UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 1-3551
EQUITABLE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-0464690
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
420 Boulevard of the Allies 15219
Pittsburgh, Pennsylvania (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (412) 261-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, no par value New York Stock Exchange
Philadelphia Stock Exchange
7 1/2% Debentures due July 1, 1999 New York Stock Exchange
9 1/2% Convertible Subordinated
Debentures due 2006 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter periods that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of
the registrant as of February 28, 1994: $1,245,649,859
The number of shares outstanding of the issuer's classes of common
stock as of February 28, 1994: 34,481,657
DOCUMENTS INCORPORATED BY REFERENCE
Part III, a portion of Item 10 and Items 11, 12, and 13 are
incorporated by reference to the Proxy Statement for the Annual
Meeting of Stockholders on May 27, 1994, to be filed with the
Commission within 120 days after the close of the Company's fiscal
year ended December 31, 1993.
Index to Exhibits - Page 62.
TABLE OF CONTENTS
Part I Page
Item 1 Business 1
Item 2 Properties 9
Item 3 Legal Proceedings 11
Item 4 Submission of Matters to a Vote
of Security Holders 11
Item 10 Directors and Executive Officers of the
Registrant 12
Part II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters 14
Item 6 Selected Financial Data 15
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
Item 8 Financial Statements and Supplementary Data 22
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 48
Part III
Item 10 Directors and Executive Officers of
the Registrant 49
Item 11 Executive Compensation 49
Item 12 Security Ownership of Certain Beneficial Owners
and Management 49
Item 13 Certain Relationships and Related Transactions 49
Part IV
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K 50
Index to Financial Statements
and Financial Statement Schedules
Covered by Report of
Independent Auditors 51
Index to Exhibits 62
Signatures 66
PART I
Item 1. Business
(a)Equitable Resources, Inc. ("Equitable" or the "Company")
was formed under the laws of Pennsylvania by the consolidation
and merger in 1925 of two constituent companies, the older of
which was organized in 1888. The Company owns all the capital
stock of subsidiary companies. Principal subsidiaries are
Equitable Resources Energy Company ("Equitable Resources Energy")
and Kentucky West Virginia Gas Company ("Kentucky West").
Equitable Resources Energy owns all the capital stock of
Equitable Resources Marketing Company ("ERMCO") and Andex Energy,
Inc. ("Andex"). Kentucky West owns all the capital stock of
Equitrans, Inc. ("Equitrans") and Nora Transmission, Inc.
("Nora"). ERMCO owns all the capital stock of Louisiana
Intrastate Gas Company ("LIG"). The Company and all such
subsidiaries are referred to as the "Company and its
Subsidiaries" or the "Companies." The Companies operate in the
Appalachian area and, to a lesser extent, in the Rocky Mountain,
Southwest, Louisiana and Gulf Coast offshore areas, the Canadian
Rockies and has interests in Colombia, South America. The
Companies engage primarily in the exploration for, development,
production, purchase, transmission, storage, distribution and
marketing of natural gas, the extraction of natural gas liquids,
the exploration for, development, production and sale of oil and
contract drilling.
LIG was acquired by the Company on June 30, 1993 as
described in Note L to the consolidated financial statements in
Part II. LIG owns a 1,900 mile intrastate pipeline system in
Louisiana, four natural gas processing plants and is also engaged
in gas marketing. Hershey Oil Corporation ("Hershey") was
acquired on July 8, 1993. Hershey owns natural gas and oil
reserves and acreage in Alberta, Canada. These subsidiaries are
included in the Energy Resource segment.
(b)The Company's business is comprised of two business
segments, Energy Resources and Utility Services. Financial
information by business segment is presented in Note K to the
consolidated financial statements contained in Part II.
(b) (1)Not applicable.
(b) (2)Not applicable.
(c) (1)ENERGY RESOURCES. Energy Resources activities are
conducted by Equitable Resources Energy Company through its
divisions and subsidiaries. Its activities are principally in
the Appalachian area where it explores for, develops, produces
and markets natural gas and oil, performs contract drilling and
well maintenance services, and extracts and markets natural gas
liquids.
Energy Resources also conducts operations in the Rocky
Mountain area including the Canadian Rockies where it explores
for, develops and produces oil, and to a lesser extent natural
gas.
In Louisiana, the segment provides intrastate transportation
of gas and extracts and markets natural gas liquids.
Item 1. Business (Continued)
In the Southwest and Gulf Coast offshore areas, this segment
participates in exploration and development of gas and oil
projects. Energy Resources also owns an interest in two natural
gas liquids plants in Texas.
Andex participates in ventures to explore for and develop
oil in Colombia, South America.
ERMCO operates nationwide as a full-service natural gas
marketing and supply company. ERMCO provides a full range of
energy services, including monthly "spot" and longer term
contracts, peak shaving and transportation arrangements.
UTILITY SERVICES. Utility Services activities are conducted
by Equitable Gas Company ("Equitable Gas"), a division of the
Company, and three wholly-owned subsidiaries: Kentucky West,
Equitrans and Nora.
Equitable Gas is a natural gas utility, regulated by state
public utility commissions in Pennsylvania, West Virginia and
Kentucky and is engaged in the purchase, distribution, marketing
and transportation of natural gas. The territory served by
Equitable Gas embraces principally the city of Pittsburgh and
surrounding municipalities in southwestern Pennsylvania, a few
municipalities in northern West Virginia and field line sales in
eastern Kentucky.
Kentucky West, regulated by the Federal Energy Regulatory
Commission (FERC), is an open access natural gas pipeline
company. Prior to restructuring pursuant to FERC Order 636,
Kentucky West purchased gas from the Energy Resource segment and
independent producers in Kentucky. Most of Kentucky West's sales
were to Equitrans and, to a lesser extent, to industrial
customers and other utilities. Kentucky West also transported
gas independently marketed by Energy Resources. With the FERC
Order 636 restructuring, which was effective July 1, 1993,
Kentucky West provides only open-access transportation service.
Transportation service is provided to Equitable Gas, Equitrans,
Energy Resources and other industrial end-users. Kentucky West's
pipelines are not physically connected with those of Equitrans or
Equitable Gas and deliveries are made to Columbia Gas
Transmission Corporation, a nonaffiliate, which in turn delivers
like quantities to Equitrans in West Virginia and Pennsylvania
under a Transportation and Exchange Agreement.
Equitrans is a FERC regulated open access pipeline company
with production, storage and transmission facilities in
Pennsylvania and West Virginia. Prior to FERC Order 636
restructuring, Equitrans produced, purchased and sold gas and
provided transportation and underground storage services. With
the FERC Order 636 restructuring, which was effective September
1, 1993, Equitrans provides transportation and storage services.
Equitrans provides transportation service for Equitable Gas
Company and nonaffiliates including customers in off-system
markets. Storage services are provided for Equitable Gas Company
and nine nonaffiliated customers.
Nora is a FERC regulated pipeline company which transports
Energy Resources' gas produced in Virginia and Kentucky.
Utility services, principally gas service, are provided to
more than 265,000 customers located mainly in the city of
Pittsburgh and its environs. Residential and commercial sales
volumes reflect annual variations which are primarily related to
weather. In addition, commercial and industrial sales volumes
have decreased mainly as the result of customers acquiring gas
directly from third parties. However, this gas is transported
and delivered by Utility Services.
Item 1. Business (Continued)
(c) (1) (i)Operating revenues as a percentage of total
operating revenues for each of the two business segments during
the years 1991 through 1993 are as follows:
1993 1992 1991
Energy Resources:
Natural gas - production 10% 10% 8%
- marketing 45 32 26
Natural gas liquids 4 3 3
Contract drilling 1 2 2
Oil 3 5 6
Intrastate transportation 1 - -
Other 1 1 1
Total Energy Resources 65 53 46
Utility Services:
Residential 23 30 34
Commercial 5 7 9
Industrial 1 2 2
Transportation 4 6 7
Marketed gas 1 - -
Utilities and Other 1 2 2
Total Utility Services 35 47 54
Total Revenues 100% 100% 100%
(c) (1) (ii)Not applicable.
(c) (1) (iii)The following pages (4, 5 and 6) summarize gas
and oil supply and disposition for the years 1991 through 1993.
Item 1. Business (Continued)
<TABLE>
<CAPTION>
1993
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased
and Sold (MMcf):
Produced 1,972 53,550 55,522
Purchased:
Other producers 51,870 217,985 269,855
Inter-segment purchases 7,468 3,345 (10,813)
Total purchases 59,338 221,330 (10,813) 269,855
Total produced
and purchased 61,310 274,880 (10,813) 325,377
Deduct:
Net increase in
gas in storage 6,204 6,204
Extracted natural gas liquids
(equivalent gas volumes) 3,005 3,005
System use and
unaccounted for 8,259 294 8,553
Total 46,847 271,581 (10,813) 307,615
Gas Sales (MMcf):
Residential 29,980 29,980
Commercial 8,235 8,235
Industrial 3,590 (340) 3,250
Utilities 32 32
Production 53,550 (3,719) 49,831
Marketing 4,052 218,031 (5,796) 216,287
Total gas sales 45,889 271,581 (9,855) 307,615
Processed gas extracted 958 (958)
Total 46,847 271,581 (10,813) 307,615
Natural Gas Transported (MMcf) 66,272 50,659 (34,628) 82,303
Oil Produced and Sold
thousands of bls) 2,112 2,112
Natural Gas Liquids Sold
(thousands of gallons) 162,191 162,191
Average Selling Price
Gas - Utility Sales (per Mcf) $7.631
- Energy Resource Production $ 2.266
- Energy Resource Marketing $ 2.320
Oil (per barrel) $16.183
Natural Gas Liquids (per gallon) $ .291
</TABLE>
Item 1. Business (Continued)
<TABLE>
<CAPTION>
1992
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased
and Sold (MMcf):
Produced 2,698 48,243 50,941
Purchased:
Pipeline suppliers 5,008 5,008
Other producers 37,967 131,711 169,678
Sub-total 42,975 131,711 174,686
Inter-segment purchases 8,489 2,654 (11,143)
Total purchases 51,464 134,365 (11,143) 174,686
Total produced
and purchased 54,162 182,608 (11,143) 225,627
Deduct:
Net decrease in
gas in storage (3,704) (3,704)
Extracted natural gas liquids
(equivalent gas volumes) 2,061 2,061
System use and
unaccounted for 13,180 593 13,773
Total 44,686 179,954 (11,143) 213,497
Gas Sales (MMcf):
Residential 30,089 30,089
Commercial 8,097 8,097
Industrial 4,312 (593) 3,719
Utilities 127 127
Production 48,243 (4,491) 43,752
Marketing 131,711 (3,998) 127,713
Total gas sales 42,625 179,954 (9,082) 213,497
Processed gas extracted 2,061 (2,061)
Total 44,686 179,954 (11,143) 213,497
Natural Gas Transported (MMcf) 71,166 (35,453) 35,713
Oil Produced and Sold (thousands of bls) 2,406 2,406
Natural Gas Liquids Sold
(thousands of gallons) 64,938 64,938
Average Selling Price
Gas - Utility Sales (per Mcf) $ 7.431
- Energy Resource Production $ 1.925
- Energy Resource Marketing $ 2.044
Oil (per barrel) $18.066
Natural Gas Liquids (per gallon) $ .327
</TABLE>
Item 1. Business (Continued)
<TABLE>
<CAPTION>
1991
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased
and Sold (MMcf):
Produced 3,322 40,022 43,344
Purchased:
Pipeline suppliers 7,729 7,729
Other producers 34,243 102,456 136,699
Sub-total 41,972 102,456 144,428
Inter-segment purchases 13,038 2,642 (15,680)
Total purchases 55,010 105,098 (15,680) 144,428
Total produced
and purchased 58,332 145,120 (15,680) 187,772
Deduct:
Net increase in
gas in storage 3,634 3,634
Extracted natural gas liquids
(equivalent gas volumes) 2,039 2,039
System use and
unaccounted for 12,187 603 12,790
Total 42,511 142,478 (15,680) 169,309
Gas Sales (MMcf):
Residential 28,103 28,103
Commercial 7,720 7,720
Industrial 4,487 (603) 3,884
Utilities 162 162
Production 40,022 (8,060) 31,962
Marketing 102,456 (4,978) 97,478
Total gas sales 40,472 142,478 (13,641) 169,309
Processed gas extracted 2,039 (2,039)
Total 42,511 142,478 (15,680) 169,309
Natural Gas Transported (MMcf) 70,897 (29,204) 41,693
Oil Produced and Sold (thousands of bls) 2,006 2,006
Natural Gas Liquids Sold
(thousands of gallons) 64,200 64,200
Average Selling Price
Gas - Utility Sales (per Mcf) $7.498
- Energy Resource Production $ 1.811
- Energy Resource Marketing $ 1.814
Oil (per barrel) $18.980
Natural Gas Liquids (per gallon) $ .367
</TABLE>
Item 1. Business (Continued)
During 1993, a total of 325,377,000 Mcf of gas was produced
and purchased by the Companies compared with 225,627,000 Mcf in
1992. The increase reflects greater marketing activity,
including the consolidation of LIG, and increased production.
GAS PURCHASES. Total purchases in 1993 amounted to
269,855,000 Mcf, of which 222,037,000 Mcf was applicable to
marketing operations and 47,818,000 Mcf was for system supply,
compared with 131,711,000 Mcf for marketing operations and
42,975,000 Mcf for system supply in 1992. Through gas purchase
contracts for system supply, the Company controls proved reserves
on acreage developed by independent producers. The majority of
these contracts cover the productive lives of the wells.
NATURAL GAS AND OIL PRODUCTION. Natural gas production by
Energy Resources in 1993 of 53,550,000 Mcf increased over the
1992 total of 48,243,000 Mcf. Utility Services production in
1993 of 1,972,000 Mcf decreased from the 1992 total of 2,698,000
Mcf.
Production of crude oil in 1993 was 2,112,000 barrels,
compared with 2,406,000 barrels in 1992.
In 1993, Energy Resources drilled 212 gross wells (152.7 net
wells). The primary focus of drilling activity was in Kentucky
and Virginia. Drilling in this area was for development of oil
in the Big Lime formation and coalbed methane.
The Company has been able to develop gas reserves at costs
which make it very competitive in marketing its gas to pipeline
and commercial buyers. As a result, even in periods of surplus
gas supply, the Company has been able to sell gas produced by
energy resource operations at a profit.
NATURAL GAS AND OIL RESERVES. The Company's estimate of
proved developed and undeveloped gas reserves for the Energy
Resource segment comprised 822.6 Bcf as of December 31, 1993.
These reserves included 759.3 Bcf of proved developed reserves.
The Company's oil reserves at December 31, 1993 consisted of 16.5
million barrels of proved developed and undeveloped reserves;
proved developed oil reserves amounted to 16.4 million barrels.
Substantially all of the gas and approximately one half of the
oil reserves are located in the Appalachian area. See Note P to
the Consolidated Financial Statements in Part II for details of
gas and oil producing activities.
STORAGE. Net storage withdrawals for system use during the
1992-93 heating season were 11.0 Bcf, compared with 9.8 Bcf the
previous heating season. Net withdrawals of 12.8 Bcf were made
during the 1992-93 heating season for storage service customers
compared with 13.4 Bcf the previous heating season.
SUPPLY OUTLOOK. The Company's near-term utility gas supply
is excellent. The long-range gas supply outlook also is very
favorable. Annual gas supply is forecasted to exceed demand at
least for the next decade.
Item 1. Business (Continued)
Energy Resources has also been in a favorable supply
position and reserves have continued to increase. However, the
development or purchase of future supplies will depend largely on
energy prices.
(c) (1) (iv) Equitable Gas is regulated by the Pennsylvania
Public Utility Commission and the Public Service Commissions of
West Virginia and Kentucky; LIG is regulated by the Louisiana
Public Service Commission; Kentucky West, Equitrans, Nora, LIG
and Equitable Resources Energy are regulated by the Federal
Energy Regulatory Commission under the Natural Gas Act and the
Natural Gas Policy Act. Equitable Gas, Kentucky West, Equitrans,
Nora, LIG and Equitable Resources Energy are also subject to
regulation by the Department of Transportation under the Natural
Gas Pipeline Safety Act of 1968 with respect to safety
requirements in the design, construction, operation and
maintenance of pipelines and related facilities.
(c) (1) (v) and (vi) Approximately 65 percent of annual
Utility Service revenue is recorded during the winter heating
season from November through March. Significant quantities of
purchased gas are placed in underground storage inventory during
the off-peak season to accommodate high customer demands during
the winter heating season. Funds required to finance this
inventory are obtained through short-term loans.
Energy Resource's revenues are not subject to seasonal
variation to the same degree as Utility Service revenues.
(c) (1) (vii)Not applicable.
(c) (1) (viii)Not applicable.
(c) (1) (ix)Not applicable.
(c) (1) (x)Equitable Gas is in competition with others for
the purchase of natural gas and Equitable Resources Energy is in
competition with others for the acquisition of gas and oil
leases.
Equitable Gas competes for gas sales with other utilities in
its service area, as well as with other fuels and forms of energy
and other sources of natural gas available to existing or
potential customers.
Utility Services has been successful in meeting competition
with aggressive marketing which retained load and added new
residential, commercial and off-system customers in areas served
by two or more energy suppliers. This has been achieved by
responding to market requirements with a portfolio of firm and
interruptible services at competitive prices.
See Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in Part
II regarding FERC Order 636 and its impact on the operations of
the Utility Service companies.
(c) (1) (xi) Not material.
Item 1. Business (Continued)
(c) (1) (xii)The Company and its subsidiaries are subject to
federal, state and local environmental laws and regulations.
Principal concerns are with respect to oil and thermal pollution
of waterways, storage and disposal of hazardous wastes and
liquids and erosion and sedimentation control in pipeline
construction work. For further discussion of environmental
matters, see Management's Discussion and Analysis of Financial
Condition and Results of Operations and Note N to the
consolidated financial statements in Part II.
(c) (1) (xiii)The Companies had 2,454 regular employees at
the end of 1993.
(d) Not material.
Item 2. Properties
Principal facilities are owned by the Company's business
segments with the exception of several office locations and
warehouse buildings. The terms of the leases on these facilities
expire at various times from 1994 through 2014. All leases
contain renewal options for various periods. A minor portion of
equipment is also leased. With few exceptions, utility
transmission, storage and distribution pipelines are located on
or under (1) public highways under franchises or permits from
various governmental authorities, or (2) private properties owned
in fee, or occupied under perpetual easements or other rights
acquired for the most part without examination of underlying land
titles. The Company's facilities have adequate capacity, are well
maintained and, where necessary, are replaced or expanded to meet
operating requirements.
UTILITY SERVICES. Equitable Gas owns and operates natural
gas distribution properties as well as other general property and
equipment in Pennsylvania, West Virginia and Kentucky. Equitrans
owns and operates production, underground storage and
transmission facilities as well as other general property and
equipment in Pennsylvania and West Virginia. Kentucky West owns
and operates gathering and transmission properties as well as
other general property and equipment in Kentucky.
ENERGY RESOURCES. This business segment owns or controls
and operates substantially all of the Company's gas and oil
production properties, the majority of which are located in the
Appalachian area. This segment also owns an intrastate pipeline
system and four hydrocarbon extraction plants in Louisiana,
hydrocarbon extraction facilities in Kentucky with a 100-mile
liquid products pipeline which extends into West Virginia and an
interest in two hydrocarbon extraction plants in Texas.
This business segment owns or controls acreage of proved
developed and undeveloped gas and oil lands located principally
in the Appalachian area and, to a lesser extent, in the Rocky
Mountain area including the Canadian Rockies, the Southwest and
Gulf Coast offshore areas and in Colombia, South America. The
acquisition of Canadian properties in 1993 is described in Note L
to the consolidated financial statements and significant
purchases of oil and gas properties in 1991 are described in Note
M to the consolidated financial statements contained in Part II.
Information relating to Company estimates of natural gas and oil
reserves and future net cash flows is summarized in Note P to the
consolidated financial statements in Part II.
No report has been filed with any Federal authority or
agency reflecting a five percent or more difference from the
Company's estimated total reserves.
Item 2. Properties (Continued)
Gas and Oil Production (Energy Resources):
1993 1992 1991
Gas - MMcf 53,550 48,243 40,022
Oil - Thousands of Barrels 2,112 2,406 2,006
Natural Gas:
Average field sales price of natural gas produced during
1993, 1992 and 1991 was $2.27, $1.93 and $1.81 per Mcf,
respectively.
Average production cost (lifting cost) of natural gas
during 1993, 1992 and 1991 was $.458, $.443 and $.460 per
Mcf, respectively.
Oil:
Average sales price of oil produced during 1993, 1992 and
1991 was $16.18, $18.07 and $18.98 per barrel,
respectively.
Average production cost (lifting cost) of oil during 1993,
1992 and 1991 was $4.30, $3.75 and $3.77 per barrel,
respectively.
Gas Oil
Total productive wells at December 31, 1993:
Total gross productive wells 5,838 876
Total net productive wells 4,301 535
Total acreage at December 31, 1993:
Total gross productive acres 725,000
Total net productive acres 596,000
Total gross undeveloped acres 3,192,000
Total net undeveloped acres 2,341,000
Number of net productive and dry exploratory wells and
number of net productive and dry development wells drilled:
1993 1992 1991
Exploratory wells:
Productive 12.0 11.6 12.4
Dry 6.7 6.3 8.6
Development wells:
Productive 123.4 134.1 120.4
Dry 10.6 12.0 12.6
As of December 31, 1993, the Company had 4 gross wells (2.16
net wells) in the process of being drilled.
Item 3. Legal Proceedings
LIG is a party to certain claims involving its gas purchase
contracts, including take-or-pay liabilities. As more fully
described in Note L to the consolidated financial statements in
Part II, the seller, and/or the previous owner of LIG, have
provided indemnifications for the Company.
There are no other material pending legal proceedings, other
than those which are adequately covered by insurance, to which
the Company or any of its subsidiaries is a party, or to which
any of their property is subject. The Company is claimant as a
creditor in Columbia Gas Transmission Company's bankruptcy
proceeding as described in Notes B and N to the consolidated
financial statements in Part II.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's
security holders during the last quarter of its fiscal year ended
December 31, 1993.
Item 10. Directors and Executive Officers of the Registrant
(b) Identification of executive officers
Name and Age Title Business Experience
First elected to
present position
Donald I. Moritz Chairman and Chief December 17, 1993;
(66) Executive Officer President and Chief
Executive Officer
from August 1, 1978.
First elected to
present position
December 17, 1993;
Executive Vice
President and Chief
Operating Officer
Frederick H. President and from June 1, 1992;
Abrew (56) Chief Operating
Officer Executive Vice
President from
June 1, 1991;
Executive Vice
President - Utility
Services from June 1,
1988.
First elected to
Senior Vice present position
Jeremiah J. Ayres President - February 1, 1991;
(61) Environment and Vice President -
Technology Corporate Services
from March 26, 1987.
Augustine A. Senior Vice First elected to
Mazzei, Jr. (57) President and present position
General Counsel June 1, 1988.
First elected to
Robert E. Daley Vice President and present position
(54) Treasurer May 22, 1986.
First elected to
present position
June 1, 1992;
President - Equitable
Harry E. Gardner, Vice President - Resources Energy
Jr. (56) Energy Resources Company since January
1, 1991; President
Equitable Resources
Exploration Division
from July 1, 1987.
Joseph L. Giebel Vice President - First elected to
(63) Accounting and present position
Administration February 1, 1991;
Vice President -
Accounting from May
1, 1981.
Name and Age Title Business Experience
First elected to
present position
January 1, 1994; Vice
President - Utility
Services from June 1,
John C. Gongas, Vice President - 1992; President of
Jr. (49) Utility Group Kentucky West
Virginia Gas Company
since April 20, 1992;
President of
Equitrans, Inc. from
February 26, 1988.
Vice President and First elected to
Audrey C. Moeller Corporate present position May
(58) Secretary 22, 1986.
First elected to
present position
January 1, 1994; Vice
President - Corporate
Development from
August 1, 1991;
Director - Special
Projects from October
Richard Riazzi Vice President - 1, 1990; President -
(39) Energy Group Equitable Resources
Marketing Company
from February 27,
1989; Vice President
- Strategic Planning
for Equitable
Resources Energy
Company from July 1,
1987.
Officers are elected annually to serve during the ensuing year
or until their successors are chosen and qualified. Except as
indicated, the officers listed above were elected on May 21,
1993.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
(a) The Company's common stock is listed on the New York
Stock Exchange and the Philadelphia Stock Exchange. The high and
low sales prices reflected in the New York Stock Exchange
Composite Transactions as reported by The Wall Street Journal and
the dividends declared and paid per share are summarized as
follows:
<TABLE>
<CAPTION>
1993 1992
High Low Dividend High Low Dividend
<S> <C> <C> <C> <C> <C> <C>
1st Quarter 41 1/2 33 $.270 27 3/4 23 1/2 $.257
2nd Quarter 40 3/4 36 7/8 .270* 27 3/4 23 3/8 .257*
3rd Quarter 44 1/4 35 1/4 .270 33 27 1/8 .257
4th Quarter 42 3/4 35 1/4 .285 34 1/8 31 .270
<F/N>
* Actually declared near the end of the preceding quarter.
<F/N>
</TABLE>
(b)As of December 31, 1993, there were 8,994 shareholders of
record of the Company's common stock.
(c)(1)The indentures under which the Company's long-term debt is
outstanding contain provisions limiting the Company's right to declare
or pay dividends and make certain other distributions on, and to
purchase any shares of, its common stock. Under the most restrictive
of such provisions, $387,755,000 of the Company's consolidated
retained earnings at December 31, 1993, was available for declarations
or payments of dividends on, or purchases of its common stock.
(c)(2)The Company anticipates dividends will continue to be paid
on a regular quarterly basis.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
(Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Operating
revenues $1,094,794 $ 812,374 $ 679,631 $ 659,216 $ 511,540
Net income $73,455 $ 60,026 $ 64,168 $ 58,949 $ 50,874
Earnings per share of
common stock $2.27 $1.92 $2.05 $1.88 $1.62
Total assets* $1,946,907 $1,468,424 $1,440,593 $1,229,154 $1,187,951
Long-term debt $378,845 $346,693 $346,818 $254,725 $256,665
Cash dividends
declared per share
of common stock $1.10 $1.04 $1.00 $.91 $.86
<F/N>
* Total assets at December 31, 1989 through 1992 were restated to reflect the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
</F/N>
</TABLE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
OVERVIEW
Equitable's consolidated net income for 1993 of $73.5
million, or $2.27 per share, was the second highest in the
Company's history. The 1993 results represent a 22 percent
increase over 1992 net income of $60.0 million, or $1.92 per
share, and a 14 percent increase over 1991 net income of $64.2
million, or $2.05 per share.
Earnings for all three years include income from regulatory
approvals for the recovery of higher wellhead prices for natural
gas produced and sold in prior years as more fully described in
Note B to the consolidated financial statements. The recovery
increased income by approximately $4.7 million for both 1993 and
1992 and $14.9 million for 1991.
The increase in net income for 1993 compared to 1992 is due
primarily to increases in production and average wellhead prices
for natural gas and increased margins from utility service
operations. These increases were partially offset by a $5
million increase in 1993 federal income taxes as a result of a
one percent increase in the federal corporate income tax rate as
more fully described in Note C to the consolidated financial
statements. The increase in net income for 1992 compared to
1991, excluding the effect of the direct billing settlements, is
the result of increased sales of produced gas and oil, higher
average wellhead prices for natural gas and increased retail gas
sales reflecting colder weather in 1992.
RESULTS OF OPERATIONS
This discussion supplements the detailed financial
information by business segment presented in Note K to the
consolidated financial statements.
ENERGY RESOURCES
Operating revenues were $743.1 million in 1993 compared with
$461.6 million in 1992 and $367.3 million in 1991. The increase
in revenues between the periods is due primarily to increases in
gas marketing activity, production and average wellhead prices
for natural gasand increased production of natural gas liquids in
1993. The increase in marketed natural gas and production of
natural gas liquids for 1993 is due primarily to the acquisition
of Louisiana Intrastate Gas Company (LIG) on June 30, 1993 as
more fully described in Note L to the consolidated financial
statements. Increased production of natural gas and oil for 1992
compared to 1991 reflects the full-year impact of 1991
acquisitions.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Energy Resources 1993 1992 1991
Operating Revenues (thousands):
Natural Gas:
Production . . . . . . . . $121,360 $ 92,864 $ 72,498
Marketing . . . . . . . . . 505,830 269,182 185,901
Oil . . . . . . . . . . . . 34,176 43,469 38,074
Natural Gas Liquids . . . . . 47,121 21,256 23,573
Direct Billing Settlements . 7,815 7,815 24,960
Other . . . . . . . . . . . . 26,762 27,056 22,291
Total Revenues . . . . . $743,064 $461,642 $367,297
Sales Quantities:
Natural Gas (MMcf):
Production . . . . . . . . 53,550 48,243 40,022
Marketing . . . . . . . . . 218,031 131,711 102,456
Oil (MBls) . . . . . . . . . 2,112 2,406 2,006
Natural Gas Liquids
(thousands of gallons) . . . 162,191 64,938 64,200
Gas purchased amounted to $533.7 million in 1993 compared
with $277.0 million in 1992 and $193.1 million in 1991. The
increased cost in 1993 reflects the increase in volume of
marketed natural gas and requirements for the higher production
level of natural gas liquids. The increase for 1992 is due to
the increase in volume of marketed natural gas.
Other operating expenses were $155.2 million in 1993, $143.4
million in 1992 and $127.6 million in 1991. Increases for the
respective years are attributed to increased production expenses,
depreciation and depletion related to the higher level of natural
gas production and the consolidation of LIG in 1993.
Operating income, excluding income from direct billing
settlements, was $46.4 million in 1993 compared with $33.4
million in 1992 and $21.6 million in 1991. The increase in
operating income for 1993 compared to 1992 reflects primarily the
increase in average wellhead prices and production of natural
gas. The increase for 1992 compared to 1991 is due mainly to
increased production of natural gas and oil and higher average
wellhead prices for gas.
Energy resource operations accounted for more than half of
consolidated net income in 1993. This was achieved through the
combination of improved wellhead prices for natural gas and
increased production realized from recent acquisitions as well as
ongoing development activity. Average wellhead prices increased
18 percent in 1993 and reached a level that has not been
experienced since 1988. Production was increased by 11 percent
in 1993 and represents a 34 percent increase since 1991 when
wellhead prices were at their lowest point in more than ten
years.
Appalachian gas reserves and acreage position remain a firm
foundation for the segment's strategy of traditional development
and expanding diversification into other areas. The recent
acquisition of LIG has enhanced expansion of marketing activities
in the Gulf coast area where the Company has been active in
natural gas production. LIG will serve as the nucleus for
development of a "market hub" with broad access in this area of
major production activity as well as interconnections with major
pipelines serving substantially all regions of the country.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
In 1994, the segment's $90.5 million capital expenditure
program includes $35.3 million for development of Appalachian
holdings, $24.6 million for the Rocky Mountain area, $17.2
million for off-shore drilling in the Gulf of Mexico and $2.6
million for participation in exploration in South America.
Bolstered by the frigid weather experienced in early 1994, the
Company believes the market for natural gas will sustain recent
price trends. Market and price trends will continue to be the
principal factors for the economic justification of drilling
investments under the 1994 program. In addition, $10.8 million
in the 1994 capital program is earmarked for other projects,
including further development of LIG. The Company is also
proceeding with plans to fund and develop storage and interchange
facilities which will interconnect with LIG and the Henry Hub.
These facilities will establish the capability to provide
services necessary for the creation of a separate market hub.
UTILITY SERVICES
Operating revenues, which are derived principally from the
sale and transportation of natural gas, were $397.3 million in
1993 compared with $393.6 million in 1992 and $381.7 million in
1991. The increase in revenues for 1993 compared to 1992 is due
to the full-year impact of a retail rate increase for
Pennsylvania customers that went into effect in July of 1992,
offset by lower retail rates to pass-through decreased purchased
gas costs to customers. The increase in revenues for 1992
compared to 1991 is due primarily to increased retail gas sales
resulting from colder weather which were offset somewhat by lower
off-system sales and transportation.
Utility Services 1993 1992 1991
Operating Revenues (thousands):
$314,312 $305,310 $291,955
Pipeline Gas Sales . . . . . 12,257 24,186 24,071
Transportation Service . . . 44,760 48,732 48,829
Storage Service . . . . . . . 6,927 5,553 5,935
Marketed Gas Sales . . . . . 10,200 - -
Other . . . . . . . . . . . . 8,841 9,847 10,865
Total Revenues . . . . . . $397,297 $393,628 $381,655
Sales Quantities (MMcf):
Retail Gas Sales . . . . . . 39,982 38,907 36,688
Pipeline Gas Sales . . . . . 2,814 5,779 5,823
Transportation . . . . . . . 66,272 71,166 70,897
Marketed Gas . . . . . . . . 4,052 - -
Heating Degree Days
(Normal - 5,968) . . . . . . 5,628 5,629 5,030
Gas purchased amounted to $153.6 million in 1993, $170.6
million in 1992 and $163.4 million in 1991. The decrease in gas
costs for 1993 reflects the pass-through of lower costs in rates
to retail customers. The increase in 1992 is due primarily to
the increase in retail sales volumes.
Other operating expenses amounted to $167.4 million in 1993,
$149.8 million in 1992 and $148.3 million in 1991. The increase
in other operating expenses for 1993 reflects increased labor and
employee benefits, increased depreciation, higher taxes other
than income, and recording of a reserve for possible refund of
interstate billings.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Operating income was $76.3 million in 1993 compared with
$73.2 million in 1992 and $70.0 million in 1991. The increase in
operating income for 1993 compared to 1992 is due primarily to
the full-year impact of the retail rate increase that went into
effect in July 1992. The increase in operating income for 1992
compared to 1991 is attributed to higher retail sales.
In May 1992, the Federal Energy Regulatory Commission (FERC)
issued new regulations, in its Order 636, that significantly
altered the manner in which natural gas is sold and transported
in interstate commerce. The main feature of the new regulations
requires pipelines to unbundle their services and rates by
function and permit customers to select one or more of the
services offered by the pipeline, i.e., transportation, storage,
etc. Under the new structure, local distribution utilities,
other marketers and end users will purchase their own gas supply
and use pipeline services for handling and transporting the gas.
The regulations require pipelines to establish new rates using a
straight fixed variable design. Under this method, all fixed
costs, including return on investment in facilities, are
recovered through a fixed demand or capacity charge based on peak
requirements reserved by customers. The vast majority of costs
in pipeline rates are fixed costs. The remaining variable costs
are recovered in commodity rates based on actual customer usage.
The regulations also provide a rate mechanism for pipelines to
recover prudently incurred transition costs as they move away
from the merchant function.
The Company's interstate pipelines, Kentucky West and
Equitrans, have successfully implemented their Order 636
restructured tariffs effective July 1, 1993 and September 1,
1993, respectively. All restructuring issues have been resolved
for Kentucky West. On September 2, 1993, Equitrans filed a new
rate case to address operational and transitional cost recovery
issues which were severed from its Order 636 compliance filing by
the FERC. On September 30, 1993, the FERC issued an order
accepting and suspending certain tariff provisions and rejecting
other conditions. The major area of difference was the timing
and method of recovering some $60 million of transition costs.
