<PAGE>
As filed with the Securities and Exchange Commission on October 22, 1996
REGISTRATION NO. 333-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-55153
POST-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION STATEMENT NO. 33-44327
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT, POST-EFFECTIVE AMENDMENT NO. 1
AND POST-EFFECTIVE AMENDMENT NO. 3
UNDER THE SECURITIES ACT OF 1933
---------------
EL PASO NATURAL GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 74-0608280
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
BRITTON WHITE, JR.
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL
ONE PAUL KAYSER CENTER ONE PAUL KAYSER CENTER
100 NORTH STANTON STREET 100 NORTH STANTON STREET
EL PASO, TEXAS 79901 EL PASO, TEXAS 79901
(915) 541-2600 (915) 541-2600
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE,
TELEPHONE NUMBER, INCLUDING AREA AND TELEPHONE NUMBER, INCLUDING
CODE, OF REGISTRANT'S PRINCIPAL AREA CODE, OF AGENT FOR SERVICE)
EXECUTIVE OFFICES)
---------------
COPIES TO:
GARY PAUL COOPERSTEIN, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
(212) 859-8000
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions and other factors.
---------------
If the only securities being registered on this form are to be 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 of 1933, 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 of 1933, 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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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(1)(2) PRICE(1)(2) FEE(1)
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<S> <C> <C> <C> <C>
Debt Securities..........
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Preferred Stock..........
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Common Stock.............
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Total................... $800,000,000 100% $800,000,000 $258,336(3)
</TABLE>
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(1) There are being registered hereunder such presently indeterminate
principal amount or number of Debt Securities, shares of Preferred Stock
and shares of Common Stock with an aggregate initial offering price not to
exceed $800,000,000. Pursuant to Rule 457(o) under the Securities Act of
1933, which permits the registration fee to be calculated on the basis of
the maximum offering price of all securities listed, the table does not
specify by each class information as to the amount to be registered,
proposed maximum offering price per unit or proposed maximum aggregate
offering price.
(2) Estimated solely for the purpose of determining the registration fee.
<PAGE>
(3) Of which $137,123 has already been paid (the "Previously Paid Registration
Fee"). The Previously Paid Registration Fee relates to $400,000,000
aggregate initial offering price of Debt Securities, Common Stock and
Preferred Stock of the registrant (the "Previously Registered Securities")
registered under two Registration Statements on Form S-3 (Nos. 33-44327
and 33-55153) which were declared effective on January 9, 1992 and March
10, 1995, respectively. The Previously Registered Securities are being
carried forward to this Registration Statement pursuant to Rule 429 under
the Securities Act.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this registration statement is a combined prospectus relating also
to each of Registration Statement on Form S-3 (No. 33-44327) and Registration
Statement on Form S-3 (No. 33-55153) previously filed by El Paso Natural Gas
Company and declared effective. This registration statement, which is a new
registration statement, also constitutes Post-Effective Amendment No. 3 to the
Registration Statement on Form S-3 (No. 33-44327) and Post-Effective Amendment
No. 1 to Registration Statement on Form S-3 (No. 33-55153), and each such
Post-Effective Amendment shall hereafter become effective concurrently with
the effectiveness of this registration statement and in accordance with
Section 8(c) of the Securities Act of 1933. This registration statement and
the registration statements amended hereby are collectively referred to herein
as the "Registration Statement".
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED OCTOBER 22, 1996
PROSPECTUS
EL PASO NATURAL GAS COMPANY
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
-----------
El Paso Natural Gas Company ("EPG" or the "Company") may offer and sell from
time to time in one or more series its (i) unsecured debt securities consisting
of notes, debentures or other evidences of indebtedness (the "Debt
Securities"), (ii) shares of preferred stock, $.01 par value (the "Preferred
Stock"), and (iii) shares of common stock, $3.00 par value (the "Common
Stock"). The Debt Securities, the Preferred Stock and the Common Stock offered
hereby are collectively hereinafter referred to as the "Securities". The
Securities will be limited to an aggregate initial public offering price not to
exceed $800,000,000, or, in the case of Debt Securities, the equivalent thereof
in one or more foreign currencies, including composite currencies. The
Securities may be offered, separately or together, in separate series, in
amounts, at prices and on terms to be determined at the time of sale and set
forth in a supplement to this Prospectus (a "Prospectus Supplement").
Certain specific terms of the particular Securities in respect of which this
Prospectus is being delivered will be set forth in a related Prospectus
Supplement, including, where applicable, (i) in the case of Debt Securities,
the specific designation, aggregate principal amount, authorized denominations,
maturities, interest rate or rates (which may be fixed or variable), the date
or dates on which interest, if any, shall be payable, the place or places where
principal of and premium, if any, and interest, if any, on such Debt Securities
of the series will be payable, terms of optional or mandatory redemption or any
sinking fund or analogous provisions, currency or currencies, or currency unit
or currency units of denomination and payment if other than U.S. dollars, the
initial public offering price, terms relating to temporary or permanent global
securities, provisions regarding convertibility, if any, provisions regarding
registration of transfer or exchange, the proceeds to EPG and other special
terms; (ii) in the case of Preferred Stock, the specific designations, the
number of shares, dividend rights (including, if applicable, the manner of
calculation thereof), and any liquidation, redemption, conversion, voting and
other rights, the initial public offering price and other special terms; and
(iii) in the case of Common Stock, the terms of the offering and sales thereof.
The Securities may be offered and sold to or through underwriters, dealers,
or agents as designated from time to time, or through a combination of such
methods, and also may be offered and sold directly to one or more other
purchasers. See "Plan of Distribution". The names of, and the principal amounts
or number of shares to be purchased by, underwriters, dealers or agents, and
the compensation of such underwriters, dealers or agents, including any
applicable fees, commissions, and discounts, will be set forth in the related
Prospectus Supplement. No Securities may be sold without delivery of a
Prospectus Supplement describing such series or issue of Securities and the
method and terms of offering thereof.
-----------
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 , 1996
<PAGE>
AVAILABLE INFORMATION
EPG is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 7 World
Trade Center, Suite 1300, New York, New York 10048; and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material also may be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
Such material also may be accessed electronically by means of the Commission's
home page on the Internet at http://www.sec.gov. EPG's Common Stock is listed
on the New York Stock Exchange, and reports, proxy statements and other
information concerning EPG may be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement, of which this Prospectus is a part, filed with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). Reference is made to such Registration Statement for further
information with respect to EPG and the Securities offered hereby. Statements
contained herein concerning the provisions of documents are necessarily
summaries of such documents, and each statement is qualified in its entirety
by reference to the copy of the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by EPG pursuant
to the Exchange Act are incorporated herein by reference:
1. EPG's Annual Report on Form 10-K for the fiscal year ended December 31,
1995;
2. EPG's Quarterly Report on Form 10-Q for the quarterly periods ended March
31, 1996, as amended pursuant to a Form 10-Q/A filed May 15, 1996, and June
30, 1996;
3. EPG's Proxy Statement for the Annual Meeting of Stockholders held on April
30, 1996; and
4. EPG's Current Reports on Form 8-K dated May 2, 1996, June 28, 1996 and
October 22, 1996.
All documents filed by EPG 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 of the Securities offered hereby shall be deemed
to be incorporated by reference in this Prospectus and to be part hereof from
the date of filing of such documents. Any statement contained 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 therein or in any other 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.
EPG will provide without charge to each person, including any beneficial
owner of a Security, to whom a copy of this Prospectus is delivered, upon
written or oral request of such person, a copy of any or all documents
incorporated by reference in this Prospectus (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents). Written requests for such copies should be directed to the
Vice President, Investor and Public Relations, El Paso Natural Gas Company,
One Paul Kayser Center, 100 North Stanton Street, El Paso, Texas 79901
(telephone (915) 541-2600).
2
<PAGE>
THE COMPANY
GENERAL
EPG is a Delaware corporation which was incorporated in 1928. In recognition
of changes in the natural gas industry and the manner in which EPG manages its
businesses, and in order to facilitate a more detailed understanding of the
various activities in which it engages, EPG began doing business under the
name El Paso Energy Corporation (effective April 22, 1996) and has segregated
its business activities into three business segments: (i) natural gas
transmission, (ii) field and merchant services, and (iii) corporate and other.
The natural gas transmission segment includes one of the nation's largest
mainline natural gas transmission systems, connecting natural gas supply
regions in New Mexico, Texas, Oklahoma, and Colorado to markets in California,
Nevada, Arizona, New Mexico, Texas, and northern Mexico. The transmission
system consists of approximately 10,000 miles of pipeline and is connected to
one of the most prolific supply basins in the nation, the San Juan Basin of
northern New Mexico and southern Colorado.
