasers pursuant to this
Agreement, will be validly issued, fully paid and
nonassessable;
(G) That the New Securities conform in all
material respects as to legal matters with the
statements concerning the New Securities in the
Prospectus;
(H) That the statements of the law and legal
conclusions in the Prospectus set forth in the
section "The Company and Its Subsidiaries,"
"Description of Common Stock", "Description of
Preferred Stock" and, in the Annual Report of the
Company on Form 10-K incorporated by reference in the
Prospectus (in the sections "[insert appropriate
sections of Form 10-K]"), are to the best of the
knowledge of said counsel true and accurate and do
not omit to state any material facts required to be
stated therein or necessary to make such statements
not misleading;
(I) That (i) the Registration Statement and
the Prospectus and any amendment or supplement
thereto (other than the financial statements and
other financial and statistical information contained
therein, as to which such counsel need express no
opinion) comply as to form with the requirements of
Form S-3 and the Rules and Regulations; and (ii) the
documents incorporated by reference in the Prospectus
at the time the Registration Statement became
effective and at the time of purchase (other than the
financial statements and other financial and
statistical information contained therein, as to
which such counsel need express no opinion) complied
when filed pursuant to the Exchange Act as to form
with the requirements of the Exchange Act and the
Exchange Act Rules and Regulations;
(J) (i) The original order of the Commission
referred to in subsection (c) of Section 2 of this
Agreement has been obtained and, to the best of the
knowledge of said counsel, is in full force and
effect; (ii) any required supple-
<PAGE>
11
mental order of the Commission, referred to in
subsection (c) of Section 2 of this Agreement, has
been duly issued and, to the best of the knowledge of
said counsel, is in full force and effect; and (iii)
no further approval, authorization, consent,
certificate or order of any Federal commission or
regulatory authority is necessary for the
consummation of the transactions contemplated in this
Agreement except such as have been obtained under the
Act and such as may be required under the Blue Sky or
foreign laws of any jurisdiction in connection with
the purchase and distribution of the New Securities
by the Purchasers, and such other approvals specified
in such opinion as have been obtained;
(K) That all contracts of the Company and
its subsidiaries that are required to be filed as
exhibits to the Registration Statement under the Act
and the Rules and Regulations have been so filed, and
that to the extent required all material contracts of
the Company and its subsidiaries have been properly
described in the Registration Statement and
Prospectus; and
(L) That such counsel has participated in
the preparation of the Registration Statement and
Prospectus and no facts have come to the attention of
such counsel to lead such counsel to believe that
either the Registration Statement or the Prospectus
at the time the Registration Statement or any
amendment thereto became effective, or the Prospectus
or any amendment or supplement thereto when the
Prospectus or such amendment or supplement was filed,
or the Prospectus as it may be amended or
supplemented as of the time of purchase, contains an
untrue statement of a material fact or omits to state
a material fact required to be stated therein or
necessary to make the statements therein not
misleading;
(ii) An opinion of Counsel for the Purchasers as to
matters referred to in paragraph (a)(i) of this Section 5
under the subheadings (C),(E),(F),(H) and (J) (except for the
third clause, in lieu of which such counsel shall state that
they are unaware of any
<PAGE>
12
approval of any other regulatory body being so required), and
that the Registration Statement and the Prospectus, as of the
date the Registration Statement became effective (other than
the financial statements and other financial and statistical
information contained therein and Exhibit 12 to the
Registration Statement), appear to comply as to form in all
material respects with the requirements of Form S-3 and the
Rules and Regulations. In addition such counsel shall state
that they have participated in conferences with officers and
other representatives of the Company, counsel for the Company
and representatives of the independent accountants of the
Company at which the contents of the Registration Statement
and Prospectus and related matters were discussed and,
although such counsel is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement and
Prospectus (except as to the matters referred to in paragraph
(a)(i) of this Section 5 under subheading (E)), on the basis
of the foregoing (relying as to materiality to a large extent
upon the opinions of officers, counsel and other
representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that the
Registration Statement or any amendment thereto when such
Registration Statement or amendment became effective or the
Prospectus or any supplement thereto when such supplement was
filed contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances in which they were made, not
misleading (it being understood that such counsel need make
no comment with respect to the financial statements and other