While Equitrans continues to recover other costs in restructured
rates, it has filed a request for rehearing with the FERC
regarding the recovery of transition costs.
CAPITAL RESOURCES AND LIQUIDITY
Operating Activities
Cash required for operations is impacted primarily by the
seasonal nature of the Company's utility operations. Gas
purchased for storage during the nonheating season is financed
with short-term loans which are repaid as gas is withdrawn from
storage and sold during the heating season. Short-term loans are
also used to provide other working capital requirements during
the nonheating season.
Investing Activities
The Company's business requires major ongoing expenditures
for replacements, improvements and additions to utility plant and
continuing development and expansion of its energy resources.
Such expenditures during 1993 were $339.4 million including
approximately $209 million for the purchase of LIG and Hershey
Oil Corporation as described in Note L to the consolidated
financial statements. A total of $151.2 million has been
authorized for the 1994 capital expenditure program, including
$90.5 million for energy resources.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Short-term loans are used as interim financing for a portion
of capital expenditures. The Company expects to finance its 1994
capital expenditures with cash generated from operations and
temporarily with short-term loans.
Capital expenditures, including acquisitions, totaled about
$865 million during the five- year period ended December 31,
1993, of which 45 percent was financed from operations.
Financing Activities
The Company believes it has adequate borrowing capacity to
meet its financing requirements. Bank loans and commercial
paper, supported by available credit, are used to meet short-term
financing requirements. Interest rates on these short-term loans
ranged from 2.94 percent to 3.78 percent during 1993. At
December 31, 1993, $189.9 million of commercial paper and $64.0
million of bank loans were outstanding at an average interest
rate of 3.30 percent. Lines of credit currently available to the
Company total $325 million which require commitment fees
averaging one-tenth of one percent. Adequate lines of credit are
expected to continue to be available in the future.
On September 29, 1993, the Company issued 3 million shares of
common stock at a price of $38.50 per share. Net proceeds of
approximately $111.6 million, after underwriters' commissions and
other issuance costs, were used to repay a portion of the short-
term debt incurred to purchase the stock of LIG.
The Company filed a shelf-registration in March 1992 to issue
$100 million of medium-term notes to be used primarily to retire
short-term loans incurred to finance a portion of acquisitions
made in 1991. Given the advantage of short-term interest rates
during 1992 and 1993, the Company issued only $24.5 million of
the medium-term notes during 1992 and an additional $32 million
during 1993. It is anticipated that the remaining $43.5 million
of medium-term notes will be issued in the first half of 1994.
As more fully described in Note H to the consolidated
financial statements, the Company has redeemed $31.6 million of
long-term debt during the past two years to further reduce
interest costs. These redemptions were temporarily financed with
short-term debt.
Accounting Developments
The Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109)
effective January 1, 1993 and elected to restate its financial
statements as of January 1, 1988. The Company also adopted SFAS
No. 106 "Employers' Accounting for Postretirement Benefits Other
Than Pensions" (OPEBS) effective January 1, 1993. The effect of
adoption of SFAS No. 109 and SFAS No. 106 are more fully
described in Notes C and E, respectively, to the consolidated
financial statements.
The effect of adoption of both standards on net income was
the deferral of increased expenses related to rate regulated
utility operations. At December 31, 1993, regulatory assets
related to deferred income taxes under SFAS No. 109 and
accounting for OPEBS under SFAS No. 106 were approximately $76.4
million and $2.9 million, respectively.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Federal Income Tax Provisions
In August 1993, the Omnibus Budget Reconciliation Act of 1993
(OBRA) was signed into law. One of the provisions of OBRA was to
raise the maximum corporate income tax rate from 34 percent to 35
percent. The effect of this tax rate change increased deferred
tax liabilities by approximately $11 million and increased
regulatory assets by approximately $6 million.
Cash flow has been affected by the Alternative Minimum Tax
(AMT) since 1988. Despite the availability of nonconventional
fuels tax credit, the Company has incurred an AMT liability in
each of the years 1988 through 1993. Although AMT payments can
be carried forward indefinitely and applied to income tax
liabilities in future periods, they reduce cash generated from
operations. At December 31, 1993, the Company has available
$69.3 million of AMT credit carryforwards. The collection of
revenues from direct billing settlements described in Note B to
the consolidated financial statements will improve cash flow with
the utilization of carryover credits. Nevertheless, the impact
of AMT on cash flow will continue to depend on the future levels
of energy prices. AMT is not expected to affect the Company's
ability to finance future capital requirements.
Under current law, wells drilled after 1992 do not qualify
for the nonconventional fuels tax credit. While production from
qualified Energy Resources' wells drilled in the Appalachian area
will generate tax credits through the year 2002, it is
anticipated that the amount of such credits will decline after
1993 as the related reserves are depleted. The credits recorded
in 1993, 1992 and 1991 reduced the Company's federal income tax
provisions by $20.6 million, $14.1 million and $11.0 million,
respectively.
Environmental Matters
Management does not know of any environmental liabilities
that will have a material effect on the Company's financial
position or results of operations. The Company has identified
situations that require remedial action for which $6.0 million is
accrued at December 31, 1993. The portion of amounts expensed
through 1993 that have been deferred and included in regulatory
assets amounts to $3.1 million. Environmental matters are
described in Note N to the consolidated financial statements.
Balance Sheet Changes
The increase in deferred purchased gas cost is due to the
timing of pass-through of gas costs to ratepayers. Changes in
deferred purchased gas cost generally do not affect results of
operations due to regulatory procedures for purchased gas cost
recovery in rates. Gas stored underground--current inventory
increased because all inventory is valued at average cost. See
Note A to the consolidated financial statements. The increases
in accounts receivable, accounts payable and other current
liabilities reflect mainly the consolidation of LIG and increased
marketing activities.
AUDIT COMMITTEE
The Audit Committee, composed entirely of outside directors,
meets periodically with the Company's independent auditors, its
internal auditor and management to review the Company's financial
statements and the results of audit activities. The Audit
Committee, in turn, reports to the Board of Directors on the
results of its review and recommends the selection of independent
auditors.
Item 8. Financial Statements and Supplementary Data
Page
Reference
Report of Independent Auditors 23
Statements of Consolidated Income
for each of the three years in
the period ended December 31, 1993 24
Consolidated Balance Sheets
December 31, 1993 and 1992 25 & 26
Statements of Consolidated Cash Flows
for each of the three years in the
period ended December 31, 1993 27
Statements of Common Stockholders'
Equity for each of the three
years in the period ended
December 31, 1993 28
Long-term Debt, December 31,
1993 and 1992 29
Notes to Consolidated Financial
Statements 30 - 47
<AUDIT-REPORT>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Equitable Resources, Inc.
We have audited the accompanying consolidated balance sheets
and statements of long-term debt of Equitable Resources, Inc.,
and Subsidiaries at December 31, 1993 and 1992, and the related
consolidated statements of income, common stockholders' equity
and cash flows for each of the three years in the period ended
December 31, 1993. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Equitable Resources, Inc., and Subsidiaries
at December 31, 1993 and 1992, and the consolidated results of
their operations and their cash flows for each of the three years
in the period ended December 31, 1993 in conformity with
generally accepted accounting principles. Also, in our opinion,
the related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.
As described in Note C and Note E to the consolidated
financial statements, the Company changed its method of
accounting for income taxes and postretirement benefits in 1993.
s/ Ernst & Young
-------------------------------
Ernst & Young
Pittsburgh, Pennsylvania
February 22, 1994
</AUDIT-REPORT>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
(Thousands Except per
Share Amounts)
<S> <C> <C> <C>
Operating Revenues $1,094,794 $812,374 $679,631
Cost of Gas Purchased 644,157 407,055 290,614
Net operating revenues 450,637 405,319 389,017
Operating Expenses:
Operation 174,420 161,972 159,214
Maintenance 29,024 26,327 24,441
Depreciation and depletion 76,894 65,940 54,593
Taxes other than income 39,802 36,654 34,192
Total operating expenses 320,140 290,893 272,440
Operating Income 130,497 114,426 116,577
Other Income (Expense) 1,706 1,781 (528)
Interest Charges 38,728 37,411 31,945
Income Before Income Taxes 93,475 78,796 84,104
Income Taxes 20,020 18,770 19,936
Net Income $ 73,455 $ 60,026 $ 64,168
Average Common Shares Outstanding 32,359 31,342 31,253
Earnings Per Share of Common Stock $2.27 $1.92 $2.05
</TABLE>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
ASSETS
1993 1992
Restated
(Thousands)
<S> <C> <C>
Property, Plant and Equipment
(Successful Efforts Method):
Energy resources $1,203,599 $ 814,654
Less accumulated
depreciation and depletion 298,370 249,392
Net energy resources 905,229 565,262
Utility services 903,238 852,762
Less accumulated
depreciation and depletion 260,043 242,810
Net utility services 643,195 609,952
Net property, plant and equipment 1,548,424 1,175,214
Current Assets:
Cash and cash equivalents 15,037 11,590
Accounts receivable (less
accumulated provision for
doubtful accounts: 1993,
$10,106; 1992, $9,503) 171,626 121,568
Unbilled revenues 27,853 19,637
Gas stored underground - current inventory 18,059 12,983
Material and supplies 12,261 10,311
Deferred purchased gas cost 17,148 3,124
Prepaid expenses and other 23,977 21,704
Total current assets 285,961 200,917
Other Assets:
Regulatory assets 87,024 68,367
Other 25,498 23,926
Total other assets 112,522 92,293
Total $1,946,907 $1,468,424
</TABLE>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
CAPITALIZATION AND LIABILITIES
1993 1992
Restated
(Thousands)
<S> <C> <C>
Capitalization:
Common stockholders' equity $ 728,030 $ 577,557
Long-term debt 378,845 346,693
Total capitalization 1,106,875 924,250
Current Liabilities:
Long-term debt payable within one year 1,971 16,445
Short-term loans 253,900 114,000
Accounts payable 143,808 92,127
Accrued taxes 15,358 12,126
Accrued interest 12,338 11,609
Refunds due customers 14,206 11,669
Customer credit balances 7,578 7,900
Other 14,794 4,753
Total current liabilities 463,953 270,629
Deferred and Other Credits:
Deferred income taxes 331,140 242,305
Deferred investment tax credits 23,178 24,551
Other 21,761 6,689
Total deferred and other credits 376,079 273,545
Commitments and Contingencies -
-
Total $1,946,907 $1,468,424
</TABLE>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
(Thousands)
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 73,455 $ 60,026 $ 64,168
Adjustments to reconcile
net income to net cash
provided by operating activities:
Depreciation and depletion 76,894 65,940 54,593
Deferred income taxes 756 (2,015) 3,974
Other - net 1,319 1,435 1,788
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues
(22,352) (8,035) (10,683)
Gas stored underground (5,076) 3,990 (8,877)
Material and supplies (709) (724) 1,976
Deferred purchased gas cost (14,024) 4,915 (2,871)
Regulatory assets (18,657) (2,870) (13,269)
Accounts payable 18,747 2,821 13,568
Accrued taxes 1,024 1,018 539
Refunds due customers 2,537 4,050 (540)
Other - net (4,588) 3,965 8,725
Total adjustments 35,871 74,490 48,923
Net cash provided by
operating activities 109,326 134,516 113,091
Cash Flows from Investing Activities:
Capital expenditures:
Energy resources
(including acquisitions) (296,245) (52,923) (189,472)
Utility services (43,166) (46,666) (45,717)
Proceeds from sale of property 1,270 6,872 910
Net cash used in
investing activities (338,141) (92,717) (234,279)
Cash Flows from Financing Activities:
Issuance of common stock 112,412 1,427 2,959
Purchase of treasury stock (28) (226) (6,018)
Dividends paid (35,279) (32,595) (31,254)
Proceeds from issuance of long-term debt 31,702 24,359 98,995
Repayments and retirements of long-term debt
(16,445) (15,995) (922)
Increase (decrease) in short-term loans 139,900 (15,500) 47,500
Net cash provided (used)
by financing activities 232,262 (38,530) 111,260
Net Increase (Decrease) in
Cash and Cash Equivalents 3,447 3,269 (9,928)
Cash and Cash Equivalents at
Beginning of Year 11,590 8,321 18,249
Cash and Cash Equivalents at End of Year $ 15,037 $ 11,590 $ 8,321
See notes to consolidated financial statements
Pages 30 to 47, inclusive
Cash Paid During the Year for:
Interest (net of amount capitalized) $ 34,592 $ 31,304 $ 24,605
Income taxes $ 27,547 $ 17,587 $ 20,793
</TABLE>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
Common Stock(a) Foreign Common
Shares No Retained Currency Stockholders'
Outstanding Par Value Earnings Translation Equity
(Thousands)
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1991 31,300 $ 94,701 $433,801 $ - $528,502
Cumulative effect of change in
accounting for income taxes (11,889)
Balance, January 1, 1991 as
restated 31,300 94,701 421,912 516,613
Net income for the year 1991 64,168
Dividends ($1.00 per share) (31,254)
Stock issued:
Conversion of 9 1/2%
debentures 97 1,084
Restricted stock
option plan 167 4,073
Treasury stock (253) (6,018)
Balance, December 31, 1991 (b) 31,311 93,840 454,826 548,666
Net income for the year 1992 60,026
Dividends ($1.04 per share) (32,595)
Stock issued:
Conversion of 9 1/2%
debentures 23 259
Restricted stock
option plan 60 1,427
Treasury stock (8) (226)
Balance, December 31, 1992 (b) 31,386 95,300 482,257 577,557
Net income for the year 1993 73,455
Dividends ($1.10 per share) (35,279)
Foreign currency translation for the year 1993 (581)
Stock issued:
New stock issuance 3,000 111,570
Conversion of
9 1/2% debentures 51 564
Restricted stock
option plan 29 850
Cash paid in lieu
of fractional shares (78)
Treasury stock (1) (28)
Balance, December 31, 1993
(b)(c)(d) 34,465 $208,178 $520,433 $(581) $728,030
<F/N>
(a) Shares authorized: Common - 80,000,000 shares, Preferred - 3,000,000 shares.
(b) Net of treasury stock: 1993 - 622,000 shares ($14,623,000); 1992 - 621,000 shares ($14,595,000);
1991 - 613,000 shares ($14,368,000).
(c) A total of 1,154,000 shares of authorized but unissued common stock was reserved for the
conversion of the 9 1/2% convertible subordinated debentures, for issuance under the key
employee restricted stock option and stock appreciation rights incentive compensation plan and
for issuance under the company's dividend reinvestment and stock purchase plan.
(d) Retained earnings of $387,755,000 is available for dividends on, or purchase of, common stock
pursuant to restrictions imposed by indentures securing long-term debt.
<F/N>
</TABLE>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
LONG-TERM DEBT
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
Annual Debt Maturities After
Maturities One Year
1993 1992 1993 1992
(Thousands)
<S> <C> <C> <C> <C>
First mortgage bonds, series due
June 15, 1997, 8% $ - $16,445 $ - $ -
8 1/4% Debentures, due July 1, 1996 (a)
- - 75,000 75,000
7 1/2% Debentures, due July 1, 1999
($75,000 principal amount, net of
unamortized original issue discount)(a) - - 69,684 68,968
9 1/2% Convertible subordinated
debentures, due January 15, 2006 - - 2,661 3,225
9.9% Debentures, due April 15, 2013 (b) - - 75,000 75,000
Medium-term notes:
7.2% to 9.0% Series A,
due 1998 thru 2021 - - 100,000 100,000
5.1% to 7.4% Series B,
due 1995 thru 2023 - - 56,500 24,500
Other 1,971 - - -
Total $1,971 $16,445 $378,845 $346,693
<F/N>
(a) Not redeemable prior to maturity.
(b) Annual sinking fund payments of $3,750,000 are required beginning in 1999.
</F/N>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
</TABLE>
See notes to consolidated financial statements
Pages 30 to 47, inclusive
A. Summary of Significant Accounting Policies
(1)PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of Equitable Resources, Inc. and
Subsidiaries (the "Company" or "Companies"). All subsidiaries
are 100% owned.
(2)PROPERTIES, DEPRECIATION AND DEPLETION: The cost of
property additions, replacements and improvements capitalized
includes labor, material and overhead. The cost of property
retired, plus removal costs less salvage, is charged to
accumulated depreciation.
Depreciation for financial reporting purposes is provided on
the straight-line method at composite rates based on estimated
service lives, except for most gas and oil production properties
as explained below. Depreciation rates are based on periodic
studies.
The Company uses the successful efforts method of accounting
for exploration and production activities. Under this method,
the cost of productive wells and development dry holes, as well
as productive acreage, are capitalized and depleted on the unit-
of-production method. Capitalized acquisition costs of unproved
properties are periodically assessed for impairment of value, and
any loss is recognized at the time of impairment.
(3)ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION: The
Federal Energy Regulatory Commission (FERC) prescribes a formula
to be used for computing overhead allowances for funds used
during construction (AFC). AFC applicable to equity funds
capitalized is included in other income and amounted to
$1,022,000 in 1993, $1,297,000 in 1992 and $914,000 in 1991. AFC
applicable to borrowed funds, as well as other interest
capitalized for the nonregulated companies, is applied as a
reduction of interest charges and amounted to $1,841,000 in 1993,
$1,267,000 in 1992 and $1,263,000 in 1991
(4)INVENTORIES: Inventories are stated at cost which is
below market. Gas stored underground--current inventory at
December 31, 1993 of $18,059,000 is stated at cost under the
average cost method. The December 31, 1992 balance includes
$5,918,000, which is stated at cost under the last-in, first-out
method (LIFO). As a result of FERC Order 636, certain gas stored
underground has been transferred, at book value (LIFO), to
property, plant and equipment. This gas represents cushion gas
for the regulated interstate pipeline operations, a portion of
which will be necessary to compensate for gas imbalances until
replaced in-kind by customers. Material and supplies are stated
generally at average cost.
(5)INCOME TAXES: The Companies file a consolidated federal
income tax return. The current provision for income taxes
represents amounts paid or payable. Deferred income tax assets
and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities.
Where deferred tax liabilities will be passed through to
customers in regulated rates, the Company establishes a
corresponding regulatory asset for the increase in future
revenues that will result when the temporary differences reverse.
Investment tax credits realized in prior years were deferred
and are being amortized over the estimated service lives of the
related properties where required by ratemaking rules.
A. Summary of Significant Accounting Policies (Continued)
(6)DEFERRED PURCHASED GAS COST: Where permitted by
regulatory authorities under purchased gas adjustment clauses or
similar tariff provisions, the Companies defer the difference
between purchased gas cost, less refunds, and the billing of such
cost and amortize the deferral over subsequent periods in which
billings either recover or repay such amounts.
(7)REGULATORY ASSETS: Certain costs, which will be passed
through to customers under ratemaking rules for regulated
operations, are deferred by the Company as regulatory assets.
The amounts deferred relate primarily to the accounting for
income taxes.
(8)CASH FLOWS: The Company considers all highly liquid
investments with a maturity of three months or less when
purchased to be cash equivalents.
(9)RECLASSIFICATION: Certain amounts contained in prior
year comparative information have been reclassified to conform
with the 1993 presentation.
B. Direct Billing Settlements
In 1990, a subsidiary, Kentucky West Virginia Gas Company,
received FERC approval of settlement agreements with all
customers, except Columbia Gas Transmission Company, for the
direct billing to recover the higher Natural Gas Policy Act
(NGPA) prices which the FERC had denied on natural gas produced
from energy resource properties between 1978 and 1983. The
settlements were individually negotiated and contain differing
terms providing for the collection of $100.3 million over periods
ranging from four to ten years. The recovery of $85 million of
the $89 million settlement with the Equitable Gas division was
subject to Pennsylvania Public Utility Commission (PUC) review as
described below. The agreements that were fully approved were
recorded at present value using a discount rate of 9%.
In 1991, the Equitable Gas division received PUC approval to
recover $25 million of increased gas costs relating to the FERC
settlement, including $4.9 million of additional carrying
charges. The PUC also approved the recovery of $7.8 million
relating to the settlement in each of the years 1993 and 1992.
The amounts approved increased net income reported for the third
quarter of 1993 and 1992 by $4.7 million and $14.9 million for
the third quarter of 1991. Approximately $49 million from the
settlement remains to be recovered in future gas cost filings
with the PUC over the next seven years.
A final settlement proposal negotiated with Columbia for the
recovery of $19 million was approved by the FERC in February
1993. The settlement agreement has been accepted in Columbia's
bankruptcy proceeding. However, in view of Columbia's pending
reorganization under Chapter 11 of the Bankruptcy Code, the
amount of recovery from Columbia remains uncertain and therefore
has not been recognized.
C. Income Taxes
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS
No. 109) effective January 1, 1993 and elected to restate prior
period financial statements for the effect of the change. As of
January 1, 1988, retained earnings was reduced by approximately
$12 million; periodic net income since that date was not restated
because the effect of the change in accounting on all periods
reported was not material. Application of the new rules
increased deferred income tax liabilities at January 1, 1992 by
approximately $77 million and created regulatory assets of
approximately $65 million.
The sources and tax effects of the temporary differences are
as follows:
December 31,
1993 1992
(Thousands)
Deferred tax liabilities (assets):
Exploration and development costs
expensed for income tax reporting
$138,089 $124,254
Tax depreciation in excess of
book depreciation . . . . . . 250,032 141,183
Regulatory temporary differences 36,841 28,710
Deferred purchased gas cost . . . 8,413 2,423
Alternative minimum tax . . . . . (69,333) (48,920)
Investment tax credit . . . . . . (10,340) (10,121)
Other . . . . . . . . . . . . . . (21,829) 4,958
Total (including amounts classified
as current liabilities of $733
for 1993 and $182 for 1992) . $331,873 $242,487
As of December 31, 1993 and 1992, $76.4 million and $68.4
million, respectively, of the net deferred tax liabilities are
related to rate regulated operations and have been deferred as
regulatory assets.
Income tax expense is summarized as follows:
Years Ended December 31,
1993 1992 1991
(Thousands)
Current:
Federal . . . . . . . .
$15,577 $13,540 $11,770
State . . . . . . . . . 3,687 7,245 4,192
Deferred:
Federal . . . . . . . . (2,758) (4,547) 1,254
State . . . . . . . . . 3,514 2,532 2,720
Total . . . . . . . . $20,020 $18,770 $19,936
C. Income Taxes (Continued)
Provisions for income taxes are less than amounts computed
at the federal statutory rate of 35% for 1993 and 34% for 1992
and 1991 on pretax income. The reasons for the difference are
summarized as follows:
Years Ended December 31,
1993 1992 1991
(Thousands)
Tax at statutory rate .
$ 32,716 $ 26,791 $28,595
State income taxes . . . 4,332 6,453 4,562
Increase in federal
income tax rate . . . . 5,070 - -
Nonconventional fuels tax
credit . . . . . . . . (20,600) (14,051) (10,998)
Other . . . . . . . . . (1,498) (423) (2,223)
Income tax expense . . $ 20,020 $ 18,770 $ 19,936
Effective tax rate . . . 21.4% 23.8% 23.7%
In August 1993, the Omnibus Budget Reconciliation Act of
1993 (Act) was signed into law. One of the provisions of the Act
was to raise the maximum corporate income tax rate from 34% to
35%. The effect of this tax rate change increased deferred tax
liabilities by approximately $11 million and increased regulatory
assets by approximately $6 million.
The consolidated federal income tax liability of the
Companies has been settled through 1990.
The Company has available $69.3 million of alternative
minimum tax credit carryforward which has no expiration date. In
addition, the Company has net operating loss carryforwards for
federal income tax purposes of $13.8 million which begin to
expire in 2006. The net operating loss carryforwards are the
result of the acquisition of Louisiana Intrastate Gas Company as
described in Note L.
Amortization of deferred investment tax credits amounted to
$1,373,000 for 1993, $1,138,000 for 1992 and $850,000 for 1991.
D. Employee Pension Benefits
The Companies have several trusteed retirement plans
covering substantially all employees. The Companies' annual
contributions to the plans are based on a 25-year funding level.
Plans covering union members generally provide benefits of stated
amounts for each year of service. Plans covering salaried
employees use a benefit formula which is based upon employee
compensation and years of service to determine benefits to be
provided. Plan assets consist principally of equity and debt
securities.
D. Employee Pension Benefits (Continued)
The following table sets forth the plans' funded status and
amounts recognized in the Company's consolidated balance sheets:
December 31,
1993 1992
(Thousands)
Actuarial present value
of benefit obligations:
Vested benefit obligation $132,402 $112,372
Accumulated benefit obligation $135,809 $115,192
Market value of plan assets $159,433 $149,351
Projected benefit obligation 148,265 124,100
Excess of plan assets over projected
benefit obligation 11,168 25,251
Unrecognized net asset (3,237) (3,664)
Unrecognized net gain (16,732) (27,305)
Unrecognized prior service cost 10,403 8,246
Prepaid pension cost recognized in
the consolidated balance sheets $ 1,602 $ 2,528
At year-end the discount rate used in determining the
actuarial present value of benefit obligations was 7 1/4% for
1993, 8 1/4% for 1992 and 8 1/2% for 1991. The assumed rate of
increase in compensation levels was 4 1/2% for 1993 and 5% for
1992 and 1991.
The Companies' pension cost, using a 9% average rate of
return on plan assets at the beginning of 1993 and 1992 and 8
1/2% for 1991, comprised the following:
Years Ended December 31,
1993 1992 1991
(Thousands)
Service cost benefits earned
during the period $ 2,806 $ 2,345 $ 2,726
Interest cost on projected
benefit obligation 10,472 9,917 10,305
Actual return on assets (17,224) (18,214) (27,681)
Net amortization and deferral 5,486 7,069 16,946
Net periodic pension cost $ 1,540 $ 1,117 $ 2,296
E. Other Postretirement Benefits
In addition to providing pension benefits, the Companies
provide certain health care and life insurance benefits for
retired employees and their dependents. Substantially all
employees are eligible for these benefits upon retirement from
the Companies.
E. Other Postretirement Benefits (Continued)
SFAS No. 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (OPEBS) requires, among other
things, the accrual of retirement health care and life insurance
benefits during the years an employee provides services. The new
standard requires that the accumulated plan benefit obligation
existing at the date of adoption (transition obligation) either
be recognized immediately or deferred and amortized over future
periods.
Historically, the Company recognized the cost of retiree
health care and life insurance benefits as paid and has retained
the right to modify or discontinue these benefits at any time.
However, the Company was required to adopt the new standard
effective January 1, 1993 and will amortize the resulting
transition obligation over 20 years. In determining the
accumulated postretirement benefit obligation at January 1, 1993,
the Company used an inflation factor for medical costs beginning
at 13% per year, which decreases gradually thereafter to 6%
within 15 years and a discount rate of 8 1/4%. At December 31,
1993, the beginning inflation factor was 11% decreasing gradually
to 4 3/4% within 17 years and the discount rate was 7 1/4%. The
following summarizes the status of the Company's accrued OPEBS:
December 31, January 1,
1993 1993
(Thousands)
Accumulated postretirement
benefit obligation:
Retired employees $ 23,078 $ 24,971
Active employees: 8,942 7,361
Fully eligible
Other 16,741 13,780
Total obligation 48,761 46,112
Unrecognized net gain 40 -0-
Unrecognized transition
obligation (43,806) (46,112)
Accrued postretirement
benefit cost $ 4,995 $ -0-
The net periodic cost for postretirement health care and life
insurance benefits for 1993 includes the following:
1993
(Thousands)
Service cost . . . . . . . . . . . . . . . . . $1,065
Interest cost . . . . . . . . . . . . . . . . 3,936
Amortization of transition obligation . . . . 2,306
Periodic cost . . . . . . . . . . . . . . . . $7,307
E. Other Postretirement Benefits (Continued)
As of December 31, 1993, $2.9 million of the accrued OPEBS
related to rate regulated operations have been deferred as regulatory
assets. Rate filings will be made to seek full recovery of the costs
accrued under SFAS No. 106 over periods of up to 20 years.
An increase of one percent in the assumed medical cost inflation
rate would increase the accumulated postretirement benefit obligation
by 8% and would increase the periodic cost by 10%.
The Company paid current claims for OPEBS of $3,421,000 in 1993.
The cost of OPEBS for 1992 and 1991 was recognized as paid and
amounted to $2,919,000 and $3,537,000, respectively.
F. Common Stock
(1) Common Stock Issuance
On September 29, 1993, the Company issued 3 million shares of
common stock at a price of $38.50 per share. Net proceeds after
underwriters' commissions and other issuance costs were approximately
$111.6 million. The proceeds were used to repay a portion of the
short-term debt incurred to purchase the stock of Louisiana Intrastate
Gas Company as described in Note L.
(2) Restricted Stock Options and Awards
The Equitable Resources, Inc., Key Employee Restricted Stock
Option and Stock Appreciation Rights Incentive Compensation Plan is
nonqualified and provides for the granting of restricted stock awards
or options to purchase common stock of the Company at prices ranging
from 75% to 100% of market value on the date of grant. Stock options
may be granted with or without stock appreciation units. Options
expire five years from the date of grant. Stock awarded under the
Plan or purchased through the exercise of options, and the value of
certain stock appreciation units, are restricted and subject to risk
of forfeiture should an optionee terminate employment prior to
specified vesting dates. In 1991, restricted stock awards of 41,625
shares were made to key employees. The Company used treasury shares
repurchased from plan participants for these awards.
F. Common Stock (Continued)
The following schedule summarizes the stock option activity:
Years Ended December 31,
1993 1992 1991
Options outstanding January 1 139,725 228,787 286,820
Granted 148,543 - 99,000
Exercised (33,325) (89,062) (152,158)
Canceled, forfeited, surrendered
or expired (1,875) - (4,875)
Options outstanding December 31 253,068 139,725 228,787
Average price of options
$18.97 $17.07 $15.14
At December 31:
Prices of options outstanding $17.50 $15.20 $15.20
to to to
$36.50 $20.13 $21.59
Average option price
$29.69 $19.76 $18.71
Shares reserved for issuance 671,349 705,209 794,558
(3)Dividend Reinvestment and Stock Purchase Plan
Pursuant to this plan, stockholders can reinvest dividends and
make limited additional investments in shares of common stock. Shares
issued through the plan have been acquired on the open market.
Beginning in 1994, shares issued through the plan may continue to be
acquired on the open market or by issuance of previously unissued
shares. At December 31, 1993, 241,314 shares of common stock were
reserved for issuance under the plan.
G. Short-Term Loans
Maximum lines of credit available to the Company were
$360,000,000 during 1993, $140,000,000 during 1992 and $180,000,000
during 1991. The Company is not required to maintain compensating
bank balances. Commitment fees averaging one-tenth of one percent are
paid to maintain credit availability.
G. Short-Term Loans (Continued)
At December 31, 1993, short-term loans consisted of $189,900,000
of commercial paper and $64,000,000 of bank loans; and at December 31,
1992, $79,000,000 and $35,000,000, respectively. The maximum amounts
of outstanding short-term loans were $339,000,000 in 1993,
$130,500,000 in 1992 and $153,000,000 in 1991. The average daily
total of short-term loans outstanding was approximately $174,900,000
during 1993, $107,389,000 during 1992 and $61,535,000 during 1991;
weighted average annual interest rates applicable thereto were 3.3% in
1993, 3.8% in 1992 and 5.9% in 1991.
H. Long-Term Debt
The Company filed a shelf registration in March 1992 to issue
$100 million of Medium-Term Notes--Series B to be used primarily to
retire short-term loans incurred to temporarily finance a portion of
1991 acquisitions. Through December 31, 1993, the Company issued
$56.5 million of Medium-Term Notes. These notes have maturity dates
ranging from three to thirty years and a weighted average interest
rate of 6.30%. Considering the advantage of lower short-term interest
rates, the Company has delayed issuance of the remaining notes.
On March 31, 1993, the Company redeemed $16.4 million of First
Mortgage Bonds, 8% series due June 15, 1997. The bonds were redeemed
at 101.05 percent of the principal amount thereof, plus accrued
interest through the date of redemption. On August 3, 1992, the
Company redeemed $8.6 million of 9% Debentures due June 15, 1996. The
debentures were redeemed at 100.79 percent of the principal amount
thereof, plus accrued interest through the date of redemption. On
March 2, 1992, the Company redeemed $6.6 million of First Mortgage
Bonds, 6 1/4% series due September 1, 1992.
The 9 1/2% Convertible Subordinated Debentures are convertible at
any time into common stock at a conversion price of $11.06 per share.
During 1993, 1992 and 1991, $564,000, $259,000 and $1,084,000 of
these debentures were converted into 50,983, 23,399 and 97,983 shares
of common stock, respectively. At December 31, 1993, 240,918 shares
of common stock were reserved for conversions.
Interest expense on long-term debt amounted to $33,161,000 in
1993, $31,899,000 in 1992 and $25,318,000 in 1991. Aggregate
maturities of long-term debt will be $1,971,000 in 1994, $24,500,000
in 1995, $75,000,000 in 1996, none in 1997 and $5,000,000 in 1998.
I. Fair Value of Financial Instruments
The carrying value of cash and cash equivalents as well as short-
term loans approximates fair value due to the short maturity of the
instruments.
I. Fair Value of Financial Instruments (Continued)
The estimated fair value of long-term debt, including the portion
due within one year, at December 31, 1993 and 1992 would be
$433,048,000 and $388,642,000, respectively. The fair value was
estimated based on the quoted market prices as well as the discounted
values using a current discount rate reflective of the remaining
maturity. The Company's 8 1/4% Debentures and 7 1/2% Debentures may
not be redeemed prior to maturity. The 9.9% Debentures require
payment of premiums for early redemption, exclusive of annual sinking
fund requirements.
J. Concentrations of Credit Risk
Energy resources operating revenues and related accounts
receivable are generated primarily from gas marketing activities, the
sale of produced natural gas, natural gas liquids and oil and
intrastate transportation of gas. The gas marketing activities are
nationwide to large volume customers for resale or end use. Produced
natural gas is sold primarily to utility and industrial customers
located mainly in the Appalachian area. Produced natural gas liquids
are sold to refinery customers in Louisiana and Kentucky. Produced
oil is sold to refinery customers in the Rocky Mountain and
Appalachian areas. The intrastate gas transportation is concentrated
in Louisiana.
Utility services operating revenues and related accounts
receivable are generated through regulated interstate pipeline and
natural gas utility sales, transportation and storage services.
Interstate natural gas sales, transportation and storage services are
to the affiliated utility, Equitable Gas, as well as other utility and
end-user customers located in nine mid-Atlantic and northeastern
states. Utility sales and transportation services are provided to
more than 265,000 residential, commercial and industrial customers
located in southwest Pennsylvania and parts of West Virginia and
Kentucky. Under state regulations, the utility is required to provide
continuous gas service to residential customers during the winter
heating season. In this regard, the Company continually reviews the
credit worthiness of customers and, when necessary, requests deposits
to secure future service.
The Company is not aware of any significant credit risks which
have not been recognized in provisions for doubtful accounts.
K. Financial Information by Business Segment
The Company reports its operations in two business
segments energy resources and utility services. Energy resource
activities comprise exploration, development, production, gathering
and marketing of natural gas and oil, intrastate transportation of
natural gas, extraction and sale of natural gas liquids and contract
drilling. Utility service activities comprise primarily a natural gas
utility and three regulated gas pipelines.