The field and merchant services segment provides field services, including
gathering, products extraction, dehydration, purification and compression. In
addition, the field and merchant services segment purchases, markets and
trades natural gas, natural gas liquids, power and other energy commodities,
and provides risk management activities associated with these commodities.
This segment has approximately 7,900 miles of gathering lines and 64,000
horsepower of compression located in the San Juan, Anadarko and Permian
Basins, and in East Texas and Louisiana.
The corporate and other segment includes El Paso Energy International,
through which EPG conducts its international activities, and other corporate
activities.
EPG's principal executive offices are located at One Paul Kayser Center, 100
North Stanton Street, El Paso, Texas 79901, and its telephone number at that
address is (915) 541-2600. Upon consummation of the Merger (as defined below),
if it occurs, EPG's principal executive offices will be located at
, Houston, Texas, and its telephone number at that address will be
.
THE TENNECO MERGER
On June 19, 1996, EPG, El Paso Merger Company, an indirect wholly owned
subsidiary of EPG ("El Paso Subsidiary"), and Tenneco Inc. ("Tenneco") entered
into a definitive merger agreement (as amended and supplemented from time to
time, the "Merger Agreement"), pursuant to which El Paso Subsidiary will be
merged with and into Tenneco (the "Merger"). Prior to the Merger, Tenneco and
its subsidiaries will undertake various intercompany transfers and
distributions designed to restructure, divide and separate their existing
businesses, assets and liabilities so that all the assets, liabilities and
operations related to their automotive parts, packaging and administrative
services businesses and their shipbuilding business will be spun-off to
Tenneco's common stockholders (the "Distributions"). The remaining existing
and discontinued operations of Tenneco, consisting primarily of those
operations related to the transmission and marketing of natural gas (the
"Energy Business"), will continue to be owned by Tenneco.
The Merger is conditioned upon, among other things, the receipt of tax
rulings stating that the Distributions and the Merger are tax-free, completion
of a debt realignment plan by Tenneco, certain government approvals, and
approval of Tenneco's stockholders.
Consideration in the Merger will consist of:
. approximately $2.65 billion of assumed Tenneco debt, less
approximately $275 million of new Tenneco preferred stock to be
issued prior to closing;
. the issuance of EPG equity securities valued at $750 million, based
on the June 18, 1996 closing price of $34.875 per share of Common
Stock, to Tenneco's existing common and preferred stockholders,
subject to a minimum and maximum exchange ratio; and
.approximately $600 million of assumed liabilities and other
consideration.
3
<PAGE>
The proposed issuance by EPG (the "Merger Stock Issuance") of up to
23,894,862 shares of Common Stock to Tenneco stockholders in connection with
the transactions contemplated by the Merger Agreement is being submitted for
approval of EPG's stockholders at a special meeting presently scheduled to be
held on , 1996. If the Merger Stock Issuance is not approved, the Merger
is still expected to be consummated but EPG will issue to Tenneco stockholders
7,000,000 shares of Common Stock, with the balance of the equity consideration
to consist of depositary shares, each representing a fractional interest in a
whole share of a new series of EPG voting preferred stock. Tenneco's
stockholders are being asked to vote on a significant reorganization of
Tenneco, of which the Merger and the Distributions are parts, at a special
meeting to be held on , 1996.
There can be no assurance that the Merger Stock Issuance will be approved.
Furthermore, although EPG believes that all the conditions to the Merger will
be satisfied, there can be no assurance that such conditions will be satisfied
and that the Merger will be consummated.
For further information regarding the Merger and the various transactions to
be undertaken in connection therewith, see EPG's Current Report on Form 8-K,
dated October 22, 1996, which Current Report is incorporated herein by
reference.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the net proceeds from
the sale of the Securities will be used for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------- -----------------------------
1996 1995 1994 1993 1992 1991
-------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Combined
Fixed Charges and Preferred and
Preference Stock Dividend
Requirements..................... -- (a) 2.51x 2.87x 3.04x 2.73x 2.86x
</TABLE>
- --------
(a) Earnings for the six months ended June 30, 1996 were inadequate to cover
fixed charges by $18 million due to a special charge for employee separation
and asset impairments of $99 million pre-tax.
The ratio of earnings to combined fixed charges and preferred and preference
stock dividend requirements for the periods presented is the same as the ratio
of earnings to fixed charges since EPG has no outstanding preferred stock or
preference stock and, therefore, no dividend requirements.
For purposes of calculating these ratios: (i) "fixed charges" represent
interest expense (exclusive of interest on rate refunds), amortization of debt
costs and the portion of rental expense representing the interest factor; and
(ii) "earnings" represent the aggregate of income from continuing operations
before income taxes, interest expense (exclusive of interest on rate refunds),
amortization of debt costs and the portion of rental expense representing the
interest factor.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby will represent unsecured obligations of
EPG. The Debt Securities offered hereby will be issued under an Indenture
dated as of , 1996 (the "Indenture"), between EPG and The Chase Manhattan
Bank, as trustee (the "Trustee"). The Indenture does not limit the aggregate
principal amount of Debt Securities that may be issued thereunder from time to
time in one or more series.
4
<PAGE>
The terms of the Debt Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Debt Securities are subject
to all such terms, and holders of Debt Securities are referred to the
Indenture and the Trust Indenture Act for a statement of those terms.
The statements set forth below in this section are brief summaries of
certain provisions contained in the Indenture, do not purport to be complete,
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Indenture, including the definitions therein of certain
terms, a copy of which Indenture is incorporated by reference as an exhibit to
the Registration Statement of which this Prospectus is a part. Capitalized
terms used in this section and not otherwise defined in this section have the
respective meanings assigned to them in the Indenture.
GENERAL
Reference is made to the Prospectus Supplement relating to the particular
series offered thereby for the terms of such Debt Securities, including where
applicable: (a) the form and title of the Debt Securities; (b) the aggregate
principal amount of the Debt Securities; (c) the date or dates on which the
Debt Securities may be issued; (d) the date or dates on which the principal of
and premium, if any, on the Debt Securities shall be payable; (e) the rate or
rates (which may be fixed or variable) at which the Debt Securities shall bear
interest, if any, and the date or dates from which such interest shall accrue;
(f) the dates on which interest, if any, shall be payable and the record dates
for the interest payment dates; (g) the place or places where the principal of
and premium, if any, and interest, if any, on the Debt Securities of the
series will be payable; (h) the period or periods, if any, within which, the
price or prices at which, and the terms and conditions upon which, the Debt
Securities may be redeemed at the option of EPG or otherwise; (i) any optional
or mandatory redemption or any sinking fund or analogous provisions; (j) if
other than denominations of $1,000 and integral multiples thereof, the
denominations in which the Debt Securities of the series shall be issuable;
(k) if other than the principal amount thereof, the portion of the principal
amount of the Debt Securities which shall be payable upon declaration of the
acceleration of the maturity thereof in accordance with the provisions of the
Indenture; (l) whether payment of the principal of and premium, if any, and
interest, if any, on the Debt Securities shall be with or without deduction
for taxes, assessments, or governmental charges, and with or without
reimbursement of taxes, assessments, or governmental charges paid by the
holders; (m) the currency or currencies, or currency unit or currency units,
in which the principal of and premium, if any, and interest, if any, on the
Debt Securities shall be denominated, payable, redeemable or purchasable, as
the case may be; (n) any Events of Default (as defined below) with respect to
the Debt Securities that differ from those set forth in the Indenture; (o)
whether the Debt Securities will be convertible; (p) whether the Debt
Securities of such series shall be issued as a global certificate or
certificates and, in such case, the identity of the depositary for such
series; and (q) any other terms not inconsistent with the Indenture.
If any Debt Securities offered hereby are sold for foreign currencies or
foreign currency units or if the principal of and premium, if any, or
interest, if any, on any series of Debt Securities is payable in foreign
currencies or foreign currency units, the restrictions, elections, tax
consequences, specific terms and other information with respect to such issue
of Debt Securities and such currencies and currency units will be set forth in
the Prospectus Supplement relating thereto.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities offered hereby will be issued only in fully registered
form in denominations of $1,000 or any integral multiple thereof. The Debt
Securities of a series may be issuable in the form of one or more global
certificates, which will be denominated in an amount equal to all or a portion
of the aggregate principal amount of such Debt Securities. See "--Global Debt
Securities".