financial and statistical data included in the Registration
Statement or Prospectus and Exhibit 12 to the Registration
Statement); and
(iii) A letter, dated the time of purchase and the
additional time of purchase addressed to the Purchasers from
the independent accountants for the Company to the effect
that:
<PAGE>
13
(A) they are independent accountants within the
meaning of the Act and the Rules and Regulations;
(B) in their opinion, the consolidated financial
statements audited by them and incorporated by reference
in the Registration Statement comply as to form in all
material respects with the applicable accounting
requirements of the Act and the Rules and Regulations
with respect to registration statements on Form S-3;
(C) on the basis of procedures (but not an
examination in accordance with generally accepted
auditing standards) consisting of:
(1) reading the minutes of meetings of the
stockholders and the Board of Directors of the
Company and its consolidated subsidiaries since
December 31 of the most recent preceding year as
set forth in the minute books, but in no event
through a specified date not more than five
business days prior to the date of delivery of such
letter;
(2) reading the unaudited
condensedconsolidated balance sheets, the unaudited
consolidated statements of income and the unaudited
condensed consolidated statements of cash flows for
the periods included in the Company's quarterly
reports on Form 10-Q for the current year (for the
quarters ended March 31, June 30 and September 30,
as the case may be), incorporated by reference in
the Registration Statement;
(3) reading the unaudited consolidated
financial data of the Company and subsidiaries for
the period from the latest quarterly reporting
period to the date of the latest available interim
data, furnished by the Company, officials of the
Company having advised them that no such
consolidated financial data as of any date or for
any period subsequent to such latest date were
available; and
<PAGE>
14
(4) making inquiries of certain officials of
the Company who have responsibility for financial
and accounting matters regarding the specific items
for which representations are requested below;
nothing has come to their attention as a result of
the foregoing procedures that caused them to
believe that:
(a) the unaudited condensed consolidated financial
statements incorporated by reference in the
Registration Statement do not comply as to
form in all material respects with the
applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and
the Exchange Act Rules and Regulations or said
financial statements are not stated on a basis
substantially consistent with that of the
audited financial statements incorporated by
reference in the Registration Statement;
(b) for the period from the date of the latest
quarterly report on Form 10-Q to the date of
the latest available unaudited consolidated
income statement read by such accountants,
there were any decreases, as compared with the
corresponding period of the prior year, in
consolidated total operating revenue, in
operating income before income taxes or in net
income, except in all instances for decreases
which the Registration Statement discloses
have occurred or may occur, or they shall
state any specific decreases;
(c) at the date of the latest available unaudited
consolidated balance sheet read by such
accountants, and at a subsequent specified
date not more than five days prior to the date
of delivery of such letter, there was any
change in common stock or long-term debt of
the Company, or any decrease in total
stockholders' equity as compared with amounts
shown on the latest unaudited condensed
consolidated balance
<PAGE>
15
sheet included in the Registration Statement
(including documents incorporated by
reference), [except as to dividends on common
stock that have been declared in the normal
course of business, amortization of long-term
debt discount or premium, the retirement of
long-term debt to satisfy mandatory sinking
fund requirements, and the issuance of common
stock in connection with the Company's
long-term incentive plans and thrift plans or
dividend reinvestment plans,]1 or, from the
date of the latest available unaudited
condensed consolidated income statement read
by such accountants to the subsequent
specified date, any decreases, as compared
with the corresponding period in the preceding
year, in consolidated total operating
revenues, in operating income before income
taxes or in net income, except in all
instances for changes or decreases which the
Registration Statement (including documents
incorporated by reference) discloses have
occurred or may occur, or except as otherwise
noted in such letter.
(D) the specified dollar amounts (or
percentages derived from such dollar amounts) under
captions specified by the purchasers and agreed to by
such independent accountants contained in the
Registration Statement (including documents
incorporated by reference), in each case to the
extent that such dollar amounts and percentages are
obtained from the general accounting records of the
Company and its subsidiaries subject to the internal
control structure, policies and procedures of the
Company's accounting system or are derived directly
from such records by analysis or computation, is in
agreement with such
- ----------
* Relevant exceptions will be stated.
