As filed with the Securities and Exchange Commission on June 25, 1997
Registration No. 333-25347
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
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)
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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
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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. |_|
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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
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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.
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. 3 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.
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Prospectus Subject to Completion, Dated June 25, 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. Each
share of Common Stock issued hereunder shall be accompanied by a Right as
described in "Description of Common Stock-Common Stock Purchase Rights". 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.
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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.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and information with the Securities and Exchange
Commission, Washington, D.C. (the "Commission"). Certain information, as of
particular dates, concerning the directors and officers of the Company, their
remuneration and any material interests of such persons in transactions with the
Company, is disclosed in proxy statements distributed to shareholders and filed
with the Commission. The Company has filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus omits certain
information contained in the Registration Statement. For such information,
reference is made to the Registration Statement and the exhibits thereto.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to herein are not necessarily complete. With respect
to each such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed to
be qualified in its entirety by such reference.
The Registration Statement, as well as the reports, proxy statements and
other information filed by the Company with the Commission in accordance with
the Exchange Act, may be inspected without charge at the principal office of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and is also available
for inspection and copying at the regional offices of the Commission located at
Seven World Trade Center, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
maintains a Web Site (http:/www.sec.gov) that contains such reports, proxy
statements and other information. Such reports, proxy statements and other
information also may be inspected at the office of the New York Stock Exchange,
20 Broad Street, New York, New York 10005, on which certain of the Company's
securities are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which were filed by the Company with the
Commission (File No. 1- 3196), are incorporated in this Prospectus by reference:
(1) the Company's Annual Report on Form 10-K for the year ended December
31, 1996; and
(2) the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997.
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.
Distribution
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. During 1996, the distribution business accounted for 50% and
47% of the System's total operating revenues and operating income before income
taxes, respectively.
Transmission
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. During 1996, the transmission business accounted for 10%
and 32% of the System's total operating revenues and operating income before
income taxes, respectively.
Exploration and Production
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. This segment of the business also includes the gas and oil production
activities of CNG Transmission Corporation. During 1996, the exploration and
production business accounted for 8% and 24% of the System's total operating
revenues and operating income before income taxes, respectively.
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Energy Marketing Services
CNG Energy Services Corporation conducts activities in the unregulated
energy area, including gas and electric power marketing, and invests in power
generation facilities. During 1996, the energy marketing services business
accounted for 32% and (2)% of the System's total operating revenues and
operating income before income taxes, respectively.
International Activities
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. During 1996, international activities
and other minor lines of business accounted for less than 1% and (1)% of the
System's total operating revenues and operating income before income taxes,
respectively.
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 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 does 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 Indenture does not restrict the amount of additional unsecured debt (whether
senior or subordinated) or secured debt which the Company may incur. See
"Certain Covenants" below for possible limitations on the Company's ability to
create Liens (as defined) and enter into Sale-Leaseback Transactions (as
defined). The Indenture also does not limit the amount which the Company may
apply to the payment of dividends or the redemption or purchase of shares of its
stock. Unless the Securities Resolution establishing the terms of Debt
Securities otherwise provides, the Indenture and the Debt Securities do not
contain any
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covenants which would afford Holders of Debt Securities protections in the event
of a highly leveraged transaction. If such covenants are included in the
Securities Resolution with respect to any offered Debt Securities, such
covenants will be described in the related Prospectus Supplement.
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)
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) See "Book-Entry Securities" below for the terms of
the depositary arrangement.
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
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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-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.
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 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
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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 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
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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)
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)
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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 (in which event the Prospectus Supplement for such series
shall so indicate), 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
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.
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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 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
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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 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
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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.
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
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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
Each holder of the Company's Common Stock, including shares issued pursuant
to this Prospectus, holds one right ("Right") for each outstanding share of
Common Stock held. Rights are 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 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 February 28, 1996 (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. 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
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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 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
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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.
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. As of the date hereof, no shares of Preferred Stock are issued or
outstanding.
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;
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(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 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.
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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
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")
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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.
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.
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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.
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
19
<PAGE>
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.
20
<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 $1,000,000,000
buy, 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..................................... 4 Common Stock
Certain Terms and Descriptions
of Debt Securities and Indenture ................. 4
Description of Common Stock......................... 11
Description of Preferred Stock ..................... 15
Book-Entry Securities............................... 17
Plan of Distribution................................ 19
Legal Opinions...................................... 19
Experts............................................. 20 , 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................................................... 40,000
Other Miscellaneous Expenses................................ 15,121
Total Expenses........................................ $ 770,000
- ----------
(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* - Form T-1: Statement of Eligibility of Trustee.
- ----------------
* Filed herewith.
** Previously filed.
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.
(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
II-5
<PAGE>
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 amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on the
25th day of June, 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 amendment
to the 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 June 25, 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
)------------------
)D.M. Westfall
J.W. Connolly Director )As Attorney-in-Fact
)June 25, 1997
R.J. Groves Director )
)
P.E. Lego Director )
)
M.A. McKenna Director )
)
S.A. Minter Director )
)
R.P. Simmons Director )
II-8
Consolidated Natural Gas Company
CNG Tower
625 Liberty Avenue
Pittsburgh, PA 15222-3199
(412) 227-1000
June 25, 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 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 (File No. 333-25347, which as amended also
constitutes Post-Effective Amendment No. 3 to Registration Statement on Form
S-3, File No. 33-52585) (the "Registration Statement"), including the prospectus
constituting a part thereof, filed with the Securities and Exchange Commission
(the "Commission"), relating to the registration of the Securities pursuant to
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, at 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
<PAGE>
2
Trustee; and the corporate records and proceedings relating to the issuance of
such Securities.