One or more series of Debt Securities offered hereby may be sold at a
substantial discount below their stated principal amount, bearing no interest
or interest at a rate that at the time of issuance is below market rates. The
5
<PAGE>
Federal income tax consequences and special considerations applicable to any
such series of Debt Securities will be described generally in the Prospectus
Supplement relating thereto.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Unless and until such global certificate
or certificates are exchanged in whole or in part for Debt Securities in
individually certificated form, a global Debt Security may not be transferred
except as a whole to a nominee of the Depositary for such global Debt
Security, or by a nominee for the Depositary to the Depositary, or to a
successor of the Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities and the rights of, and limitations on, owners of beneficial
interests in a global Debt Security representing all or a portion of a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series.
CERTAIN COVENANTS
Limitations on Liens. The Indenture provides that EPG will not, nor will it
permit any Restricted Subsidiary (as defined below) to, create, assume, incur
or suffer to exist any Lien (as defined below) upon any Principal Property (as
defined below), whether owned or leased on the date of the Indenture or
thereafter acquired, to secure any Debt (as defined below) of EPG or any other
Person (as defined below) (other than the Debt Securities issued thereunder),
without in any such case making effective provision whereby all of the Debt
Securities Outstanding thereunder shall be directly secured equally and
ratably with, or prior to, such Debt. There is excluded from this restriction:
(i) any Lien upon any property or assets of EPG or any Restricted
Subsidiary in existence on the date of the Indenture or created pursuant to
an "after-acquired property" clause or similar term in existence on the
date of the Indenture or any mortgage, pledge agreement, security agreement
or other similar instrument in existence on the date of the Indenture;
(ii) any Lien upon any property or assets created at the time of
acquisition of such property or assets by EPG or any Restricted Subsidiary
or within one year after such time to secure all or a portion of the
purchase price for such property or assets or Debt incurred to finance such
purchase price, whether such debt was incurred prior to, at the time of or
within one year of such acquisition;
(iii) any Lien upon any property or assets existing thereon at the time
of the acquisition thereof by EPG or any Restricted Subsidiary (whether or
not the obligations secured thereby are assumed by EPG or any Restricted
Subsidiary);
(iv) any Lien upon any property or assets of a Person existing thereon at
the time such Person becomes a Restricted Subsidiary by acquisition, merger
or otherwise;
(v) the assumption by EPG or any Restricted Subsidiary of obligations
secured by any Lien existing at the time of the acquisitions by EPG or any
Restricted Subsidiary of the property or assets subject to such Lien or at
the time of the acquisition of the Person which owns such property or
assets;
(vi) any Lien on property to secure all or part of the cost of
construction or improvements thereon or to secure Debt incurred prior to,
at the time of, or within one year after completion of such construction or
making of such improvements, to provide funds for any such purpose;
(vii) any Lien on any oil, gas, mineral and processing and other plant
properties to secure the payment of costs, expenses or liabilities incurred
under any lease or grant or operating or other similar agreement in
connection with or incident to the exploration, development, maintenance or
operation of such properties;
(viii) any Lien arising from or in connection with a conveyance by EPG or
any Restricted Subsidiary of any production payment with respect to oil,
gas, natural gas, carbon dioxide, sulphur, helium, coal, metals, minerals,
steam, timber or other natural resources;
6
<PAGE>
(ix) any Lien in favor of EPG or any Restricted Subsidiary;
(x) any Lien created or assumed by EPG or any Restricted Subsidiary in
connection with the issuance of Debt the interest on which is excludable
from gross income of the holder of such Debt pursuant to the Internal
Revenue Code of 1986, as amended, or any successor statute, for the purpose
of financing, in whole or in part, the acquisition or construction of
property or assets to be used by EPG or any Subsidiary;
(xi) any Lien upon property or assets of any foreign Restricted
Subsidiary to secure Debt of that foreign Restricted Subsidiary;
(xii) Permitted Liens (as defined below);
(xiii) any Lien upon any additions, improvements, replacements, repairs,
fixtures, appurtenances or component parts thereof attaching to or required
to be attached to property or assets pursuant to the terms of any mortgage,
pledge agreement, security agreement or other similar instrument, creating
a Lien upon such property or assets permitted by clauses (i) through (xii)
above; or
(xiv) any extension, renewal, refinancing, refunding or replacement (or
successive extensions, renewals, refinancing, refundings or replacements)
of any Lien, in whole or in part, that is referred to in clauses (i) and
(xiii) above; provided, however, that the principal amount of Debt so
secured pursuant to this clause (xiv) shall not exceed the original
principal amount of Debt so secured (plus the aggregate amount of premiums,
other payments, costs, and expenses required to be paid or incurred in
connection with such extension, renewal, refinancing, refunding or
replacement), and that such extension, renewal, refinancing, refunding or
replacement shall be limited to all or a part of the property (including
improvements, alterations and repairs on such property) subject to the
encumbrance so extended, renewed, refinanced, refunded or replaced (plus
improvements, alterations and repairs on such property).
Notwithstanding the foregoing, under the Indenture, EPG may, and may permit
any Restricted Subsidiary to, create, assume, incur, or suffer to exist any
Lien upon any Principal Property to secure Debt of EPG or any Person (other
than the Debt Securities) that is not excepted by clauses (i) through (xiv)
above without equally and ratably securing the Debt Securities issued under
the Indenture, provided that the aggregate principal amount of all Debt then
outstanding under and secured by such Lien and all similar Liens, together
with all net sale proceeds from Sale-Leaseback Transactions (as defined below)
(excluding Sale-Leaseback Transactions permitted by clauses (i) through (iv)
of the first paragraph of the restriction on sale-leasebacks covenant
described below) does not exceed 15% of Consolidated Net Tangible Assets (as
defined below).
Restriction on Sale-Leasebacks. The Indenture provides that EPG will not,
nor will it permit any Restricted Subsidiary to, sell or transfer any
Principal Property with EPG or any Restricted Subsidiary taking back a lease
of such Principal Property (a "Sale-Leaseback Transaction"), unless: (i) such
Sale-Leaseback Transaction occurs within one year from the date of acquisition
of such Principal Property or the date of the completion of construction or
commencement of full operations on such Principal Property, whichever is
later; (ii) the Sale-Leaseback Transaction involves a lease for a period,
including renewals, of not more than three years; (iii) EPG or such Restricted
Subsidiary would be entitled to incur Debt secured by a Lien on such Principal
Property in a principal amount equal to or exceeding the net sale proceeds
from such Sale-Leaseback Transaction without securing the Debt Securities; or
(iv) EPG or such Restricted Subsidiary, within a one-year period after such
Sale-Leaseback Transaction, applies or causes to be applied an amount not less
than the net proceeds of the sale of such Principal Property to (A) the
repayment, redemption or retirement of Funded Debt (as defined below) of EPG
or any Subsidiary, or (B) investment in another Principal Property.
Notwithstanding the foregoing, under the Indenture, EPG may, and may permit
any Restricted Subsidiary to, effect any Sale-Leaseback Transaction involving
any Principal Property, provided that the net sale proceeds from such Sale-
Leaseback Transaction, together with all Debt (other than the Debt Securities)
secured by Liens not excepted by clauses (i) through (xiv) of the first
paragraph of the limitation on liens covenant described above, do not exceed
15% of the Consolidated Net Tangible Assets.
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Certain Defined Terms. As used herein:
"Consolidated Net Tangible Assets" means, at any date of determination, the
total amount of assets after deducting therefrom (i) all current liabilities
(excluding (A) any current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed, and (B)
current maturities of long-term debt), and (ii) the value (net of any
applicable reserves) of all goodwill, trade names, trademarks, patents and
other like intangible assets, all as set forth on the consolidated balance
sheet of EPG and its consolidated subsidiaries for EPG's most recently
completed fiscal quarter, prepared in accordance with generally accepted
accounting principles.
"Debt" means, generally, any obligation created or assumed by any Person for
the repayment of money borrowed and any purchase money obligation created or
assumed by such Person.
"Funded Debt" means all Debt maturing one year or more from the date of the
creation thereof, all Debt directly or indirectly renewable or extendible, at
the option of the debtor, by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more from the date of the
creation thereof, and all Debt under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year or
more.
"Lien" means any mortgage, pledge, security interest, lien or other
encumbrance.