K. Financial Information by Business Segment (Continued)
The following table sets forth financial information for each of
the two business segments:
Years Ended December 31,
1993 1992 1991
(Thousands)
Operating Revenues:
Energy Resources $ 743,064 $ 461,642 $ 367,297
Utility Services 397,297 393,628 381,655
Sales between segments (45,567) (42,896) (69,321)
Total $1,094,794 $ 812,374 $ 679,631
Operating Income:
Energy Resources $ 54,153 $ 41,198 $ 46,605
Utility Services 76,344 73,228 69,972
Total $ 130,497 $ 114,426 $ 116,577
Net Income:
Energy Resources $ 38,000 $ 29,502 $ 31,929
Utility Services 35,455 30,524 32,239
Total $ 73,455 $ 60,026 $ 64,168
Identifiable Assets (a):
Energy Resources $1,085,407 $ 696,801 $ 695,907
Utility Services 906,920 822,064 801,209
Eliminations (45,420) (50,441) (56,523)
Total $1,946,907 $1,468,424 $1,440,593
Depreciation and Depletion:
Energy Resources $ 53,423 $ 45,638 $ 36,002
Utility Services 23,471 20,302 18,591
Total $ 76,894 $ 65,940 $ 54,593
Capital Expenditures:
Energy Resources
(including acquisitions) $ 296,245 $ 52,923 $ 189,472
Utility Services 43,166 46,666 45,717
Total $ 339,411 $ 99,589 $ 235,189
(a) Amounts for 1992 and 1991 have been restated for the effect of
adoption of SFAS No. 109 as described in Note C.
L. Acquisitions
On June 30, 1993, the Company purchased the outstanding common
stock of Louisiana Intrastate Gas Company (LIG) for $191 million. LIG
owns a 1,900 mile intrastate pipeline system in Louisiana, four
natural gas processing plants and is also engaged in gas marketing.
The purchase was funded initially with short-term debt, a portion of
which was repaid with the proceeds from the issuance of common stock
as described in Note F to the consolidated financial statements.
Under terms of the purchase agreement, the seller, and/or the previous
owner of LIG, have indemnified the Company against losses resulting
from claims of liability under gas purchase contracts and
substantially all environmental liabilities attributable to operation
of LIG prior to June 30, 1993.
On July 8, 1993, the Company purchased all of the outstanding
stock of Hershey Oil Corporation (Hershey) for approximately $18
million. Hershey's assets consist primarily of approximately 68
billion cubic feet of proved natural gas reserves and 17,000 net
undeveloped acres in Alberta, Canada.
The acquisitions were accounted for under the purchase method
and are included in the energy resource segment. Had the purchases
occurred as of the beginning of 1993 and 1992, unaudited proforma
consolidated results for the Company would have been: revenues of
$1.119 billion and $872 million; net income of $74.0 million and $68.6
million; and earnings per share of $2.29 and $2.19 for the years ended
December 31, 1993 and 1992, respectively.
M. Purchase of Properties
On September 30, 1991, the Company purchased oil and gas
properties in the Rocky Mountain area for approximately $64 million.
The purchase, which was effective July 1, 1991, includes interests in
approximately 400 wells and 438,000 net acres situated primarily in
Wyoming, Montana, North Dakota and Utah. On November 25, 1991, the
Company purchased gas properties and drilling programs in the
Appalachian Basin for approximately $75 million. The purchase, which
was effective September 1, 1991, includes properties located in
western Virginia consisting of approximately 200 producing wells,
218,000 net acres and 205 miles of gathering and transmission lines
which are connected to a major interstate pipeline. In both cases,
the entire purchase price was attributed to the properties.
N. Commitments and Contingencies
Rent expense was $9,834,000 in 1993, $9,333,000 in 1992 and
$8,353,000 in 1991. Long-term leases are principally for division
operating headquarters and warehouse buildings and computer hardware
and have renewal options ranging to 20 years from December 31, 1993.
Future minimum rentals for all noncancelable long-term leases at
December 31, 1993 are as follows: 1994, $5,448,000; 1995, $4,605,000;
1996, $3,622,000; 1997, $3,137,000; 1998, $2,803,000 and $15,424,000
thereafter for a total of $35,039,000.
Utility Services has annual commitments of approximately $43
million for demand charges under existing long-term contracts with
pipeline suppliers for periods extending up to 9 years at December 31,
1993. However, substantially all of these costs are recoverable in
customer rates.
The Company is subject to federal, state and local environmental
laws and regulations. These laws and regulations, which are
constantly changing, can require expenditures for remediation and may
in certain instances result in assessment of fines. The Company has
established procedures for on-going evaluation of its operations to
identify potential environmental exposures and assure compliance with
regulatory policies and procedures.
On-going expenditures for compliance with environmental laws and
regulations, including investments in plant and facilities to meet
environmental requirements, have not been material. Management
believes that any such required expenditures will not be significantly
different in either their nature or amount in the future.
The estimated costs associated with identified situations that
require remedial action are accrued. However, certain of these costs
are deferred when recoverable by claims against third parties or
through regulated rates. Management does not know of any
environmental liabilities that will have a material effect on the
Company's financial position or results of operations.
As described in Note B, the Company has a claim in Columbia Gas
Transmission Company's bankruptcy proceeding related to the direct
billing settlements. In addition, the Company has various claims
against Columbia for abrogation of contracts to purchase gas from the
Company. The amount that may be realized, if any, under the claims
cannot be estimated in view of Columbia's bankruptcy proceeding.
O. Interim Financial Information (Unaudited)
The following quarterly summary of operating results reflects
variations due primarily to the seasonal nature of the Company's
business and the activities of new subsidiaries from the date of
acquisition as described in Note L.
March June September December
31 30 30 31
(Thousands except per share amounts)
1993
Operating revenues $269,819 $207,782 $272,745 $344,448
Operating income 55,349 13,978 24,787 36,383
Net income 30,795 8,831 8,612 25,217
Earnings per share $.98 $.28 $.27 $.73
1992
Operating revenues $245,208 $161,352 $144,429 $261,385
Operating income 50,351 8,678 14,358 41,039
Net income 26,105 3,626 7,161 23,134
Earnings per share $.83 $.12 $.23 $.74
P. Natural Gas and Oil Producing Activities
The supplementary information summarized below presents the
results of natural gas and oil activities for the Energy Resource
segment in accordance with SFAS No. 69, "Disclosures About Oil and Gas
Producing Activities."
The information presented excludes data associated with natural
gas reserves related to rate regulated operations. These reserves
(proved developed) are less than 5% of total Company proved reserves
for the years presented.
P. Natural Gas and Oil Producing Activities (Continued)
(1)Production Costs
The following table presents the costs incurred relating to
natural gas and oil production activities:
1993 1992 1991
(Thousands)
At December 31:
Capitalized costs . . . $836,638 $748,325 $718,140
Accumulated depreciation
and depletion . . . . 256,508 216,005 187,321
Net capitalized costs . $580,130 $532,320 $530,819
Costs incurred :
Property acquisition:
Proved properties . . $29,345 $ 663 $119,308
Unproved properties . - - 20,806
Exploration . . . . . . 13,928 13,166 22,924
Development . . . . . . 62,336 46,321 37,498
(2) Results of Operations for Producing Activities
The following table presents the results of operations related to
natural gas and oil production:
1993 1992 1991
(Thousands)
Revenues:
Affiliated . . . . . . $ 15,467 $ 8,964 $ 16,407
Nonaffiliated . . . . 140,380 127,369 94,165
Production costs . . . . 33,620 30,385 25,971
Exploration expenses . . 13,559 16,439 17,144
Depreciation and depletion 43,841 40,744 31,863
Income tax expense . . . 5,039 5,221 2,748
Results of operations from
producing activities
(excluding corporate
overhead) . . . . . . . $ 59,788 $ 43,544 $ 32,846
P. Natural Gas and Oil Producing Activities (Continued)
(3) Reserve Information (Unaudited)
The information presented below represents estimates of proved
gas and oil reserves prepared by Company engineers. Proved developed
reserves represent only those reserves expected to be recovered from
existing wells and support equipment. Proved undeveloped reserves
represent proved reserves expected to be recovered from new wells
after substantial development costs are incurred. Substantially all
reserves are located in the United States.
Natural Gas 1993 1992 1991
(Millions of Cubic Feet)
Proved developed and
undeveloped reserves:
Beginning of year 720,032 695,898 620,755
Revision of previous
estimates 9,399 25,736 (2,959)
Purchase of natural gas
in place - net 86,113(a) 434 89,925
Extensions, discoveries
and other additions
Production (53,550) (48,243) (40,022)
End of year 822,583(b) 720,032 695,898
Proved developed reserves:
Beginning of year 665,194 621,846 528,573
End of year 759,282(c) 665,194 621,846
(a) Includes 68,000 MMcf purchased in Canada.
(b) Includes 70,000 MMcf proved reserves in Canada.
(c) Includes 46,000 MMcf proved developed reserves in Canada.
P. Natural Gas and Oil Producing Activities (Continued)
Oil 1993 1992 1991
(Thousands of Barrels)
Proved developed and
undeveloped reserves:
Beginning of year 20,023 19,427 12,253
Revision of previous
estimates (4,876) 951 (309)
Purchase (sale) of oil in
place - net 418(a) (138) 7,907
Extensions, discoveries
and other additions 3,015 2,189 1,582
Production (2,112) (2,406) (2,006)
End of year 16,468(b) 20,023 19,427
Proved developed reserves:
Beginning of year 18,540 17,072 11,166
End of year 16,442(c) 18,540 17,072
(a) Includes 68,000 barrels purchased in Canada.
(b) Includes 65,000 barrels proved reserves in Canada.
(c) Includes 39,000 barrels proved developed reserves in Canada.
(4) Standard Measure of Discounted Future Cash Flows (Unaudited)
Management cautions that the standard measure of discounted
future cash flows should not be viewed as an indication of the fair
market value of gas and oil producing properties, nor of the future
cash flows expected to be generated therefrom. The information
presented does not give recognition to future changes in estimated
reserves, selling prices or costs and has been discounted at an
arbitrary rate of 10%. Estimated future net cash flows from natural
gas and oil reserves based on selling prices and costs at year-end
price levels are as follows:
1993 1992 1991
(Thousands)
Future cash inflows $2,140,151 $2,058,973 $1,835,380
Future production costs (598,707) (551,987) (462,367)
Future development costs (24,579) (41,612) (63,243)
Future income tax expenses (434,362) (409,970) (351,087)
Future net cash flow 1,082,503 1,055,404 958,683
10% annual discount for
estimated timing of
cash flows (515,023) (507,082) (456,624)
Standardized measure of
discounted future net
cash flows $ 567,480(a) $ 548,322 $ 502,059
(a) Includes $31,267,000 in Canada.
Summary of changes in the standardized measure of discounted
future net cash flows:
1993 1992 1991
(Thousands)
Sales and transfers of gas
and oil produced - net $ (122,227) $ (105,948) $ (84,601)
Net changes in prices, production
and development costs (80,256) 11,370 (141,414)
Extensions, discoveries, and
improved recovery, less
related costs 90,035 77,759 43,188
Development costs incurred 18,482 27,807 25,588
Purchase (sale) of minerals
in place - net 62,843 (142) 120,533
Revisions of previous
quantity estimates (14,910) 1,709 (4,440)
Accretion of discount 69,284 62,548 64,829
Net change in income taxes (8,584) (21,093) 49,691
Other 4,491 (7,747) (9,150)
Net increase 19,158 46,263 64,224
Beginning of year 548,322 502,059 437,835
End of year $ 567,480 $ 548,322 $ 502,059
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information required by Item 10 with respect to directors is
incorporated herein by reference to the section describing "Election
of Directors" in the Company's definitive proxy statement relating to
the annual meeting of stockholders to be held on May 27, 1994, which
will be filed with the Commission within 120 days after the close of
the Company's fiscal year ended December 31, 1993.
Information required by Item 10 with respect to executive
officers is included herein after Item 4 at the end of Part I.
Item 11. Executive Compensation
Information required by Item 11 is incorporated herein by
reference to the section describing "Executive Compensation",
"Employment Contracts and Change-In-Control Arrangements" and "Pension
Plan" in the Company's definitive proxy statement relating to the
annual meeting of stockholders to be held on May 27, 1994.
Item 12.Security Ownership of Certain Beneficial
Owners and Management
Information required by Item 12 is incorporated herein by
reference to the section describing "Voting Securities and Record
Date" in the Company's definitive proxy statement relating to the
annual meeting of stockholders to be held on May 27, 1994.
Item 13. Certain Relationships and Related Transactions
Not applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Financial statements
The financial statements listed in the accompanying
index to financial statements and financial statement
schedules (page 51) are filed as part of this annual
report.
2. Financial statement schedules
The financial statement schedules listed in the
accompanying index to financial statements and
financial statement schedules (page 51) are filed as
part of this annual report.
3. Exhibits
The exhibits listed on the accompanying index to
exhibits (pages 62 through 65) are filed as part of
this annual report.
(b) Reports on Form 8-K filed during the quarter ended
December 31, 1993.
None
(c) Each management contract and compensatory arrangement
in which any director or any named executive officer
participates has been marked with an asterisk (*) in
the Index to Exhibits.
EQUITABLE RESOURCES, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES COVERED BY REPORT OF INDEPENDENT AUDITORS
(Item 14 (a))
1. The following consolidated financial statements of Equitable
Resources, Inc. and Subsidiaries are included in Item 8:
Page Reference
Statements of Consolidated Income
for each of the three years in
the period ended December 31, 1993 24
Consolidated Balance Sheets
December 31, 1993 and 1992 25 & 26
Statements of Consolidated Cash Flows
for each of the three years in the
period ended December 31, 1993 27
Statements of Common Stockholders'
Equity for each of the three years in the
period ended December 31, 1993 28
Long-term Debt, December 31, 1993 and 1992 29
Notes to Consolidated Financial Statements 30 thru 47
2. Schedules for the Years Ended December 31,
1993, 1992 and 1991 included in Part IV:
V - Property, Plant and Equipment 52, 53 & 54
VI - Accumulated Depreciation,
Depletion and Amortization 55, 56, 57, 58
of Property, Plant and Equipment & 59
VIII- Valuation and Qualifying
Accounts and Reserves 60
X - Supplementary Income Statement
Information 61
Schedules I, II, III, IV, VII, XI, XII, XIII and XIV are
omitted since the subject matter thereof is either not present or
is not present in amounts sufficient to require submission of the
schedules as permitted by Regulation S-X.
The information called for in Schedule IX is set forth in
the consolidated balance sheet and notes to consolidated financial
statements.
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F
Balance at Other Changes Balance at
Beginning Additions End of
Classifications Period at Cost Retirements Add Deduct Period
(Thousands)
<S> <C> <C> <C> <C> <C> <C>
Property, Plant and Equipment (at original cost):
Energy Resources:
Gas:
In service:
Natural gas and
oil production $ 738,239 $101,158 $ 8,572 $ $ $ 830,825
General 38,386 17,867 1,168 55,085
Total gas plant
in service 776,625 119,025 9,740 885,910
Construction work
in progress 11,864 141(B) 12,005
Total gas plant 788,489 119,166 9,740 897,915
Gas liquids extraction 26,165 17,738 43,903
Intrastate transmission 263,018 1,237 61,781
Total Energy
Resources 814,654 399,922 10,977 1,203,599
Utility Services:
Gas:
In service:
Intangible 6,089 2,529 272 8,346
Production 130,545 1,438 1,163 130,820
Storage 56,320 15,153 164 15,069(A) 86,378
Transmission 126,020 10,548 1,160 135,408
Distribution 445,015 18,944 2,992 460,967
General 55,641 1,376 1,998 55,019
Total gas plant
in service 819,630 49,988 7,749 15,069 876,938
Construction work
in progress 32,437 (6,822)(B) 25,615
Held for future use 263 10 253
Total gas plant 852,330 43,166 7,759 15,069 902,806
Other 432 432
Total Utility
Services 852,762 43,166 7,759 15,069 903,238
Total $1,667,416 $443,088 $18,736 $15,069 $ $2,106,837
<F/N>
Notes:
A. Reclassification from gas stored underground--current inventory. See Note A to the consolidated
financial statements.
B. Net change in construction work in progress.
C. There were no other significant and unusual additions, abandonments, or retirements, or any
significant and unusual changes in the general character and location of principal plants and other
important units.
</F/N>
</TABLE>
<TABLE> EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Changes Balance at
Classifications Beginning Additions Note (A) End of
of Period at Cost Retirements Add Deduct Period
(Thousands)
<S> <C> <C> <C> <C> <C> <C>
Property, Plant and Equipment (at original cost):
Energy Resources:
Gas:
In service:
Natural gas and
oil production $ 711,604 $43,375 $16,740 $ $ $ 738,239
General 35,451 5,046 1,854 257 38,386
Total gas plant
in service 747,055 48,421 18,594 257 776,625
Construction work
in progress 7,475 4,389(B) 11,864
Total gas plant 754,530 52,810 18,594 257 788,489
Gas liquids extraction 26,058 113 6 26,165
Total Energy
Resources 780,588 52,923 18,600 257 814,654
Utility Services:
Gas:
In service:
Intangible 4,584 1,555 50 6,089
Production 127,149 4,015 761 198 56 130,545
Storage 51,886 4,442 8 56,320
Transmission 122,046 4,484 368 56 198 126,020
Distribution 427,679 18,078 742 445,015
General 51,416 6,050 1,825 55,641
Total gas plant
in service 784,760 38,624 3,754 254 254 819,630
Construction work
in progress 24,293 7,887(B) 257 32,437
Held for future use 269 6 263
Total gas plant 809,322 46,511 3,760 511 254 852,330
Heating and Cooling:
In service . 11,916 11,916
Construction work
In progress
Held for future use 21 21
Total heating
and cooling 11,937 11,937
Other 277 155 432
Total Utility
Services 821,536 46,666 15,697 511 254 852,762
Total $1,602,124 $99,589 $34,297 $511 $511 $1,667,416
<F/N>
Notes:
A. Reclassifications of property resulting from change in function.
B. Net change in construction work in progress.
C. There were no other significant and unusual additions, abandonments, or retirements, or any
significant and unusual changes in the general character and location of principal plants and
other important units.
</F/N>
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
Column A Column B Column C Column D Column E Column F
Balance at Other Changes Balance
Beginning Additions (Note A) at End of
Classifications of Period at Cost Retirements Add Deduct Period
(Thousands)
<S> <C> <C> <C> <C> <C> <C>
Property, Plant and Equipment (at original cost):
Energy Resources:
Gas:
In service:
Natural gas and
oil production $ 532,142 $186,225 $ 6,763 $ $ $ 711,604
General 29,963 5,749 261 35,451
Total gas plant
in service 562,105 191,974 7,024 747,055
Construction work
in progress 10,657 (3,182)(B) 7,475
Total gas plant 572,762 188,792 7,024 754,530
Gas liquids extraction 25,378 680 26,058
Total Energy
Resources 598,140 189,472 7,024 780,588
Utility Services:
Gas:
In service:
Intangible 4,557 27 4,584
Production 121,849 5,874 574 127,149
Storage 51,432 543 89 51,886
Transmission 115,257 6,850 61 122,046
Distribution 412,245 17,008 1,574 427,679
General 45,531 6,846 961 51,416
Total gas plant
in service 750,871 37,148 3,259 784,760
Construction work
in progress 15,918 8,375(B) 24,293
Held for future use 269 269
Total gas plant 767,058 45,523 3,259 809,322
Heating and Cooling:
In service . 11,727 221 32 11,916
Construction work
in progress 27 (27)(B)
Held for future use 21 21
Total heating
and cooling 11,775 194 32 11,937
Other 3,124 2,847 277
Total Utility
Services 781,957 45,717 6,138 821,536
Total $1,380,097 $235,189 $13,162 $ $ $1,602,124
<F/N>
Notes:
A. Reclassifications of property resulting from change in function.
B. Net change in construction work in progress.
C. There were no other significant and unusual additions, abandonments, or retirements, or any
significant and unusual changes in the general character and location of principal plants and
other important units.
</F/N>
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLAN AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F
Additions Other Changes
Balance at Charged to Add (Deduct) Balance at
Description (Note A) Beginning Costs and Retirements Describe End of
of Period Expenses Period
(Thousands)
<S> <C> <C> <C> <C> <C>
Energy Resources:
Gas Plant:
Depreciation:
Portion classified by
functions of property:
Natural gas and
oil production $216,395 $42,951 $ 2,338 $ $257,008
General 16,712 4,084 972 19,824
Total depreciation
and depletion
on gas plant 233,107 47,035 3,310 276,832
Gas liquids extraction 16,285 1,590 17,875
Intrastate transmission 4,918 1,255 3,663
Total Energy
Resources 249,392 53,543 4,565 298,370
Utility Services:
Gas plant:
Depreciation:
Portion classified by
functions of property:
Intangible plant 3,018 1,209 407 3,820
Production plant 59,723 3,403 1,160 61,966
Storage plant 18,940 1,274 156 (207) 19,851
Transmission plant 42,153 3,237 1,126 207 44,471
Distribution plant 96,538 11,655 3,808 104,385
General plant 20,673 4,804 1,998 23,479
Total depreciation 241,045 25,582 8,655 257,972
Retirement work in progress (632) (217)(B) (415)
Amortization and storage
land and land rights 1,566 95 8 1,653
Amortization and depletion
of producing natural
gas land and land rights 458 4 12 10 460
Held for future use
Total depreciation
and depletion
on gas plant 242,437 25,681 8,458 10 259,670
Heating and Cooling
Other physical property 373 373
Total Utility
Services 242,810 25,681 8,458 10 260,043
Total $492,202 $79,224 $13,023(C) $ 10 $558,413
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLAN AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
Column A Column B Column C Column D Column E Column F
Balance At Additions
Beginning Charged To Other Changes Balance at
Description (Note A) of Period Costs and Retirements Add (Deduct) End of
Expenses Describe Period
(Thousands)
<S> <C> <C> <C> <C> <C>
Energy Resources:
Gas Plant:
Depreciation:
Portion classified by
functions of property:
Natural gas and oil
production $187,606 $40,834 $12,045 $ $216,395
General 14,299 3,695 1,282 16,712
Total depreciation
and depletion
on gas plant 201,905 44,529 13,327 233,107
Gas liquids extraction 15,181 1,109 5 16,285
Total Energy
Resources 217,086 45,638 13,332 249,392
Utility Services:
Gas plant:
Depreciation:
Portion classified by
functions of property:
Intangible plant 2,148 920 50 3,018
Production plant 57,408 3,146 913 82 59,723
Storage plant 17,919 1,022 8 7 18,940
Transmission plant 39,603 2,990 351 (89) 42,153
Distribution plant 88,730 10,143 2,173 (162) 96,538
General plant 18,103 4,032 1,624 162 20,673
Total depreciation 223,911 22,253 5,119 241,045
Retirement work in
progress (1,531) (899)(B) (632)
Amortization and storage
land and land rights 1,484 82 1,566
Amortization and depletion
of producing natural
gas land and land
rights 452 6 458
Held for future use 5 5
Total depreciation
and depletion
on gas plant 224,316 22,346 4,225 242,437
Heating and Cooling 4,381 4,381
Other physical property 218 155 373
Total Utility
Services 228,915 22,501 8,606 242,810
Total $446,001 $68,139 $21,938(C) $ $492,202
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLAN AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
Column A Column B Column C Column D Column E Column F
Balance At Additions Other Changes
Beginning Charged to Add (Deduct) Balance at
Description (Note A) of Period Costs and Retirements Describe End of
Expenses Period
(Thousands)
<S> <C> <C> <C> <C> <C>
Energy Resources:
Gas Plant:
Depreciation:
Portion classified by
functions of property:
Natural gas and oil
production $160,806 $31,926 $ 5,126 $ $187,606
General 11,539 3,006 246 14,299
Total depreciation
and depletion
on gas plant 172,345 34,932 5,372 201,905
Gas liquids extraction 14,112 1,069 15,181
Total Energy
Resources 186,457 36,001 5,372 217,086
Utility Services:
Gas plant:
Depreciation:
Portion classified by
functions of property:
Intangible plant 1,208 940 2,148
Production plant 55,414 2,971 993 16 57,408
Storage plant 17,029 977 87 17,919
Transmission plant 36,818 2,839 54 39,603
Distribution plant 81,012 9,515 1,781 (16) 88,730
General plant 15,521 3,357 775 18,103
Total depreciation 207,002 20,599 3,690 223,911
Retirement work in progress (1,434) 97(B) (1,531)
Amortization and storage
land and land rights 1,407 77 1,484
Amortization and depletion
of producing natural
gas land and land
rights 444 8 452
Held for future use
Total depreciation
and depletion
on gas plant 207,419 20,684 3,787 224,316
Heating and Cooling 4,710 (297) 32 4,381
Other physical property 3,069 (6) 2,845 218
Total Utility
Services 215,198 20,381 6,664 228,915
Total $401,655 $56,382 $12,036(C) $ $446,001
</TABLE>
EQUITABLE RESOURCES, INC.
NOTES TO SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993
(Thousands)
A. Includes $1,859 depreciation of automotive equipment charged to
transportation clearing account and then distributed principally to
various operating expenses and construction accounts.
B. Net change in retirement work in progress.
C. Retirements shown in Schedule V, Property, Plant and Equipment are
reconciled with the amounts shown in Column D of this schedule as
deductions from accumulated retirement reserves, as follows:
Retirements or sales as shown in Schedule V $18,736
Add - Cost of removal 798 $19,534
Deduct:
Salvage 1,276
Retirements not charged to reserve 5,235
Retirements, renewals and replacements as
shown in Column D of this schedule $13,023
1992
(Thousands)
A. Includes $2,022 depreciation of automotive equipment charged to
transportation clearing account and then distributed principally to
various operating expenses and construction accounts.
B. Net change in retirement work in progress.
C. Retirements shown in Schedule V, Property, Plant and Equipment are
reconciled with the amounts shown in Column D of this schedule as
deductions from accumulated retirement reserves, as follows:
Retirements or sales as shown in Schedule V $34,297
Add - Cost of removal 243 $34,540
Deduct:
Salvage 2,311
Retirements not charged to reserve 10,291
Retirements, renewals and replacements as
shown in Column D of this schedule $21,938
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1991
(Thousands)
A. Includes $1,791 depreciation of automotive equipment charged to
transportation clearing account and then distributed principally to
various operating expenses and construction accounts.
B. Net change in retirement work in progress.
C. Retirements shown in Schedule V, Property, Plant and Equipment are
reconciled with the amounts shown in Column D of this schedule as
deductions from accumulated retirement reserves, as follows:
Retirements or sales as shown in Schedule V $13,162
Add - Cost of removal 726 $13,888
Deduct:
Salvage 914
Retirements not charged to reserve 938
Retirements, renewals and replacements as
shown in Column D of this schedule $12,036
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E
Balance At Additions Charged Balance
Beginning To Costs At End
Description Of Period and Expenses Deductions Of Period
(Thousands)
1993
Accumulated Provision
for Doubtful
Accounts $9,503 $9,352 $8,749(A) $10,106
1992
Accumulated Provision
for Doubtful
Accounts $8,722 $8,998 $8,217(A) $9,503
1991
Accumulated Provision
for Doubtful
Accounts $7,531 $8,534 $7,343(A) $8,722
Note:
(A) Customer accounts written off, less recoveries.
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
Column A Column B
Charged to
Item Costs and Expenses
1993 1992 1991
(Thousands)
1. Maintenance and repairs $29,024 $26,327 $24,441
2. Depreciation and amortization
of intangible assets (Note A) (Note A) (Note A)
3. Taxes other than payroll
and income taxes:
Pennsylvania gross receipts $14,837 $12,233 $13,268
State severance taxes 8,970 8,581 6,853
Other 10,707 10,978 9,225
Total $34,514 $31,792 $29,346
4. Royalties (Note B) $14,978 $15,736 $13,780
5. Advertising costs (Note A) (Note A) (Note A)
Notes:
(A) Not material in amount.
(B) Substantially all royalties are reflected as a reduction of gas
and oil revenues in the financial statements.
EXHIBITS DESCRIPTION METHOD OF FILING
2.01 (a) Stock Purchase Agreement Filed as Exhibit 2.1 (a)
dated May 5, 1993 among to Form 8-K Dated June 30,
Arkla, Inc., Arkla Finance 1993
Corporation and Equitable
Pipeline Company for the
purchase of Louisiana
Intrastate Gas Company
2.01 (b) Schedule 4.1.11 to the Filed as Exhibit 2.1 (b)
Stock Purchase Agreement to Form 8-K Dated June 30,
pertaining to outstanding 1993
litigation claims
2.01 (c) Schedule 4.1.15 to the Filed as Exhibit 2.1 (c)
Stock Purchase Agreement to Form 8-K Dated June 30,
pertaining to environmental 1993
matters
2.01 (d) Letter Agreement Dated June Filed as Exhibit 2.1 (d)
30, 1993 amending the Stock to Form 8-K Dated June 30,
Purchase Agreement 1993
3.01 Restated Articles of Filed herewith at page 68
Incorporation of the
Company dated May 21, 1993
(effective May 27, 1993)
3.02 By-Laws of the Company Filed herewith at page 77
(amended through December
17, 1993
4.01 (a) Indenture dated as of April Filed as Exhibit 4.01
1, 1983 between the Company (Revised) to Post-
and Pittsburgh National Effective Amendment No. 1
Bank relating to Debt to Registration Statement
Securities (Registration No. 2-80575)
4.01 (b) Instrument appointing Refiled herewith at page
Bankers Trust Company as 96 pursuant to Rule 24 of
successor trustee to SEC's Rules of Practice
Pittsburgh National Bank
4.01 (c) Resolution adopted June 26, Refiled herewith at page
1986 by the Finance 106 pursuant to Rule 24 of
Committee of the Board of SEC's Rules of Practice
Directors of the Company
establishing the term of
the $75,000,000 of
debentures, 8 1/4% Series
due July 1, 1996
4.01 (d) Resolutions adopted June Refiled herewith at page
22, 1987 by the Finance 109 pursuant to Rule 24 of
Committee of the Board of SEC's Rules of Practice
Directors of the Company
establishing the terms of
the 75,000 units
(debentures with warrants)
issued July 1, 1987
4.01 (e) Resolution adopted April 6, Refiled herewith at page
1988 by the Ad Hoc Finance 118 pursuant to Rule 24 of
Committee of the Board of SEC's Rules of Practice
Directors of the Company
establishing the terms and
provisions of the 9.9%
Debentures issued April 14,
1988
4.01 (f) Supplemental indenture Filed as Exhibit 4.3 to
dated March 15, 1991 with Form S-3 (Registration
Bankers Trust Company Statement 33-39505) filed
eliminating limitations on August 21, 1991
liens and additional funded
debt
4.01 (g) Resolution adopted August Filed as Exhibit 4.05 to
19, 1991 by the Ad Hoc Form 10-K for the year
Finance Committee of the ended December 31, 1991
Board of Directors of the
Company Addenda Nos. 1 thru
27, establishing the terms
and provisions of the
Series A Medium-Term Notes
EXHIBITS DESCRIPTION METHOD OF FILING
4.01 (h) Resolutions adopted July 6, Filed as Exhibit 4.05 to
1992 and February 19, 1993 Form 10-K for the year
by the Ad Hoc Finance ended December 31, 1992
Committee of the Board of
Directors of the Company
and Addenda Nos. 1 thru 8,
establishing the terms and
provisions of the Series B
Medium-Term Notes
*10.01 Equitable Resources, Inc. Filed as Exhibit 10.07 to
Key Employee Restricted Form 10-K for the year
Stock Option and Stock ended December 31, 1989
Appreciation Rights
Incentive Compensation Plan
(as amended through March
17, 1989)
*10.02(a) Employment Agreement dated Refiled herewith at page
as of March 18, 1988 with 126 pursuant to Rule 24 of
Frederick H. Abrew SEC's Rules of Practice
*10.02(b) Amendment effective June 1, Refiled herewith at page
1989 to Employment 153 pursuant to Rule 24 of
Agreement with Frederick H. SEC's Rules of Practice
Abrew
*10.03(a) Employment Agreement dated Refiled herewith at page
as of March 18, 1988 with 154 pursuant to Rule 24 of
Augustine A. Mazzei, Jr. SEC's Rules of Practice
*10.03(b) Amendment effective June 1, Refiled herewith at page
1989 to Employment 181 pursuant to Rule 24 of
Agreement with Augustine A. SEC's Rules of Practice
Mazzei, Jr.
*10.04(a) Agreement dated December Filed as Exhibit 10.16 to
15, 1989 with Barbara B. Form 10-K for the year
Sullivan for deferred ended December 31, 1989
payment of 1990 director
fees
*10.04(b) Agreement dated December Filed as Exhibit 10.16 to
21, 1990 with Barbara B. Form 10-K for the year
Sullivan for deferred ended December 31, 1990
payment of 1991 director
fees
*10.04(c) Agreement dated December Filed as Exhibit 10.16 to
13, 1991 with Barbara B. Form 10-K for the year
Sullivan for deferred ended December 31, 1991
payment of 1992 director
fees
*10.04(d) Agreement dated December Filed herewith at page 182
28, 1993 with Barbara B.
Sullivan for deferred
payment of 1994 director
fees
* 10.05 Supplemental Executive Filed herewith at page 187
Retirement Plan (as amended
and restated through
December 17, 1993)
*10.06 Retirement Program for the Filed as Exhibit 10.19 to
Board of Directors of Form 10-K for the year
Equitable Resources, Inc. ended December 31, 1989
(as amended through August
1, 1989)
*10.07 Supplemental Pension Plan Filed herewith at page 197
(as amended and restated
through December 17, 1993)
*10.08 Policy to Grant Filed as Exhibit 10.21 to
Supplemental Deferred Form 10-K for the year
Compensation Benefits in ended December 31, 1989
Selected Instances to a
Select Group of Management
or Highly Compensated
Employees (as amended and
restated through August 1,
1989)
EXHIBITS DESCRIPTION METHOD OF FILING
*10.09(a) Equitable Resources, Inc. Filed as Exhibit 10.22 to
and Subsidiaries Short-Term Form 10-K for the year
Incentive Compensation Plan ended December 31, 1987
dated January 18, 1988
*10.09(b) Amendment dated February Filed as Exhibit 10.22 to
17, 1993 to Equitable Form 10-K for the year
Resources, Inc. and ended December 31, 1992
Subsidiaries Short-Term
Incentive Compensation Plan
*10.10(a) Agreement dated December Refiled herewith at page
31, 1987 with Malcolm M. 206 pursuant to Rule 24 of
Prine for deferred payment SEC's Rules of Practice
of 1988 director fees
*10.10(b) Agreement dated December Refiled herewith at page
30, 1988 with Malcolm M. 211 pursuant to Rule 24 of
Prine for deferred payment SEC's Rules of Practice
of 1989 director fees
*10.11(a) Agreement dated September Refiled herewith at page
30, 1986 with Daniel M. 216 pursuant to Rule 24 of
Rooney for deferred payment SEC's Rules of Practice
of 1986 and 1987 director
fees
*10.11(b) Agreement dated December Refiled herewith at page
21, 1987 with Daniel M. 221 pursuant to Rule 24 of
Rooney for deferred payment SEC's Rules of Practice
of 1988 director fees
*10.11(c) Agreement dated December Refiled herewith at page
30, 1988 with Daniel M. 226 pursuant to Rule 24 of
Rooney for deferred payment SEC's Rules of Practice
of 1989 director fees
*10.11(d) Agreement dated December Filed as Exhibit 10.27 to
15, 1989 with Daniel M. Form 10-K for the year
Rooney for deferred payment ended December 31, 1989
of 1990 director fees
*10.11(e) Agreement dated December Filed as Exhibit 10.27 to
21, 1990 with Daniel M. Form 10-K for the year
Rooney for deferred payment ended December 31, 1990
of 1991 director fees
*10.11(f) Agreement dated December Filed as Exhibit 10.27 to
13, 1991 with Daniel M. Form 10-K for the year
Rooney for deferred payment ended December 31, 1991
of 1992 director fees
*10.11(g) Agreement dated December Filed as Exhibit 10.27 to
18, 1992 with Daniel M. Form 10-k for the year
Rooney for deferred payment ended December 31, 1992
of 1993 director fees
*10.11(h) Agreement dated December Filed herewith at page 231
14, 1993 with Daniel M.