Consolidated's 1935 Act authorization for the sale and issuance of the
Securities in File No. 70-8667 extends through March 31, 2001.
We are of the opinion that:
1. With respect to shares of Common Stock, when (a) the Commission shall
have permitted the Registration Statement to become effective, as
post-effectively amended, and (b) the Board of Directors, or a committee
thereof, shall have determined the number of shares of Common Stock to be
offered and sold and approved the terms and conditions of the sale of such
Common Stock in the manner contemplated by the Registration Statement, said
Common Stock will be duly authorized and, upon the issuance and sale thereof by
Consolidated and receipt therefor by Consolidated of payment of not less than
par value thereof, as contemplated by the Registration Statement, said Common
Stock will be legally issued, validly outstanding, fully paid and nonassessable,
and the holders thereof will be entitled to the rights and privileges
appertaining thereto, as set forth in Consolidated's Certificate of
Incorporation, as amended.
2. With respect to shares of Preferred Stock, when (a) the Commission shall
have permitted the Registration Statement to become effective, as
post-effectively amended, (b) the Board of Directors, or a committee thereof,
shall have determined, through the authorization of a preferred stock
designation ("Preferred Stock Designation"), the number of shares of Preferred
Stock to be offered and sold and approved the terms and conditions of the sale
of such Preferred Stock in the manner contemplated by the Registration
Statement, and (c) the Preferred Stock Designation shall have been duly filed
with the Secretary of State of the State of Delaware, said Preferred Stock will
be duly authorized and, upon the issuance and sale thereof by Consolidated and
receipt therefor by Consolidated of payment of not less than par value thereof,
as contemplated by the Registration Statement, said Preferred Stock will be
legally issued, validly outstanding, fully paid and nonassessable, and the
holders thereof will be entitled to the rights and privileges appertaining
thereto, as set forth in Consolidated's Certificate of Incorporation, as
amended, including the Preferred Stock Designation.
3. With respect to the Debt Securities to be issued under the Indenture,
when (a) the Commission shall have permitted the Registration Statement to
become effective, as post-effectively amended, and (b) the Board of Directors,
or a com-
<PAGE>
3
mittee thereof, shall have determined, through adoption of a securities
resolution ("Securities Resolution"), the principal amount of Debt Securities to
be offered and sold and approved the terms and conditions of the sale of such
Debt Securities in the manner contemplated by the Registration Statement, said
Debt Securities will be duly authorized and, upon execution, authentication,
issuance and delivery thereof and payment therefor, as contemplated by the
Registration Statement, said Debt Securities will be legally issued and validly
outstanding and will be binding obligations of Consolidated, in accordance with
their terms and the terms of the Securities Resolution relating thereto.
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 Securities by Consolidated as contemplated by the Registration
Statement.
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 will not have a material effect on Consolidated's financial
position, results of operations or cash flows.
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 Amendment No. 1 to 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
June 25, 1997
Exhibit 25
FORM T-1
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) _______
------------------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-3818954
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
114 West 47th Street 10036-1532
New York, NY (Zip Code)
(Address of principal
executive offices)
------------------
Consolidated Natural Gas Company
(Exact name of obligor as specified in its charter)
Delaware 13-0596475
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
CNG Tower 15222-3199
625 Liberty Avenue (Zip Code)
Pittsburgh, Pennsylvania
(Address of principal executive offices)
------------------
Debt Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:
Consolidated Natural Gas Company currently is not in default under any of
its outstanding securities for which United States Trust Company of New
York is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10,
11, 12, 13, 14 and 15 of Form T-1 are not required under General
Instruction B.
16. List of Exhibits
T-1.1 -- Organization Certificate, as amended, issued by the
State of New York Banking Department to transact business
as a Trust Company, is incorporated by reference
to Exhibit T-1.1 to Form T-1 filed on September 15, 1995
with the Commission pursuant to the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990
(Registration No. 33-97056).
T-1.2 -- Included in Exhibit T-1.1.
<PAGE>
2
T-1.3 -- Included in Exhibit T-1.1.
T-1.4 -- The By-Laws of United States Trust Company of New York,
as amended, is incorporated by reference to Exhibit T-1.4
to Form T-1 filed on September 15, 1995 with the
Commission pursuant to the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990
(Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b) of
the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTE
As of May 22, 1997, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
------------------
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 22nd day
of May, 1997.
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By: /s/ John Guiliano
-----------------------
John Guiliano
Vice President
<PAGE>
Exhibit T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission 450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /s/ Gerard F. Ganey
-----------------------
Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
DECEMBER 31, 1996
(IN THOUSANDS)
ASSETS
Cash and Due from Banks $75,754
Short-Term Investments 276,399
Securities, Available for Sale 925,886
Loans 1,638,516
Less: Allowance for Credit Losses 13,168
------------
Net Loans 1,625,348
Premises and Equipment 61,278
Other Assets 120,903
-----------
Total Assets $3,085,568
LIABILITIES
Deposits:
Non-Interest Bearing $ 645,424
Interest Bearing 1,694,581
----------
Total Deposits 2,340,005
Short-Term Credit Facilities 449,183
Accounts Payable and Accrued Liabilities 139,261
-----------
Total Liabilities $2,928,449
==========
STOCKHOLDER'S EQUITY
- --------------------
Common Stock 14,995
Capital Surplus 42,394
Retained Earnings 98,926
Unrealized Gains (Losses) on Securities 804
Available for Sale, Net of Taxes
Total Stockholder's Equity 157,119
-----------
Total Liabilities and Stockholder's $3,085,568
Equity ===========
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory authority
and is true to the best of my knowledge and belief.
Richard E. Brinkmann, SVP & Controller
April 9, 1997