"Permitted Liens" means (i) Liens upon rights-of-way for pipeline purposes;
(ii) any governmental Lien, mechanics', materialmen's, carriers' or similar
Lien incurred in the ordinary course of business which is not yet due or which
is being contested in good faith by appropriate proceedings and any
undetermined Lien which is incidental to construction; (iii) the right
reserved to, or vested in, any municipality or public authority by the terms
of any right, power, franchise, grant, license, permit or by any provision of
law, to purchase or recapture or to designate a purchaser of, any property;
(iv) Liens of taxes and assessments which are (A) for the then current year,
(B) not at the time delinquent, or (C) delinquent but the validity of which is
being contested at the time by EPG or any Subsidiary in good faith; (v) Liens
of, or to secure performance of, leases; (vi) any Lien upon, or deposits of,
any assets in favor of any surety company or clerk of court for the purpose of
obtaining indemnity or stay of judicial proceedings; (vii) any Lien upon
property or assets acquired or sold by EPG or any Restricted Subsidiary
resulting from the exercise of any rights arising out of defaults on
receivables; (viii) any Lien incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance, temporary
disability, social security, retiree health or similar laws or regulations or
to secure obligations imposed by statute or governmental regulations; (ix) any
Lien upon any property or assets in accordance with customary banking practice
to secure any Debt incurred by EPG or any Restricted Subsidiary in connection
with the exporting of goods to, or between, or the marketing of goods in, or
the importing of goods from, foreign countries; or (x) any Lien in favor of
the United States of America or any state thereof, or any other country, or
any political subdivision of any of the foregoing, to secure partial,
progress, advance, or other payments pursuant to any contract or statute, or
any Lien securing industrial development, pollution control, or similar
revenue bonds.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity, unincorporated organization, or government or any agency or political
subdivision thereof.
"Principal Property" means (a) any pipeline assets of EPG or any Subsidiary,
including any related facilities employed in the transportation, distribution,
or marketing of natural gas that are located in the United States or Canada,
and (b) any processing or manufacturing plant owned or leased by EPG or any
Subsidiary and located within the United States or Canada, except, in the case
of either clause (a) or (b), any such assets or plant which, in the opinion of
EPG's Board of Directors, is not a Principal Property in relation to the
activities of EPG and its Subsidiaries as a whole.
"Restricted Subsidiary" means any Subsidiary of EPG owning or leasing any
Principal Property.
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CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that EPG may, without the consent of the Trustee or
the holders of any Debt Securities issued thereunder, consolidate or merge
with, or sell, lease, transfer or otherwise dispose of its property and assets
as, or substantially as, an entirety to, any Person, provided that (i) either
EPG is the continuing entity or such successor Person shall become liable and
be bound for and shall expressly assume the due and punctual payment of the
principal of and premium, if any, and interest on, all Debt Securities then
outstanding and the performance and observance of each covenant and condition
of the Indenture on the part of EPG to be performed or observed, and (ii)
immediately after giving effect to the transaction no Default or Event of
Default exists. Any such successor Person shall succeed to and be substituted
for EPG under the Indenture with the same effect as if it had been named
therein as a party thereto and thereafter such Person may exercise the rights
and power of EPG under the Indenture and any act or proceeding by and
provision of the Indenture permitted to be done by any board or officer of EPG
may be done with like force and effect by the like board or officer of any
such successor. Upon compliance with the conditions to any sale, lease,
transfer or other disposition by EPG of its property and assets as, or
substantially as, an entirety, EPG shall automatically be released and
discharged from all its obligations under the Debt Securities and the
Indenture.
EVENTS OF DEFAULT
An "Event of Default" will occur under the Indenture with respect to Debt
Securities of a particular series issued thereunder if: (a) EPG shall fail to
pay when due all or any part of the principal of, or premium, if any, on such
series (whether at maturity or otherwise); (b) EPG shall fail to pay when due
any installment of interest on such series and such default shall continue for
a period of 30 days; (c) EPG shall fail to perform or observe any other term,
covenant, or agreement contained in the Indenture or the Debt Securities with
respect to such series for a period of 60 days after written notice thereof,
as provided in the Indenture; or (d) certain events of bankruptcy, insolvency,
or reorganization shall have occurred.
The Indenture provides that: (1) if an Event of Default due to the default
in payment of principal of or premium or interest on a series of Debt
Securities issued thereunder or due to a failure to perform or observe any
other term, covenant, or agreement contained therein with respect to a series
of Debt Securities issued thereunder (but not with respect to all series of
Debt Securities issued thereunder) shall have occurred and be continuing,
either the Trustee or the holders of not less than 25% in aggregate principal
amount of Debt Securities of such series then outstanding thereunder may
declare the principal amount of all Debt Securities of such series to be due
and payable immediately; or (2) if an Event of Default due to a failure to
perform or observe any other term, covenant, or agreement contained in the
Indenture with respect to all series of Debt Securities issued thereunder then
outstanding and certain events of bankruptcy, insolvency and reorganization
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in aggregate principal amount of all Debt Securities then
outstanding thereunder (treated as one class) which have not previously become
due and payable may declare the principal amount of all Debt Securities then
outstanding thereunder to be due and payable immediately. Upon certain
conditions, the Indenture provides that such declarations may be annulled by
the holders of a majority in aggregate principal amount of Debt Securities
then outstanding of each series affected (voting as a separate class) and past
defaults may be waived (except a continuing default in payment of principal of
and premium, if any, or interest, if any, on any series of Debt Securities) by
the holders of a majority in aggregate principal amount of Debt Securities
then outstanding of each series affected (voting as a separate class).
Pursuant to the Indenture, the holders of a majority in aggregate principal
amount of each affected series of Debt Securities then outstanding (with each
series voting as a separate class) may direct with respect to such series the
time, method, and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that such direction shall not be in conflict with any rule of law or
the Indenture. Before proceeding to exercise any right or power under the
Indenture with respect to such series at the direction of such holders, the
Trustee shall be entitled to receive from such holders reasonable security or
indemnity against the costs, expenses, and liabilities which might be incurred
by it in compliance with any such direction.
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Under the terms of the Indenture, EPG is required to furnish to the Trustee
annually a statement of certain officers to the effect that to the best of
their knowledge EPG is not in default in the performance of the terms of the
Indenture or, if they have knowledge that EPG is in default, specifying such
default. The Indenture requires the Trustee to give to all holders of Debt
Securities outstanding thereunder notice of any default by EPG, unless such
default shall have been cured or waived; however, except in the case of a
default in the payment of principal of and premium, if any, or interest, if
any, on any Debt Securities outstanding thereunder, the Trustee is entitled to
withhold such notice in the event that the board of directors, the executive
committee, or a trust committee of directors or certain officers of the
Trustee in good faith determine that withholding such notice is in the
interest of the holders of such outstanding Debt Securities.
SATISFACTION AND DISCHARGE; LEGAL AND COVENANT DEFEASANCE
Under the terms of the Indenture, under arrangements reasonably satisfactory
to the Trustee, EPG may discharge certain obligations to holders of Debt
Securities of any series which have not already been delivered to the Trustee
for cancellation and which have either become due and payable or are by their
terms due and payable within one year or are to be called for redemption
within one year by irrevocably depositing or causing to be irrevocably
deposited with the Trustee (or an escrow agent satisfactory to the Trustee)
funds in an amount sufficient to pay at maturity the principal, interest, and
mandatory sinking fund payments, if any, on such series of Debt Securities.
The Indenture also provides that EPG will be discharged from any and all
obligations in respect of any series of Debt Securities issued thereunder
(excluding, however, certain obligations to register the transfer or exchange
of such outstanding Debt Securities of such series, to replace stolen, lost,
or mutilated certificates and to maintain paying agencies) upon (i) the
irrevocable deposit, in trust, of cash or U.S. Government Obligations (or a
combination thereof) which through the payment of interest and principal
thereof in accordance with their terms will provide cash in an amount
sufficient to pay the principal and interest on the outstanding Debt
Securities of such series and any mandatory sinking fund payments, in each
case, on the stated maturity of such payments in accordance with the terms of
the Indenture and the outstanding Debt Securities of such series, (ii) EPG's
receipt of an opinion of counsel based on the fact that (A) EPG has received
from, or there has been published by, the Internal Revenue Service a ruling,
or (B) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case, to the effect that such a
discharge will not or result in a taxable event with respect to holders of the
outstanding Debt Securities of such series, and (iii) EPG's receipt and
delivery to the Trustee of an officers' certificate and an opinion of counsel,
each stating that the conditions precedent under the Indenture have been
complied with.
Under the Indenture, EPG also may discharge its obligations referred to
above under "--Certain Covenants" and "--Consolidation, Merger and Sale of
Assets", as well as certain of its reporting obligations under the Indenture,
in respect of any series of Debt Securities upon satisfying the conditions
described in clauses (i) and (iii) in the immediately preceding paragraph with
respect to such series of Debt Securities.