Rooney for deferred payment
of 1994 director fees
10.12 Trust Agreement with Filed as Exhibit 10.28 to
Pittsburgh National Bank to Form 10-K for the year
act as Trustee for ended December 31, 1989
Supplemental Pension Plan,
Supplemental Deferred
Compensation Benefits,
Retirement Program for
Board of Directors, and
Supplemental Executive
Retirement Plan
EXHIBITS DESCRIPTION METHOD OF FILING
11.01 Statement re Computation of Filed herewith at page 236
Earnings Per Share
21 Schedule of Subsidiaries Filed herewith at page 237
23.01 Consent of Independent Filed herewith at page 238
Auditors
99.01 Equitable Resources, Inc. Filed herewith at page 239
Employees Savings Plan Form
11-K Annual Report
The Company agrees to furnish to the Commission, upon request,
copies of instruments with respect to long-term debt which have not
previously been filed.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EQUITABLE RESOURCES, INC.
(Registrant)
By: s/ Donald I. Moritz
(Donald I. Moritz)
Chairman and Chief Executive
Officer
Date: March 18, 1994
Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Chairman and Chief Executive
Officer and Director
s/ Donald I. Moritz (Principal Executive Officer) March 18, 1994
Donald I. Moritz
Vice President and Treasurer
s/ Robert E. Daley (Chief Financial Officer) March 18, 1994
Robert E. Daley
Vice President - Accounting
and Administration
s/ Joseph L. Giebel (Chief Accounting Officer) March 18, 1994
Joseph L. Giebel
President and
Chief Operating Officer
s/ Frederick H. Abrew and Director March 18, 1994
Frederick H. Abrew
Director March 18, 1994
Clifford L. Alexander, Jr.
s/ Merle E. Gilliand Director March 18, 1994
Merle E. Gilliand
SIGNATURES (Continued)
s/ E. Lawrence Keyes, Jr. Director March 18, 1994
E. Lawrence Keyes, Jr.
s/ Thomas A. McConomy Director March 18, 1994
Thomas A. McConomy
Director March 18, 1994
Malcolm M. Prine
s/ Daniel M. Rooney Director March 18, 1994
Daniel M. Rooney
Director March 18, 1994
David S. Shapira
s/ Barbara Boyle Sullivan Director March 18, 1994
Barbara Boyle Sullivan
RESTATED ARTICLES OF EQUITABLE RESOURCES, INC.
(As Amended Through May 27, 1993)
The following is a Composite Copy of the Articles of
Equitable Resources, Inc., as restated effective August 7, 1981,
and as amended effective June 23, 1982, January 13, 1984, October
1, 1984, June 12, 1987, and May 27, 1993.
First: The name of the Company is EQUITABLE RESOURCES, INC.
Second: The location and post office address of its current
registered office in the Commonwealth of Pennsylvania is 420
Boulevard of the Allies, City of Pittsburgh, 15219, County of
Allegheny.
Third: The purposes for which the Company is incorporated under
the Business Corporation Law of the Commonwealth of Pennsylvania
are to engage in, and to do any lawful act concerning, any or all
lawful business for which corporations may be incorporated under
said Business Corporation Law, including but not limited to:
A. the supply of heat, light and power to the public
by any means;
B. the production, purchase, generation, manufacture,
transmission, transportation, storage, distribution and
supplying of natural or artificial gas, steam or air
conditioning, electricity, or any combination thereof to or
for the public; and
C. manufacturing, processing, owning, using and
dealing in personal property of every class and description,
engaging in research and development, the furnishing of
services, and acquiring, owning, using and disposing of real
property of every nature whatsoever.
Fourth: The term of the Company's existence shall be perpetual.
Fifth: The aggregate number of shares which the Company shall
have authority to issue shall be:
(a)3,000,000shares of Preferred Stock, without par value;
and
(b)80,000,000shares of Common Stock, without par value.
The designations, preferences, qualifications, limitations,
restrictions, and the special or relative rights in respect of
the Preferred Stock and of the Common Stock of the Company, and a
statement of the authority hereby vested in the Board of
Directors of the Company to fix and determine the designations,
preferences, qualifications, limitations, restrictions, and
special or relative rights in respect of all series of the
Preferred Stock shall be as follows:
Division A THE PREFERRED STOCK
1.1 Preferred Stock. The Preferred Stock may be divided into
and issued in series. The Board of Directors is hereby expressly
authorized, at any time or from time to time, to divide any or
all of the shares of the Preferred Stock into series, and in the
resolution or resolutions establishing a particular series,
before issuance of any of the shares thereof, to fix and
determine the designation and the relative rights and preferences
of the series so established, to the fullest extent now or
hereafter permitted by the laws of the Commonwealth of
Pennsylvania, including, but not limited to, the variations
between different series in the following respects:
(a)the distinctive serial designation of such series;
(b)the annual dividend rate for such series, and the date
or dates from which dividends shall commence to accrue;
(c)the redemption price or prices, if any, for shares of
such series and the terms and conditions on which such shares
may be redeemed;
(d)the provisions for a sinking, purchase or similar fund,
if any, for the redemption or purchase of shares of such
series;
(e)the preferential amount or amounts payable upon shares
of such series in the event of the voluntary or involuntary
liquidation of the Company;
(f)the voting rights, if any, of shares of such series;
(g)the terms and conditions, if any, upon which shares of
such series may be converted and the class or classes or
series of securities of the Company into which such shares may
be converted;
(h)the relative seniority, parity or junior rank of such
series with respect to other series of Preferred Stock then or
thereafter to be issued; and
(i)such other terms, limitations and relative rights and
preferences, if any, of shares of such series as the Board of
Directors may, at the time of such resolutions, lawfully fix
and determine under the laws of the Commonwealth of
Pennsylvania.
Division B PROVISIONS APPLICABLE TO BOTH THE
PREFERRED STOCK AND THE COMMON STOCK
2.1 Voting Rights. Except as provided in this Section 2.1,
the holders of the Common Stock shall have exclusive voting
rights for the election of Directors and for all other purposes
and shall be entitled to one vote for each share held.
The holders of the Preferred Stock shall have no voting rights
except as may be provided with respect to any particular series
of the Preferred Stock by the Board of Directors pursuant to
Subdivision 1.1 of Division A hereof. On any matter on which the
holders of the Preferred Stock shall be entitled to vote, they
shall be entitled to vote as established by the Board of
Directors pursuant to Subdivision 1.1 of Division A hereof.
In all elections for Directors, every stockholder entitled to
vote shall have the right, in person or by proxy, to multiply the
number of votes to which such stockholder may be entitled by the
number of Directors for the election of whom he is entitled to
vote at such meeting, and such stockholder may cast the whole
number of such votes for one candidate or may distribute them
among any two or more can-didates. The candidates receiving the
highest number of votes up to the number of Directors to be
elected shall be elected. The foregoing provisions of this
paragraph shall not be changed with respect to any class of stock
unless the holders of record of not less than two-thirds of the
number of shares of such class of stock then outstanding shall
consent thereto in writing or by voting therefor in person or by
proxy at the meeting of stockholders at which any such change is
considered.
2.2 Pre-emptive Rights. Upon any issue for money or other
consideration of any stock of the Company that may be authorized
from time to time, no holder of stock, irrespective of the kind
of such stock, shall have any pre-emptive or other right to
subscribe for, purchase, or receive any proportionate or other
share of the stock so issued, but the Board of Directors may
dispose of all or any portion of such stock as and when it may
determine, free of any such rights, whether by offering the same
to stock-holders or by sale or other disposition as said Board
may deem advisable; provided, however, that if the Board of
Directors shall determine to offer any new or additional shares
of Common Stock, or any security convertible into Common Stock,
for money, other than (i) by a public offering of all of such
shares or offering of all of such shares to or through
underwriters or investment bankers who shall have agreed promptly
to make a public offering of such shares, or (ii) pursuant to any
employee compensation, incentive or other benefit program adopted
by the Board of Directors, the same shall first be offered pro
rata to the holders of the then outstanding shares of Common
Stock of the Company at a price not less favorable than the price
at which the Board of Directors issues and disposes of such stock
or securities to other than such holders of Common Stock before
deducting reasonable commissions or compensation that may be paid
by the Company in connection with the sale of any such stock and
securities; and provided, further, that the time within which
such pre-emptive rights shall be exercised may be limited by the
Board of Directors to such time as the said Board may deem
proper, not less, however, than ten days after mailing of notice
that such stock rights are available and may be exercised. The
foregoing provisions of this Subdivision 2.2 shall not be changed
unless the holders of record of not less than two-thirds of the
number of shares of the Common Stock then outstanding shall
consent thereto in writing or by voting therefor in person or by
proxy at the meeting of stockholders at which any such change is
considered.
2.3 Amendments to By-Laws. The Board of Directors may make,
amend and repeal the By-Laws
with respect to those matters which are not, by statute, reserved
exclusively to the shareholders, subject always to the power of
the shareholders to change such action as provided herein. No
By-Law may be made, amended or repealed by the shareholders
unless such action is approved by the affirmative vote of the
holders of not less than 80% of the voting power of the then
outstanding shares of capital stock of the Company entitled to
vote in an annual election of directors, voting together as a
single class, unless such action has been previously approved by
a two-thirds vote of the whole Board of Directors, in which event
(unless otherwise expressly provided in the Articles or the By-
Laws) the affirmative vote of not less than a majority of the
votes which all shareholders are entitled to cast thereon shall
be required.
2.4 Amendments to Articles. Subject to the voting rights
given to any particular series of the Preferred Stock by the
Board of Directors pursuant to Subdivision 1.1 of Division A
hereof, and except as may be specifically provided to the
contrary in any other provision in the Articles with respect to
amendment or repeal of such provision, the affirmative vote of
the holders of not less than 80% of the voting power of the then
outstanding shares of capital stock of the Company entitled to
vote in an annual election of directors, voting together as a
single class, shall be required to amend the Articles of the
Company or repeal any provision thereof, unless such action has
been previously approved by a two-thirds vote of the whole Board
of Directors, in which event (unless otherwise expressly provided
in the Articles) the affirmative vote of not less than a majority
of the votes which all shareholders are entitled to cast thereon
shall be required.
2.5 General. The Company may issue and dispose of any of its
authorized shares for such consideration as may be fixed by the
Board of Directors subject to the laws then applicable and to the
provisions of Subdivision 2.2 of this Division B.
Division C BOARD OF DIRECTORS;
CLASSIFICATION; REMOVAL; VACANCIES
3.1 The business and affairs of the Company shall be managed
by a Board of Directors comprised as follows:
(a)The Board of Directors shall consist of not less than 5
nor more than 12 persons, the exact number to be fixed from
time to time by the Board of Directors pursuant to a
resolution adopted by a majority vote of the directors then in
office.
(b)Directors of the Company shall be classified with
respect to the time for which they shall severally hold office
by dividing them into three classes: Class 1; Class 2; and
Class 3, as nearly equal in number as possible. At the
special meeting of shareholders at which the amendment adding
this Division C shall be adopted, the then current directors
shall be assigned to the three classes in accordance with
resolutions adopted by the Board of Directors. Class 1
directors shall not be elected at such special meeting but
shall continue to hold office until the annual meeting of
shareholders in 1984. Class 2 directors shall be elected by
shareholders at such special meeting to extended terms of
office, to serve until the annual meeting in 1985. Class 3
directors shall be elected by share-holders at such special
meeting to extended terms of office, to serve until the annual
meeting in 1986. Each class of directors to be elected at
such special meeting shall be elected in a separate election.
At each succeeding annual meeting of shareholders, the class
of directors then being elected shall be elected to hold
office for a term of three years. Each director shall hold
office for the term for which elected and until his or her
successor shall have been elected and qualified.
(c)Any director, any class of directors or the entire
Board of Directors may be removed from office by shareholder
vote at any time, without assigning any cause, but only if
shareholders entitled to cast at least 80% of the votes which
all shareholders would be entitled to cast at an annual
election of directors or of such class of directors shall vote
in favor of such removal; provided, however, that no
individual director shall be removed without cause (unless the
entire Board of Directors or any class of directors be
removed) in case the votes cast against such removal would be
sufficient, if voted cumulatively for such director, to elect
him or her to the class of directors of which he or she is a
member.
(d)Vacancies in the Board of Directors, including
vacancies resulting from an increase in the number of
directors, shall be filled only by a majority vote of the
remaining directors then in office, though less than a quorum,
except that vacancies resulting from removal from office by a
vote of the shareholders may be filled by the shareholders at
the same meeting at which such removal occurs. All directors
elected to fill vacancies shall hold office for a term
expiring at the annual meeting of shareholders at which the
term of the class to which they have been elected expires. No
decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
(e)Whenever the holders of any class or series of
preferred stock shall have the right, voting separately as a
class, to elect one or more directors of the Company, none of
the foregoing pro-visions of this Section 3.1 shall apply with
respect to the director or directors elected by such holders
of preferred stock.
3.2 Notwithstanding any other provisions of law, the Articles
or the By-Laws of the Company, the affirmative vote of the
holders of not less than 80% of the voting power of the then
outstanding shares of capital stock of the Company entitled to
vote in an annual election of directors, voting together as a
single class, shall be required to amend, alter, change or
repeal, or adopt any provision inconsistent with, this Division
C, unless such action has been previously approved by a two-
thirds vote of the whole Board of Directors.
3.3 No Director shall be personally liable for monetary
damages as such (except to the extent otherwise provided by law)
for any action taken, or any failure to take any action, unless
such Director has breached or failed to perform the duties of his
or her office under Title 42, Chapter 83, Subchapter F of the
Pennsylvania Consolidated Statutes (or any successor statute
relating to Directors' standard of care and justifiable
reliance); and the breach or failure to perform constitutes self-
dealing, willful misconduct or recklessness.
If the Pennsylvania Consolidated Statutes are amended after
May 22, 1987, the date this section received shareholder
approval, to further eliminate or limit the personal liability of
Directors, then a Director shall not be liable, in addition to
the circumstances set forth in this section, to the fullest
extent permitted by the Pennsylvania Consolidated Statutes, as so
amended.
The provisions of this section shall not apply to any actions
filed prior to January 27, 1987 nor to any breach of performance
of duty, or any failure of performance of duty, by any Director
occurring prior to January 27, 1987.
Division D PROCEDURES RELATING
TO CERTAIN BUSINESS COMBINATIONS
4.1 Votes Required; Exceptions.
(a)The affirmative vote of the holders of not less than
80% of the voting power of the then outstanding shares of
capital stock of the Company entitled to vote in an annual
election of directors (the "Voting Stock"), voting together as
a single class, shall be required for the approval or
authorization of any "Business Combination" (as hereinafter
defined) involving a "Related Person" (as hereinafter
defined); provided, however, that the 80% voting requirement
shall not be applicable if:
(1) The "Continuing Directors" (as hereinafter
defined) of the Company by a two-thirds vote have
expressly approved such Business Combination either in
advance of or subsequent to such Related Person's having
become a Related Person; or
(2) both the following conditions are satisfied:
(A)the aggregate amount of the cash and the "Fair
Market Value" (as hereinafter defined) of the property,
securities and "Other Consideration" (as hereinafter
defined) to be received per share by holders of capital
stock of the Company in the Business Combination, other
than the Related Person, is not less than the "Highest
Equivalent Price" (as hereinafter defined) of such
shares of capital stock; and
(B)a proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934, as
amended, whether or not the Company is then subject to
such requirements, shall have been mailed to all
shareholders of the Company. The proxy or information
statement shall contain at the front thereof, in a
prominent place, the position of the Continuing
Directors as to the advisability (or inadvisability) of
the Business Combination and, if deemed advisable by a
majority of the Continuing Directors, the opinion of an
investment banking firm selected by the Continuing
Directors as to the fairness of the terms of the
Business Combination, from the point of view of the
holders of the outstanding shares of capital stock of
the Company other than any Related Person.
(b)Such 80% vote shall in any such instance be required
notwithstanding the fact that no vote may be required or that
a lesser percentage may be specified by law or in any
agreement with any national securities exchange or otherwise.
4.2 Definitions. For purposes of this Division D:
(a)A "Person" shall mean any individual, partnership,
corporation or other entity. As used herein, the pronouns
"which" and "it" in relation to Persons which are individuals
shall be construed to mean "who" or "whom", "he" or "she", and
"him" or "her", as appropriate.
(b)The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on November 10, 1983 (the
term "registrant" in said Rule 12b-2 meaning in this case the
Company).
(c)The term "Beneficial Owner" (and variations thereof)
shall have the meaning ascribed to such term in Rule 13d-3 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on November 10, 1983;
provided, however, that notwithstanding any provision of Rule
13d-3 to the contrary, an entity shall be deemed to be the
Beneficial Owner of any share of capital stock of the Company
that such entity has the right to acquire at any time pursuant
to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise.
(d)The term "Voting Stock" shall have the meaning set
forth at the beginning of Section 4.1(a) of this Division D.
(e)The term "Subsidiary" of any Person shall mean any
corporation of which a majority of the capital stock entitled
to vote for the election of directors is Beneficially Owned by
such Person directly or indirectly though other Subsidiaries
of such Person.
(f)The term "Substantial Part" of the assets of any person
shall mean more than 10% of the Fair Market Value, as
determined by a two-thirds vote of the Continuing Directors,
of the total consolidated assets of such Person and its
Subsidiaries as of the end of its most recent fiscal year
ended prior to the time the determination is being made.
(g)The term "Other Consideration" shall include, without
limitation, shares of Common Stock or other capital stock of
the Company retained by the holders of such shares in the
event of a Business Combination in which the Company is the
surviving corporation.
(h)The term "Continuing Director" shall mean a director of
the Company who is unaffiliated with any Related Person and
either (1) was a director of the Company immediately prior to
the time the Related Person involved in a Business Combination
became a Related Person or (2) is a successor to a Continuing
Director and is recommended to succeed a continuing Director
by a majority of the then Continuing Directors. Where this
Division D contains provisions for a determination,
recommendation or approval by the Continuing Directors, if
there is at any particular relevant time no Continuing
Director in office, then such provision shall be deemed to be
satisfied if the Board, by a two-thirds vote of the whole
Board of Directors, makes or gives such determination,
recommendation or approval.
(i)The term "Business Combination" shall mean
(1) any merger, consolidation or share exchange of
the Company or a Subsidiary of the Company with a Related
Person, in each case without regard to which entity is the
surviving entity;
(2) any sale, lease, exchange, transfer or other
disposition, including without limitation a mortgage or
any other security device, of all or any Substantial Part
of the assets of the Company (including without limitation
any voting securities of a Subsidiary of the Company) or a
Subsidiary of the Company to or with a Related Person
(whether in one transaction or series of transactions), or
of all or any Substantial Part of the assets of a Related
Person to the Company or a Subsidiary of the Company;
(3) the issuance, transfer or delivery of any
securities of the Company or a Subsidiary of the Company
by the Company or any of its Subsidiaries to a Related
Person, or of any securities of a Related Person to the
Company or a Subsidiary of the Company (other than an
issuance or transfer of securities which is effected on a
pro rata basis to all shareholders of the Company or of
the Related Person, as the case may be);
(4) any recapitalization, reorganization or
reclassification of securities (including any reverse
stock split) or other transaction that would have the
effect, directly or indirectly, of increasing the voting
power of a Related Person;
(5) the adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed by or
on behalf of a Related Person; or
(6) any agreement, plan, contract or other
arrangement providing for any of the transactions
described in this definition of Business Combination.
(j)The term "Related Person" at any particular time shall
mean any Person if such Person, its Affiliates, its
Associates, and all Persons of which it is an Affiliate or
Associate Beneficially Own in the aggregate 10% or more of the
outstanding Voting Stock of the Company, and any Affiliate or
Associate of any such Person, and any Person of which such
Person is an Affiliate or Associate. With respect to any
particular Business Combination, the term "Related Person"
means the Related Person involved in such Business
Combination, any Affiliate or Associate of such Related
Person, and any Person of which such Related Person is an
Affiliate or Associate. Where in this Division D any reference
is made to a transaction involving, or ownership of securities
by, a Related Person, it shall mean and include one or more
transactions involving different Persons all included within
the definition of "Related Person", or ownership of securities
by any or all of such Persons. Each Person who is an
Affiliate or Associate of a Related Person shall be deemed to
have become a Related Person at the earliest time any of such
Persons becomes a Related Person.
(k)The term "highest Equivalent Price" with respect to
shares of capital stock of the Company of any class or series
shall mean the following:
(1) with respect to shares of Common Stock, the
highest price that can be determined to have been paid at
any time by a Related Person for any shares of Common
Stock; and
(2) with respect to any class or series of shares of
capital stock other than Common Stock, the higher of the
following:
(A)if any shares of such class or series are
Beneficially Owned by a Related Person, the highest
price that can be determined to have been paid at any
time by a Related Person for such shares; or
(B)the amount determined by the Continuing
Directors, on whatever basis they believe is
appropriate, to be the per share price equivalent of
the highest price that can be determined to have been
paid at any time by a Related Person for any shares of
any other class or series of capital stock of the
Company.
In determining the Highest Equivalent Price, all purchases by
a Related Person shall be taken into account regardless of
whether the shares were purchased before or after the Related
Person became a Related Person. Also, the Highest Equivalent
Price shall include any brokerage commissions, transfer taxes,
soliciting dealers' fees and other expenses paid by the
Related Person with respect to the shares of capital stock of
the Company acquired by the Related Person. In the case of
any Business Combination with a Related Person, the Continuing
Directors by a two-thirds vote shall determine the Highest
Equivalent Price for each class and series of capital stock of
the Company.
(l)The term "Fair Market Value" shall mean (1) in the case
of stock, the highest closing sale price during the 30-day
period immediately preceding the date in question of a share
of such stock on the New York Stock Exchange's consolidated
transaction reporting system, or, if such stock is not listed
on such Exchange, on the principal United States securities
exchange registered under the Securities Exchange Act of 1934
on which such stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid quotation with
respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotation System or any
system then in use, or if no such quotations are available,
the fair market value on the date in question of a share of
such stock as determined by the Continuing Directors; and (2)
in the case of property other than stock or cash, the fair
market value of such property on the date in question as
determined by a two-thirds vote of the Continuing Directors.
4.3 Miscellaneous.
(a)The Continuing Directors, by a two-thirds vote, are
authorized to determine for purposes of this Division D on the
basis of information known to them after reasonable inquiry:
(1) whether a Person is a Related Person, (2) the number of
shares of Voting Stock Beneficially Owned by any Person, (3)
whether a Person is an Affiliate or Associate of another, (4)
whether certain assets constitute a Substantial Part of the
assets of any Person, (5) the amounts of prices paid, market
prices, and other factors relative to fixing the Highest
Equivalent Price of shares of capital stock of the Company and
(6) the Fair Market Value of property, securities and Other
Consideration received in a Business Combination. Any such
determination made in good faith shall be binding and
conclusive on all parties.
(b)Nothing contained in this Division D shall be construed
to relieve any Related Person from any fiduciary obligation
imposed by law.
(c)The fact that any Business Combination complies with
the conditions set forth in Subsection (a)(2) of Section 4.1
of this Division D shall not be construed to impose any
fiduciary duty, obligation or responsibility on the Board of
Directors, or any member thereof, to approve such Business
Combination or recommend its adoption or approval to the
shareholders of the Company, nor shall such compliance limit,
prohibit or otherwise restrict in any manner the Board of
Directors, or any member thereof, with respect to evaluations
of or actions and responses taken with respect to such
Business Combination.
(d)Notwithstanding any other provisions of law, the
Articles or the By-Laws of the Company, the affirmative vote
of the holders of not less than 80% of the voting power of the
Voting Stock of the Company, voting together as a single
class, shall be required to amend, alter, change or repeal, or
adopt any provision inconsistent with, this Division D.
Sixth: Henceforth, these Articles of the Company shall not
include any prior documents.
EQUITABLE RESOURCES, INC.
BY-LAWS
(Amended through December 17, 1993)
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1.01 All meetings of the shareholders shall
be held at the principal office of the Company or such other
places, either within or without the Commonwealth of Pennsylva-
nia, as the Board of Directors may from time to time determine.
Section 1.02 An annual meeting of shareholders shall
be held in each calendar year at such time and place as the Board
of Directors shall determine. If the annual meeting shall not be
called and held during such calendar year, any shareholder may
call such meeting at any time thereafter.
Section 1.03 At each such annual meeting, the class
of Directors then being elected shall be elected to hold office
for a term of three (3) years, and until their successors shall
have been elected and qualified. All elections of Directors
shall be conducted by three (3) Judges of Election, who need not
be shareholders, appointed by the Board of Directors. If any
such appointees are not present, the vacancy shall be filled by
the presiding officer of the meeting. The Chairman of the
Company shall preside and the Secretary shall take the minutes at
all meetings of the shareholders. In the absence of the Chair-
man, the President shall preside. In the absence of both, the
presiding officer shall be designated by the Board of Directors
or, if not so designated, by the shareholders of the Company, and
if the Secretary is unable to do so, the presiding officer shall
designate any person to take the minutes of the meeting.
Section 1.04 The presence, in person or by proxy, of
the holders of a majority of the voting power of all shareholders
shall constitute a quorum except as otherwise provided by law or
by the Restated Articles of the Company. If a meeting is not
organ-ized because a quorum is not present, the shareholders
present may adjourn the meeting to such time and place as they
may determine, except that any meeting at which Directors are to
be elected shall be adjourned only from day to day, or for such
longer periods not exceeding fifteen (15) days each, as may be
directed by a majority of the voting stock present.
Section 1.05 Shareholders entitled to vote on any
matter shall be entitled to one (1) vote for each share of
capital stock standing in their respective names upon the books
of the Company to be voted by the shareholder in person or by his
or her duly authorized proxy or attorney. The validity of every
unrevoked proxy shall cease eleven (11) months after the date of
its exe-cution unless some other definite period of validity
shall be expressly provided therein, but in no event shall a
proxy, unless coupled with an interest, be voted on after three
(3) years from the date of its execution. All questions shall be
decided by the vote of shareholders entitled to cast at least a
majority of the votes which all shareholders present and voting
(excluding abstentions) are entitled to cast on the matter,
unless otherwise expressly provided by law or by the Restated
Articles of the Company.
Section 1.06 Special meetings of shareholders may be
called by the Board of Directors, by the Chairman, by the Presi-
dent, or by the holders of at least one-fifth (1/5) of all the
shares outstanding and entitled to vote thereat.
Section 1.07 Notice of the annual meeting and of all
special meetings of shareholders shall be given by sending a
written or printed notice thereof by mail, specifying the place,
day, and hour of the meeting and, in the case of a special
meeting of shareholders, the general nature of the business to be
trans-acted, to each shareholder at the address appearing on the
books of the Company, or the address supplied by such shareholder
to the Company for the purpose of notice, at least five (5) days
before the day named for the meeting, unless such shareholders
shall waive notice or be in attendance at the meeting.
ARTICLE II
GENERAL PROVISIONS
Section 2.01 The principal office of the Company
shall be in the City of Pittsburgh, Pennsylvania, and shall be
kept open during business hours every day except Saturdays,
Sundays, and legal holidays, unless otherwise ordered by the
Board of Directors, the Chairman or the President.
Section 2.02 The Company shall have a corporate seal
which shall contain within a circle the following words: "Equi-
table Resources, Inc., Pittsburgh, Pennsylvania" and in an inner
circle the words "Corporate Seal."
Section 2.03 The fiscal year of the Company shall
begin with January 1 and end with December 31 of the same calen-
dar year.
Section 2.04 The Board of Directors shall fix a time,
not more than seventy (70) days prior to the date of any meeting
of shareholders, or the date fixed for the payment of any divi-
dend or distribution, or the date for any allotment of rights, or
the date when any change or conversion or exchange of shares will
be made or go into effect, as a record date for the determination
of the shareholders entitled to notice of, or to vote at, any
such meeting, or entitled to receive payment of any such dividend
or distribution, or to receive any such allotment of rights, or
to exercise the rights in respect of any such change, conversion,
or exchange of shares.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 Regular meetings of the Board of Direc-
tors shall be held at least six (6) times each year, immediately
after the annual meeting of shareholders and at such other times
and places as the Board of Directors shall from time to time
designate by resolution of the Board. Notice need not be given
of regular meetings of the Board held at the times and places
fixed by resolution of the Board.
If the Board shall fail to designate the specific time
and place of any regular meeting, such regular meeting shall be
held at such time and place as designated by the Chairman or the
President and, in such case, oral, telegraphic or written notice
shall be duly served or sent or mailed by the Secretary to each
Director not less than five (5) days before the meeting.
Section 3.02 Special meetings may be held at any time
upon the call of the Chairman or the President at such time and
place as he may deem necessary, or by the Secretary at the
request of any two (2) members of the Board, by oral, telegraphic
or written notice duly served or sent or mailed to each Director
not less than twenty-four (24) hours before the meeting.
Section 3.03 Fifty percent (50%) of the Directors at
the time in office shall constitute a quorum for the transaction
of business. Vacancies in the Board of Directors, including
vacancies resulting from an increase in the number of Directors,
shall be filled only by a majority vote of the remaining Direc-
tors then in office, though less than a quorum, except that
vacancies resulting from removal from office by a vote of the
shareholders may be filled by the shareholders at the same
meeting at which such removal occurs. All Directors elected to
fill vacancies shall hold office for a term expiring at the
annual meeting of shareholders at which the term of the class to
which they have been elected expires.
Section 3.04 One (1) or more Directors may par-
ticipate in a meeting of the Board or of a committee of the Board
by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, and all Directors so participating
shall be deemed present at the meeting.
Section 3.05 The full Board of Directors shall
consist of not less than five (5) nor more than twelve (12)
persons, the exact number to be fixed from time to time by the
Board of Directors pursuant to a resolution adopted by a majority
vote of the Directors then in office.
Section 3.06 The Board of Directors may elect one (1)
of its members (who shall not be an officer of the Company during
his tenure) as its Chairman, if the By-Laws of the Company do not
then provide for the election of a Chairman of the Board who
shall be the Chief Executive Officer of the Company. A Chairman
so elected shall confer with the President as to the content of
agendas for such meetings and shall consult with the President as
to matters affecting or relating to the Board of Directors. The
Chairman so elected shall serve until the first meeting of the
Board following the next annual meeting of the shareholders. The
Board shall also fix the annual rate of compensation to be paid
to the Chairman in addition to compensation paid to all non-
officer members of the Board. The Chairman, or in the absence of
the Chairman, the President, shall preside at all meetings of the
Board, preserve order, and regulate debate according to the usual
parliamentary rules. In the absence of the Chairman or the
President, a Chairman pro tem may be appointed by the Board.
Section 3.07 Only persons who are nominated in accor-
dance with the following procedures shall be eligible for elec-
tion as directors. Nomination for election to the Board of
Directors of the Company at a meeting of shareholders may be made
by the Board of Directors or by any shareholder of the Company
entitled to vote for the election of directors at such meeting
who complies with the notice procedures set forth in this Section
3.07. Such nomi-nations, other than those made by or on behalf
of the Board of Directors, shall be made by notice in writing
delivered or mailed by first class United States mail, postage
prepaid, to the Secretary, and received not less than 60 days nor
more than 90 days prior to such meeting; provided, however, that
if less than 70 days' notice or prior public disclosure of the
date of the meeting is given to shareholders, such nomination
shall have been mailed or delivered to the Secretary not later
than the close of business on the 10th day following the day on
which the notice of the meeting was mailed or such public dis-
closure was made, whichever occurs first. Such notice shall set
forth (a) as to each proposed nominee (i) the name, age, business
address and, if known, residence address of each such nominee,
(ii) the principal occupation or employment of each such nominee,
(iii) the number of shares of stock of the Company which are
beneficially owned by each such nominee, and (iv) any other
information concerning the nominee that must be disclosed as to
nominees in proxy solicitations pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (including such
person's written consent to be named as a nominee and to serve as
a director if elected); and (b) as to the shareholder giving the
notice (i) the name and address, as they appear on the Company's
books, of such shareholder and (ii) the class and number of
shares of the Company which are beneficially owned by such share-
holder. The Company may require any proposed nominee to furnish
such other information as may reasonably be required by the
Company to determine the eligibility of such proposed nominee to
serve as a director of the Company.
The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defec-
tive nomination shall be disregarded.
Section 3.08 The age limit for Directors of this
Company shall be seventy-two (72) and they shall not be eligible
for election or re-election after reaching their seventy-second
(72nd) birthday; provided, this qualification and limitation
shall not apply to Directors holding office on June 12, 1972, the
date this By-Law was adopted by the shareholders. No person who
is an employee or officer of the Company, except the Chief
Executive Officer, shall be eligible to serve as a Director of
the Company after he has retired from service as an employee or
officer.
Section 3.09 No Director shall be personally liable
for monetary damages as such (except to the extent otherwise
provided by law) for any action taken, or any failure to take any
action, unless such Director has breached or failed to perform
the duties of his or her office under Title 42, Chapter 83,
Subchapter F of the Pennsylvania Consolidated Statutes (or any
successor statute relating to Directors' standard of care and
justifiable reliance); and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness.
If the Pennsylvania Consolidated Statutes are amended
after May 22, 1987, the date this section received shareholder
approval, to further eliminate or limit the personal liability of
Directors, then a Director shall not be liable, in addition to
the circumstances set forth in this section, to the fullest
extent permitted by the Pennsylvania Consolidated Statutes, as so
amended.
The provisions of this section shall not apply to any
actions filed prior to January 27, 1987, nor to any breach of
performance of duty, or any failure of performance of duty, by
any Director occurring prior to January 27, 1987.
ARTICLE IV
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 4.01 Directors, officers, agents, and employ-
ees of the Company shall be indemnified as of right to the
fullest extent not prohibited by law in connection with any
actual or threatened action, suit or proceeding, civil, criminal,
admin-istrative, investigative or other (whether brought by or in
the right of the Company or otherwise) arising out of their
service to the Company or to another enterprise at the request of
the Company. The Company may purchase and maintain insurance to
protect itself and any such Director, officer, agent or employee
against any liability asserted against and incurred by him or her
in respect of such service, whether or not the Company would have
the power to indemnify him or her against such liability by law
or under the provisions of this section. The provisions of this
section shall be applicable to persons who have ceased to be
Directors, officers, agents, and employees and shall inure to the
benefit of the heirs, executors, and administrators of persons
entitled to indemnity hereunder.