<PAGE>
16
records or computations made therefrom, except as
otherwise specified in such letter;
(b) That no amendment to the Registration Statement in
the form in which the Registration Statement is effective at
the date of this Agreement, filed subsequent to the execution
of this Agreement, or supplement to the Prospectus
constituting a part of such Registration Statement, filed
subsequently to the execution of this Agreement, shall
contain information substantially different from that
contained in such Registration Statement or Prospectus which
shall be unsatisfactory in substance to you or unsatisfactory
in form to Counsel for the Purchasers;
(c) That prior to the time of purchase or the additional
time of purchase, no stop order with respect to the
effectiveness of the Registration Statement shall have been
issued under the Act by the Commission or proceedings
therefor initiated or threatened; that at the time of
purchase or the additional time of purchase the Registration
Statement, as amended or supplemented, shall not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and that the
Prospectus, as amended or supplemented, shall not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(d) That since the respective dates as of which
information is given in the Registration Statement and
Prospectus and prior to the time of purchase or the
additional time of purchase, no material and unfavorable
change in the condition of the Company and its subsidiaries
on a consolidated basis, financial or otherwise, shall have
taken place (other than as referred to in the Registration
Statement and Prospectus); and the Company will, at the time
of purchase or the additional time of purchase, deliver to
you, with photostatic copies for delivery to each of the
Purchasers, a certificate of its Chairman of the Board or its
President or a Vice President and its Treasurer or an
Assistant Treasurer that such a change has not occurred;
<PAGE>
17
(e) That subsequent to the date of this Agreement and
prior to the time of purchase or the additional time of
purchase there shall not have occurred (i) any downgrading in
the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act); (ii) any
banking moratorium declared by Federal or New York
authorities; or (iii) any outbreak or escalation of major
hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial
national or international calamity or emergency if, in your
reasonable judgment, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the
sale of and payment for the New Securities;
(f) That the Company shall have performed such of its
obligations under this Agreement as are to be performed by
the terms hereof at or before the time of purchase or the
additional time of purchase.
6. Conditions of Company's Obligations. The obligations of the Company
with respect to the delivery of the New Securities shall be subject to the
following conditions:
(a) That prior to the time of purchase, no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act by the Commission or proceedings therefor
initiated or threatened; and
(b) That no order or supplement to any order of the Commission
relating to the issue or sale of the New Securities or to the
application of the proceeds thereof shall contain any conditions or
provisions that are not acceptable to the Company, it being understood
that no order in effect as of the date of this Agreement contains any
such unacceptable conditions or provisions.
7. Termination of Agreement. If a public offering of the New Securities
is to be made by the Purchasers, this Agreement may be terminated at any time
prior to 5:30 P.M., New York City time, on the first business day following the
date of this Agreement (but not after the initial public offering of the New
Securities) by you with the consent of the Purchasers (including you) who have
agreed to purchase in the aggregate
<PAGE>
18
50% or more of the number of shares of the New Securities agreed to be purchased
hereunder, if trading in common stock on the New York Stock exchange shall have
been suspended or limited (other than a temporary suspension in trading to
provide for an orderly market), or minimum prices shall have been established on
such exchange, or a banking moratorium shall have been declared by either
Federal or New York State authorities. This Agreement may also be terminated by
you, with like consent whether or not a public offering of the New Securities
has been made, at any time prior to the time of purchase, if the Company or any
of its subsidiaries shall have sustained a loss by fire, flood, accident or
other calamity that is substantial with respect to the property of the Company
and its subsidiaries as a whole and that, in your judgment, shall render it
inadvisable to proceed with the delivery of the New Securities, whether or not
such loss shall have been insured.
The time of the "initial public offering," for the purposes of this
Section 7, shall mean the time, after the execution of this Agreement, of the
release by you for publication of the first newspaper advertisement referring to
the New Securities, or the time, after the execution of this Agreement, at which
the New Securities are first generally offered by the Purchasers to the public
or to dealers by letter or telegram or otherwise, whichever shall first occur.
If this Agreement is terminated as provided in this Section 7, the
Company and each other Purchaser shall be notified promptly by telephone or
telegram, confirmed by letter. If this Agreement shall not be carried out by any
Purchaser for any reason permitted under this Agreement or if the sale of the
New Securities to the Purchasers as herein contemplated shall not be carried out
because the Company shall be unable in good faith to comply with any of the
terms of this Agreement or if the Company shall not deliver the New Securities
for any reasons specified in Section 7 hereof, the Company shall not be under
any obligation under this Agreement (except that the Company shall remain liable
to the extent provided in Sections 4(j), 4(k), 9 and 11 hereof) and the
Purchasers (except any Purchasers in default hereunder) shall be under no
liability to the Company nor be under any liability under this Agreement to one
another.