CHANGES IN CONTROL AND HIGHLY LEVERAGED TRANSACTIONS
The Indenture does not contain provisions requiring redemption of the Debt
Securities issued thereunder, or adjustment to any terms of such Debt
Securities, upon any change in control of EPG.
Other than the limitations on Liens and the restriction on Sale-Leaseback
Transactions described above under "--Certain Covenants", the Indenture does
not contain any covenant or other provisions designed to afford holders of the
Debt Securities issued thereunder protection in the event of a highly
leveraged transaction involving EPG.
MODIFICATION OF THE INDENTURE
The Indenture provides that EPG and the Trustee may enter into supplemental
indentures without the consent of the holders of Debt Securities issued
thereunder to: (a) secure any of such Debt Securities,
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(b) evidence the assumption by a successor Person of the obligations of EPG;
(c) add covenants and Events of Default for the protection of the holders of
all or any particular series of such Debt Securities; (d) add to, change or
eliminate any of the provisions of the Indenture, provided that any such
addition, change or elimination shall become effective only after there are no
such Debt Securities of any series entitled to the benefit of such provision
outstanding; (e) establish the forms or terms of the Debt Securities of any
series issued thereunder; (f) cure any ambiguity or correct any inconsistency
in the Indenture; and (g) evidence the acceptance of appointment by a
successor trustee.
The Indenture also contains provisions permitting EPG and the Trustee, with
the consent of the holders of a majority in aggregate principal amount of all
outstanding Debt Securities affected by such supplemental indenture (voting as
one class), to add any provisions to, or change in any manner or eliminate any
of the provisions of, the Indenture, or modify in any manner the rights of the
holders of such Debt Securities, provided that EPG and the Trustee may not,
without the consent of the holder of each outstanding Debt Security affected
thereby, (a) change the stated maturity of the principal of, or premium, if
any, on any installment of principal of or interest, if any, on any Debt
Security, reduce the principal amount thereof, reduce the rate of interest
thereon, change the place of payment where, or the coin or currency in which,
interest is payable, or impair the right to institute suit for the enforcement
of any such payment when due, or (b) reduce the percentage in principal amount
of Debt Securities required for any such modification.
NO PERSONAL LIABILITY OF OFFICERS, DIRECTORS, EMPLOYEES OR STOCKHOLDERS
No director, officer, employee or stockholder, as such, of EPG or any of its
affiliates shall have any personal liability in respect of the obligations of
EPG under the Indenture or the Debt Securities by reason of his, her or its
status as such.
APPLICABLE LAW
The Indenture is, and the Debt Securities offered hereby will be, governed
by, and construed in accordance with, the laws of the State of New York.
CONCERNING THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set
forth in the Indenture. If an Event of Default has occurred and is continuing,
the Trustee will use the same degree of care and skill in its exercise of the
rights and powers vested in it by the Indenture as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
The Indenture contains limitations on the rights of the Trustee, should it
become a creditor of EPG, to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of such claims, as
security or otherwise. The Trustee is permitted to engage in other
transactions; provided, however, that if it acquires any conflicting interest,
it must eliminate such conflict or resign.
The Chase Manhattan Bank, a New York banking corporation, is the Trustee
under the Indenture. EPG maintains banking and other commercial relationships
with The Chase Manhattan Bank in the ordinary course of business.
DESCRIPTION OF CAPITAL STOCK
The statements under this caption are brief summaries, do not purport to be
complete, and are subject to, and are qualified in their entirety by reference
to, the more complete descriptions contained in (a) EPG's Restated Certificate
of Incorporation, as amended (the "EPG Charter"), and the Shareholder Rights
Agreement, dated as of July 7, 1992, between EPG and The First National Bank
of Boston, as Rights Agent (the "Shareholder Rights Agreement"), copies of
which are incorporated by reference as exhibits to the Registration Statement
of which this Prospectus is a part, and (b) the certificate of designation
relating to each series of Preferred Stock, which will be filed with the
Commission at, or prior to, the time of the offering of such series of
Preferred Stock.
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GENERAL
EPG currently is authorized by the EPG Charter to issue up to 100,000,000
shares of Common Stock and up to 25,000,000 shares of Preferred Stock. As of
September 30, 1996, there were issued and outstanding 36,212,026 shares of
Common Stock and no shares of Preferred Stock.
COMMON STOCK
EPG currently is authorized by the EPG Charter to issue up to 100,000,000
shares of Common Stock. The holders of Common Stock are entitled to one vote
for each share held of record on all matters submitted to a vote of
stockholders. Subject to preferences that may be applicable to any outstanding
Preferred Stock, holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors of EPG out of funds
legally available therefor. In the event of a liquidation, dissolution, or
winding up of EPG, holders of Common Stock are entitled to share ratably in
all assets remaining after payment of liabilities and liquidation preference
of any outstanding Preferred Stock. Holders of Common Stock have no preemptive
rights and have no rights to convert their Common Stock into any other
securities. There are no redemption provisions with respect to any shares of
Common Stock. All of the outstanding shares of Common Stock are, and the
Common Stock offered hereby will be, upon issuance against full payment of the
purchase price therefor, fully paid and nonassessable.
The transfer agent and registrar for EPG's Common Stock is The First
National Bank of Boston.
PREFERRED STOCK
EPG's Board of Directors, without any further action by the stockholders of
EPG, is authorized to issue up to 25,000,000 shares of Preferred Stock, and to
divide the Preferred Stock into one or more series, and to fix by resolution
or resolutions any of the designations, powers, preferences and rights, and
the qualifications, limitations, or restrictions of the shares of each such
series, including, but not limited to, dividend rates, conversion rights,
voting rights, terms of redemption and liquidation preferences, and the number
of shares constituting each such series. The issuance of Preferred Stock may
have the effect of delaying, deterring, or preventing a change in control of
EPG. Preferred Stock, upon issuance against full payment of the purchase price
therefor, will be fully paid and nonassessable. The specific terms of a
particular series of Preferred Stock will be described in the Prospectus
Supplement relating to that series. The description of Preferred Stock set
forth below and the description of the terms of the particular series of
Preferred Stock set forth in the related Prospectus Supplement do not purport
to be complete and are qualified in their entirety by reference to the
certificate of designation relating to the particular series of Preferred
Stock.
The designations, powers, preferences and rights, and the qualifications,
limitations, or restrictions of the Preferred Stock of each series will be
fixed by the certificate of designation relating to such series. The
Prospectus Supplement relating to each series will specify the terms of the
Preferred Stock as follows:
(a)The maximum number of shares to constitute such series and the
distinctive designation thereof;
(b)The annual dividend rate, if any, on shares of such series, whether
such rate is fixed or variable or both, the date or dates from which
dividends will begin to accrue or accumulate, and whether dividends will be
cumulative;
(c)The price at which, and the terms and conditions on which, the shares
of such series may be redeemed, including the time during which shares of
such series may be redeemed and any accumulated dividends thereon that the
holders of shares of such series shall be entitled to receive upon the
redemption thereof;
(d)The liquidation preference, if any, and any accumulated dividends
thereon, that the holders of shares of such series shall be entitled to
receive upon the liquidation, dissolution, or winding up of the affairs of
EPG;
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(e)Whether or not the shares of such series will be subject to operation
of a retirement or sinking fund, and, if so, the extent and manner in which
any such fund shall be applied to the purchase or redemption of the shares
of such series for retirement or for other corporate purposes, and the
terms and provisions relating to the operation of such fund;
(f)The terms and conditions, if any, on which the shares of such series
shall be convertible into, or exchangeable for, debt securities, shares of
any other class or classes of capital stock of EPG, or any series of any
other class or classes, or of any other series of the same class, including
the price or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same;
(g)The voting rights, if any, on the shares of such series; and
(h)Any or all other preferences and relative, participating, operational,
or other special rights, qualifications, limitations, or restrictions
thereof.
The Federal income tax consequences and special considerations applicable to
any such series of Preferred Stock will be generally described in the
Prospectus Supplement relating thereto.
As of the date of this Prospectus, no Preferred Stock is outstanding.
Pursuant to the Shareholder Rights Agreement, the Board of Directors of EPG
has designated the Series A Preferred Stock (as defined below).