Indemnification under this section shall include the
right to be paid expenses incurred in advance of the final
disposition of any action, suit or proceeding for which indem-
nification is provided, upon receipt of an undertaking by or on
behalf of the indemnified person to repay such amount if it
ultimately shall be determined that he or she is not entitled to
be indemnified by the Company. The indemnification rights
granted herein are not intended to be exclusive of any other
rights to which those seeking indemnification may be entitled and
the Company may enter into contractual agreements with any
Director, officer, agent or employee to provide such individual
with indemnification rights as set forth in such agreement or
agreements, which rights shall be in addition to the rights set
forth in this section.
The provisions of this section shall be applicable to
actions, suits or proceedings commenced after the adoption
hereof, whether arising from acts or omissions occurring before
or after the adoption hereof.
ARTICLE V
STANDING COMMITTEES
Section 5.01 The Board of Directors shall have
authority to appoint an Executive Committee, a Finance Committee,
an Audit Committee, and such other committees as it deems ad-
visable, each to consist of two (2) or more Directors, and from
time to time to define the duties and fix the number of members
of each committee. In the absence or disqualification of any
member of any such committee, the member or members thereof
present at any meeting and not disqualified from voting, whether
or not con-stituting a quorum, may unanimously appoint another
Director or Directors to act at the meeting in the place of any
such absent or disqualified member or members.
ARTICLE VI
OFFICERS
Section 6.01 The officers of the Company shall be
chosen by the Board of Directors and shall be a Chairman, a
President, a Secretary, and a Treasurer. The Board of Directors
may also choose such Vice Presidents, including one (1) or more
Executive Vice Presidents and Senior Vice Presidents, and one (1)
or more Assistant Secretaries and Assistant Treasurers as it may
determine.
Section 6.02 The Board of Directors shall, at the
first meeting of the Board after its election, elect the prin-
cipal officers of the Company, and may elect additional officers
at that or any subsequent meeting. All officers elected by the
Board of Directors shall hold office at the pleasure of the
Board.
Section 6.03 At the discretion of the Board of
Directors, any two (2) of the offices mentioned in Section 6.01
hereof may be held by the same person except the offices of
Chairman and President; Chairman and Secretary; and President and
Secretary.
Section 6.04 The salaries of all officers of the
Company, other than Assistant Secretaries and Assistant Treasur-
ers, shall be fixed by the Board of Directors.
Section 6.05 The officers of the Company shall hold
office until the next annual meeting of the Board and until their
successors are chosen and qualify in their stead or until their
earlier resignation or removal. Any officer or agent may be
removed by the Board of Directors whenever in its judgment the
best interests of the Company will be served thereby. Such
removal, however, shall be without prejudice to the contract
rights of the person so removed. If the office of any officer
becomes vacant for any reason, the vacancy may be filled by the
Board of Directors.
CHAIRMAN
Section 6.06 The Chairman shall be the Chief Execu-
tive Officer of the Company; shall preside at all meetings of the
share-holders and at all meetings of the Board of Directors;
shall have general and active management of the business of the
Company; and shall see that all orders and resolutions of the
Board of Directors are carried into effect.
PRESIDENT
Section 6.07 At the request of the Chairman, or in
his absence or disability, the President shall have and exercise
all the powers and authority of the Chairman.
In addition to any specific powers conferred upon the
President by these By-Laws, he shall have and exercise such
further powers and duties as from time to time may be conferred
upon or assigned to him by the Board of Directors or the Chair-
man.
SECRETARY
Section 6.08 The Secretary shall attend all meetings
of the shareholders and Board of Directors; shall record all
votes and the minutes of all proceedings in a book to be kept for
that purpose; and shall perform like duties for all committees of
the Board, if so designated by the Board. The Secretary shall
keep in safe custody the seal of the Company and when authorized
by the Board of Directors, affix the seal of the Company to any
instrument requiring it and, when so affixed, it shall be at-
tested by the signature of the Secretary or by the signature of
the Treasurer or an Assistant Secretary. The Secretary shall
have custody of all contracts, leases, assignments, and all other
valuable instruments unless the Board of Directors or the Presi-
dent shall otherwise direct. The Secretary shall give, or cause
to be given, notice of all annual meetings of the shareholders
and any other meetings of the shareholders and, when required,
notice of the meetings of the Board of Directors; and, in gen-
eral, shall perform all duties incident to the office of a
secretary of a corporation, and such other duties as may be
prescribed by the Board of Directors, the Chairman, or the
President.
Section 6.09 The Board of Directors may elect one (1)
or more Assistant Secretaries who shall perform the duties of the
Secretary in the event of the Secretary's absence or inability to
act, as well as such other duties as the Board of Directors, the
Chairman, the President, or the Secretary may from time to time
designate.
TREASURER
Section 6.10 The Treasurer shall have charge of all
moneys and securities belonging to the Company subject to the
direction and control of the Board of Directors. The Treasurer
shall deposit all moneys received by the Company in the name and
to the credit of the Company in such bank or other place or
places of deposit as the Board of Directors shall designate; and
for that purpose the Treasurer shall have power to endorse for
collection or payment all checks or other negotiable instruments
drawn payable to the Treasurer's order or to the order of the
Company. The Treasurer shall disburse the moneys of the Company
upon properly drawn checks which shall bear the signature of the
Treasurer or of any Assistant Treasurer or of the Cashier (who
shall be appointed by the Assistant Treasurer with the approval
of the Treasurer). All checks shall be covered by vouchers which
shall be certified by the Controller or the Auditor of Disburse-
ments or such other employee of the Company (other than the
Cashier) as may be designated by the Treasurer from time to time.
The Treasurer may create, from time to time, such special imprest
funds as may, in the Treasurer's discretion, be deemed advisable
and necessary, and may open accounts with such bank or banks as
may be deemed advisable for the deposit therein of such special
imprest funds, and may authorize disbursements therefrom by
checks drawn against such accounts by the Treasurer, any Assis-
tant Treasurer, or such other employee of the Company as may be
designated by the Treasurer from time to time. The Treasurer
shall perform such other duties as may be assigned from time to
time by the Board of Directors, the Chairman, or the President.
Section 6.11 No notes or similar obligations shall be
made except jointly by the Chairman, the President or an Execu-
tive Vice President and a Senior Vice President or the Treasurer
or an Assistant Treasurer, except as otherwise authorized by the
Board of Directors.
Section 6.12 The Board of Directors may elect one (1)
or more Assistant Treasurers who shall perform the duties of the
Treasurer in the event of the Treasurer's absence or inability to
act, as well as such other duties as the Board of Directors, the
Chairman, the President, or the Treasurer may from time to time
designate.
VICE PRESIDENTS
Section 6.13 Vice Presidents shall perform such
duties as may be assigned to them from time to time by the Board
of Directors, the Chairman or the President as their positions
are established or changed. During the absence or inability of
the Chairman or the President to serve, an Executive Vice Presi-
dent or Senior Vice President so designated by the Board of
Directors shall have all the powers and perform the duties of the
President.
GENERAL
Section 6.14 Fidelity bond coverage shall be obtained
on such officers and employees of the Company, and of such type
and in such amounts as may, in the discretion of the Board of
Directors, be deemed proper and advisable.
ARTICLE VII
CERTIFICATES OF STOCK
Section 7.01 The shares of the capital stock of the
Company shall be represented by certificates of stock signed by
the Chairman, the President or a Vice President, and counter-
signed by the Secretary or an Assistant Secretary or the Treasur-
er or an Assistant Treasurer, and sealed with the corporate seal
of the Company. Said certificates shall be in such form as the
Board of Directors may from time to time prescribe. The Board of
Directors may from time to time appoint an incorporated company
or companies to act as Transfer Agent and Registrar of the stock
certificates of the Company, and in the case of the appointment
of such Transfer Agent, the officers of the Company shall sign
and seal stock certificates in blank and place them with the
transfer books in the custody and control of such Transfer Agent.
If any stock cer-tificate is signed by a Transfer Agent or
Registrar, the signature of any such officer and the corporate
seal upon any such certificate may be a facsimile, engraved or
printed.
Section 7.02 New certificates for shares of stock may
be issued to replace certificates lost, stolen, destroyed or
mutilated upon such terms and conditions as the Board may from
time to time determine.
ARTICLE VIII
AMENDMENTS
Section 8.01 (a) The Board of Directors may make,
amend, and repeal the By-Laws with respect to those matters which
are not, by statute, reserved exclusively to the shareholders,
subject always to the power of the shareholders to change such
action as provided herein. No By-Law may be made, amended or
repealed by the shareholders unless such action is approved by
the affirmative vote of the holders of not less than eighty
percent (80%) of the voting power of the then outstanding shares
of capital stock of the Company entitled to vote in an annual
election of Directors, voting together as a single class, unless
such action has been previously approved by a two-thirds vote of
the whole Board of Directors, in which event (unless otherwise
expressly provided in the Articles or the By-Laws) the affirma-
tive vote of not less than a majority of the votes which all
shareholders are entitled to cast thereupon shall be required.
(b) Unless otherwise provided by a By-Law, by the
Restated Articles or by law, any By-Law may be amended, altered
or repealed, and new By-Laws may be adopted, by vote of a majori-
ty of the Directors present at any regular or special meeting
duly convened, but only if notice of the specific sections to be
amended, altered, repealed or added is included in the notice of
meeting. No provision of the By-Laws shall vest any property or
contract right in any shareholder.
ARTICLE IX
PENNSYLVANIA CORPORATION LAW
Section 9.01 Subchapter G--Control Share Acquisi-
tions--and Subchapter H--Disgorgement by Certain Controlling
Shareholders Following Attempts to Acquire Control--of Title 15,
Chapter 25, of the Pennsylvania Consolidated Statutes, shall not
be applicable to the Company.
(Amended through December 17, 1993)
Exhibit 4.01 (b)
INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
entered into as of the 1st day of February, 1985, among EQUITABLE
RESOURCES, INC., a Pennsylvania corporation, formerly known as
Equitable Gas Company (the "Issuer"), PITTSBURGH NATIONAL BANK
("PNB"), and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers").
W I T N E S S E T H
WHEREAS, the Issuer and PNB entered into an Indenture dated
as of April 1, 1983 (the "Indenture") providing for the issuance
from time to time of the Issuer's unsecured debentures, notes or
other evidences of indebtedness (defined in the Indenture as
"Securities"), to be issued in one or more series as provided in
the Indenture;
WHEREAS, there has been issued under the Indenture
$50,000,000 aggregate principal amount of the Issuer's
Debentures, 12-1/8% Series Due April 1, 2008 (the "Debentures"),
all of which are outstanding at the date hereof and which are the
only Securities outstanding under the Indenture;
WHEREAS, PNB has been acting as Trustee under the Indenture:
WHEREAS, Section 610 (b) of the Indenture provides that the
Trustee may resign at any time and be discharged of the trust
created by the Indenture by giving written notice thereof to the
Issuer and by mailing notice of its resignation to the holders of
Debentures;
WHEREAS, Section 610 (e) of the Indenture further provides
for the appointment by the Issuer of a successor Trustee in the
event of the Trustee's resignation;
WHEREAS, the Issuer has, by action of its Board of
Directors, determined to appoint Bankers as successor Trustee
under the Indenture; and
WHEREAS, Bankers is qualified to act as successor Trustee
under the Indenture and is willing to accept such appointment as
successor Trustee on the terms and conditions set forth herein
and under the Indenture.
NOW, THEREFORE, pursuant to the provisions of the Indenture,
in consideration of the covenants herein contained and intending
to be legally bound hereby, the Issuer, PNB and Bankers agree as
follows:
1. PNB hereby resigns as Trustee under the Indenture.
2. The Issuer hereby accepts the resignation of PNB as
Trustee under the Indenture. Pursuant to the authority vested in
it by Section 610 (e) of the Indenture, the Issuer hereby
appoints Bankers as successor Trustee under the Indenture, with
all the estate, properties, rights, powers, trusts, duties and
obligations heretofore vested in PNB as Trustee under the
Indenture. The Issuer also hereby designates, pursuant to
Section 1002 of the Indenture, the corporate trust office of
Bankers, presently located at Four Albany Street, New York, New
York 10015, as the office or agency of the Issuer in the Borough
of Manhattan, the City of New York, New York where (a) the
Debentures outstanding under the Indenture may be presented or
surrendered for payment, (b) the
Debentures may be presented for registration of transfer or
exchange, and (c) notices and demands to or upon the Issuer in
respect of the Indenture or the Debentures may be served. The
Issuer also hereby confirms its prior designation, pursuant to
Section 1002 of the Indenture and Section 5.1 of the Board
Resolution establishing certain terms and provisions of the
Debentures, of the corporate trust office of PNB, presently
located at Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania
15222 as the office or agency of the Issuer in the City of
Pittsburgh, Pennsylvania for the aforesaid purposes. PNB's
resignation as Trustee, Bankers' succession as Trustee and the
designation of the office described in the second preceding
sentence shall each be effective at the close of business on the
date of this instrument.
3. The Issuer represents and warrants to Bankers that:
(a) it is validly organized and existing under the
laws of the state of its incorporation and has the
power and authority to carry out its business as
now conducted;
(b) the Debentures were validly and lawfully issued;
(c) it has performed or fulfilled each covenant,
agreement and condition on its part to be
performed or fulfilled under the Indenture;
(d) it has no knowledge of the existence of any
default, or Event of Default (as defined in the
Indenture), or any event which upon notice or
passage of time or both would become an Event of
Default under the Indenture: and
(e) it has not appointed any paying agents under the
Indenture other than PNB.
4. PNB represents and warrants to the Issuer and to
Bankers that:
(a) it has made, or promptly will make, available to
Bankers, originals of all documents relating to
the trust created by the Indenture and all
information in the possession of its corporate
trust department relating to the administration of
the trust and will furnish to Bankers any of such
documents or information as Bankers may select:
(b) based on information known to the Trustee, no
default, or Event of Default (as defined in the
Indenture), or any event which upon notice or
passage of time or both would become an Event of
Default under the Indenture exists; and
(c) it has lawfully and fully discharged its duties as
Trustee under the Indenture.
5. Bankers represents and warrants to the Issuer that it
is qualified and eligible to act as Trustee under the Indenture,
including under the provisions of Sections 608 and 609 thereof.
6. Bankers hereby accepts the appointment as successor
Trustee under the Indenture and the trust created thereby, and
assumes all rights, powers, duties and obligations of the Trustee
under the Indenture. Bankers will execute said trust and exercise
and perform said rights, powers, duties and obligations upon the
terms and conditions set forth in the Indenture.
7. Bankers hereby accepts the designation of its corporate
trust office as the office or agency of the Issuer in the Borough
of Manhattan, the City of New York, New York for the purposes
specified in paragraph 2.
8. PNB hereby acknowledges receipt of all compensation and
other amounts due it under the Indenture and hereby confirms,
assigns, transfers and sets over to Bankers, as successor Trustee
under the Indenture, upon the trust expressed in the Indenture,
any and all moneys and all the rights, powers, trusts, duties and
obligations which PNB now holds as Trustee under and by virtue of
the Indenture.
9. Bankers shall, on behalf of the Company and PNB and at
the expense of the
Company, mail a notice, in the form of Annex A hereto, of the
resignation and succession effected hereby to the holders of the
Debentures within 10 days of the date hereof.
10. Except as affected hereby, the Indenture is hereby
confirmed and shall remain in full force and effect.
11. The Issuer and PNB hereby agree, upon the request of
Bankers, to execute, acknowledge and deliver such further
instruments of conveyance and assurance and do such other things
as may be required for more fully and certainly vesting and
confirming in Bankers all of the properties, rights, powers,
duties and obligations of Bankers as successor Trustee under the
Indenture
12. Terms not otherwise defined in this Agreement are used
as defined in the Indenture.
13. This Agreement and the rights of the Parties hereunder
shall be governed by, and construed in accordance with, the laws
of the Commonwealth of Pennsylvania.
14. This agreement may be executed and acknowledged in one
or more counterparts, and by the different Parties hereunto
separate counterparts, each of which shall be deemed an original,
and all such counterparts shall together constitute but one and
the same instrument. This Agreement shall become effective upon
the execution of counterparts hereof by all parties hereto
whether or not all such parties have executed the same
counterpart.
WITNESS the due execution hereof as of the date first above
written.
[CORPORATE SEAL]
ATTEST: EQUITABLE RESOURCES, INC.
By
Secretary John C. Bertges,
Senior Vice
President - Financial and
Administrative
(CORPORATE SEAL)
ATTEST: PITTSBURGH NATIONAL BANK
Authorized Officer By Joseph A. Richardson, Jr.
Senior Vice President and
Secretary
(CORPORATE SEAL)
ATTEST: BANKERS TRUST COMPANY
Assistant Secretary Vice President
ANNEX A
NOTICE OF RESIGNATION OF TRUSTEE
AND
APPOINTMENT OF SUCCESSOR TRUSTEE
To the Holders of
EQUITABLE GAS COMPANY
(now EQUITABLE RESOURCES, INC.)
DEBENTURES, 12-1/8% SERIES DUE APRIL 1, 2008
(the "Debentures")
NOTICE IS HEREBY GIVEN that, pursuant to Section 610 of the
Indenture dated as of April 1, 1983 (the "Indenture") under which
the above mentioned Debentures were issued, the undersigned
PITTSBURGH NATIONAL BANK has resigned as Trustee under the
Indenture, and EQUITABLE RESOURCES, INC., formerly Equitable Gas
Company (the "Company"), has appointed BANKERS TRUST COMPANY as
successor Trustee under the Indenture. Bankers Trust Company has,
pursuant to Section 611 of the Indenture, accepted such
appointment. The address of the corporate trust office of the
successor Trustee is Four Albany Street, New York, New York
10015. The Company has also designated said office as the office
or agency of the Company in the Borough of Manhattan, the City of
New York, New York where (a) the Debentures may be presented or
surrendered for payment, (b) the Debentures may be presented for
registration of transfer or exchange and (c) notices and demands
to or upon the Company in respect of the Debentures or the
Indenture may be served. Such resignation and succession and the
designation of such office are all effective at the close of
business on the date of this Notice. Pittsburgh National Bank
remains the office or agency of the Company
for such purposes in the City of Pittsburgh, Pennsylvania.
Debentures being sent for payment or registration of
transfer or exchange should be sent to one of the following
addresses:
By Mail By Hand
Corporate Trust Office Corporate Trust Office
Pittsburgh National Bank Pittsburgh National Bank
Fifth Avenue and Wood Street Fifth Avenue and Wood Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
Bankers Trust Company Bankers Trust Company
Corporate Trust and Agency Group Corporate Trust and Agency
Group
Securities Processing Service Securities Processing Service
Division Division
P. O. Box 2579 123 Washington Street
Church Street Station First Floor
New York, NY 10008 New York, NY 10006
Dated: February 1, 1985 EQUITABLE RESOURCES, INC.
PITTSBURGH NATIONAL BANK
BANKERS TRUST COMPANY
COMMONWEALTH OF PENNSYLVANIA )
) ss:
COUNTY OF ALLEGHENY )
On this 1st day of February, 1985, before me, the
undersigned officer, personally appeared JOHN C. BERTGES, who
acknowledged himself to be Vice President - Financial and
Administrative of Equitable Resources, Inc., a corporation, and
that he as such Vice President, being authorized to do so,
executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as
President.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
Notary Public
My Commission Expires
COMMONWEALTH OF PENNSYLVANIA )
) ss:
COUNTY OF ALLEGHENY )
On this 1st day of February, 1985, before me, the
undersigned officer, personally appeared JOSEPH A. RICHARDSON,
JR., who acknowledged himself to be Senior Vice President and
Secretary of Pittsburgh National Bank, a national banking
association, and that he as such Senior Vice President and
Secretary, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name
of said banking association by himself as Vice President and
Secretary.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
Notary Public
My Commission Expires:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this 1st day of February, 1985, before me, the
undersigned officer, personally appeared T.J. Moskio who
acknowledged himself to be Vice President of Bankers Trust
Company, a New York banking association, and that he as such Vice
President, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name
of said banking association by himself as Vice President.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
Notary Public
By Commission Expires:
Exhibit 4.01 (c)
Resolution Adopted June 26, 1986 by the Finance
Committee of the Board of Directors of the Company
Establishing the Terms of the $75 Million of
Debentures, 8-1/4 % Series Due July 1, 1996
RESOLVED, That in accordance with Section 301 of the
Indenture dated as of April 1, 1983 (the "Indenture") from
Equitable Resources, Inc. (the "Company") to Bankers Trust
Company, as trustee (the "Trustee"), there is hereby established
for authentication and delivery by the Trustee the second series
of Securities (such series being referred to herein as the
"Debentures") of the Company to be issued under the Indenture,
having the following terms and provisions in addition to the
terms and provisions established by the Indenture:
1.1 Title. The title of the Debentures shall be "Debentures,
8-1/4 % Series Due July 1, 1996".
2.1 Principal Amount. The aggregate principal amount of the
Debentures which may be authenticated and delivered under the
Indenture (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Debentures pursuant to Section 304, 305, 306, 906 or 1107
of the Indenture) shall be limited to $75,000,000.
3.1 Maturity. The principal of the Debentures shall be
payable on July 1, 1996.
4.1 Interest Rate. The Debentures shall bear interest at the
rate of 8-1/4% per annum until the principal thereof is paid or
made available for payment and (to the extent that the payment of
such interest shall be legally enforceable) at the same rate per
annum on any overdue principal and on any overdue installment of
interest.
4.2 Interest Accrual. Interest on the Debentures shall
accrue from the date of the original issue of any of the
Debentures or from the most recent Interest Payment Date (as
specified in Section 4.3 below) to which interest has been paid
or duly provided for.
4.3 Interest Payment Dates. The Interest Payment Dates on
which interest on the Debentures shall be paid or duly provided
for shall be semi-annually on January 1 and July 1 in each year,
commencing January 1, 1987.
4.4 Regular Record Dates. The Regular Record Dates for the
interest on the Debentures so payable on any Interest Payment
Date (as specified in Section 4.3 above) shall be December 15 or
June 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.
5.1 Place of Payment. Principal of the Debentures shall be
payable at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, the City of New York,
New York. Unless otherwise designated by the Company in a written
notice to the Trustee, such office or agency in the Borough of
Manhattan for the above purpose shall be the Corporate Trust
Office of the Trustee. Interest on the Debentures shall be
payable by check mailed to the registered address of the holder
of record on the Regular Record Date for such interest payment or
may be made in any other manner not unacceptable to the Trustee.
6.1 Redemption. The Debentures shall not be subject to
redemption, in whole or in part, prior to their stated maturity.
7.1 Denominations. As contemplated by the Indenture, the
Debentures shall be issuable in denominations of $1,000 and any
integral multiple thereof.
8.1 Convertibility. The Debentures shall not be convertible
into shares of capital stock or other securities of the Company.
9.1 Repayment. Except as provided in Section 10.1 hereof,
the Company shall have no obligation to repay the Debentures (at
the option of Holders or otherwise) prior to the Maturity of the
Debentures (as specified in Section 3.1 above).
10.1 Acceleration. The principal amount of the Debentures
(and not a portion thereof) shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502 of
the Indenture.
11.1 Section 403 of Indenture. Section 403 of the Indenture
shall apply to the Debentures.
12.1 Other Provisions. The Debentures shall have no other
terms than as set forth in this Board Resolution and the
Indenture or as may be set forth in any indenture or indentures
supplemental to the Indenture.
Capitalized terms used in this Board Resolution have the
meanings set forth in the Indenture unless otherwise indicated or
the context indicates otherwise.
Exhibit 4.01 (d)
Resolutions Adopted June 22, 1987 by the Finance
Committee of the Board of Directors of the Company
Approving the Issue and Sale of $75,000,000 Debentures,
7-1/2% Series Due July 1, 1999,
With 1,500,000 Common Stock Purchase Warrants
RESOLVED, That this Committee hereby authorizes and approves
the issue and sale by the Company of 75,000 Units (the "Units"),
each Unit consisting of $1,000 principal amount of a Debenture,
7-1/2% Series due July 1, 1999 (collectively, the "Debentures")
and 20 Common Stock Purchase Warrants (collectively, the
"Warrants"), each such Warrant being exercisable to purchase one
share of the Common Stock, without par value, of the Company (the
"Common Stock");
RESOLVED FURTHER, That the Debentures and Warrants
comprising the Units shall have the terms and provisions (i) set
forth in the attached Board Resolution establishing the terms and
provisions of the Debentures and hereby adopted by this
Committee, and (ii) as hereinafter set forth;
RESOLVED FURTHER, That the initial Exercise Price of each
Warrant shall be $57.50 per share, to be evidenced by Warrant
Certificates to be countersigned and delivered by Mellon Bank,
N.A., as Warrant Agent (the "Warrant Agent") under a Warrant
Agreement to be dated June 23, 1987 (the "Warrant Agreement")
between the Company and the Warrant Agent, and expiring at 5:00
p.m., prevailing local time in New York, New York on July 1,
1992, with the number of Warrants and the Exercise Price to be
subject to adjustment as provided in the Warrant Agreement;
RESOLVED FURTHER, That the Debentures and the Warrants
comprising each Unit shall not be separately transferable until
October 1, 1987 or such earlier date as may be determined on
behalf of the Company by the President, the Executive Vice
President or the Vice President and Treasurer, with the consent
of the Representative of the Underwriters, all as more fully set
forth in the Warrant Agreement and the Board Resolution;
RESOLVED FURTHER, That the Underwriting Agreement dated June
23, 1987 between the Company and The First Boston Corporation
("First Boston"), on behalf of itself and as Representative of
the several Underwriters named on Schedule A thereto, presented
to this meeting (the "Underwriting Agreement") be and the same
hereby is approved, and that the proper officers of the Company
be and thereby they are authorized and directed to execute and
deliver, on behalf of the Company, the Underwriting Agreement,
substantially in the form presented to this meeting, with such
changes therein as the officers executing the same may approve;
RESOLVED FURTHER, That the Company shall issue and sell for
cash to the several Underwriters named in the Underwriting
Agreement the Units at the purchase price of $985.00 per Unit
specified in the Underwriting Agreement, and that the proper
officers of the Company be, and each of them hereby is,
authorized and directed to cause the Units, in the amounts agreed
to be purchased by each Underwriter, to be delivered to First
Boston for the several accounts of such Underwriters against
payment to the Company of the purchase price therefor, all in
accordance with the provisions of the Underwriting Agreement;
RESOLVED FURTHER, That the form of Warrant Agreement
presented to this meeting between the Company and the Warrant
Agent, providing for the appointment of the Warrant Agent and for
certain terms and provisions of the Warrants, be and the same
hereby is approved, and that the proper officers of the Company
be and hereby they are authorized and directed to execute and
deliver, on behalf of the Company, the Warrant Agreement
substantially in the form presented to this meeting, with such
changes therein as the officers executing the same may approve;
RESOLVED FURTHER, That the authority of the Company's
Transfer Agent and Registrar with respect to the issuance,
transfer, countersignature and registration of shares of the
Company's Common Stock be and hereby it is extended to cover the
authorized but unissued shares of Common Stock issuable upon
exercise of Warrants, and that the proper officers of the Company
be and hereby they are authorized and directed to issue such
orders and instructions to the Company's Transfer Agent and
Registrar as they or any of them shall deem necessary or
advisable in connection with the foregoing;
RESOLVED FURTHER, That the actions of the officers of the
Company in causing to be filed with the Securities and Exchange
Commission (the "SEC") on April 7, 1987 a Registration Statement
(Form S-3, Registration Number 33-13232), including a Preliminary
Prospectus dated April 7, 1987, relating to 75,000 Units and
1.575 million shares of Common Stock be, and hereby it is, in all
respects ratified, confirmed and approved, and that the proper
officers of the Company be, and each of them hereby is,
authorized and empowered, for and on behalf of the Company, to
prepare or cause to be prepared and to execute and file with the
SEC Amendment No. 1, including a Final Prospectus, to the
Registration Statement, and to use such Amendment and such Final
Prospectus in connection with the offering and sale of Units;
RESOLVED FURTHER, That the forms of Debentures and Warrants
(proofs of May 8, 1987 and May 7, 1987, respectively) presented
to this meeting be and the same hereby are approved, and that the
proper officers of the Company be and hereby they are authorized
and directed to execute and deliver, on behalf of the Company,
the Debentures and Warrants in substantially the forms presented
to this meeting, with the blanks appropriately filled, and with
such changes therein as the officers executing the same may
approve;
RESOLVED FURTHER, That the Debentures shall, as provided in
the Indenture, be signed in the name and on behalf of the Company
by the facsimile signature of the President of the Company under
its corporate seal (which may be printed, engraved or otherwise
reproduced on the Debentures, by facsimile or otherwise),
attested by the facsimile signature of the Secretary of the
Company, and that the facsimile signatures of Donald I. Moritz
and Audrey C. Moeller, as President and Secretary of the Company,
respectively, be and hereby they are adopted and approved for
such purpose;
RESOLVED FURTHER, That the action of the proper officers of
the Company, in causing to be filed with the New York Stock
Exchange an application for the listing thereon, subject to
official notice of issuance, of $75,000,000 principal amount of
7-1/2% Debentures due July 1, 1999 and 1,500,000 shares of
authorized but unissued shares of common stock issuable upon
exercise of common stock warrants sold in conjunction with the
Debentures due July 1, 1999, is hereby ratified, confirmed and
approved and each of them is hereby authorized to make such
changes therein and to take such steps as may be necessary or
desirable to conform to applicable requirements for listing of
such Debentures and shares of common stock;
RESOLVED FURTHER, That the form presented to this meeting of
the proposed Indemnity Agreement between the Company and The New
York Stock Exchange, relating to the listing on said Exchange of
the Debentures executed by facsimile signature as aforesaid, be
and the same hereby is approved, and that the proper officers of
the Company be and hereby they are authorized and directed to
execute and deliver, on behalf of the Company, such Indemnity
Agreement substantially in the form presented to this meeting,
with such changes therein as the officers executing the same may
approve;
RESOLVED FURTHER, That the action of the proper officers of
the Company in causing to be filed with the Philadelphia Stock
Exchange an application for the listing thereon, subject to
official notice of issuance, of 1,500,000 shares of authorized
but unissued shares of common stock is hereby ratified, confirmed
and approved.
On motion duly made and seconded, the following resolution
was unanimously adopted:
RESOLVED,That in accordance with Section 301 of the
Indenture dated as of April 1, 1983 (the "Indenture") from the
Company to Bankers Trust Company, as trustee (the "Trustee"),
there is hereby established for authentication and delivery by
the Trustee the third series of Securities (such series being
referred to herein as the "Debentures") of the Company to be
issued under the Indenture, having the following terms and
provisions in addition to the terms and provisions established by
the Indenture:
1.1 Title. The Title of the Debentures shall be "Debentures,
7-1/2% Series Due July 1, l999".
2.1 Principal Amount. The aggregate principal amount of the
Debentures which may be authenticated and delivered under the
Indenture (except for Debentures authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu
of, other Debentures pursuant to Section 304, 305, 306, 906 or
1107 of the Indenture) shall be limited to $75,000,000.
3.1 Maturity. The principal of the Debentures shall be
payable on July 1, 1999.
4.1 Interest Rate. The Debentures shall bear interest at the
rate of 7-1/2% per annum until the principal thereof is paid or
made available for payment and (to the extent that the payment of
such interest shall be legally enforceable) at the same rate per
annum on any overdue principal and premium and on any overdue
installment of interest.
4.2 Interest Accrual. Interest on the Debentures shall
accrue from the date of the original issue of any of the
Debentures or from the most recent Interest Payment Date (as
specified in Section 4.3 below) to which interest has been paid
or duly provided for.
4.3 Interest PaYment Dates. The Interest Payment Dates on
which interest on the Debentures shall be paid or duly provided
for shall be semiannually on January 1 and July 1 in each year,
commencing January 1, 1988.
4 Regular Record Dates. The Regular Record Dates for the
interest on the Debentures so payable on any Interest Payment
Date (as specified in Section 4.3 above) shall be the December 15
or June 15 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.
5.1 Place of Payment. Principal of the Debentures shall be
payable at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, the City of New York,
New York. Unless otherwise designated by the Company in a
written notice to the Trustee, such office or agency in the
Borough of Manhattan for the above purpose shall be the Corporate
Trust Office of the Trustee. Interest on the Debentures shall be
payable by check mailed to the registered address of the holder
of record on the Regular Record Date for such interest payment.
6.1 Redemption. The Debentures shall not be redeemable, in
whole or in part, prior to maturity.
7.1 Denominations. As contemplated by the Indenture, the
Debentures shall be issuable in denominations of $1,000 and any
integral multiple thereof.
8.1 Convertibility. The Debentures shall not be convertible
into shares of capital stock or other securities of the Company.
9.1 Repayment. Except as provided in Section 10.1 hereof,
the Company shall have no obligation to repay the Debentures (at
the option of Holders or otherwise) prior to the Maturity of the
Debentures (as specified in Section 3.1 above).
10.1 Acceleration. In the event of a declaration of
acceleration of the maturity of the Debentures pursuant to
Section 502 of the Indenture, only an amount of principal equal
to the accreted value of the Debentures may be declared to be due
and payable. The accreted value of the Debentures shall be equal
to the issue price of the Debentures as established for the
purchasers upon original issue, increased by the amount of
original issue discount which such purchasers would have been
required to include in gross income to the time of such
declaration of acceleration, in each case as determined for
purposes of federal income taxes under the provisions of the
Internal Revenue Code as in effect on the date of original
issuance of the Debentures. In determining the issue price and
original issue discount of the Debentures, the Trustee shall be
entitled to rely on a certificate of a firm of independent
certified public accountants who shall be satisfactory to the
Trustee (and who may be accountants to the Company).
11.1 Section 403 of the Indenture. Section 403 of the
Indenture shall apply to the Debentures.
12.1 Transfers. Until October 1, 1987 or such earlier date
(the "Termination Date") as may be determined by the Company with
the consent of The First Boston Corporation, the Debentures may
not be transferred without the simultaneous transfer of 20 of the
Company's Common Stock Purchase Warrants (the "Warrants") to the
same registered holder for each $1,000 principal amount of
Debentures so transferred.
13.1 Other Provisions. The Debentures shall have no other
terms than as set forth in this Board Resolution and the
Indenture or as may be set forth in any indenture or indentures
supplemental to the Indenture.
Capitalized terms used in this Board Resolution have the
meanings set forth in the Indenture unless otherwise indicated or
the context indicates otherwise.
Exhibit 4.01 (e)
EQUITABLE RESOURCES, INC.
Excerpt from the Minutes of a Meeting of The Finance
Committee of The Board of Directors Held April 6, 1988
In connection with the contemporaneous adoption by the
Finance Committee of the Board Resolution establishing the terms
and provisions of the Company's Debentures, 9.90% Series Due
April 15, 2013 (the "Debentures"), and so as to provide for the
issue and sale of the Debentures, the Committee, on motion duly
made and seconded, unanimously adopted the following resolutions:
RESOLVED, that the Purchase Agreement among the Company and
The First Boston Corporation and Morgan Stanley & Co.