8. Indemnity by the Company. The Company agrees to indemnify, defend
and hold harmless each Purchaser and each person, if any, who controls any
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act,
<PAGE>
19
from and against any loss, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Purchaser or person
may incur under the Act or otherwise, insofar as such loss, expense, liability
or claim arises out of or is based upon any alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof) or in the
Prospectus (the term "Prospectus" for the purpose of this Section 8 shall be
deemed to include any preliminary prospectus, the prospectus included in the
Registration Statement at the time it became effective, the Prospectus, the
Prospectus as amended or supplemented and any document incorporated by reference
therein pursuant to Item 12 of Form S-3), or arises out of or is based upon any
alleged omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the statements
made in such Registration Statement not misleading or necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading, except insofar as any such loss, expense,
liability or claim arises out of or is based upon any alleged untrue statement
of a material fact contained in information furnished in writing to the Company
through you for use in such Registration Statement or in such Prospectus or
arises out of or is based upon any alleged omission from information furnished
in writing to the Company on behalf of any Purchaser through you to state a
material fact in connection with such information required to be stated therein
or necessary to make such information when used in such Registration Statement
not misleading, or necessary to make such information when used in such
Prospectus, in the light of the circumstances under which it was used, not
misleading. The Company's agreement to indemnify or reimburse any such Purchaser
or person with respect to any such loss, expense, liability or claim is
expressly conditioned upon its being notified of the action in connection
therewith brought against such Purchaser or person by letter or telegram
addressed to the Company within ten days after the summons or other first legal
process which discloses the nature of the liability or claim shall have been
personally served upon such Purchaser or person (or after he shall have received
notice of such service upon any agent designated by him) but failure so to
notify the Company shall not relieve the Company from any liability which it may
have to such Purchaser or person otherwise than on account of the indemnity
agreement contained in this Section 8. The Company shall be entitled to assume
the investigation of any liability or claim or the defense of any suit brought
to enforce any such liability or claim and
<PAGE>
20
the Purchaser or person against whom such suit is brought shall be entitled to
participate in such investigation and defense. If the Company assumes the
investigation and defense, such investigation and defense shall be conducted by
counsel of good standing chosen by the Company and satisfactory to such
Purchaser or person, and in such case such Purchaser or person shall bear the
expense of his investigation and the fees and expenses of any additional counsel
retained by him, except those incurred after notifying the Company of such claim
and prior to being advised by the Company of its intention to assume such
investigation or defense. If the Company does not assume the investigation of
any such claim or the defense of any such suit, or if the Company shall agree in
writing to pay such fees and expenses, or if such Purchaser or person shall
reasonably conclude that there may be defenses available to it or them which are
different from or in addition to those available to the Company, the Company
will reimburse such Purchaser or person for the reasonable fees and expenses of
any counsel retained by him; provided, however, that in such event the Company
shall be entitled, at its own expense, to participate in the investigation or
defense.
The Company's indemnity agreement contained in this Section 8 and its
warranties and representations in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any Purchaser or
controlling person, and shall survive any termination of this Agreement or the
issue and delivery of the New Securities.
The Company agrees promptly to notify the Purchasers of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the issue and sale of the New
Securities, or such Registration Statement or Prospectus.
9. Warranties of and Indemnity by Purchasers. (a) Each Purchaser
warrants and represents that the information furnished in writing to the Company
through you for use in the Registration Statement or in the Prospectus does not
contain an untrue statement of a material fact and does not omit to state a
material fact in connection with such information required to be stated therein
or necessary to make such information when used in such Registration Statement
not misleading, or necessary to make such information when used in such
Prospectus, in the light of the circumstances under which it was used, not
misleading. Each Purchaser, in addition to any other information furnished to
the Company through you for use in the Regis-
<PAGE>
21
tration Statement and Prospectus, hereby authorizes you to furnish to the
Company the information with regard to the terms of offering of the New
Securities by such Purchaser, for use in the Registration Statement.