EPG is currently seeking approval from its stockholders to issue up to
23,894,862 shares of Common Stock (i.e., the Merger Stock Issuance) in
connection with the Merger. If the Merger Stock Issuance is not approved by
the stockholders of EPG, the Merger is still expected to be consummated, but
common stockholders and certain preferred stockholders of Tenneco will receive
an aggregate of 7,000,000 shares of Common Stock plus depositary shares
representing interests in shares of a new series of Preferred Stock to be
designated the Adjustable Rate Cumulative Preferred Stock, $.01 par value per
share (the "AR Preferred Stock"). Each share of AR Preferred Stock will
entitle the holder thereof to 15 votes per share on all matters submitted to a
vote at any meeting of EPG stockholders. In addition, the EPG Charter provides
that holders of Preferred Stock of EPG, including the holders of Series A
Preferred Stock and AR Preferred Stock, shall have the right to vote together
as a class to elect two directors of EPG during any period that dividends on
such stock are in arrears in an amount equal to six quarterly dividend
payments.
SHAREHOLDER RIGHTS AGREEMENT
In July 1992, EPG's Board of Directors declared a dividend distribution of
one right (a "Right") for each share of Common Stock then outstanding. All
shares of Common Stock issued subsequently also include these Rights. Under
certain conditions, each Right may be exercised to purchase from EPG one one-
hundredth of a share of a series of EPG's Preferred Stock, designated as
Series A Junior Participating Preferred Stock, $.01 par value (the "Series A
Preferred Stock"), at a price of $75 per one one-hundredth of a share, subject
to adjustment.
The EPG Charter provides that the holders of Series A Preferred Stock are
entitled to 100 votes per share on all matters submitted to a vote of the
stockholders of EPG, subject to adjustment. In addition, during any period
that dividends on the Series A Preferred Stock are in arrears in an amount
equal to six quarterly dividend payments, the holders of Series A Preferred
Stock will have the right to vote together as a class to elect two directors
of EPG as described above.
The Rights are exercisable only if, without the prior consent of EPG's Board
of Directors, a person or group acquires or obtains the right to acquire
beneficial ownership of 15% or more of the voting power of all outstanding
voting securities of EPG or commences or announces a tender or exchange offer,
after consummation of which such person or group would beneficially own 15% or
more of EPG's voting securities. If, after the Rights become exercisable, EPG
is involved in a merger or other business combination transaction in which its
Common Stock is exchanged or changed, or it sells 50% or more of its assets or
earning power, each Right will entitle the holder thereof to purchase, at the
Right's then-current exercise price, common stock of the acquiring
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company having a value of twice the exercise price of the Right. In the event
that a person becomes the beneficial owner of securities having 15% or more of
the voting power of all then-outstanding voting securities of EPG, or if,
during any period of such ownership, there shall be any reclassification of
securities, or recapitalization of EPG, or any merger or consolidation of EPG
with any of its subsidiaries or any other transaction or series of
transactions which has the effect, directly or indirectly, of increasing by
more than 1% the proportionate share of the outstanding shares of any class of
equity securities of EPG or any of its subsidiaries which is directly or
indirectly owned by such person, then each Right not owned by such person will
entitle the holder thereof to purchase, at the Right's then-current exercise
price, shares of Common Stock (or in certain circumstances other equity
securities of EPG with at least the same economic value as the Common Stock)
having a market value of twice the Right's then-current exercise price. The
Rights, which have no voting rights, expire no later than July 7, 2002. The
Rights may be redeemed by EPG under certain circumstances prior to their
expiration date at a purchase price of $.01 per Right. It is possible that the
existence of the Rights may have the effect of delaying, deterring or
preventing a takeover of EPG.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
EPG is subject to Section 203 of the Delaware General Corporation Law
("Section 203") which restricts certain transactions and business combinations
between a corporation and an interested stockholder (defined in Section 203,
generally, as a person owning 15% or more of a corporation's outstanding
voting stock) for a period of three years from the time such person becomes an
interested stockholder. Subject to certain exceptions, unless the transaction
is approved by the board of directors and the holders of at least 66 2/3% of
the outstanding voting stock of the corporation (excluding voting stock held
by the interested stockholder), Section 203 prohibits certain business
transactions, such as a merger with, disposition of assets to, or receipt of
disproportionate financial benefits by the interested stockholder, or any
other transaction that would increase the interested stockholder's
proportionate ownership of any class or series of the corporation's stock. The
statutory ban does not apply if, upon consummation of the transaction in which
any person becomes an interested stockholder, the interested stockholder owns
at least 85% of the outstanding voting stock of the corporation (excluding
voting stock held by persons who are both directors and officers or by certain
employee stock plans) or if either the proposed transaction or the transaction
by which the interested stockholder became such is approved by the board of
directors of the corporation prior to the date such stockholder becomes an
interested stockholder.
EPG'S RESTATED CERTIFICATE OF INCORPORATION
The EPG Charter contains provisions applicable to a merger, consolidation,
asset sale, liquidation, recapitalization, or certain other business
transactions, including the issuance of stock of EPG ("Business
Combinations"). The EPG Charter requires the affirmative vote of 51% or more
of the voting stock of EPG, excluding any voting stock held by an interested
stockholder (defined in the EPG Charter as any person who owns 10% or more of
the voting stock and certain defined affiliates), with respect to all Business
Combinations involving the interested stockholder, unless directors who served
as such prior to the time the interested stockholder became an interested
stockholder determine by a two-thirds vote (i) that the proposed consideration
meets certain minimum price criteria, or (ii)(A) the interested stockholder
holds 80% or more of the voting stock and (B) the interested stockholder has
not received (other than proportionately as a stockholder) the benefit of any
financial assistance from EPG, whether in anticipation of or in connection
with such Business Combination. To meet the minimum price criteria, all
stockholders must receive consideration in or retain value per share after the
transaction which is not less than the price per share paid by the interested
stockholder. The EPG Charter also requires the dissemination to stockholders
of a proxy or information statement describing the Business Combination.
The EPG Charter also prohibits the taking of any action by written
stockholder consent in lieu of a meeting and the subsequent amendment of the
EPG Charter to repeal or alter the above provisions without the affirmative
vote of 51% of EPG's voting stock, excluding voting stock held by any
interested stockholder.
14
<PAGE>
PLAN OF DISTRIBUTION
EPG may offer or sell Securities to or through one or more underwriters,
dealers, or agents as designated from time to time, or through a combination
of such methods and also may offer or sell the Securities directly to one or
more other purchasers. EPG may sell Securities as soon as practicable after
effectiveness of the Registration Statement of which this Prospectus is a
part.
A Prospectus Supplement will set forth the terms of the offering of the
particular series of Securities offered thereby, including: (i) the name or
names of any underwriters or agents; (ii) the initial public offering or
purchase price of such series of Securities; (iii) any underwriting discounts,
commissions, and other items constituting underwriters' compensation and any
other discount, concessions, or commissions allowed or reallowed or paid by
any underwriters to other dealers; (iv) any commissions paid to any agents;
(v) the net proceeds to EPG from the sales; and (vi) any securities exchanges
or markets on which the Securities may be listed.
Unless otherwise set forth in the Prospectus Supplement relating to a
particular series of Securities, the obligations of the underwriters to
purchase such series of Securities will be subject to certain conditions
precedent and each of the underwriters with respect to such series of
Securities will be obligated to purchase all of the Securities of such series
allocated to it if any such Securities are purchased. Any initial public
offering price and any discounts or concessions allowed, reallowed, or paid to
dealers may be changed from time to time.
The Securities may be offered and sold by EPG directly or through agents
designated by EPG from time to time. Unless otherwise indicated in the related
Prospectus Supplement, each such agent will be acting on a best efforts basis
for the period of its appointment. Any agent participating in the distribution
of Securities may be deemed to be an "underwriter", as that term is defined in
the Securities Act, of the Securities so offered and sold. The Securities also
may be sold to dealers at the applicable price to the public set forth in the
Prospectus Supplement relating to such series of Securities. Such dealers may
be deemed to be "underwriters" within the meaning of the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered
into with EPG, to indemnification by EPG against certain civil liabilities,
including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, EPG in the ordinary course of business.
If so indicated in the Prospectus Supplement relating to a particular series
of Securities, EPG will authorize underwriters, dealers, or agents to solicit
offers by certain institutions to purchase Securities of such series pursuant
to delayed delivery contracts providing for payment and delivery at a future
date. Such contracts will be subject only to those conditions set forth in the
related Prospectus Supplement and such Prospectus Supplement will set forth
the commission payable for solicitation for such contracts.
Other than Common Stock, all Securities offered will be a new issue of
securities with no established trading market. Any underwriter to whom
Securities are sold by EPG for public offering and sale may make a market in
such Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Securities may
or may not be listed on a national securities exchange or a foreign securities
exchange, except that the Common Stock is listed on the New York Stock
Exchange. Any Common Stock sold pursuant to a Prospectus Supplement will be
listed on the New York Stock Exchange, subject to official notice of issuance.