Incorporated (the "Underwriters"), dated April 6, 1988 (the
"Purchase Agreement"), presented to this meeting be and the same
hereby is approved, and that the proper officers of the Company
be and hereby they are authorized and directed to execute and
deliver, on behalf of the Company, the Purchase Agreement
substantially in the form presented to this meeting, with such
changes therein as the officers executing the same may approve;
FURTHER RESOLVED, that the Company shall issue and sell for
cash to the Underwriters $75,000,000 aggregate principal amount
of the Debentures at the purchase price of 96.525% of the
principal amount thereof specified in the Purchase Agreement, and
that the proper officers of the Company be, and each of them
hereby is, authorized and directed to cause the Debentures in
definitive form, in the amount agreed to be purchased by each
Underwriter, to be delivered to such Underwriter against payment
to the Company of the purchase price therefor, all in accordance
with the provisions of the Purchase Agreement; and
FURTHER RESOLVED, that the action of the officers of the
Company in causing to be prepared and filed with the Securities
and Exchange Commission (the "SEC") a Preliminary Prospectus
Supplement dated April 4, 1988 (the "Preliminary Prospectus
Supplement"), including therein a Prospectus dated August 26,
1986 (the "Prospectus") relating to $75,000,000 aggregate
principal amount of the Debentures, and the use of such
Preliminary Prospectus Supplement and Prospectus in connection
with the marketing and offering of the Debentures be, and hereby
it is, in all respects ratified, confirmed and approved; and
FURTHER RESOLVED, that the proper officers of the Company
be, and each of them hereby is, authorized and empowered, for and
on behalf the Company, to cause to be prepared and filed with the
SEC a final Prospectus Supplement (the "Prospectus Supplement"),
including therein the Prospectus, and to use such Prospectus
Supplement and Prospectus in connection with the offering and
sale of the Debentures; and
FURTHER RESOLVED, that the form (proof of April 5, 1988)
presented to this meeting of the Debentures be, and the same
hereby is, approved, and that the proper officers of the Company
be, and hereby are, authorized and directed to execute and
deliver, on behalf of the Company, the Debentures in
substantially the form presented to this meeting, with the blanks
therein appropriately filled and with such changes therein as the
officers executing the same may approve.
EQUITABLE RESOURCES, INC.
BOARD RESOLUTION
Resolution of the Finance Committee, a duly authorized
Committee appointed by the Board of Directors,
Establishing Certain Terms and Provisions of the Fourth Series
of Securities to be Issued under the Indenture dated
as of April 1, 1983 from Equitable Resources, Inc.
to Bankers Trust Company, as Trustee
RESOLVED, that, in accordance with Section 301 of the
Indenture dated as of April 1, 1983 (the "Indenture") from
Equitable Resources, Inc. (the "Company") to Bankers Trust
Company, as successor trustee (the "Trustee"), there is hereby
established for authentication and delivery by the Trustee the
fourth series of Securities (such series being referred to herein
as the "Debentures") of the Company to be issued under the
Indenture, having the following terms and provisions in addition
to the terms and provisions established by the Indenture:
1.1 Title. The title of the Debentures shall be "Debentures,
9.90% Series Due April 15, 2013".
2.1 Principal Amount. The aggregate principal amount of the
Debentures which may be authenticated and delivered under the
Indenture (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Debentures pursuant to Section 304, 305, 306, 906 or 1107
of the Indenture) shall be limited to $75,000,000.
3.1 Maturity. The principal of the Debentures shall be
payable on April 15, 2013.
4.1 Interest Rate. The Debenture shall bear interest at the
rate of 9.90% per annum until the principal thereof is paid or
made available for payment and (to the extent that the payment of
such interest shall be legally enforceable) at the same rate per
annum on any overdue principal and premium and on any overdue
installment of interest.
4.2 Interest Accrual. Interest on the Debentures shall
accrue from the date of the original issue of any of the
Debentures or from the most recent Interest Payment Date (as
specified in Section 4.3 below) to which interest has been paid
or duly provided for.
4.3 Interest Payment Dates. The Interest Payment Dates on
which interest on the Debentures shall be paid or duly provided
for shall be semiannually on April 15 and October 15 in each
year, commencing October 15, 1988.
4.4 Regular Record Dates. The Regular Record Dates for the
interest on the Debentures so payable on any Interest Payment
Date (as specified in Section 4.3 above) shall be the March 31 or
September 30 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.
5.1 Place of Payment. Principal of (and premium, if any, on)
the Debentures shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan,
the City of New York, New York. Unless otherwise designated by
the Company in a written notice to the Trustee, such office or
agency in the Borough of Manhattan for the above purpose shall be
the Corporate Trust Office of the Trustee. Interest on the
Debentures shall be payable by check mailed to the registered
address of the holder of record on the Regular Record Date for
such interest payment.
6.1 Redemption. The Company may, at its option, redeem the
Debentures on or after April 15, 1998, as a whole at any time or
in part from time to time, otherwise than through operation of
the sinking fund, at the Redemption Prices (expressed as
percentages of the principal amount) set forth in the table
below, in each case together with accrued interest to the
Redemption Date:
If Redeemed If Redeemed
During the During the
Twelve-Month Twelve-Month
Period Beginning Redemption Period Beginning Redemption
April 15, Price April 15, Price
1998 103.65% 2006 100.73%
1999 103.29 2007 100.37
2000 102.92 2008 100.00
2001 102.56 2009 100.00
2002 102.19 2010 100.00
2003 101.83 2011 100.00
2004 101.46 2012 100.00
2005 101.10
7.1 Sinking Fund. The Company will pay to the Trustee on or
before April 15 in each of the years 1999 through 2012,
inclusive, an amount sufficient to redeem not less than
$3,750,000 principal amount of Debentures, as a mandatory sinking
fund, at the sinking fund redemption price of 100% of the
principal amount, and the Company may, at its option, also pay to
the Trustee on or before such date in each of such years an
amount sufficient to redeem not more than an additional
$7,500,000 principal amount of Debentures at such sinking fund
redemption price. The right to make such additional optional
sinking fund payment shall not be cumulative. The cash amount of
any mandatory sinking fund payment shall be subject to reduction
as provided in Section 1202 of the Indenture. Each sinking fund
payment shall be applied to the redemption of Debentures as
provided in Section 1203 of the Indenture.
8.1 Denominations. As contemplated by the Indenture, the
Debentures shall be issuable in denominations of $1,000 and any
integral multiple thereof.
9.1 Convertibility. The Debentures shall not be convertible
into shares of capital stock or other securities of the Company.
10.1 Repayment. Except as provided in Sections 7.1 and 11.1
hereof, the Company shall have no obligation to repay the
Debentures (at the option of Holders or otherwise) prior to the
Maturity of the Debentures (as specified in Section 3.1 above).
11.1 Acceleration. The principal amount of the Debentures
(and not a portion thereof) shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502 of
the Indenture.
12.1 Section 403 of Indenture. Section 403 of the Indenture
shall apply to the Debentures.
13.1 Other Provisions. The Debentures shall have no other
terms than as set forth in this Board Resolution and the
Indenture or as may be set forth in any indenture or indentures
supplemental to the Indenture.
Capitalized terms used in this Board Resolution have the
meanings set forth in the Indenture unless otherwise indicated or
the context indicates otherwise.
Exhibit 10.02 (a)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of the 18th day of March
1988, between Equitable Resources, Inc., a Pennsylvania
corporation, with its principal executive offices at 420
Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (the
Company"), and Frederick H. Abrew, an individual and resident of
Venetia, Pennsylvania (the "Executive").
WHEREAS, the Executive is and has been employed by the
Company and is currently Vice President - Utility Services of the
Company; and
WHEREAS, the Company wishes to assure itself of the services
of Executive for the period provided in this Agreement and the
Executive is willing to serve in the employ of the Company on a
full time basis for said period and upon the other terms and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and intending to be legally bound, the Company
and the Executive hereby amend and restate their agreement
relating to the Executive's employment with the Company as
follows:
1. Position and Duties.
(a) The Company hereby agrees to, and hereby does,
continue to employ the Executive, for the term of this Agreement,
to render services to the Company as Vice President - Utility
Services of the Company and in connection therewith to perform
such duties as the Executive is now performing and such other
duties, commensurate with such position, as the Executive may
reasonably be directed to perform by the President and Chief
Executive Officer of the Company provided, however, that without
the prior written consent of the Executive there shall be no
geographic change from Pittsburgh, Pennsylvania or its environs
or transfer of the office or place of performance of the
Executive's service or duties. Except to the extent that the
President and Chief Executive Officer of the Company delegates
the duties and assigns the positions described below with
respect to subsidiaries of the Company to such other person or
persons as the President and Chief Executive Officer of the
Company, in his discretion, shall determine, the Executive will
continue to serve as the vice president of such of the
subsidiaries of the Company and in connection therewith to
perform such duties as the Executive is now performing and such
other duties, commensurate with such position as vice president
of such subsidiaries, as the Executive may reasonably be directed
to perform by the President and Chief Executive Officer of the
Company. The Executive shall have the right to devote a
reasonable amount of time and effort to industry, community or
charity organizations, and, subject to the provisions of
Section 7 and Section 8 hereof, the Executive may serve as a
director of other companies with the consent of the President and
Chief Executive Officer of the Company and of the Board which
consent in either case shall not be unreasonably withheld.
(b) The Executive hereby accepts such employment and
agrees faithfully to perform to the best of his ability the
duties described in Section 1(a).
2. Term. Subject to Section 4 hereof, the term of the
employment of the Executive under this Agreement shall commence
on the day this Agreement shall have been executed by both
parties hereto (the "Effective Date") and shall terminate on the
last day of the calendar month in which occurs the earlier of (i)
the Executive's 65th birthday or (ii) unless further extended as
hereinafter set forth, the date which is 36 calendar months after
the Effective Date. Commencing on the last day of the first full
calendar month after the Effective Date and on the last day of
each succeeding calendar month, the term of this Agreement shall
be automatically extended without further action by either party
(but not beyond the Executive's 65th birthday) for one additional
calendar month unless one party notifies the other in writing
that such party does not wish to extend the term of this
Agreement. In the event that such notice shall have been
delivered, the term hereof shall no longer be subject to
automatic extension and the term hereof shall expire on the date
which is 36 calendar months after the last day of the month in
which such written notice is received. (The last day of the
calendar month in which the term hereof, as extended from time to
time, shall end is hereinafter referred to as the "Expiration
Date").
3. Compensation. In consideration of the Executive's
Agreements contained herein and as compensation to the Executive
for the performance of the services required hereunder, the
Company shall pay or grant to him the following salary and other
compensation and benefits:
(a) a base salary, payable in equal installments not
less frequently than monthly, at such annual rate, not less than
$120,000 per year, as is determined from time to time by the
Board or an appropriate committee thereof, provided, however,
that the Executive's base salary shall be periodically reviewed
by the Board and shall be increased if the Board determines that
an increase is appropriate on the basis of the types of factors
it generally takes into account in increasing the salaries of
executive officers of the Company;
(b) an annual incentive compensation payment equal to
the amount, if any, payable to the Executive under the terms and
conditions of the Company's Short-Term Incentive Compensation
Plan as in effect for each annual period during the term of this
Agreement;
(c) such other awards under the Company's Key Employee
Restricted Stock Option and Stock Appreciation Rights Incentive
Compensation Plan (the "Option Plan") or under any other stock
option, incentive compensation or other compensation plan,
program or arrangement, now existing or hereafter adopted as
applicable to executive officers of the Company, as the Board, or
an appropriate committee thereof administering such plan, program
or arrangement, may determine appropriate in light of the duties
and responsibilities of the Executive in respect to other
executive officers;
(d) participation on the same terms and conditions as
all other employees in all employee benefit plans, whether or not
qualified within the meaning of Section 401(a) of the Internal
Revenue Code of 1986, as may be amended from time to time (the
"Code"), as may be now or hereafter sponsored or maintained for
all employees of the Company and participation on the same terms
and conditions as other executive officers in such other plan,
program or arrangement as may be now or hereafter sponsored or
maintained for executive officers of the Company;
(e) reimbursement for reasonable travel and other
expenses incurred by Executive in performing his obligations
hereunder pursuant to the terms and conditions of the Company's
policy in respect thereto; and
(f) reasonable vacations, absences on account of
temporary illness and fringe benefits customarily enjoyed by
employees or officers of the Company under the terms and
conditions of the Company's policy in respect thereto.
Nothing contained in this Agreement shall prevent the Board
from amending or otherwise altering the Short-Term Incentive
Plan, the Option Plan or any other plan, program or arrangement
so long as such amendment or alteration (i) is accomplished
pursuant to the terms thereof as in effect on the Effective Date
or on the date such is adopted, if later, and (ii) equitably
affects all employees, executive or otherwise, previously covered
thereunder.
4. Termination of Employment. This Agreement shall terminate
upon the Expiration Date or upon the death of the Executive. The
Company may terminate this Agreement prior to the Expiration Date
and the Executive's employment hereunder for "Disability" or
"Cause" and the Executive may terminate the Agreement prior to
the Expiration Date and his employment hereunder pursuant to his
"Resignation for Good Reason" or "Retirement for Good Reason" as
such terms are hereinafter defined. Termination of this Agreement
for any reason not set forth above shall not be deemed a
permitted termination and shall be deemed a breach of this
Agreement. In the event of any termination of this Agreement
prior to the Expiration Date, whether a permitted termination or
otherwise, the provisions of Section 5 of this Agreement shall
determine the amount, if any, of any compensation thereafter due
the Executive in respect to such termination.
As used in this Agreement, the following terms shall have
the meanings set forth:
(a) Disability. The Executive shall be entitled to
leaves of absence from the Company in accordance with the
Company's policy generally applicable to executives for illness
or other temporary disabilities for a period or periods not
exceeding an aggregate of six months in any calendar year, and
his compensation and status as an employee hereunder shall
continue during any such period or periods. If, as a result of
the Executive's incapacity due to physical or mental illness, the
Executive shall have been absent from his duties with the
Company on a full-time basis for six consecutive months, and
within thirty days after written notice of termination is given
by the Company, the Executive shall not have returned to the
full-time daily performance of his duties, the Executive shall be
deemed to have experienced a Disability and the Company may
terminate the Executive's employment.
(b) Cause. Termination by the Company of employment for
"Cause" shall mean termination upon:
(i) the willful and continued failure by the
Executive to substantially perform his duties with the Company
(other than (A) any such failure resulting from his incapacity
due to physical or mental illness, or (B) any such actual or
anticipated failure resulting from his Resignation for Good
Reason or Retirement for Good Reason), after a written demand for
substantial performance is delivered to the Executive by the
Board which specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his
duties, and which failure has not been cured within thirty days
after such written demand; or
(ii) the willful and continued engaging by the
Executive in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise, or
(iii) the breach by the Executive of the
Noncompetition clause in Section 7 hereof or the Confidentiality
clause in Section 8 hereof.
For purposes of this Subsection (b), no act, or failure to
act, on the Executive's part shall be considered "willful" unless
done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that such action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of
a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for that purpose (after
reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board the
Executive was guilty of conduct set forth above in clauses (i),
(ii) or (iii) of the first sentence of this Subsection (b) and
specifying the particulars thereof in detail.
(c) Retirement for Good Reason. For purposes of this
Agreement "Retirement for Good Reason" shall mean the Executive's
election to retire under the terms of the Company's Pension Plan
for Salaried Employees as a result of the occurrence of one of
the events referred to in Subsection (e) below.
(d) Resignation for Good Reason. For purposes of this
Agreement, "Resignation for Good Reason" shall mean the
Executive's election to resign as a result of the occurrence of
one of the events referred to in Subsection (e) below.
(e) Good Reason. For purposes of this Agreement, "Good
Reason" shall, absent the Executive's express written consent to
the contrary, mean:
(i) removal of the Executive as Vice President -
Utility Services of the Company, (by reason other than death,
Disability or Cause), or any other material breach by the Company
of its obligations contained in this Agreement;
(ii) the assignment to the Executive of any
duties inconsistent with his status as Vice President - Utility
Services of the Company or a substantial alteration in the nature
or status of the Executive's responsibilities which renders the
Executive's position to be of less dignity, responsibility or
scope;
(iii) a reduction by the Company in the
Executive's annual base salary as in effect on the date hereof
or as the same may be increased from time to time, except for
proportional across-the-board salary reductions similarly
affecting all executives of the Company and all executives of any
person in control of the Company, provided, however, that in no
event shall the Executive's salary be reduced below $120,000 per
year without the Executive's consent;
(iv) the failure to grant the Executive an annual
salary increase reasonably necessary to maintain such salary as
reasonably comparable to salaries of senior executives holding
positions equivalent to the Executive's in the industry in which
the Company's then principal business activity is conducted;
(v) the relocation of the Company's principal
executive offices to a location outside the Pittsburgh,
Pennsylvania Metropolitan Area or the Company's requiring the
Executive to be based anywhere other than the Company's principal
executive offices except for required travel on the Company's
business to an extent substantially consistent with the
Executive's present business travel obligations
(vi) the failure by the Company to continue in
effect any compensation plan, program or arrangement in which the
Executive participates, unless an equitable arrangement
reasonably acceptable to the Executive (embodied in an ongoing
substitute or alternative plan, program or arrangement) has been
made with respect to such plan, or the failure by the Company to
continue the Executive's participation therein;
(vii) any material reduction by the Company of the
benefits enjoyed by the Executive under any of the Company's
pension, retirement, profit sharing, savings, life insurance,
medical, health-and-accident, disability or other employee
benefit plans, programs or arrangements, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any
material fringe benefits, or the failure by the Company to
provide the Executive with the number of paid vacation days to
which he is entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation policy,
provided that this paragraph (vii) shall not apply to any
proportional across-the-board reduction or action similarly
affecting all executives of the Company and all executives of any
person in control of the Company;
(viii) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section ll(b)(ii)
hereof; or
(ix) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (f) below
and, if applicable, Subsection (b) above, and for purposes of
this Agreement, no such purported termination shall be effective.
(f) Notice of Termination. Any purported termination by
the Company or Resignation for Good Reason or Retirement for Good
Reason by the Executive shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 10 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the
specific termination, resignation or retirement provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such
termination, resignation or retirement under the provision so
indicated.
(g) Date of Termination, Etc. "Date of
Termination" shall mean (i) if the Executive's employment is
terminated for Disability, thirty days after Notice of
Termination is given (provided that the Executive shall not have
returned to the performance of the Executive's duties on a full-
time daily basis during such thirty-day period), and (ii) if the
Executive's employment is terminated for any other reason, the
date specified in the Notice of Termination (which shall not be
less than thirty days nor more than sixty days, from the date
such Notice of Termination is given); provided that if within
thirty days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally
determined by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected).
Any party giving notice of a dispute shall pursue the resolution
of such dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
the Executive his full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited
to, base salary) and continue the Executive as a participant in
all compensation, employee benefit and insurance plans, programs
and arrangements in which the Executive was participating when
the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this Subsection
(g).
5. Compensation Upon Termination.
(a) Death. If the Executive's employment hereunder
terminates by reason of his death, the Company shall be obligated
to pay to his surviving widow, or to his legal representatives if
he leaves no surviving widow or if his surviving widow dies prior
to fulfillment of the Company's obligations, (i) the Executive's
then current base salary for a six-month period commencing on the
first day of the month following the Executive's death, or until
the Expiration Date, whichever shall be the first to occur, and
(ii) any benefits to which the Executive is entitled under any
insurance policies on the life of the Executive, under the
Company's insurance programs and other employee benefit plans,
programs and arrangements then in effect and under the Company's
Pension Plan for Salaried Employees.
(b) Disability. If the Executive's employment hereunder
terminates by reason of his Disability, the Company shall pay to
the Executive, in monthly installments, such amount as shall
aggregate 70% of the Executive's then current base salary for the
lesser of a six-month period or until such time as the Executive
has reached the age at which he would be entitled to retire under
the Company's retirement policies and the Pension Plan for
Salaried Employees. Benefits otherwise receivable by the
Executive pursuant to this Subsection (b) shall be reduced to the
extent other benefits are received by the Executive pursuant to
any disability income or income protection plan, policy or
arrangement, the premiums for which or benefits under which are
paid by the Company. If the Executive dies prior to the date on
which such additional amounts would have ceased to be payable
under this Subsection (b), the amount that would have been
payable by the Company had he lived shall continue to be paid by
the Company to his surviving widow, for a period of 12 months
following the Executive's death, at the same times and rates as
it would have been payable to him.
(c) Cause. If the Executive's employment hereunder is
terminated by the Company for Cause, the Company shall pay to the
Executive his full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and
the Company shall have no further obligations to the Executive
under this Agreement.
(d) Voluntary Resignation or Retirement. In the event
the Executive retires or resigns other than pursuant to his
Retirement for Good Reason or Resignation for Good Reason, the
Company shall pay to the Executive his full base salary through
the Date of Termination at the rate in effect at the time Notice
of Termination is given and, except as provided in Section 6, the
Company shall have no further obligations to the Executive under
this Agreement.
(e) Other. If the Executive's employment hereunder is
terminated (1) by the Company other than for Cause or Disability
or (2) by the Executive pursuant to his Retirement for Good
Reason or Resignation for Good Reason, then the Executive shall
be entitled to the benefits provided below:
(i) the Company shall pay the Executive his full
base salary through the Date of Termination at the rate in effect
at the time Notice of Termination is
given;
(ii) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination, the
Company shall pay as severance pay to the Executive, not later
than the fifteenth day following the Date of Termination, a lump
sum severance payment equal to the Executive's full base salary
for the then remaining term of this Agreement (without regard to
the date of such Notice of Termination) at the rate then in
effect, discounted to present value at a discount rate of 7% per
annum applied to each future payment from the time it would have
become payable;
(iii) in lieu of shares of common stock issuable
upon exercise of outstanding options ("Options"), if any, or any
stock appreciation rights ("SAR"), if any, whether or not such
Options or SARs are vested or then exercisable pursuant to their
respective terms, granted to the Executive under the Company's
stock option or stock appreciation rights plans or otherwise
(which Options and SARs shall be cancelled upon the making of the
payment referred to below), the Executive shall receive, not
later than the fifteenth day following the Date of Termination,
an amount in cash equal to the product of (i) the difference (to
the extent that such difference is a positive number) obtained by
subtracting the per share exercise price of each Option and each
SAR held by the Executive, whether or not then fully exercisable,
from the closing price of the Common Stock (the "Closing Price")
as reported on the New York Stock Exchange on the Date of
Termination (or if not traded on the Date of Termination, the
closing price on the next preceding business day on which the
Common Stock traded), and (ii) the number of shares of Common
Stock covered by each such Option or SAR;
(iv) the Company shall also pay to the Executive
all legal fees and expenses incurred by the Executive in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this Agreement
or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to
any payment or benefit provided hereunder;
(v) for a period of time remaining until the
Expiration Date, the Company shall arrange to provide the
Executive with and shall pay the cost or premiums when due for
life, disability and health-and-accident insurance benefits
substantially similar to those which the Executive is receiving
immediately prior to the Notice of Termination;
(vi) The payments under this Subsection (e) are
intended by the parties to be due and payable under the
circumstances of a termination for the reasons set forth above
whether or not such circumstances are preceded by a change in
control of the Company. Notwithstanding the intentions of the
parties, in the event that it is asserted by any governmental
agency, in any tax audit, administrative proceeding or otherwise,
that any payments provided under this Subsection (e) (the
"Severance Payments") are or will be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code and/or that a
federal income tax deduction for amounts paid as Severance
Payments will not be allowed to the Company for any year by
reason of Section 280G of the Code, the Executive may contest or
refute such assertion with respect to the Excise Tax in any
appropriate forum (the "Executive's Contest") and the Company
shall diligently and vigorously contest or refute such assertion
with respect to the disallowance of such deduction in all
administrative proceedings and in the federal district court or
the Tax Court, whichever shall have jurisdiction (the "Company's
Contest"). The Executive's Contest and the Company's Contest
shall be conducted and presented separately unless the Executive,
in his discretion but with the consent of the Company, joins in
the Company's Contest. In any event, the Executive shall be
entitled to retain attorneys and other experts deemed necessary
or appropriate by the Executive to the proper presentation of the
Executive's Contest and shall not be compelled by the Company to
compromise, settle or otherwise terminate the Executive's Contest
without his written consent thereto. The Company and the
Executive shall cooperate one with the other and each shall
provide to the other copies of all documents relevant to or
useful in connection the Executive's Contest or the Company's
Contest as may reasonably be requested by the other. The
Executive shall attend any hearing, deposition or other
proceeding at which his attendance in person is material to the
Company's Contest. The Company shall cause the appropriate
authorized officer or officers of the Company to attend any
hearing, deposition or other matter at which the Company's
appearance is requested by any party; and
(vii) The payments provided for in this Subsection
(e), shall be made not later than the fifteenth day following the
Date of Termination, provided, however, that if the amounts of
such payments cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate,
as determined in good faith by the Company, of the minimum amount
of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the
Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company
to the Executive payable on the fifth day after demand by the
Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
(f) The Executive shall not be required to mitigate
the amount of any payment provided for in this Section 5 by
seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Section 5 be reduced by any
compensation earned by the Executive as the result of employment
by another employer, or otherwise. Benefits otherwise receivable
by the Executive pursuant to Section 5(e)(v) above shall be
reduced to the extent comparable benefits are actually received
by the Executive during the period of time remaining until the
Expiration Date from the plan or plans of any subsequent employer
or from any program maintained by any governmental body not
requiring contribution by the Executive, and any such benefits
actually received by the Executive shall be reported to the
Company.
(g) In addition to all other amounts payable to the
Executive under this Section 5, the Executive shall be entitled
to receive all benefits payable to him under the Company's
Pension Plan for Salaried Employees, the Employee Savings Plan,
and any other plan, program or arrangement relating to
retirement, profit sharing, or other benefits including, without
limitation, any employee stock ownership plan or any plan
established as a supplement to any of the aforenamed plans. No
amount payable to the Executive under Subsection 5(e) shall be
considered for any benefit calculation or other purpose under the
Company's Pension Plan for Salaried Employees.
6. Retirement Under Circumstances Not Constituting
Retirement For Good Reason. Nothing contained in this Agreement
shall be deemed to limit the Executive's ability to retire under
the Company's retirement policies and Pension Plan for Salaried
Employees under circumstances not constituting Retirement for
Good Reason and to receive all benefits payable to him under the
Company's Pension Plan for Salaried Employees, the Company's
Employee Savings Plan and any other plan, program or arrangement
relating to retirement.
7. Non Competition. During the term of this Agreement and
for one year thereafter, the Executive shall refrain from
competing with the Company or any subsidiary of the Company
except with the Company's prior written consent. The phrase
"refrain from competing with the Company or any subsidiary of the
Company" shall mean that the Executive will not engage, directly
or indirectly (including, by way of example only, as a principal,
partner, venturer, employee or agent) nor have any direct or
indirect interest in any enterprise (a "Competing Enterprise")
which competes with the Company or any subsidiary thereof by
engaging in the production, transmission, storage or distribution
of natural gas or natural gas liquids or the ownership or
operation of a central plant heating system in the Company's
distribution area or in substantial and direct competition with
any other business operation actively conducted by the Company or
its subsidiaries at the date of termination. It is agreed that
the foregoing provisions shall not restrict the Executive from
either (i) subject to the provisions of Subsection 8(a) hereof,
being a director of or having any investments or other interests
in an enterprise which is not a competing enterprise or (ii)
having any investments in any competing enterprise the stock of
which is listed on a national securities exchange or traded
publicly over-the-counter so long as such investment does not
give the Executive more than one percent (1%) of the voting stock
of such company.
8. Confidentiality. The Executive agrees:
(a) To keep secret all confidential matters of the
Company and its subsidiaries and affiliates specifically
indicated to be such by the Company or established as such by
written Company policy, and not to disclose them to any one
outside the Company or its subsidiaries and affiliates, either
during or after his employment with the Company, except with the
Company's prior written consent or as required by law; and
(b) To deliver promptly to the Company on termination
of employment of the Executive by the Company all memoranda,
notes, records, reports and other documents (and all copies
thereof) with respect to any such confidential matters and other
proprietary information (such as customers lists, suppliers
lists, etc.) which the Executive may then possess or have under
his control.
9. Arbitration. Any disputes hereunder shall be settled by
arbitration in Pittsburgh, Pennsylvania under the auspices of,
and in accordance with the rules of, the American Arbitration
Association, and the decision in such arbitration shall be final
and conclusive on the parties and judgment upon such decision may
be entered in any court having jurisdiction thereof.
10. Notices. All notices and other communications which are
required or may be given under this Agreement shall be in
writing and shall be delivered personally or by registered or
certified mail addressed to the party concerned at the following
addresses:
If to the Company:
Equitable Resources, Inc.
420 Boulevard of Allies
Pittsburgh, PA 15219
If to the Executive:
Frederick H. Abrew
338 Bower Hill Road
Venetia, PA 15367
or to such other address as shall be designated by notice in
writing to the other party in accordance herewith. Notices and
other communications hereunder shall be deemed effectively given
when personally delivered, or, if mailed, 48 hours after deposit
in the United States mail.
11. Miscellaneous.
(a) This Agreement supersedes all prior agreements,
arrangements and undertakings, written or oral, relating to the
subject matter hereof.
(b) (i) This Arrangement shall inure to the benefit
of the Executive's heirs, representatives or estate to the extent
stated herein.
(ii) The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such
succession had taken place. As used in this Agreement, "Company"
shall mean the Company as defined in the preamble to this
Agreement and any successor to its business or assets which
executes and delivers the agreement provided for in this
Subsection 11(b)(ii) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(c) This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or
covenants hereof may be waived, only by a written instrument
executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any
provisions hereof shall in no manner affect the right at a later
time to enforce such provisions thereafter. No waiver by either
party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach or a waiver of the breach of
any other term or covenant contained in this Agreement.
(d) In the event any one or more of the covenants,
terms or provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity of the
remaining covenants, terms and provisions contained herein shall
be in no way affected, prejudiced or disturbed thereby.
(e) This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations
hereunder, except as provided in Paragraph ll(b) above. Without
limiting the foregoing, the Executive's right to receive payments
hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than
a transfer by his will or by the laws of descent or distribution,
and in the event of any attempted assignment or transfer contrary
to this Subsection 11(e) the Company shall have no liability to
pay any amount so attempted to be assigned or transferred.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
By By
Secretary Donald I. Moritz, President and
Chief Executive Officer
WITNESS:
By By
Exhibit l0.02 (b)
June 26, 1989
Mr. Frederick H. Abrew
Executive Vice President - Utility Services
Equitable Gas Company
420 Boulevard of the Allies
Pittsburgh, Pennsylvania 15219
Re: Employment Agreement dated as of
March 18, 1988
Dear Mr. Abrew:
This is to advise you that, pursuant to a recommendation by
the Compensation Committee of the Board of Directors that
executive employment contracts be amended to reflect a recent
change in the Company's executive retirement policy, Section 2 of
your Employment Agreement dated as of March 18, 1988 shall be
amended effective June 1, 1989 by deleting the phrase "(i) the
Executive's sixty-fifth (65th) birthday" and substituting
therefore "(i) the date of the Executive's retirement in
accordance with the provisions of the Company's retirement policy
as set forth in its Management Manual."
All other terms and conditions of the Employment Agreement
shall remain unaltered by this Amendment.
Please indicate your acceptance of this amendment by signing
below.
Very truly yours,
EQUITABLE RESOURCES, INC.
By
President and Chief Executive Officer
APPROVED AND ACCEPTED
Frederick H. Abrew
Exhibit 10.03 (a)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of the 18th day of March
1988, between Equitable Resources, Inc., a Pennsylvania
corporation, with its principal executive offices at 420
Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (the
Company"), and Augustine A. Mazzei, Jr., an individual and
resident of Monroeville, Pennsylvania (the "Executive").
WHEREAS, the Executive is and has been employed by the
Company and is currently Vice President and General Counsel of
the Company;
WHEREAS, the Company and the Executive had entered an
agreement concerning the employment of the Executive by the
Company, and has amended, restated and supplemented such
employment agreement (such agreement as amended, restated and
supplemented is hereinafter referred to as the "Prior
Agreement");
WHEREAS, the Company and the Executive desire to amend and
restate the Prior Agreement, and to restate said agreement as
amended in its entirety;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and intending to be legally bound, the Company
and the Executive hereby amend and restate their agreement
relating to the Executive's employment with the Company as
follows:
1. Position and Duties.
(a) The Company hereby agrees to, and hereby does,
continue to employ the Executive, for the term of this Agreement,
to render services to the Company as Vice President and General
Counsel of the Company and in connection therewith to perform
such duties as the Executive is now performing and such other
duties, commensurate with such position, as the Executive may
reasonably be directed to perform by the President and Chief
Executive Officer of the Company provided, however, that without
the prior written consent of the Executive there shall be no
geographic change from Pittsburgh, Pennsylvania or its environs
or transfer of the office or place of performance of the
Executive's service or duties. Except to the extent that the
President and Chief Executive Officer of the Company delegates
the duties and assigns the positions described below with
respect to subsidiaries of the Company to such other person or
persons as the President and Chief Executive Officer of the
Company, in his discretion, shall determine, the Executive will
continue to serve as the vice president and general counsel of
such of the subsidiaries of the Company and in connection
therewith to perform such duties as the Executive is now
performing and such other duties, commensurate with such position
as vice president and general counsel of such subsidiaries, as
the Executive may reasonably be directed to perform by the
President and Chief Executive Officer of the Company. The
Executive shall have the right to devote a reasonable amount of
time and effort to industry, community or charity organizations,
and, subject to the provisions of Section 7 and Section 8
hereof, the Executive may serve as a director of other companies
with the consent of the President and Chief Executive Officer of
the Company and of the Board which consent in either case shall
not be unreasonably withheld.
(b) The Executive hereby accepts such employment and
agrees faithfully to perform to the best of his ability the
duties described in Section l(a).
2. Term. Subject to Section 4 hereof, the term of the
employment of the Executive under this Agreement shall commence
on the day this Agreement shall have been executed by both
parties hereto (the "Effective Date") and shall terminate on the
last day of the calendar month in which occurs the earlier of (i)
the Executive's 65th birthday or (ii) unless further extended as
hereinafter set forth, the date which is 36 calendar months after
the Effective Date. Commencing on the last day of the first full
calendar month after the Effective Date and on the last day of
each succeeding calendar month, the term of this Agreement shall
be automatically extended without further action by either party
(but not beyond the Executive's 65th birthday) for one additional
calendar month unless one party notifies the other in writing
that such party does not wish to extend the term of this
Agreement. In the event that such notice shall have been
delivered, the term hereof shall no longer be subject to
automatic extension and the term hereof shall expire on the date
which is 36 calendar months after the last day of the month in
which such written notice is received. (The last day of the
calendar month in which the term hereof, as extended from time to
time, shall end is hereinafter referred to as the "Expiration
Date").