(b) Each Purchaser severally agrees to indemnify, defend and hold
harmless the Company and its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, from and against any loss, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company or any such person may incur under the Act or otherwise, insofar as
such loss, expense, liability or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in information furnished
in writing to the Company by such Purchaser or through you for use in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof), or in the prospectus (or in the Prospectus as
amended or supplemented), or arises out of or is based upon any alleged omission
from information furnished in writing to the Company by or on behalf of such
Purchaser through you to state a material fact in connection with such
information required to be stated therein or necessary to make such information
when used in such Registration Statement not misleading, or necessary to make
such information when used in such Prospectus, in the light of the circumstances
under which it was used, not misleading. The agreement of such Purchaser to
indemnify or reimburse the Company or any such person with respect to any such
loss, expense, liability or claim is expressly conditioned upon such Purchaser
being notified of the action in connection therewith brought against the Company
or any such person, by letter or telegram addressed to you, within ten days
after the summons or other first legal process which discloses the nature of the
liability or claim shall have been personally served upon the Company or any
such person (or after the Company or any such person shall have received notice
of such service on any agent designated by the Company or any such person), but
failure so to notify such Purchaser shall not relieve such Purchaser from any
liability which it may have to the Company or any such person otherwise than on
account of the indemnity agreement contained in this Section 9(b). Such
Purchaser shall be entitled to assume the investigation of any liability or
claim and the defense of any suit brought to enforce any such liability or
claim, if such liability or claim is based solely upon such alleged misstatement
or omission on the part of such Purchaser, and the Company or any person against
whom such ac-
<PAGE>
22
tion is brought shall be entitled to participate in such investigation and
defense. If such Purchaser shall be entitled to assume and does assume the
investigation and defense, such investigation and defense shall be conducted by
counsel of good standing chosen by such Purchaser and satisfactory to the
Company or such person, and in such case the Company or such person shall bear
the expense of its investigation and the fees and expenses of any additional
counsel retained by it except those incurred after notifying such Purchaser of
such claim and prior to being advised by such Purchaser of its intention to
assume such investigation or defense. If such Purchaser shall be entitled to
assume but does not assume the investigation of any such claim or the defense of
any such suit, of if such Purchaser shall agree in writing to pay such fees and
expenses, or if the Company or such person shall reasonably conclude that there
may be defenses available to it or him which are different from or in addition
to those available to such Purchaser, such Purchaser will reimburse the Company
or such person for the reasonable fees and expenses of any counsel retained by
it; provided, however, that in such event, such Purchaser shall be entitled, at
its own expense, to participate in the investigation or defense.
The indemnity agreement on the part of such Purchaser contained in this
Section 9(b) and the warranties and representations of such Purchaser contained
in this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or such person, and shall
survive any termination of this Agreement or the issue and delivery of the New
Securities.
Each Purchaser agrees promptly to notify the Company and each other
Purchaser of the commencement of any litigation or proceedings against such
Purchaser in connection with the issue and sale of the New Securities, or such
Registration Statement or Prospectus.
10. Contribution by the Company and the Purchasers. (a) If the
indemnification provided for in Section 8 or Section 9 is unavailable to an
indemnified party under such Sections in respect of any losses, expenses,
liabilities or claims referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
expenses, liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Purchasers on the
<PAGE>
23
other hand from the offering of the New Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Purchasers on the other in connection with the statements or
omissions which resulted in such losses, expenses, liabilities or claims, as
well as any other relevant equitable consideration. The relative benefits
received by the Company on the one hand and the Purchasers on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Company bear to the underwriting discounts and commissions
received by the Purchasers, in each case as set forth in the table on the cover
page of the Prospectus or Prospectus Supplement with respect to the New
Securities if the same be so set forth. The relative fault of the Company on the
one hand and of the Purchasers on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement of
a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Purchasers through you
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any claim or action.
(b) The Company and Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation (even if the Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10, no Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the New Securities purchased by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not
<PAGE>
24
guilty of such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 10 are several in proportion to their
respective underwriting commitments and not joint.
(c) The contribution agreement contained in this Section 10 shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Purchaser, or any person who controls any Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors and officers or any person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the New Securities.