No assurance can be given as to the liquidity of or the trading markets for
any Securities.
15
<PAGE>
LEGAL MATTERS
The validity of the Securities will be passed upon for EPG by Fried, Frank,
Harris, Shriver & Jacobson (a partnership including professional
corporations), New York, New York. If the Securities are being distributed in
an underwritten offering, the validity of the Securities will be passed upon
for the underwriters by counsel identified in the related Prospectus
Supplement.
EXPERTS
The consolidated financial statements and financial statement schedules of
EPG as of December 31, 1995 and 1994, and for the years ended December 31,
1995, 1994, and 1993, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of such firm as experts in
accounting and auditing.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than selling or
underwriting discounts and commissions, to be incurred by EPG in connection
with the issuance and distribution of the Securities being registered. All
amounts shown are estimated except the Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.................. $258,336
Blue Sky expenses, including legal fees.............................. *
Printing and engraving expenses...................................... *
Legal fees and expenses.............................................. *
Rating agency fees................................................... *
Accounting fees and expenses......................................... *
Trustee's fees and expenses.......................................... *
Miscellaneous........................................................ *
--------
Total.............................................................. $*
========
</TABLE>
- --------
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees
and individuals against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement in connection with specified actions,
rules, or proceedings, whether civil, criminal, administrative, or
investigative (other than action by or in the right of the corporation--a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) incurred in connection with
the defense or settlement of such action, and the statute requires court
approval before there can be any indemnification where the person seeking
indemnification has been found liable to the corporation. The statute provides
that it is not exclusive of other indemnification that may be granted by a
corporation's charter, by-laws, disinterested director vote, stockholder vote,
agreement, or otherwise.
Article X of EPG's By-laws require indemnification to the full extent
permitted under Delaware law as from time to time in effect. Subject to any
restrictions imposed by Delaware law, the By-laws of EPG provide an
unconditional right to indemnification for all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes, or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered
by any person in connection with any actual or threatened proceeding
(including, to the extent permitted by law, any derivative action) by reason
of the fact that such person is or was serving as a director, officer, or
employee of EPG or that, being or having been such a director or officer or an
employee of EPG, such person is or was serving at the request of EPG as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, including an employee benefit plan.
The By-laws of EPG also provide that EPG may, by action of its Board of
Directors, provide indemnification to its agents with the same scope and
effect as the foregoing indemnification of directors and officers.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
payment of unlawful dividends or unlawful stock purchases or redemptions, or
(iv) any transaction from which the director derived an improper personal
benefit.
II-1
<PAGE>
Article 10 of EPG's Restated Certificate of Incorporation, as amended,
provides that to the full extent that the Delaware General Corporation Law, as
it now exists or may hereafter be amended, permits the limitation or
elimination of the liability of directors, a director of EPG shall not be
liable to EPG or its stockholders for monetary damages for breach of fiduciary
duty as a director. Any amendment to or repeal of such Article 10 shall not
adversely affect any right or protection of a director of EPG for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
EPG maintains directors' and officers' liability insurance which provides
for payment, on behalf of the directors and officers of EPG and its
subsidiaries, of certain losses of such persons (other than matters
uninsurable under law) arising from claims, including claims arising under the
Securities Act, for acts or omissions by such persons while acting as
directors or officers of EPG and/or its subsidiaries, as the case may be.
Reference is made to Exhibits 1.1 and 1.2 hereto, respectively, which
contain provisions for indemnification of EPG, and its directors, officers,
and any controlling persons, against certain liabilities for information
furnished by the underwriters and/or agents, as applicable, expressly for use
in the Prospectus Supplements.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBITNO. EXHIBIT
---------- -------
<C> <C> <S>
+1.1 -- Form of EPG Debt Securities Underwriting Agreement
+1.2 -- Form of EPG Equity Securities Underwriting Agreement
+2.1 -- Agreement and Plan of Merger, dated as of June 19, 1996, as
such may be amended from time to time, among EPG, El Paso
Merger Company and Tenneco Inc.
+2.2 -- Agreement, dated June 19, 1996, between EPG and Tenneco Inc.,
relating to consulting services.
+4.1 -- Form of Indenture between EPG and The Chase Manhattan Bank,
as Trustee
4.2 -- Restated Certificate of Incorporation of EPG (incorporated by
reference to Exhibit 3.A of EPG's Form 10-K for the fiscal
year ended December 31, 1991, file no. 1-2700, filed January
29, 1992); Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock of EPG,
dated July 7, 1992 (incorporated by reference to Exhibit
3.A.1 of EPG's Form 10-K for the fiscal year ended December
31, 1992, file no. 1-2700, filed February 3, 1993)
4.3 -- By-laws of EPG, as amended April 1, 1996 (incorporated by
reference to Exhibit 3(ii) of EPG's Form 10-Q for the quarter
ended March 31, 1996, file no. 1-2700, filed May 15, 1996)
4.4 -- Shareholder Rights Agreement, dated as of July 7, 1992,
between EPG and The First National Bank of Boston, as Rights
Agent (incorporated by reference to Exhibit 4 of EPG's Form
10-Q for the quarter ended September 30, 1992, file no. 1-
2700, filed November 12, 1992)
+5 -- Opinion of Fried, Frank, Harris, Shriver & Jacobson as to the
legality of the Securities
12 -- Computation of Ratio of Earnings to Fixed Charges and Ratio
of Earnings to Combined Fixed Charges and Preferred and
Preference Stock Dividend Requirements
23.1 -- Consent of Coopers & Lybrand L.L.P.
+23.2 -- Consent of Fried, Frank, Harris, Shriver & Jacobson (included
in Exhibit 5)
24 -- Powers of Attorney (appear on page II-4)
25 -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of the Trustee
</TABLE>
- --------
+To be filed by amendment.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
A.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:
(a)To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b)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; and
(c)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 this Registration Statement;
provided, however, that paragraphs A(1)(a) and A(1)(b) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 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, each such post-effective amendment 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.
(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.
B.The undersigned Registration hereby undertakes that, for purposes of
determining any liability under the Securities Act, such filing of EPG's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C.Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant 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 the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of El Paso, State of Texas, on October
22, 1996.
EL PASO NATURAL GAS COMPANY
/s/ William A. Wise
By :_________________________________
William A. Wise
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes H.
Brent Austin and Britton White, Jr. and each of them as attorneys-in-fact with
full power of substitution, to execute in the name and on behalf of such
person, individually and in each capacity stated below, and to file, any and
all amendments to this Registration Statement, including any and all post-
effective amendments.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates as indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William A. Wise Chairman of the Board, October 22, 1996
- -------------------------------
William A. Wise Chief Executive Officer
and Director
/s/ H. Brent Austin Executive Vice President October 22, 1996
- -------------------------------
H. Brent Austin and Chief Financial Officer
/s/ Jeffrey I. Beason Vice President, Chief October 22, 1996
- ------------------------------- Accounting Officer,
Jeffrey I. Beason Controller and Treasurer
/s/ Byron Allumbaugh Director October 22, 1996
- -------------------------------
Byron Allumbaugh
Eugenio Garza Laguera Director October 22, 1996
/s/ James F. Gibbons Director October 22, 1996
- -------------------------------
James F. Gibbons
/s/ Ben F. Love Director October 22, 1996
- -------------------------------
Ben F. Love
/s/ Kenneth L. Smalley Director October 22, 1996
- -------------------------------
Kenneth L. Smalley
/s/ Malcolm Wallop Director October 22, 1996
- -------------------------------
Malcolm Wallop
</TABLE>
II-4
<PAGE>
LIST OF EXHIBITS
<TABLE>
<CAPTION>
PAGE
EXHIBITNO. EXHIBIT NO.
---------- ------- ----
<C> <C> <S> <C>
+1.1 -- Form of EPG Debt Securities Underwriting Agreement
+1.2 -- Form of EPG Equity Securities Underwriting Agreement
+2.1 -- Agreement and Plan of Merger, dated as of June 19,
1996, as such may be amended from time to time, among
EPG, El Paso Merger Company and Tenneco Inc.
+2.2 -- Agreement, dated June 19, 1996, between EPG and
Tenneco Inc., relating to consulting services.