3. Compensation. In consideration of the Executive's
Agreements contained herein and as compensation to the Executive
for the performance of the services required hereunder, the
Company shall pay or grant to him the following salary and other
compensation and benefits:
(a) a base salary, payable in equal installments not
less frequently than monthly, at such annual rate, not less than
$125,000 per year, as is determined from time to time by the
Board or an appropriate committee thereof, provided, however,
that the Executive's base salary shall be periodically reviewed
by the Board and shall be increased if the Board determines that
an increase is appropriate on the basis of the types of factors
it generally takes into account in increasing the salaries of
executive officers of the Company;
(b) an annual incentive compensation payment equal to
the amount, if any, payable to the Executive under the terms and
conditions of the Company's Short-Term Incentive Compensation
Plan as in effect for each annual period during the term of this
Agreement;
(c) such other awards under the Company's Key Employee
Restricted Stock Option and Stock Appreciation Rights Incentive
Compensation Plan (the "Option Plan") or under any other stock
option, incentive compensation or other compensation plan,
program or arrangement, now existing or hereafter adopted as
applicable to executive officers of the Company, as the Board, or
an appropriate committee thereof administering such plan, program
or arrangement, may determine appropriate in light of the duties
and responsibilities of the Executive in respect to other
executive officers;
(d) participation on the same terms and conditions as
all other employees in all employee benefit plans, whether or not
qualified within the meaning of Section 401(a) of the Internal
Revenue Code of 1986, as may be amended from time to time (the
"Code"), as may be now or hereafter sponsored or maintained for
all employees of the Company and participation on the same terms
and conditions as other executive officers in such other plan,
program or arrangement as may be now or hereafter sponsored or
maintained for executive officers of the Company;
(e) reimbursement for reasonable travel and other
expenses incurred by Executive in performing his obligations
hereunder pursuant to the terms and conditions of the Company's
policy in respect thereto; and
(f) reasonable vacations, absences on account of
temporary illness and fringe benefits customarily enjoyed by
employees or officers of the Company under the terms and
conditions of the Company's policy in respect thereto.
Nothing contained in this Agreement shall prevent the Board
from amending or otherwise altering the Short-Term Incentive
Plan, the Option Plan or any other plan, program or arrangement
so long as such amendment or alteration (i) is accomplished
pursuant to the terms thereof as in effect on the Effective Date
or on the date such is adopted, if later, and (ii) equitably
affects all employees, executive or otherwise, previously covered
thereunder.
4. Termination of Employment. This Agreement shall terminate
upon the Expiration Date or upon the death of the Executive. The
Company may terminate this Agreement prior to the Expiration Date
and the Executive's employment hereunder for "Disability" or
"Cause" and the Executive may terminate the Agreement prior to
the Expiration Date and his employment hereunder pursuant to his
"Resignation for Good Reason" or "Retirement for Good Reason" as
such terms are hereinafter defined. Termination of this Agreement
for any reason not set forth above shall not be deemed a
permitted termination and shall be deemed a breach of this
Agreement. In the event of any termination of this Agreement
prior to the Expiration Date, whether a permitted termination or
otherwise, the provisions of Section 5 of this Agreement shall
determine the amount, if any, of any compensation thereafter due
the Executive in respect to such termination.
As used in this Agreement, the following terms shall have
the meanings set forth:
(a) Disability. The Executive shall be entitled to
leaves of absence from the Company in accordance with the
Company's policy generally applicable to executives for illness
or other temporary disabilities for a period or periods not
exceeding an aggregate of six months in any calendar year, and
his compensation and status as an employee hereunder shall
continue during any such period or periods. If, as a result of
the Executive's incapacity due to physical or mental illness, the
Executive shall have been absent from his duties with the
Company on a full-time basis for six consecutive months, and
within thirty days after written notice of termination is given
by the Company, the Executive shall not have returned to the
full-time daily performance of his duties, the Executive shall be
deemed to have experienced a Disability and the Company may
terminate the Executive's employment.
(b) Cause. Termination by the Company of employment for
"Cause" shall mean termination upon:
(i) the willful and continued failure by the
Executive to substantially perform his duties with the Company
(other than (A) any such failure resulting from his incapacity
due to physical or mental illness or (B) any such actual or
anticipated failure resulting from his Resignation for Good
Reason or Retirement for Good Reason), after a written demand for
substantial performance is delivered to the Executive by the
Board
which specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his
duties, and which failure has not been cured within thirty days
after such written demand; or
(ii) the willful and continued engaging by the
Executive in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise, or
(iii) the breach by the Executive of the
Noncompetition clause in Section 7 hereof or the Confidentiality
clause in Section 8 hereof.
For purposes of this Subsection (b), no act, or failure to
act, on the Executive's part shall be considered "willful" unless
done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that such action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of
a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for that purpose (after
reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board the
Executive was guilty of conduct set forth above in clauses (i),
(ii) or (iii) of the first sentence of this Subsection (b) and
specifying the particulars thereof in detail.
(c) Retirement for Good Reason. For purposes of this
Agreement "Retirement for Good Reason" shall mean the Executive's
election to retire under the terms of the Company's Pension Plan
for Salaried Employees as a result of the occurrence of one of
the events referred to in Subsection (e) below.
(d) Resignation for Good Reason. For purposes of this
Agreement, "Resignation for Good Reason" shall mean the
Executive's election to resign as a result of the occurrence of
one of the events referred to in Subsection (e) below.
(e) Good Reason. For purposes of this Agreement, "Good
Reason" shall, absent the Executive's express written consent to
the contrary, mean:
(i) removal of the Executive as Vice President and
General Counsel of the Company, (by reason other than death,
Disability or Cause), or any other material breach by the Company
of its obligations contained in this Agreement;
(ii) the assignment to the Executive of any
duties inconsistent with his status as Vice President and
General Counsel of the Company or a substantial alteration in the
nature or status of the Executive's responsibilities which
renders the Executive's position to be of less dignity,
responsibility or scope;
(iii) a reduction by the Company in the
Executive's annual base salary as in effect on the date hereof
or as the same may be increased from time to time, except for
proportional across-the-board salary reductions similarly
affecting all executives of the Company and all executives of any
person in control of the Company, provided, however, that in no
event shall the Executive's salary be reduced below $125,000 per
year without the Executive's consent;
(iv) the failure to grant the Executive an annual
salary increase reasonably necessary to maintain such salary as
reasonably comparable to salaries of senior executives holding
positions equivalent to the Executive's in the industry in which
the Company's then principal business activity is conducted;
(v) the relocation of the Company's principal
executive offices to a location outside the Pittsburgh,
Pennsylvania Metropolitan Area or the Company's requiring the
Executive to be based anywhere other than the Company's principal
executive offices except for required travel on the Company's
business to an extent substantially consistent with the
Executive's present business travel obligations;
(vi) the failure by the Company to continue in
effect any compensation plan, program or arrangement in which the
Executive participates, unless an equitable arrangement
reasonably acceptable to the Executive (embodied in an ongoing
substitute or alternative plan, program or arrangement) has been
made with respect to such plan, or the failure by the Company to
continue the Executive's participation therein;
(vii) any material reduction by the Company of the
benefits enjoyed by the Executive under any of the Company's
pension, retirement, profit sharing, savings, life insurance,
medical, health-and-accident, disability or other employee
benefit plans, programs or arrangements, the taking of any action
by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any
material fringe benefits, or the failure by the Company to
provide the Executive with the number of paid vacation days to
which he is entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation policy,
provided that this paragraph (vii) shall not apply to any
proportional across-the-board reduction or action similarly
affecting all executives of the Company and all executives of any
person in control of the Company;
(viii) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section 11(b)(ii)
hereof; or
(ix) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Subsection (f) below
and, if applicable, Subsection (b) above, and for purposes of
this Agreement, no such purported termination shall be effective.
(f) Notice of Termination. Any purported termination by
the Company or Resignation for Good Reason or Retirement for Good
Reason by the Executive shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 10 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the
specific termination, resignation or retirement provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such
termination, resignation or retirement under the provision so
indicated.
(g) Date of Termination, Etc. "Date of
Termination" shall mean (i) if the Executive's employment is
terminated for Disability, thirty days after Notice of
Termination is given (provided that the Executive shall not have
returned to the performance of the Executive's duties on a full-
time daily basis during such thirty-day period), and (ii) if the
Executive's employment is terminated for any other reason, the
date specified in the Notice of Termination (which shall not be
less than thirty days nor more than sixty days, from the date
such Notice of Termination is given); provided that if within
thirty days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally
determined by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected).
Any party giving notice of a dispute shall pursue the resolution
of such dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company will continue to pay
the Executive his full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited
to, base salary) and continue the Executive as a participant in
all compensation, employee benefit and insurance plans, programs
and arrangements in which the Executive was participating when
the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this Subsection
(g).
5. Compensation Upon Termination.
(a) Death. If the Executive's employment hereunder
terminates by reason of his death, the Company shall be obligated
to pay to his surviving widow, or to his legal representatives if
he leaves no surviving widow or if his surviving widow dies prior
to fulfillment of the Company's obligations, (i) the Executive's
then current base salary for a six-month period commencing on the
first day of the month following the Executive's death, or until
the Expiration Date, whichever shall be the first to occur, and
(ii) any benefits to which the Executive is entitled under any
insurance policies on the life of the Executive, under the
Company's insurance programs and other employee benefit plans,
programs and arrangements then in effect and under the Company's
Pension Plan for Salaried Employees.
(b) Disability. If the Executive's employment hereunder
terminates by reason of his Disability, the Company shall pay to
the Executive, in monthly installments, such amount as shall
aggregate 70% of the Executive's then current base salary for the
lesser of a six-month period or until such time as the Executive
has reached the age at which he would be entitled to retire under
the Company's retirement policies and the Pension Plan for
Salaried Employees. Benefits otherwise receivable by the
Executive pursuant to this Subsection (b) shall be reduced to the
extent other benefits are received by the Executive pursuant to
any disability income or income protection plan, policy or
arrangement, the premiums for which or benefits under which are
paid by the Company. If the Executive dies prior to the date on
which such additional amounts would have ceased to be payable
under this Subsection (b), the amount that would have been
payable by the Company had he lived shall continue to be paid by
the Company to his surviving widow, for a period of 12 months
following the Executive's death, at the same times and rates as
it would have been payable to him.
(c) Cause. If the Executive's employment hereunder is
terminated by the Company for Cause, the Company shall pay to the
Executive his full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given and
the Company shall have no further obligations to the Executive
under this Agreement.
(d) Voluntary Resignation or Retirement. In the event
the Executive retires or resigns other than pursuant to his
Retirement for Good Reason or Resignation for Good Reason, the
Company shall pay to the Executive his full base salary through
the Date of Termination at the rate in effect at the time Notice
of Termination is given and, except as provided in Section 6, the
Company shall have no further obligations to the Executive under
this Agreement.
(e) Other. If the Executive's employment hereunder is
terminated (1) by the Company other than for Cause or Disability
or (2) by the Executive pursuant to his Retirement for Good
Reason or Resignation for Good Reason, then the Executive shall
be entitled to the benefits provided below:
(i) the Company shall pay the Executive his full
base salary through the Date of Termination at the rate in effect
at the time Notice of Termination is
given;
(ii) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination, the
Company shall pay as severance pay to the Executive, not later
than the fifteenth day following the Date of Termination, a lump
sum severance payment equal to the Executive's full base salary
for the then remaining term of this Agreement (without regard to
the date of such Notice of Termination) at the rate then in
effect, discounted to present value at a discount rate of 7% per
annum applied to each future payment from the time it would have
become payable;
(iii) in lieu of shares of common stock issuable
upon exercise of outstanding options ("Options"), if any, or any
stock appreciation rights ("SAR"), if any, whether or not such
Options or SARs are vested or then exercisable pursuant to their
respective terms, granted to the Executive under the Company's
stock option or stock appreciation rights plans or otherwise
(which Options and SARs shall be cancelled upon the making of the
payment referred to below), the Executive shall receive, not
later than the fifteenth day following the Date of Termination,
an amount in cash equal to the product of (i) the difference (to
the extent that such difference is a positive number) obtained by
subtracting the per share exercise price of each Option and each
SAR held by the Executive, whether or not then fully exercisable,
from the closing price of the Common Stock (the "Closing Price")
as reported on the New York Stock Exchange on the Date of
Termination (or if not traded on the Date of Termination, the
closing price on the next preceding business day on which the
Common Stock traded), and (ii) the number of shares of Common
Stock covered by each such Option or SAR;
(iv) the Company shall also pay to the Executive
all legal fees and expenses incurred by the Executive in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this Agreement
or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to
any payment or benefit provided hereunder;
(v) for a period of time remaining until the
Expiration Date, the Company shall arrange to provide the
Executive with and shall pay the cost or premiums when due for
life, disability and health-and-accident insurance benefits
substantially similar to those which the Executive is receiving
immediately prior to the Notice of Termination;
(vi) The payments under this Subsection (e) are
intended by the parties to be due and payable under the
circumstances of a termination for the reasons set forth above
whether or not such circumstances are preceded by a change in
control of the Company. Notwithstanding the intentions of the
parties, in the event that it is asserted by any governmental
agency, in any tax audit, administrative proceeding or otherwise,
that any payments provided under this Subsection (e) (the
"Severance Payments") are or will be subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code and/or that a
federal income tax deduction for amounts paid as Severance
Payments will not be allowed to the Company for any year by
reason of Section 280G of the Code, the Executive may contest or
refute such assertion with respect to the Excise Tax in any
appropriate forum (the "Executive's Contest") and the Company
shall diligently and vigorously contest or refute such assertion
with respect to the disallowance of such deduction administrative
proceedings and in the federal district court or the Tax Court,
whichever shall have jurisdiction (the "Company's Contest"). The
Executive's Contest and the Company's Contest shall be conducted
and presented separately unless the Executive, in his discretion
but with the consent of the Company, joins in the Company's
Contest. In any event, the Executive shall be entitled to retain
attorneys and other experts deemed necessary or appropriate by
the Executive to the proper presentation of the Executive's
Contest and shall not be compelled by the Company to compromise,
settle or otherwise terminate the Executive's Contest without his
written consent thereto. The Company and the Executive shall
cooperate one with the other and each shall provide to the other
copies of all documents relevant to or useful in connection with
either the Executive's Contest or the Company's Contest as may
reasonably be requested by the other. The Executive shall attend
any hearing, deposition or other proceeding at which his
attendance in person is material to the Company's Contest. The
Company shall cause the appropriate authorized officer or
officers of the Company to attend any hearing, deposition or
other matter at which the Company's appearance is requested by
any party; and
(vii) The payments provided for in this Subsection
(e), shall be made not later than the fifteenth day following the
Date of Termination, provided, however, that if the amounts of
such payments cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate,
as determined in good faith by the Company, of the minimum amount
of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the
Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company
to the Executive payable on the fifth day after demand by the
Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
(f) The Executive shall not be required to mitigate
the amount of any payment provided for in this Section 5 by
seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Section 5 be reduced by any
compensation earned by the Executive as the result of employment
by another employer, or otherwise. Benefits otherwise receivable
by the Executive pursuant to Section 5(e)(v) above shall be
reduced to the extent comparable benefits are actually received
by the Executive during the period of time remaining until the
Expiration Date from the plan or plans of any subsequent employer
or from any program maintained by any governmental body not
requiring contribution by the Executive, and any such benefits
actually received by the Executive shall be reported to the
Company.
(g) In addition to all other amounts payable to the
Executive under this Section 5, the Executive shall be entitled
to receive all benefits payable to him under the Company's
Pension Plan for Salaried Employees, the Employee Savings Plan,
and any other plan, program or arrangement relating to
retirement, profit sharing, or other benefits including, without
limitation, any employee stock ownership plan or any plan
established as a supplement to any of the aforenamed plans. No
amount payable to the Executive under Subsection 5(e) shall be
considered for any benefit calculation or other purpose under the
Company's Pension Plan for Salaried Employees.
6. Retirement Under Circumstances Not Constituting
Retirement For Good Reason. Nothing contained in this Agreement
shall be deemed to limit the Executive's ability to retire under
the Company's retirement policies and Pension Plan for Salaried
Employees under circumstances not constituting Retirement for
Good Reason and to receive all benefits payable to him under the
Company's Pension Plan for Salaried Employees, the Company's
Employee Savings Plan and any other plan, program or arrangement
relating to retirement.
7. Non Competition. During the term of this Agreement and
for one year thereafter, the Executive shall refrain from
competing with the Company or any subsidiary of the Company
except with the Company's prior written consent. The phrase
"refrain from competing with the Company or any subsidiary of the
Company" shall mean that the Executive will not engage, directly
or indirectly (including, by way of example only, as a principal,
partner, venturer, employee or agent) nor have any direct or
indirect interest in any enterprise (a "Competing Enterprise")
which competes with the Company or any subsidiary thereof by
engaging in the production, transmission, storage or distribution
of natural gas or natural gas liquids or the ownership or
operation of a central plant heating system in the Company's
distribution area or in substantial and direct competition with
any other business operation actively conducted by the Company or
its subsidiaries at the date of termination. It is agreed that
the foregoing provisions shall not restrict the Executive from
either (i) subject to the provisions of Subsection 8(a) hereof,
being a director of or having any investments or other interests
in an enterprise which is not a competing enterprise or (ii)
having any investments in any competing enterprise the stock of
which is listed on a national securities exchange or traded
publicly over-the-counter so long as such investment does not
give the Executive more than one percent (1%) of the voting stock
of such company.
8. Confidentiality. The Executive agrees:
(a) To keep secret all confidential matters of the
Company and its subsidiaries and affiliates specifically
indicated to be such by the Company or established as such by
written Company policy, and not to disclose them to any one
outside the Company or its subsidiaries and affiliates, either
during or after his employment with the Company, except with the
Company's prior written consent or as required by law; and
(b) To deliver promptly to the Company on termination
of employment of the Executive by the Company all memoranda,
notes, records, reports and other documents (and all copies
thereof) with respect to any such confidential matters and other
proprietary information (such as customers lists, suppliers
lists, etc.) which the Executive may then possess or have under
his control.
9. Arbitration. Any disputes hereunder shall be settled by
arbitration in Pittsburgh, Pennsylvania under the auspices of,
and in accordance with the rules of, the American Arbitration
Association, and the decision in such arbitration shall be final
and conclusive on the parties and judgment upon such decision may
be entered in any court having jurisdiction thereof.
10. Notices. All notices and other communications which are
required or may be given under this Agreement shall be in
writing and shall be delivered personally or by registered or
certified mail addressed to the party concerned at the following
addresses:
If to the Company:
Equitable Resources, Inc.
420 Boulevard of Allies
Pittsburgh, PA 15219
If to the Executive:
Mr. Augustine A. Mazzei, Jr.
105 Briar Crest Drive
Monroeville, PA 15146
or to such other address as shall be designated by notice in
writing to the other party in accordance herewith. Notices and
other communications hereunder shall be deemed effectively given
when personally delivered, or, if mailed, 48 hours after deposit
in the United States mail.
11. Miscellaneous.
(a) This Agreement supersedes all prior agreements,
arrangements and undertakings, written or oral, relating to the
subject matter hereof.
(b) (i) This Arrangement shall inure to the benefit
of the Executive's heirs, representatives or estate to the extent
stated herein.
(ii) The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such
succession had taken place. As used in this Agreement, "Company"
shall mean the Company as defined in the preamble to this
Agreement and any successor to its business or assets which
executes and delivers the agreement provided for in this
Subsection 11(b)(ii) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(c) This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or
covenants hereof may be waived, only by a written instrument
executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any
provisions hereof shall in no manner affect the right at a later
time to enforce such provisions thereafter. No waiver by either
party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach or a waiver of the breach of
any other term or covenant contained in this Agreement.
(d) In the event any one or more of the covenants,
terms or provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity of the
remaining covenants, terms and provisions contained herein shall
be in no way affected, prejudiced or disturbed thereby.
(e) This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations
hereunder, except as provided in Paragraph 11(b) above. Without
limiting the foregoing, the Executive's right to receive payments
hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than
a transfer by his will or by the laws of descent or distribution,
and in the event of any attempted assignment or transfer contrary
to this Subsection 11(e) the Company shall have no liability to
pay any amount so attempted to be assigned or transferred.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
By By
Secretary Donald I. Moritz, President and
Chief Executive Officer
WITNESS:
By By
Exhibit 10.03 (b)
June 26, 1989
Mr. Augustine A. Mazzei, Jr.
Senior Vice President and General Counsel
Equitable Resources, Inc.
420 Boulevard of the Allies
Pittsburgh, Pennsylvania 15219
Re: Employment Agreement dated as of
March 18, 1988
Dear Mr. Mazzei:
This is to advise you that, pursuant to a recommendation by
the Compensation Committee of the Board of Directors that
executive employment contracts be amended to reflect a recent
change in the Company's executive retirement policy, Section 2 of
your Employment Agreement dated as of March 18, 1988 shall be
amended effective June 1, 1989 by deleting the phrase "(i) the
Executive's sixty-fifth (65th) birthday" and substituting
therefor "(i) the date of the Executive's retirement in
accordance with the provisions of the Company's retirement policy
as set forth in its Management Manual."
All other terms and conditions of the Employment Agreement
shall remain unaltered by this Amendment.
Please indicate your acceptance of this amendment by signing
below.
Very truly yours,
EQUITABLE RESOURCES, INC.
President and Chief Executive Officer
APPROVED AND ACCEPTED
Augustine A. Mazzei
Exhibit 10.04 (d)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 28th day of December,
1993, by and between Equitable Resources, Inc., herein designated
as "Equitable", and Barbara B. Sullivan, herein designated as the
"Participant."
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board
of Directors of Equitable as a Director or an Advisory Director;
and
WHEREAS, Equitable and the Participant desire to defer all
of the fees arising from the above-stated relationship.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1) Effective January 1, 1994, the Participant herein
elects to defer, under the terms of this Agreement, all compensa-
tion earned for his/her service as a Director or an Advisory
Director of Equitable for the calendar year 1994.
1.2) Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to the
Account the amounts of the deferred fees.
1.3) Interest shall be credited to the Account monthly.
The rate of interest shall be the same as the yield for 30-day
Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1) All amounts credited to the Account on the
Participant's behalf shall be payable in one lump sum by Equita-
ble to the Participant on 1996 (date selected by the Participant)
but in no event later than sixty (60) days after the Participant
ceases to be a Director or an Advisory Director of Equitable.
Unless a date specific is selected by the Participant, the
distribution will be made within sixty (60) days after the
Participant ceases to be a Director or an Advisory Director of
Equitable; provided, however, that nothing contained in this
Section 2.1 shall negate the provisions of Section 2.3 below.
2.2) In the event of the death of the Participant, such
payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these, last designated by the Partici-
pant to receive benefits provided under this Agreement. Such
designation shall be in writing filed with the Compensation
Committee of the Board of Directors (the "Committee") and shall
be revocable at any time through written instrument similarly
filed without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the
Participant's estate for administration as a part thereof.
2.3) For financial reasons, the Participant may apply to
the Committee for withdrawal from the Agreement prior to the
Payment Date. Such early withdrawal shall lie within the abso-
lute discretion of the Committee. Upon approval from the Commit-
tee, and within fifteen (15) days thereafter, the Participant
will be deemed to have withdrawn from the Agreement and a distri-
bution, in the amount necessary, will be made in a one-time
payment. Amounts still payable to the Participant after the
application of this Paragraph 2.3 shall be distributed pursuant
to the foregoing Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1) Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall create
or be construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his/her
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2) The right of the Participant or any other person to
the payment of deferred fees under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by
the laws of descent and distribution.
3.3) If the Committee shall find that any person to whom
any payment is payable under this Agreement is unable to care for
his/her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4) Nothing contained herein shall be construed as confer-
ring upon the Participant the right to continue in the service of
Equitable as a member of the Board of Directors.
3.5) This Agreement shall be binding upon and inure to the
benefit of Equitable, its successors and assigns and the Partici-
pant and his/her heirs, executors, administrators and legal
representatives.
3.6) Equitable may terminate this Plan at any time. Upon
such termination, the Committee shall dispose of any benefits of
the Participant as provided in Section 2.
Equitable may also amend the provisions of this Plan at any
time; provided, however, that no amendment shall affect the
rights of the Participant, or his/her beneficiaries, to the
receipt of payment of benefits to the extent of any compensation
deferred before the time of the amendment.
This Agreement shall terminate when the payment due under
this Agreement is made.
3.7) This Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1) The Committee's interpretation and construction of the
Agreement, and the actions thereunder, including the amount or
recipient of the payment to be made therefrom, shall be binding
and conclusive on all persons for all purposes. The Committee
members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of this Agreement unless attributable to his/her own willful
misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to
be executed by its duly authorized officers and the Participant
has hereunto set his/her hand as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ D. I. Moritz
Vice President and Chairman and
Corporate Secretary Chief Executive Officer
WITNESS: (Participant)
s/ Janice A. Haas s/ Barbara Sullivan
Exhibit 10.05
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
EQUITABLE RESOURCES, INC.
Effective Date: January 1, 1989
As Amended and Restated
Through December 17, 1993
I. EFFECTIVE DATE OF PLAN
1.1. Effective Date. The effective date of the Plan is
January 1, 1989.
II. DEFINITIONS
2.1 Affiliated Company: Any company which is wholly-
owned or less than wholly-owned but is controlled
by the Company, and any other organization so
designated by the Company.
2.2 Beneficiary: The spouse or other beneficiary
entitled to a benefit under the applicable
Qualified Plan in the event of the death of a
participant in such Qualified Plan.
2.3 Company: Equitable Resources, Inc., or any
corporation which succeeds to the position of
Equitable Resources, Inc.
2.4 Internal Revenue Code: The Internal Revenue Code,
as amended, or as it may be amended from time to
time, and any regulations issued thereunder.
2.5 Participant: All salaried employees of the
Company or Affiliated Company who participate in
a Qualified Plan, who are deemed part of a select
group of management or highly compensated
employees, and who are chosen to participate in
the Plan by the Company's Employee Pension
Committee. A Participant may be also referred to
as "a Member" herein.
2.6 Plan: The Equitable Resources, Inc. Supplemental
Executive Retirement Plan as set forth herein, and
as may be hereafter amended.
2.7 Qualified Plan: Any defined benefit pension plan
of the Company or an Affiliated Company which is
qualified under Section 401 of the Internal
Revenue Code.
2.8 Capitalized terms not defined herein shall have
the meaning given to such terms in the Retirement
Plan for Non-Union Employees of Equitable
Resources, Inc., Equitable Resources Energy
Company, Equitrans, Inc. and Equitable Resources
Marketing Company, as amended and restated.
III. PLAN BENEFIT
3.1 The monthly benefit payable to a Participant shall
be an amount not less than zero equal to (a)
reduced by (b) and (c) as follows:
(a) The amount of retirement benefit that would
have been payable to the Participant under
any Qualified Plan in which he participates
if that Qualified Plan
(1) had provided a retirement benefit
without regard to any applicable maximum
benefit limitations under Section 415 of
the Internal Revenue Code or any
limitation as to the maximum amount of
annual compensation which may be taken
into account under Section 401(a)(17) of
the Internal Revenue Code or any
limitation on the maximum number of
years of a Participant's service for
which an unrestricted amount of benefit
accruals may be taken into account under
Section 401(1) of the Internal Revenue
Code; and
(2) had included payments made under the
Company's Short-Term Incentive
Compensation Plan in its definition of
Compensation.
reduced by
(b) The amount of retirement benefit payable to
the Participant under any Qualified Plan in
which he participates taking into account any
applicable maximum benefit limitations under
Sections 415, 401(a)(17) and 401(1) of the
Internal Revenue Code; and
(c) The amount of retirement benefit payable to
the Participant under the Company's
Supplemental Pension Plan.
IV. FORM OF PAYMENT OF BENEFITS
4.1 Normal Form: The normal form of retirement
benefit shall be a single life annuity, payable
monthly, for the life of the Member. If a Member
dies prior to the receipt of the full actuarial
value of such annuity determined at the time of
retirement, the remaining value of the annuity
shall be paid in a lump sum to the Member's
beneficiary or to the Member's estate if the
beneficiary should predecease the Member.
4.2 Qualified Joint and Survivor Annuity: If a Member
is married on the later of his applicable
Retirement Date or the date his retirement benefit
payments commence under the Plan, his retirement
benefit payment shall be in the form of a
Qualified Joint and Survivor Annuity which is the
Actuarial Equivalent of the normal form of
retirement benefit payment. A Member who would
receive the Qualified Joint Survivor Annuity as
provided herein may elect to receive his
retirement benefit in the normal form or in one of
the following survivorship optional forms and any
such election shall be an affirmative election not
to receive his benefit in the Qualified Joint and
Survivor Annuity form; provided, however, that any
such election shall be made prior to the
commencement of a Member's services with the
Company for which benefits are to be provided
under this Plan; and provided that any such
election (other than an election to make the
spouse a Joint Annuitant pursuant to Section 4.3
to receive a monthly benefit after the death of
the Member equal to 75% or 100% of the pension
paid to the Member) made after December 31, 1984
shall be effective only if the Member obtains his
spouse's consent thereto.
4.3 Survivorship Options: A Member may elect in the
manner hereinafter provided to have the value of
his retirement benefit payment apply to the
payment of a reduced pension to him during his
life, and after his death to his designated
surviving Joint Annuitant in an amount equal to
100% of, or 75% of, or 50% of, or 25% of such
reduced pension. The reduced pensions to be paid
to the Member and to the surviving Joint Annuitant
shall be determined on the basis of actuarial
values selected by the Committee according to the
ages of the Member and of the Member's designated
Joint Annuitant at the time the Member retires.
In order for an effective election of an optional
form of benefit to be made hereunder, the
following requirements must be met. The present
value of benefit payments to be made to the Member
determined as of the date benefit payments will
commence must exceed fifty percent (50%) of the
present value of all payments to be made under the
option, except where the designated Joint
Annuitant is the Member's spouse. The Member must
furnish all information requested by the Committee
at the times and in the form and manner required
by it, including specific designation of the
percentage of the benefit payable to the Member
under the option which is to be paid to the Joint
Annuitant. A Member may designate only one Joint
Annuitant with respect to his election of an
option. Any election shall be made prior to the
commencement of a Member's services with the
Company for which benefits are to be provided
under this Plan.
4.4 Pre-retirement Spouse's Benefit:
(a) Death On or After Age Fifty-Five or
Completion of Twenty-Five Years: Effective
on and after March 1, 1985, if a Member who
is married on the date of this death and who
has attained age fifty-five or completed
twenty-five years of Continuous Service dies
while actively employed by the Company, his
spouse shall receive a benefit, payable in
the form of a single life annuity, in an
amount equal to fifty percent (50%) of the
Member's Accrued Benefit determined as of the
first day of the calendar month in which he
died but without reduction for age due to
benefit commencement prior to the date such
Member would have attained age sixty-five, if
applicable.
(b) Eligibility for Alternative Benefits:
Effective on and after August 23, 1984, if a
Member who is credited with at least one hour
of service (or one hour of paid leave) on or
after August 23, 1984, is legally married on
the date of his death (a "Qualified Spouse")
and who has ten (10) or more years of
Continuous Service and a nonforfeitable right
to a benefit under the Plan, and who dies
prior to said benefit's annuity starting
date, his Qualified Spouse shall receive the
Survivor's Benefit provided herein in an
amount determined in paragraph (c).
(c) Amount: The amount of the Survivor's Benefit
payable in the form of a life annuity to the
surviving Qualified Spouse of Members
satisfying (b) shall equal (1) or (2)
whichever applies:
(1) Death on or After Age Fifty-Five or
Completion of Twenty-Five Years of
Service: An amount computed in
accordance with Section 4.4(a) without
regard to whether the Member dies while
actively employed by the Company.
(2) Death Before Age Fifty-Five or
Completion of Twenty-Five Years of
Service: An amount equal to the
survivor's portion of the Qualified
Joint and Survivor Annuity which the
Member would have received computed as
if he had terminated employment with the
Company on the date of his death with a
Deferred Vested Benefit, survived to age
Fifty-Five (55) and made an election
under a Qualified Plan for immediate
commencement of benefit payments subject
to the reduction, if any, provided in
such Qualified Plan for early
commencement of benefit payments,
commenced receipt of his Deferred Vested
Benefit in the form of said Qualified
Joint and Survivor Annuity on the first
day of the next month and then died the
next day.
4.5 Commencement and Termination of Benefit:
Retirement benefits shall commence on the Member's
Retirement Date. The Survivor Annuity payable to
a spouse and the Survivor Annuity payable to the
Member's designated Joint Annuitant shall commence
on the first day of the month next succeeding the
month in which the Member's death occurs. The
pre-retirement spouse's benefit payable under
Section 4.4 above shall commence on the first day
of the month next succeeding the month in which
the Member would have attained age fifty-five (55)
or the month which he died, whichever is the later
to occur. All benefit payments shall cease with
payment due immediately preceding the date of
death of the last person entitled to benefits
under the form of benefit payment being made.
Notwithstanding the foregoing, in the event no
effective election of a date for commencement of
benefits is made by a Member, the payment of
benefits hereunder shall commence within thirty
(30)days after the close of the Plan Year in which
occurs the latest of:
(a) attainment of the Member's Normal Retirement
Date or if the Member is not an employee his
sixty-fifth (65) birthday;
(b) the Member's termination of employment with
the Company; provided, however, the
retirement benefit payments under the Plan
shall commence no later than April 1 of the
calendar year following the calendar year in
which the Member retires.
At the first day of the month succeeding the month
in which such Member's sixty-fifth (65) birthday
occurred, in the event the whereabouts of a Member
whose only entitlement is to a Deferred Vested
Benefit are not known, a reasonable effort will be
made by the Committee to locate such Member. In
the event the Member cannot be located, the
Member's benefit payments shall be held by the
Plan until the earlier of the time the whereabouts
of the Member are made known to the Committee by
the Member or his lawful agent or seven (7) years
subsequent to his Normal Retirement Date, after
which such Member shall be presumed dead and any
other benefit which becomes payable by reason of
such death under the rules of the Plan relating to
form of benefit payment shall be paid thereafter.
4.6 Payments in the Event of Incapacity: In the event
it is determined that a Member, retired Member or
other person entitled to benefits under the Plan,
in the judgement of the Committee, is unable to
care for his affairs because of illness, accident,
or incapacity (either mental or physical), or for
any other reason, the Committee shall cause any
payment of a benefit or refund of contributions to
be paid in the form of a life annuity, payable
monthly to a duly appointed guardian, committee,
or other legal representative of such person, or,
if there is no such legal representative, to his
spouse or child or such other object of natural
bounty as the Committee may determined, or to such
person, persons or institutions as, in the
judgement of the Committee, are then maintaining
or have custody of such Member, retired Member or
other person entitled to benefits.
4.7 Nonforfeitability of Benefits: Except as provided
by the Plan, all Member retirement benefits in pay
status and all benefits after attainment of the
Normal Retirement Age shall be nonforfeitable
except in the event of death, which shall result
in a forfeiture of all such Member's benefits.
These provisions shall have no application to any
survivorship annuities, including the Qualified
Joint and Survivor Annuity which may be payable by
reason of the operation of the rules of this Plan,
which benefits shall terminate by reason of the
death of the survivor annuitant. All benefits
provided by the Plan are personal in nature and
shall be payable only to and during the life of
the applicable recipient and no other person shall
inure to any right therein. For purposes of this
Section, "Normal Retirement Age" shall mean the
date on which the Member attains age sixty-five
(65).
4.8 Special Rule for Small Payments: If a benefit
otherwise payable under this Plan is ten dollars
($10.00) or less per month, it shall be paid
annually in a lump sum equal to its commuted
value.
Where the present value of any benefit otherwise
payable under the Plan, including without limiting
the foregoing, any pre-retirement surviving
spouse's benefit, does not exceed $3,500 (and
payment of the benefit has not commenced) the
Committee shall direct the Trustee to distribute
the entire present value in one lump sum payment.