11. Default by a Purchaser. If any one or more Purchasers shall fail to
purchase and pay for any of the New Securities agreed to be purchased by such
Purchaser or Purchasers hereunder and such failure to purchase shall constitute
a default in the performance of its or their obligations under this Agreement,
the remaining Purchasers shall be obligated severally to take up and pay for (in
the respective proportions which the number of Firm New Securities set forth
opposite their names in Schedule I bears to the aggregate number of Firm New
Securities set forth opposite the names of all the remaining Purchasers) the New
Securities which the defaulting Purchaser or Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate number of Firm
New Securities which the defaulting Purchaser or Purchasers agreed but failed to
purchase shall exceed 10% of the aggregate number of New Securities set forth in
Schedule I, the remaining Purchasers shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the New Securities, and if
such nondefaulting Purchasers do not purchase all the New Securities, this
Agreement will terminate without liability to any nondefaulting Purchaser or the
Company. In the event of a default by any Purchaser as set forth in this Section
11, the execution of the Purchase Agreement shall be postponed for such period,
not exceeding seven days, as the Representative shall determine in order that
the required changes in the Registration Statement and the Prospectus Supplement
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Purchaser of its liability, if any,
to the Company and any nondefaulting Purchaser for damages occasioned by its
default hereunder.
<PAGE>
25
12. Notices. All notices hereunder shall, unless otherwise expressly
permitted, be in writing and be delivered at or mailed to the following address,
or be sent by telegram to the following address: if to the Purchasers or you, to
you at your address as it appears in the Purchase Agreement, and if to the
Company, to the Company at 625 Liberty Avenue, CNG Tower, Pittsburgh,
Pennsylvania 15222-3199.
13. Parties in Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Purchasers and the Company, and the
directors, officers and controlling persons referred to in Sections 8, 9 and 10
hereof, and their respective successors, assigns, executors and administrators
and no other person shall acquire or have any right under or by virtue of this
Agreement.
14. Section Headings. The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not part of this
Agreement. The term "Purchasers", "persons", "firms" and "corporations" as used
herein shall include the singular of such terms as well as the plural. The term
"successor" to any Purchaser shall not include any subsequent holder of the New
Securities merely by reason of such holding.
15. Construction. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts and it is not necessary that the signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
<PAGE>
CONSOLIDATED NATURAL GAS COMPANY
PURCHASE AGREEMENT
EQUITY SECURITIES
New York, New York
[Date]
[Name(s) of Purchaser(s) or
Name(s) of Co-Manager(s), if any
As Representative of the several
Purchasers]
[Address]
Dear Sirs:
Re: Equity Securities covered by Registration
Statement No. 333-[ ] (the "Registration Statement")
--------------------------------------------------------
Consolidated Natural Gas Company, a Delaware corporation (the
"Company"), subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, proposes and agrees to sell to
each purchaser named in Schedule I hereto (together, the "Purchasers"), for whom
you (the "Representative") are acting as representative, ________ shares of
________, $___ par value (the "Firm New Securities"). Each Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$________ per share, the amount of the Firm New Securities set forth opposite
such Purchaser's name in Schedule I hereto. The Firm New Securities will be
offered as set forth in the Prospectus Supplement relating to such New
Securities.
The Company also proposes to grant to the Purchasers an option to
purchase in the aggregate, up to an additional ________ shares of the New
Securities, (the "Additional New Securities") at the same purchase price per
share as above agreed. Said option may be exercised in whole or in part at any
time (but not more than once), on or before the 30th day after the date of the
Prospectus Supplement upon written or telegraphic notice by the Representative
to the Company setting forth the number of shares of the Additional New
Securities as
<PAGE>
2
to which the several Purchasers are exercising the option and the settlement
date.
The New Securities will have the following terms:*
[Dividend preferences:]
[Liquidation preferences:]
[Voting Rights]:
[Redemption Provisions:]
All of the provisions contained in the document entitled "Consolidated
Natural Gas Company Standard Purchase Agreement Provisions -- Equity New
Securities," a copy of which has been filed as Exhibit 1.1 to the Registration
Statement and has been previously furnished to you, are hereby incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein.
[The payment for the New Securities shall be made in ____________
funds.]
[The date on which the New Securities shall be purchased shall be
___________.]
[The place at which the New Securities shall be purchased shall be
___________.]
[Notices to the [Purchasers] [Representative] shall be sent to the
following addresses:]
[We represent that we are authorized to act for the several Purchasers
named in Schedule I hereto in connection with this financing and any action
under this Agreement by any of us will be binding upon all the Purchasers.]
- ----------
* Complete, if applicable. To be either described in the Prospectus and
Prospectus Supplement for the New Securities or included in this Agreement.