+4.1 -- Form of Indenture between EPG and The Chase Manhattan
Bank, as Trustee
4.2 -- Restated Certificate of Incorporation of EPG
(incorporated by reference to Exhibit 3.A of EPG's
Form 10-K for the fiscal year ended December 31, 1991,
file no. 1-2700, filed January 29, 1992); Certificate
of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of EPG, dated
July 7, 1992 (incorporated by reference to Exhibit
3.A.1 of EPG's Form 10-K for the fiscal year ended
December 31, 1992, file no. 1-2700, filed February 3,
1993)
4.3 -- By-laws of EPG, as amended April 1, 1996 (incorporated
by reference to Exhibit 3(ii) of EPG's Form 10-Q for
the quarter ended March 31, 1996, file no. 1-2700,
filed May 15, 1996)
4.4 -- Shareholder Rights Agreement, dated as of July 7,
1992, between EPG and The First National Bank of
Boston, as Rights Agent (incorporated by reference to
Exhibit 4 of EPG's Form 10-Q for the quarter ended
September 30, 1992, file no. 1-2700, filed November
12, 1992)
+5 -- Opinion of Fried, Frank, Harris, Shriver & Jacobson as
to the legality of the Securities
12 -- Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges and
Preferred and Preference Stock Dividend Requirements
23.1 -- Consent of Coopers & Lybrand L.L.P.
+23.2 -- Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5)
24 -- Powers of Attorney (appear on page II-4)
25 -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of the Trustee
</TABLE>
- --------
+To be filed by amendment.
<PAGE>
EXHIBIT 12
EL PASO NATURAL GAS COMPANY
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS
(Dollars in Millions)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------- ----------------------------
1996 1995 1994 1993 1992 1991
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings
Income (loss) from continuing
operations.......................... $(11) $ 85 $ 90 $ 92 $ 76 $ 89
Income taxes (benefit)............... (7) 48 58 59 47 52
---- ---- ---- ---- ---- ----
Income (loss) from continuing
operations before income taxes...... (18) 133 148 151 123 141
Interest and debt expense............ 43 85 76 71 68 74
Interest component of rent........... 2 3 3 3 3 2
---- ---- ---- ---- ---- ----
Total earnings available for fixed
charges............................ $ 27 $221 $227 $225 $194 $217
==== ==== ==== ==== ==== ====
Fixed charges(a)
Interest and debt expense............ $ 43 $ 85 $ 76 $ 71 $ 68 $ 74
Interest component of rent........... 2 3 3 3 3 2
---- ---- ---- ---- ---- ----
$ 45 $ 88 $ 79 $ 74 $ 71 $ 76
==== ==== ==== ==== ==== ====
Ratio of earnings to fixed charges and
ratio of earnings to combined fixed
charges and preferred and preference
stock dividend requirements(b)....... -- (c) 2.51x 2.87x 3.04x 2.73x 2.86x
==== ==== ==== ==== ==== ====
</TABLE>
- --------
(a) Fixed charges consist of interest, exclusive of interest on rate refunds,
plus interest capitalized and a portion of operating lease rent expense
deemed to be representative of interest.
(b) The ratio of earnings to combined fixed charges and preferred and
preference stock dividend requirements for the periods presented is the
same as the ratio of earnings to fixed charges since EPG has no
outstanding preferred stock or preference stock and, therefore, no
dividend requirements.
(c) Earnings are inadequate to cover fixed charges due to a special charge for
impaired assets and employee separation of $99 million. The dollar amount
needed to cover this deficiency is approximately $18 million.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3, Post-Effective Amendment No. 1 to Registration Statement No. 33-
55153 and Post-Effective Amendment No. 3 to Registration Statement No. 33-
44327 (collectively the "Registration Statements"), of our report dated March
15, 1996, on our audits of the financial statements and financial statement
schedule of El Paso Natural Gas Company (the "Company") as of December 31,
1995 and 1994, and for the years ended December 31, 1995, 1994 and 1993, which
report is included in the Company's Annual Report on Form 10-K. We also
consent to (i) the reference to our firm under the caption "Experts" in the
Registration Statements and (ii) the incorporation by reference into the
Registration Statements of the references to our firm which appear in the
Company's Preliminary Schedule 14A, as amended (File No. 1-2700), filed as
Exhibit 99 to the company's Report on Form 8-K dated October 22, 1996 and
incorporated by reference into the Registration Statements.
Coopers & Lybrand L.L.P.
El Paso, Texas
October 22, 1996
<PAGE>
EXHIBIT 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------
FORM T-1
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) [_]
----------------
THE CHASE MANHATTAN BANK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-4994650
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A NATIONAL BANK) IDENTIFICATION NO.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
WILLIAM H. MCDAVID
GENERAL COUNSEL
270 PARK AVENUE
NEW YORK, NEW YORK 10017
TEL: (212) 270-2611
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
EL PASO NATURAL GAS COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 74-0608280
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE PAUL KAYSER CENTER
100 NORTH STANTON STREET
EL PASO, TEXAS 79901
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
----------------
DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
GENERAL
ITEM 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.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
2
<PAGE>
ITEM 16. LIST OF EXHIBITS
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank.)
3. None, authorization to exercise corporate trust powers being contained in
the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank.)
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
(On July 14, 1996, in connection with the merger of Chemical Bank and The
Chase Manhattan Bank (National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank.)
8. Not applicable.
9. Not applicable.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE TRUSTEE,
THE CHASE MANHATTAN BANK, 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 OCTOBER, 1996.
THE CHASE MANHATTAN BANK
/s/ T. J. Foley
By___________________________________
T. J. Foley
Vice President
3
<PAGE>
EXHIBIT 7 TO FORM T-1
BANK CALL NOTICE
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
CHEMICAL BANK
OF 270 PARK AVENUE, NEW YORK, NEW YORK 10017
AND FOREIGN AND DOMESTIC SUBSIDIARIES,
A MEMBER OF THE FEDERAL RESERVE SYSTEM,
AT THE CLOSE OF BUSINESS JUNE 30, 1996, IN
ACCORDANCE WITH A CALL MADE BY THE FEDERAL RESERVE BANK OF THIS
DISTRICT PURSUANT TO THE PROVISIONS OF THE FEDERAL RESERVE ACT.
<TABLE>
<CAPTION>
DOLLAR
AMOUNTS
IN
ASSETS MILLIONS
------ --------
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.................... $ 4,167
Interest-bearing balances............................................. 5,094
Securities:
Held to maturity securities............................................. 3,367
Available for sale securities........................................... 27,786
Federal Funds sold and securities purchased under agreements to resell
in domestic offices of the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold.................................................... 7,204
Securities purchased under agreements to resell....................... 136
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... $ 67,215
Less: Allowance for loan and lease losses.................... 1,768
Less: Allocated transfer risk reserve........................ 75
--------
Loans and leases, net of unearned income, allowance, and reserve...... 65,372
Trading Assets.......................................................... 28,610
Premises and fixed assets (including capitalized leases)................ 1,326
Other real estate owned................................................. 26
Investments in unconsolidated subsidiaries and associated companies..... 68
Customer's liability to this bank on acceptances outstanding............ 995
Intangible assets....................................................... 309
Other assets............................................................ 6,993
--------
TOTAL ASSETS............................................................ $151,453
========
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
-----------
<S> <C>
Deposits:
In domestic offices............................................ $ 46,917
Noninterest-bearing.................................... $16,711
Interest-bearing....................................... 30,206
-------
In foreign offices, Edge and Agreement subsidiaries, and IBF's. 31,577
Noninterest-bearing.................................... $ 2,197
Interest-bearing....................................... 29,380
-------
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's
Federal funds purchased........................................ 12,155
Securities sold under agreements to repurchase................. 8,536
Demand notes issued to the U.S. Treasury......................... 1,000
Trading liabilities.............................................. 20,914
Other Borrowed money:
With a remaining maturity of one year or less.................. 10,018
With a remaining maturity of more than one year................ 192
Mortgage indebtedness and obligations under capitalized leases... 12
Bank's liability on acceptances executed and outstanding......... 1,001
Subordinated notes and debentures................................ 3,411
Other liabilities................................................ 8,091
TOTAL LIABILITIES................................................ 143,824
--------
EQUITY CAPITAL
--------------
Common stock..................................................... 620
Surplus.......................................................... 4,664
Undivided profits and capital reserves........................... 2,970
Net unrealized holding gains (Losses) on available-for-sale
securities...................................................... (633)
Cumulative foreign currency translation adjustments.............. 8
TOTAL EQUITY CAPITAL............................................. 7,629
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK AND EQUITY
CAPITAL......................................................... $151,453
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do
hereby declare that this Report of Condition has been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority
and is true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and
correct.
WALTER V. SHIPLEY
EDWARD D. MILLER DIRECTORS
THOMAS G. LABRECQUE
5