<PAGE>
3
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Purchasers.
Very truly yours,
CONSOLIDATED NATURAL GAS COMPANY
By:
-----------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
[Name(s) of Purchaser(s) or
Name(s) of Representative, if any]
By: _____________________________
By: _____________________________
[For themselves and the other several
Purchasers named in Schedule I to the
foregoing agreement.]
<PAGE>
SCHEDULE I
Number of Firm
New Securities
Purchaser to be Purchased
- --------- ---------------
$
Total................................... $
============
Consolidated Natural Gas Company
CNG Tower
625 Liberty Avenue
Pittsburgh, PA 15222-3199
(412) 227-1000
April 15, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Consolidated Natural Gas Company
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
This opinion is rendered in connection with the proposed issue and sale
by Consolidated Natural Gas Company, a Delaware corporation ("Consolidated"), of
securities of Consolidated (the "Securities") consisting of (i) debt securities
(the "Debt Securities"), (ii) common stock, par value $2.75 per share, including
common stock purchase rights (the "Common Stock") and (iii) preferred stock, par
value $100.00 per share (the "Preferred Stock" and together with the Common
Stock, the "Equity Securities") to be issued from time to time pursuant to Rule
415 under to the Securities Act of 1933, as amended (the "Act"), for an
aggregate initial offering price of up to $1,000,000,000, as described in
Consolidated's Registration Statement on Form S-3 (the "Registration
Statement"), including the prospectus constituting a part thereof, to be filed
with the Securities and Exchange Commission (the "Commission"), relating to the
registration of the Securities pursuant the Act.
As counsel for Consolidated, we have examined, among other things, the
following: the certificate of incorporation and by-laws of Consolidated; the
declaration on Form U-1, as amended, st SEC File No. 70-8667 (the
"Declaration"); the Commission Order dated March 28, 1996 (HCAR 26500) (the
"1996 Order"), File No. 70-8667, issued pursuant to the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"); the Registration Statement to
which this opinion is an exhibit; the exhibits to the Declaration and
Registration Statement; the indenture dated as of April 1, 1995 (the
"Indenture") between Consolidated and United States Trust Company of New York,
as Trustee; and the corporate records and proceedings relating to the issuance
of such Securities.
<PAGE>
-2-
Consolidated's 1935 Act authorization for the sale and issuance of the
Securities in File No. 70-8667 extends through March 31, 2001.
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post effective
amendments), will have become effective; (ii) a prospectus supplement will have
been prepared and filed with the Commission describing the Securities offered
thereby; (iii) all Securities will be issued and sold in compliance with the
1996 Order and all other applicable federal and state securities laws and in the
manner stated in the Registration Statement and the appropriate prospectus
supplement; and (iv) a definitive purchase, underwriting or similar agreement
with respect to any Securities offered will have been duly authorized and
validly executed and delivered by Consolidated and the other parties thereto.
We are of the opinion that:
1. With respect to shares of Common Stock, when certificates
representing the shares of Common Stock have been duly executed, countersigned,
registered and delivered either (a) in accordance with the applicable definitive
purchase, underwriting or similar agreement approved by the Board of Directors
of Consolidated (the "Board") upon payment of the consideration therefor (not
less that than the par value of the Common Stock) provided for therein, or (b)
upon conversion, exchange or exercise of any other Security in accordance with
the terms of such Security or the instrument governing such Security providing
for such conversion, exchange or exercise as approved by the Board, for the
consideration approved by the Board therefor (not less than the par value of the
Common Stock), the shares of Common Stock will be duly authorized, validly
issued, fully paid and non-assessable.
2. With respect to shares of Preferred Stock, when certificates
representing the shares of Preferred Stock have been duly executed,
countersigned, registered and delivered either (a) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor (not less than the par
value of the Preferred Stock) provided for therein, or (b) upon conversion,
exchange or exercise of any other Security in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion, exchange or exercise as approved by the Board, for the consideration
approved by the Board therefor (not less than the par value of the Preferred
Stock), the shares of Preferred Stock will be duly authorized, validly issued,
fully paid and non-assessable.
3. With respect to the Debt Securities to be issued under the
Indenture, when (i) the Board has taken all necessary corporate action to
approve the issuance and terms of such Debt Securities, the terms of the
offering thereof and related matters; and (ii) such Debt Securities have been
duly executed, authenticated, issued and delivered
<PAGE>
-3-
in accordance with the provisions of the Indenture and in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor provided for therein, such
Debt Securities will be legally issued and will constitute valid and binding
obligations of Consolidated, enforceable against Consolidated in accordance with
their terms, except as such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization, fraudulent transfer or other law relating to or
affecting creditors' rights generally and general principles of equity and will
be entitled to the benefits of the Indenture.
4. The order of the Commission referred to in subsection (c) of Section
2 of the Consolidated Natural Gas Company Standard Purchase Agreement -- Debt
Securities and subsection (c) of Section 2 of the Consolidated Natural Gas
Company Standard Purchase Agreement -- Equity Securities has been obtained and
is, to the best of our knowledge, in full force and effect. We are not aware of
any approval of any other regulatory body being legally required for the issue
and sale of the Debt Securities by Consolidated as contemplated by the Purchase
Agreement.
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 17 of the Notes to the Financial Statements in Consolidated's Annual
Report on Form 10-K for the year ended December 31, 1996, 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,
/s/ S. E. Williams
-------------------------
S. E. Williams
Senior Vice President and
General Counsel
/s/ N. F. Chandler
--------------------------
N. F. Chandler
General Attorney
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 18, 1997 appearing on page 17 of Appendix I to the
Consolidated Natural Gas Company proxy statement for the 1997 annual
meeting of stockholders which is incorporated in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996. We also
consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania 15219-9954
April 16, 1997
[LETTERHEAD OF RALPH E. DAVIS ASSOCIATES, INC.]
CONSENT OF INDEPENDENT GEOLOGISTS
We hereby consent to the incorporation by reference into (i) the
Registration Statement on Form S-3 to be filed on or about this date with the
Securities and Exchange Commission, relating to the registration, pursuant to
the requirements of the Securities Act of 1933, as amended, of a $950,000,000
amount of securities of Consolidated Natural Gas Company and (ii) the prospectus
relating to such Registration Statement, of our estimates of company-owned oil
and gas reserves and total gas supply contained in Consolidated Natural Gas
Company's Annual Report on Form 10-K for the year ended December 31, 1996. We
also consent to any reference to us under the heading "EXPERTS" as to the
matters and to the extent set forth in the prospectus and in Part II of the
Registration Statement, and to the filing of this Consent as an exhibit to said
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 said registrant,
Consolidated Natural Gas Company.
RALPH DAVIS ASSOCIATES, INC.
/s/ Thomas N. Sudderth
---------------------------
Thomas N. Sudderth
President
Dated: April 16, 1997
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 universal shelf registration statement or statements
("Registration Statement") for the registration under said Act of securities,
which may consist of common stock, par value $2.75 per share, preferred stock,
par value $100 per share, or debt securities, up to an aggregate amount equal to
$1,000,000,000 less the amount of securities remaining for issuance under the
Company's current shelf registration (Registration Statement No. 33-52585) at
the time the Registration Statement is filed, hereby constitutes and appoints
George A. Davidson, Jr. 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 Statement and any and all amendments thereto, 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 requested 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 hands and
seals this 10th day of December, 1996.
/s/ William S. Barrack, Jr. /s/ Margaret A. McKenna
- --------------------------------- -------------------------------------
William S. Barrack, Jr., Margaret A. McKenna, Director
Director
/s/ J.W. Connolly /s/ Steven A. Minter
- --------------------------------- -------------------------------------
J.W. Connolly, Director Steven A. Minter, Director
/s/ George A. Davidson, Jr. /s/ Walter R. Peirson
- --------------------------------- -------------------------------------
George A. Davidson, Jr., Walter R. Peirson, Director
Chairman of the Board, Chief
Executive Officer and Director
/s/ Ray J. Groves /s/ Richard P. Simmons
- --------------------------------- -------------------------------------
Ray J. Groves, Director Richard P. Simmons, Director
/s/ Paul E. Lego /s/ D.M. Westfall
- --------------------------------- -------------------------------------
Paul E. Lego, Director D.M. Westfall, Senior Vice President
and Chief Financial Officer
/s/ S.R. McGreevy /s/ Lois Wyse
- --------------------------------- -------------------------------------
S.R. McGreevy, Vice President, Lois Wyse, Director
Accounting and Financial Control