As used herein, "present value" shall mean the
value of a benefit determined as of the date of
distribution utilizing an interest rate not
greater than the interest rate which would be used
(as of the date of the distribution) by the
Pension Benefit Guaranty Corporation for purposes
of determining the present value of a lump sum
distribution on Plan termination.
4.9 No Participant shall be permitted to elect a form
of benefit payment hereunder which differs from
the form of benefit payment the Participant
receives under any qualified Plan.
4.10 A Participant may request at any time to be
granted his entire benefit under this Plan in a
lump sum form (whether or not he has commenced
receiving an annuity under the Plan). An election
of a lump sum payment of benefits hereunder must
be approved by the Compensation Committee of the
Board of Directors at its sole discretion.
However, if the Internal Revenue Service
determines at any time that a Participant has
constructively received, for any reason and under
any rationale, the total value of his benefit
payable under this Plan, the Participant shall
have an absolute right to elect to receive his
benefit in a lump sum form without any action
required by the Compensation Committee of the
Board of Directors.
V. DEATH BENEFITS
5.1 The monthly death benefit payable to the
Beneficiary of a Participant, if any, shall be
determined in accordance with Section 3.1 above
assuming that the term "Beneficiary" has been
substituted for the term "Participant" each place
it appears.
5.2 Any death benefit payable to the Beneficiary of a
Participant under Section 5.1 shall be paid to the
Beneficiary in the form of a monthly annuity for
the life of the Beneficiary.
VI. COST OF THE PLAN
6.1 The entire cost of benefits and administrative
expenses for this Plan shall be paid for by the
Company as incurred. No contributions by
Participants will be permitted or required.
VII. ADMINISTRATION
7.1 This Plan shall be administered by the
Administrator appointed under the Qualified Plan.
In addition, the terms of the Qualified Plan shall
govern in situations not specifically provided for
herein, but only to the extent such terms are not
inconsistent with the provisions and intent of
this Plan.
VIII. GENERAL PROVISIONS
8.1 This Plan is intended to be a plan maintained by
the Company for the purpose of providing deferred
compensation to a select group of management or
highly compensated employees.
8.2 This Plan is purely voluntary on the part of the
Company. The Company expects and intends to
continue the Plan indefinitely, but necessarily
reserves the right to amend, alter, suspend or
terminate the Plan in whole or in part, at any
time.
8.3 All rights of a Participant or a Beneficiary under
this Plan shall be mere unsecured creditors'
rights against the Company, with no rights to the
assets of the Company (or any trust in which
assets are held for purposes of this Plan)
superior to that of any other general unsecured
creditor.
8.4 Participant's rights payable under the Plan are
not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge or
encumbrance. Such rights may not be subject to
the debts, contracts, liabilities, engagements or
torts of the Participants or the Participant's
beneficiaries.
Exhibit 10.07
SUPPLEMENTAL PENSION PLAN
EQUITABLE RESOURCES, INC.
Effective Date: January 1, 1984
As Amended and Restated
Through December 17, 1993
I. EFFECTIVE DATE OF PLAN
1.1. Effective Date. The effective date of the Plan is
January 1, 1984.
II. DEFINITIONS
2.1 Affiliated Company: Any company which is wholly-
owned or less than wholly-owned but is controlled
by the Company, and any other organization so
designated by the Company.
2.2 Beneficiary: The spouse or other beneficiary
entitled to a benefit under the applicable
Qualified Plan in the event of the death of a
participant in such Qualified Plan.
2.3 Company: Equitable Resources, Inc., or any
corporation which succeeds to the position of
Equitable Resources, Inc.
2.4 Internal Revenue Code: The Internal Revenue Code,
as amended, or as it may be amended from time to
time, and any regulations issued thereunder.
2.5 Participant: All salaried employees of the
Company or Affiliated Company who participate in
a Qualified Plan. A Participant may be also
referred to as "a Member" herein.
2.6 Plan: The Equitable Resources, Inc. Supplemental
Pension Plan as set forth herein, and as may be
hereafter amended.
2.7 Qualified Plan: Any defined benefit pension plan
of the Company or an Affiliated Company which is
qualified under Section 401 of the Internal
Revenue Code.
2.8 Capitalized terms not defined herein shall have
the meaning given to such terms in the Retirement
Plan for Non-Union Employees of Equitable
Resources, Inc., Equitable Resources Energy
Company, Equitrans, Inc. and Equitable Resources
Marketing Company, as amended and restated.
III. PLAN BENEFIT
3.1 The monthly benefit payable to a Participant shall
be an amount not less than zero equal to (a)
reduced by (b) as follows:
(a) The amount of retirement benefit that would
have been payable to the Participant under
any Qualified Plan in which he participates
if that Qualified Plan had provided a
retirement benefit without regard to any
applicable maximum benefit limitations under
Section 415 of the Internal Revenue Code;
reduced by
(b) The amount of retirement benefit payable to
the Participant under any Qualified Plan in
which he participates taking into account any
applicable maximum benefit limitations under
Section 415 of the Internal Revenue Code.
(c) No benefit may be paid under this Plan which
is payable under any Supplemental Executive
Retirement Plan maintained by the Company.
IV. FORM OF PAYMENT OF BENEFITS
4.1 Normal Form: The normal form of retirement
benefit shall be a single life annuity, payable
monthly, for the life of the Member. If a Member
dies prior to the receipt of the full actuarial
value of such annuity determined at the time of
retirement, the remaining value of the annuity
shall be paid in a lump sum to the Member's
beneficiary or to the Member's estate if the
beneficiary should predecease the Member.
4.2 Qualified Joint and Survivor Annuity: If a Member
is married on the later of his applicable
Retirement Date or the date his retirement benefit
payments commence under the Plan, his retirement
benefit payment shall be in the form of a
Qualified Joint and Survivor Annuity which is the
Actuarial Equivalent of the normal form of
retirement benefit payment. A Member who would
receive the Qualified Joint Survivor Annuity as
provided herein may elect to receive his
retirement benefit in the normal form or in one of
the following survivorship optional forms and any
such election shall be an affirmative election not
to receive his benefit in the Qualified Joint and
Survivor Annuity form; provided, however, that any
such election shall be made prior to the
commencement of a Member's services with the
Company for which benefits are to be provided
under this Plan; and provided that any such
election (other than an election to make the
spouse a Joint Annuitant pursuant to Section 4.3
to receive a monthly benefit after the death of
the Member equal to 75% or 100% of the pension
paid to the Member) made after December 31, 1984
shall be effective only if the Member obtains his
spouse's consent thereto.
4.3 Survivorship Options: A Member may elect in the
manner hereinafter provided to have the value of
his retirement benefit payment apply to the
payment of a reduced pension to him during his
life, and after his death to his designated
surviving Joint Annuitant in an amount equal to
100% of, or 75% of, or 50% of, or 25% of such
reduced pension. The reduced pensions to be paid
to the Member and to the surviving Joint Annuitant
shall be determined on the basis of actuarial
values selected by the Committee according to the
ages of the Member and of the Member's designated
Joint Annuitant at the time the Member retires.
In order for an effective election of an optional
form of benefit to be made hereunder, the
following requirements must be met. The present
value of benefit payments to be made to the Member
determined as of the date benefit payments will
commence must exceed fifty percent (50%) of the
present value of all payments to be made under the
option, except where the designated Joint
Annuitant is the Member's spouse. The Member must
furnish all information requested by the Committee
at the times and in the form and manner required
by it, including specific designation of the
percentage of the benefit payable to the Member
under the option which is to be paid to the Joint
Annuitant. A Member may designate only one Joint
Annuitant with respect to his election of an
option. Any election shall be made prior to the
commencement of a Member's services with the
Company for which benefits are to be provided
under this Plan.
4.4 Pre-retirement Spouse's Benefit:
(a) Death On or After Age Fifty-five: If a
Member who is married on the date of his
death and who has attained age fifty-five
dies while actively employed by the Company,
his spouse shall receive the survivor portion
of the Qualified Joint and Survivor Annuity
determined as if the Member had retired upon
the first day of the calendar month in which
he died and elected the immediate
commencement of his benefit payments.
(b) Death On or After Age Fifty-Five or
Completion of Twenty-Five Years: Effective
on and after March 1, 1985, if a Member who
is married on the date of this death and who
has attained age fifty-five or completed
twenty-five years of Continuous Service dies
while actively employed by the Company, his
spouse shall receive a benefit, payable in
the form of a single life annuity, in an
amount equal to fifty percent (50%) of the
Member's Accrued Benefit determined as of the
first day of the calendar month in which he
died but without reduction for age due to
benefit commencement prior to the date such
Member would have attained age sixty-five, if
applicable.
(c) Eligibility for Alternative Benefits:
Effective on and after August 23, 1984, if a
Member who is credited with at least one hour
of service (or one hour of paid leave) on or
after August 23, 1984, is legally married on
the date of his death (a "Qualified Spouse")
and who has ten (10) or more years of
Continuous Service and a nonforfeitable right
to a benefit under the Plan, and who dies
prior to said benefit's annuity starting
date, his Qualified Spouse shall receive the
Survivor's Benefit provided herein in an
amount determined in paragraph (d).
(d) Amount: The amount of the Survivor's Benefit
payable in the form of a life annuity to the
surviving Qualified Spouse of Members
satisfying (c) shall equal (1) or (2)
whichever applies:
(1) Death on or After Age Fifty-Five or
Completion of Twenty-Five Years of
Service: An amount computed in
accordance with Section 4.4(b) without
regard to whether the Member dies while
actively employed by the Company.
(2) Death Before Age Fifty-Five or
Completion of Twenty-Five Years of
Service: An amount equal to the
survivor's portion of the Qualified
Joint and Survivor Annuity which the
Member would have received computed as
if he had terminated employment with the
Company on the date of his death with a
Deferred Vested Benefit, survived to age
Fifty-Five (55) and made an election
under a Qualified Plan for immediate
commencement of benefit payments subject
to the reduction, if any, provided in
such Qualified Plan for early
commencement of benefit payments,
commenced receipt of his Deferred Vested
Benefit in the form of said Qualified
Joint and Survivor Annuity on the first
day of the next month and then died the
next day.
4.5 Commencement and Termination of Benefit:
Retirement benefits shall commence on the Member's
Retirement Date. The Survivor Annuity payable to
a spouse and the Survivor Annuity payable to the
Member's designated Joint Annuitant shall commence
on the first day of the month next succeeding the
month in which the Member's death occurs. The
pre-retirement spouse's benefit payable under
Section 4.4 above shall commence on the first day
of the month next succeeding the month in which
the Member would have attained age fifty-five (55)
or the month which he died, whichever is the later
to occur. All benefit payments shall cease with
payment due immediately preceding the date of
death of the last person entitled to benefits
under the form of benefit payment being made.
Notwithstanding the foregoing, in the event no
effective election of a date for commencement of
benefits is made by a Member, the payment of
benefits hereunder shall commence within thirty
(30)days after the close of the Plan Year in which
occurs the latest of:
(a) attainment of the Member's Normal Retirement
Date or if the Member is not an employee his
sixty-fifth (65) birthday; or
(b) the Member's termination of employment with
the Company; provided, however, the
retirement benefit payments under the Plan
shall commence no later than April 1 of the
calendar year following the calendar year in
which the Member retires.
At the first day of the month succeeding the month
in which such Member's sixty-fifth (65) birthday
occurred, in the event the whereabouts of a Member
whose only entitlement is to a Deferred Vested
Benefit are not known, a reasonable effort will be
made by the Committee to locate such Member. In
the event the Member cannot be located, the
Member's benefit payments shall be held by the
Plan until the earlier of the time the whereabouts
of the Member are made known to the Committee by
the Member or his lawful agent or seven (7) years
subsequent to his Normal Retirement Date, after
which such Member shall be presumed dead and any
other benefit which becomes payable by reason of
such death under the rules of the Plan relating to
form of benefit payment shall be paid thereafter.
4.6 Payments in the Event of Incapacity: In the event
it is determined that a Member, retired Member or
other person entitled to benefits under the Plan,
in the judgement of the Committee, is unable to
care for his affairs because of illness, accident,
or incapacity (either mental or physical), or for
any other reason, the Committee shall cause any
payment of a benefit or refund of contributions to
be paid in the form of a life annuity, payable
monthly to a duly appointed guardian, committee,
or other legal representative of such person, or,
if there is no such legal representative, to his
spouse or child or such other object of natural
bounty as the Committee may determine, or to such
person, persons or institutions as, in the
judgement of the Committee, are then maintaining
or have custody of such Member, retired Member or
other person entitled to benefits.
4.7 Nonforfeitability of Benefits: Except as provided
by the Plan, all Member retirement benefits in pay
status and all benefits after attainment of the
Normal Retirement Age shall be nonforfeitable
except in the event of death, which shall result
in a forfeiture of all such Member's benefits.
These provisions shall have no application to any
survivorship annuities, including the Qualified
Joint and Survivor Annuity which may be payable by
reason of the operation of the rules of this Plan,
which benefits shall terminate by reason of the
death of the survivor annuitant. All benefits
provided by the Plan are personal in nature and
shall be payable only to and during the life of
the applicable recipient and no other person shall
inure to any right therein. For purposes of this
Section, "Normal Retirement Age" shall mean the
date on which the Member attains age sixty-five
(65).
4.8 Special Rule for Small Payments: If a benefit
otherwise payable under this Plan is ten dollars
($10.00) or less per month, it shall be paid
annually in a lump sum equal to its commuted
value.
Effective on or after January 1, 1985, where the
present value of any benefit otherwise payable
under the Plan, including without limiting the
foregoing, any pre-retirement surviving spouse's
benefit, does not exceed $3,500 (and payment of
the benefit has not commenced) the Committee shall
direct the Trustee to distribute the entire
present value in one lump sum payment. As used
herein, "present value" shall mean the value of a
benefit determined as of the date of distribution
utilizing an interest rate not greater than the
interest rate which would be used (as of the date
of the distribution) by the Pension Benefit
Guaranty Corporation for purposes of determining
the present value of a lump sum distribution on
Plan termination.
4.9 No Participant shall be permitted to elect a form
of benefit payment hereunder which differs from
the form of benefit payment the Participant
receives under any qualified Plan.
4.10 A Participant may request at any time to be
granted his entire benefit under this Plan in a
lump sum form (whether or not he has commenced
receiving an annuity under the Plan). An election
of a lump sum payment of benefits hereunder must
be approved by the Compensation Committee of the
Board of Directors at its sole discretion.
However, if the Internal Revenue Service
determines at any time that a Participant has
constructively received, for any reason and under
any rationale, the total value of his benefit
payable under this Plan, the Participant shall
have an absolute right to elect to receive his
benefit in a lump sum form without any action
required by the Compensation Committee of the
Board of Directors.
V. DEATH BENEFITS
5.1 The monthly death benefit payable to the
Beneficiary of a Participant, if any, shall be
determined in accordance with Section 3.1 above
assuming that the term "Beneficiary" has been
substituted for the term "Participant" each place
it appears.
5.2 Any death benefit payable to the Beneficiary of a
Participant under Section 5.1 shall be paid to the
Beneficiary in the form of a monthly annuity for
the life of the Beneficiary.
VI. COST OF THE PLAN
6.1 The entire cost of benefits and administrative
expenses for this Plan shall be paid for by the
Company as incurred. No contributions by
Participants will be permitted or required.
VII. ADMINISTRATION
7.1 This Plan shall be administered by the
Administrator appointed under the Qualified Plan.
In addition, the terms of the Qualified Plan shall
govern in situations not specifically provided for
herein, but only to the extent such terms are not
inconsistent with the provisions and intent of
this Plan.
VIII.GENERAL PROVISIONS
8.1 This Plan is intended to be an "excess benefit
plan" as that term is used in Section 3(36) of the
Employee Retirement Income Security Act of 1974,
as amended.
8.2 This Plan is purely voluntary on the part of the
Company. The Company expects and intends to
continue the Plan indefinitely, but necessarily
reserves the right to amend, alter, suspend or
terminate the Plan in whole or in part, at any
time.
8.3 All rights of a Participant or a Beneficiary under
this Plan shall be mere unsecured creditors'
rights against the Company, with no rights to the
assets of the Company (or any trust in which
assets are held for purposes of this Plan)
superior to that of any other general unsecured
creditor.
8.4 Participant's rights payable under the Plan are
not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge or
encumbrance. Such rights may not be subject to
the debts, contracts, liabilities, engagements or
torts of the Participants or the Participant's
beneficiaries.
Exhibit 10.10 (a)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT made and executed this 31st day of December,
1987, by and between Equitable Resources, Inc., herein
designated as "Equitable", and Malcolm M. Prine, herein
designated as the "Participant";
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board
of Directors of Equitable as a Director or an Advisory Director;
and;
WHEREAS, Equitable and the Participant desire to defer all
of the fees arising from the above-stated relationship;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1 Effective January 1, 1988, the Participant herein elects
to defer, under the terms of this Agreement, all compensation
earned for his/her service as a Director or an Advisory Director
of Equitable for the calendar year 1988 .
1.2 Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to
the Account the amounts of the deferred fees.
1.3 Interest shall be credited to the Account monthly. The
rate of interest shall be the same as the yield for 30-day
Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1 All amounts credited to the Account on the Participant's
behalf shall be payable in one lump sum by Equitable to the
Participant on (date selected by the Participant) but in no
event later than sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable.
2.2 In the event of the death of the Participant such
payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these last designated by the
Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation
Committee of the Board Directors (the "Committee") and shall be
revocable at any time through written instrument similarly filed
without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors
and administrators of the Participant's estate for administration
as a part thereof.
2.3 For financial reasons, the Participant may apply to the
Committee for withdrawal from the Agreement prior to the Payment
Date. Such early withdrawal shall lie within the absolute
discretion of the Committee. Upon approval from the Committee,
and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution,
in the amount necessary, will be made in a one-time payment.
Amounts still payable to the Participant after the application on
this Paragraph 2.3 shall be distributed pursuant to the foregoing
Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1 Nothing contained in this Agreement and no action taken
pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2 The right of the Participant or any other person to the
payment of deferred fees under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by
the laws of the descent and distribution.
3.3 If the Committee shall find that any person to whom any
payment is payable under this Agreement is unable to care for
his/her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4 Nothing contained herein shall be construed as
conferring upon the Participant the right to continue in the
service of Equitable as a member of the Board of Directors.
3.5 This Agreement shall be binding upon and inure to the
benefit of Equitable its successors and assigns and the
Participant and his heirs, executors, administrators and legal
representatives.
3.6 Equitable may terminate this Plan at any time. Upon such
termination,
the Committee shall dispose of any benefits of the Participants
as provided in Section 2.
Equitable may also amend the provisions of this Plan at any
time; provided, however that no amendment shall affect the
rights of the Participant or his beneficiaries to the receipt of
payment of benefits to the extent of any compensation deferred
before the time of the amendment.
This Agreement shall terminate when the payment due under
this Agreement is made.
3.7 This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1 The Committee's interpretation and construction of the
Agreement, and actions thereunder, including the amount or
recipient of the payment to be made therefrom, shall be binding
and conclusive on all persons for all purposes. The Committee
members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to
be executed by its duly authorized officers and the Participant
has hereunto set his hand as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
By
Vice President and President and Chief
Corporate Secretary Executive Officer
WITNESS: (Participant)
Exhibit 10.10 (b)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 30th day of December,
l988, by and between Equitable Resources, Inc., herein designated
as "Equitable", and Malcolm M. Prine, herein designated as the
"Participant";
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board
of Directors of Equitable as a Director or an Advisory Director;
and
WHEREAS, Equitable and the Participant desire to defer all
of the fees arising from the above-stated relationship;
NOW, THEREFORE, the parties hereby agree as follows:
Section l - Account
l.l Effective January l, 1989, the Participant herein elects
to defer, under the terms of this Agreement, all compensation
earned for his/her service as a Director or an Advisory Director
of Equitable for the calendar year 1989.
1.2 Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to the
Account the amounts of the deferred fees.
1.3 Interest shall be credited to the Account monthly. The
rate of interest shall be the same as the yield for 30-day
Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1 All amounts credited to the Account on the Participant's
behalf shall be payable in one lump sum by Equitable to the
Participant on (date selected by the Participant) but in no
event later than sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable.
2.2 In the event of the death of the Participant, such
payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these, last designated by the
Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation
Committee of the Board of Directors (the "Committee") and shall
be revocable at any time through written instrument similarly
filed without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the
Participant's estate for administration as a part thereof.
2.3 For financial reasons, the Participant may apply to the
Committee for withdrawal from the Agreement prior to the Payment
Date. Such early withdrawal shall lie within the absolute
discretion of the Committee. Upon approval from the Committee,
and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution,
in the amount necessary, will be made in a one-time payment.
Amounts still payable to the Participant after the application of
this Paragraph 2.3 shall be distributed pursuant to the foregoing
Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1 Nothing contained in this Agreement and no action taken
pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2 The right of the Participant or any other person to the
payment of deferred fees under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by
the laws of the descent and distribution.
3.3 If the Committee shall find that any person to whom any
payment is payable under this Agreement is unable to care for
his/her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4 Nothing contained herein shall be construed as
conferring upon the Participant the right to continue in the
service of Equitable as a member of the Board of Directors.
3.5 This Agreement shall be binding upon and inure to the
benefit of Equitable, its successors and assigns and the
Participant and his heirs, executors, administrators and legal
representatives.
3.6 Equitable may terminate this Plan at any time. Upon such
termination, the Committee shall dispose of any benefits of the
Participants as provided in Section 2.
Equitable may also amend the provisions of this Plan at any
time; provided, however, that no amendment shall affect the
rights of the Participant, or his beneficiaries to the receipt of
payment of benefits to the extent of any compensation deferred
before the time of the amendment.
This Agreement shall terminate when the payment due under
this Agreement is made.
3.7 This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1 The Committee's interpretation and construction of the
Agreement, and actions thereunder, including the amount or
recipient of the payment to be made therefrom, shall be binding
and conclusive on all persons for all purposes. The committee
members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to
be executed by its duly authorized officers and the Participant
has hereunto set his hand as of the date first
above written.
ATTEST: EQUITABLE RESOURCES, INC.
Vice President and By President and Chief
Corporate Secretary Executive Officer
WITNESS: (Participant)
Exhibit 10.11 (a)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 30th day of
September, 1986, by and between Equitable Resources, Inc., herein
designated as "Equitable", and Daniel M. Rooney herein designated
as the "Participant";
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board
of Directors of Equitable as a Director or an Advisory Director;
and
WHEREAS, Equitable and the Participant desire to defer all
of the fees arising from the above-stated relationship;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1 Effective October 1, 1986, the Participant hereto elects
to defer, under the terms of this Agreement, all compensation
earned for his/her service as a Director or an Advisory Director
of Equitable for the calendar year 1986-87.
1.2 Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to the
Account the amounts of the deferred fees.
1.3 Interest shall be credited to the Account monthly. The
rate of interest shall be the same as the yield for 30-day
Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1 All amounts credited to the Account on the Participant's
behalf shall be payable in one lump sum by Equitable to the
Participant on (date selected by the Participant) but in no event
later than sixty (60) days after the Participant ceases to be a
Director or an Advisory Director of Equitable.
2.2 In the event of the death of the Participant, such
payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these, last designated by the
Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation
Committee of the Board of Directors (the "Committee") and shall
be revocable at any time through written instrument similarly
filed without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the
Participant's estate for administration as a part thereof.
2.3 For financial reasons, the Participant may apply to the
Committee for withdrawal from the Agreement prior to the Payment
Date. Such early withdrawal shall lie within the absolute
discretion of the Committee. Upon approval from the Committee,
and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution,
in the amount necessary, will be made in a one-time payment.
Amounts still payable to the Participant after the application of
this Paragraph 2.3 shall be distributed pursuant to the foregoing
Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1 Nothing contained in this Agreement and no action taken
pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2 The right of the Participant or any other person to the
payment of deferred fees under this Agreement shall not be
assigned. transferred, pledged or encumbered except by will or by
the laws of the descent and distribution.
3. 3 If the Committee shall find that any person to whom any
payment is payable under this Agreement is unable to care for
his/her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4 Nothing contained herein shall be construed as
conferring upon the Participant the right to continue in the
service of Equitable as a member of the Board of Directors.
3.5 This Agreement shall be binding upon and inure to the
benefit of Equitable, its successors and assigns and the
Participant and his heirs, executors, administrators and legal
representatives.
3.6 Equitable may terminate this Plan at any time. Upon
such termination, the Committee shall dispose of any benefits of
the Participants as provided in Section 2.
Equitable may also amend the provisions of this Plan at any
time; provided, however, that no amendment shall affect the
rights of the Participant, or his beneficiaries to the receipt of
payment of benefits to the extent of any compensation deferred
before the time of this amendment.
This Agreement shall terminate when the payment due under
this Agreement is made.
3.7 This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1 The Committee's interpretation and construction of the
Agreement, and actions thereunder, including the amount or
recipient of the payment to be made therefrom, shall be binding
and conclusive on all persons for all purposes. The Committee
members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to
be executed by its duly authorized officers and the Participant
has hereunto set his hand as of the date first above written .
ATTEST: EQUITABLE RESOURCES, INC.
VICE PRESIDENT AND PRESIDENT AND CHIEF
CORPORATE SECRETARY EXECUTIVE OFFICER
WITNESS: (Participant)
Exhibit 10.11 (b)
EQUITABLE RESOURCES, INC .
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 21st day of December,
l987, by and between Equitable Resources, Inc., herein designated
herein designated as "Equitable", and Daniel M. Rooney, herein
designated as the "Participant";
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board
of Directors of Equitable as a Director or an Advisory Director;
and
WHEREAS, Equitable and the Participant desire to defer all
of the fees arising from the above-stated relationship;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1 Effective January 1, 1988, the Participant herein elects
to defer, under the terms of this Agreement, all compensation
earned for his/her service as a Director or an Advisory Director
of Equitable for the calendar year 1988.
1.2 Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to the
Account the amounts of the deferred fees.
1.3 Interest shall be credited to the Account monthly. The
rate of interest shall be the same as the yield for 30-day
Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1 All amounts credited to the Account on the Participant's
behalf shall be payable in one lump sum by Equitable to the
Participant on (date selected by the Participant) but in no event
later than sixty (60) days after the Participant ceases to be a
Director or an Advisory Director of Equitable.
2.2 In the event of the death of the Participant, such
payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these, last designated by the
Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation
Committee of the Board of Directors (the "Committee") and shall
be revocable at any time through written instrument similarly
filed without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the
Participant's estate for administration as a part thereof.
2.3 For financial reasons, the Participant may apply to the
Committee for withdrawal from the Agreement prior to the Payment
Date. Such early withdrawal shall lie within the absolute
discretion of the Committee. Upon approval from the Committee,
and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution,
in the amount necessary, will be made in a one-time payment.
Amounts still payable to the Participant after the application of
this Paragraph 2.3 shall be distributed pursuant to the foregoing
Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1 Nothing contained in this Agreement and no action taken
pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2 The right of the Participant or any other person to the
payment of deferred fees under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by
the laws of the descent and distribution.
3.3 If the Committee shall find that any person to whom any
payment is payable under this Agreement is unable to care for
his/her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4 Nothing contained herein shall be construed as
conferring upon the Participant the right to continue in the
service of Equitable as a member of the Board of Directors.
3.5 This Agreement shall be binding upon and inure the
benefit of Equitable, its successors and assigns and the
Participant and his heirs, executors, administrators and legal
representatives.
3.6 Equitable may terminate this Plan at any time. Upon such
termination, the Committee shall dispose of any benefits of the
Participants as provided in Section 2
Equitable may also amend the provisions of this Plan at any
time; provided, however, that no amendment shall affect the
rights of the Participant, or his beneficiaries to the receipt of
payment of benefits to the extent of any compensation deferred
before the time of the amendment.
This Agreement shall terminate when the payment due under
this Agreement is made.
3.7 This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1 The Committee's interpretation and construction of the
Agreement, and actions thereunder, including the amount or
recipient of the payment to be made therefrom, shall be binding
and conclusive on all persons for all purposes. The Committee
members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to
be executed by its duly authorized officers and the Participant
has hereunto set his hand as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
By
Vice President and President and Chief
Corporate Secretary Executive Officer
WITNESS: (Participant)
Exhibit 10.11 (c)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 30th day of December,
1988 , by and between Equitable Resources, Inc., herein
designated as "Equitable", and Daniel M. Rooney, herein
designated as the "Participant";
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board
of Directors of Equitable as a Director or an Advisory Director;
and
WHEREAS, Equitable and the Participant desire to defer all
of the fees arising from the above-stated relationship;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1 Effective January 1, 1989, the Participant herein elects
to defer, under the terms of this Agreement, all compensation
earned for his/her service as a Director or an Advisory Director
of Equitable for the calendar year 1989.
1.2 Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to
the Account the amounts of the deferred fees.
1.3 Interest shall be credited to the Account monthly. The
rate of interest shall be the same as the yield for 30-day
Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1 All amounts credited to the Account on the Participant's
behalf shall be payable in one lump sum by Equitable to the
Participant on (date selected by the Participant) but in no
event later than sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable.
2.2 In the event of the death of the Participant, such
payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these, last designated by the
Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation
Committee of the Board of Directors (the "Committee") and shall
be revocable at any time through written instrument similarly
filed without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the
Participant's estate for administration as a part thereof.
2.3 For financial reasons, the Participant may apply to the
Committee for withdrawal from the Agreement prior to the Payment
Date. Such early withdrawal shall lie within the absolute
discretion of the Committee. Upon approval from the Committee,
and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution,
in the amount necessary, will be made in a one-time payment.
Amounts still payable to the Participant after the application of
this Paragraph 2.3 shall be distributed pursuant to the foregoing
Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1 Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall create
or be construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2 The right of the Participant or any other person to the
payment of deferred fees under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by
the laws of the descent and distribution.
3.3 If the Committee shall find that any person to whom any
payment is payable under this Agreement is unable to care for
his/her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been
made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4 Nothing contained herein shall be construed as
conferring upon the Participant the right to continue in the
service of Equitable as a member of the Board of Directors.
3.5 This Agreement shall be binding upon and inure to the
benefit of Equitable, its successors and assigns and the
Participant and his heirs, executors, administrators and legal
representatives.
3.6 Equitable may terminate this Plan at any time. Upon such
termination, the Committee shall dispose of any benefits of the
Participants as provided in Section 2.
Equitable may also amend the provisions of this Plan at any
time; provided, however, that no amendment shall affect the
rights of the Participant, or his beneficiaries to the receipt
of payment of benefits to the extent of any compensation deferred
before the time of the amendment.
This Agreement shall terminate when the payment due under
this Agreement is made.
3.7 This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1 The Committee's interpretation and construction of the
Agreement, and actions thereunder, including the amount or
recipient of the payment to be made therefrom, shall be binding
and conclusive on all persons for all purposes. The Committee
members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration
of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to
be executed by its duly authorized officers and the Participant
has hereunto set his hand as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
Vice President and President and
Corporate Secretary Chief Executive Officer
WITNESS: (Participant)
Exhibit 10.11 (h)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 14th day of
December, 1993, by and between Equitable Resources, Inc., herein
designated as "Equitable", and Daniel M. Rooney, herein designat-
ed as the "Participant."
WITNESSETH:
WHEREAS, the Participant is currently a member of the
Board of Directors of Equitable as a Director or an Advisory
Director; and
WHEREAS, Equitable and the Participant desire to defer
all of the fees arising from the above-stated relationship.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1) Effective January 1, 1994, the Participant herein
elects to defer, under the terms of this Agreement, all compensa-
tion earned for his/her service as a Director or an Advisory
Director of Equitable for the calendar year 1994.
1.2) Equitable shall establish a bookkeeping account,
hereinafter referred to as the "Account", and shall credit to the
Account the amounts of the deferred fees.
1.3) Interest shall be credited to the Account month-
ly. The rate of interest shall be the same as the yield for 30-
day Treasury Bills applicable to the first day of such month.
Section 2 - Payment
2.1) All amounts credited to the Account on the
Participant's behalf shall be payable in one lump sum by Equita-
ble to the Participant on (date selected by
the Participant) but in no event later than sixty (60) days after
the Participant ceases to be a Director or an Advisory Director
of Equitable. Unless a date specific is selected by the Partici-
pant, the distribution will be made within sixty (60) days after
the Participant ceases to be a Director or an Advisory Director
of Equitable; provided, however, that nothing contained in this
Section 2.1 shall negate the provisions of Section 2.3 below.
2.2) In the event of the death of the Participant,
such payment shall be made to the Participant's beneficiary. For
purposes of the Agreement, "beneficiary" means any person(s) or
trust(s) or combination of these, last designated by the Partici-
pant to receive benefits provided under this Agreement. Such
designation shall be in writing filed with the Compensation
Committee of the Board of Directors (the "Committee") and shall
be revocable at any time through written instrument similarly
filed without consent of any beneficiary. In the absence of any
designation, the beneficiary shall be the Participant's spouse,
if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the
Participant's estate for administration as a part thereof.
2.3) For financial reasons, the Participant may apply
to the Committee for withdrawal from the Agreement prior to the
Payment Date. Such early withdrawal shall lie within the abso-
lute discretion of the Committee. Upon approval from the Commit-
tee, and within fifteen (15) days thereafter, the Participant
will be deemed to have withdrawn from the Agreement and a distri-
bution, in the amount necessary, will be made in a one-time
payment. Amounts still payable to the Participant after the
application of this Paragraph 2.3 shall be distributed pursuant
to the foregoing Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1) Nothing contained in this Agreement and no action
taken pursuant to the provisions of this Agreement shall create
or be construed to create a trust of any kind, or a fiduciary
relationship between Equitable and the Participant, his/her
designated beneficiary or any other person. Any fees deferred
under the provisions of this Agreement shall continue for all
purposes to be a part of the general funds of Equitable. To the
extent that any person acquires a right to receive payment from
Equitable under this Agreement, such right shall be no greater
than the right of any unsecured general creditor of Equitable.
3.2) The right of the Participant or any other person
to the payment of deferred fees under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by
the laws of descent and distribution.
3.3) If the Committee shall find that any person to
whom any payment is payable under this Agreement is unable to
care for his/her affairs because of illness or accident, or is a
minor, any payment due (unless a prior claim therefor shall have
been made by a duly appointed guardian, committee or other legal
representative) may be paid to the spouse, child, a parent, or a
brother or sister, or to any person deemed by the Committee to
have incurred expense for such person otherwise entitled to
payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4) Nothing contained herein shall be construed as
conferring upon the Participant the right to continue in the
service of Equitable as a member of the Board of Directors.
3.5) This Agreement shall be binding upon and inure to
the benefit of Equitable, its successors and assigns and the
Participant and his/her heirs, executors, administrators and
legal representatives.
3.6) Equitable may terminate this Plan at any time.
Upon such termination, the Committee shall dispose of any bene-
fits of the Participant as provided in Section 2.
Equitable may also amend the provisions of this Plan at
any time; provided, however, that no amendment shall affect the
rights of the Participant, or his/her beneficiaries, to the
receipt of payment of benefits to the extent of any compensation
deferred before the time of the amendment.
This Agreement shall terminate when the payment due
under this Agreement is made.
3.7) This Agreement shall be construed in accordance
with and governed by the laws of the Commonwealth of Pennsylva-
nia.
Section 4 - Committee
4.1) The Committee's interpretation and construction
of the Agreement, and the actions thereunder, including the
amount or recipient of the payment to be made therefrom, shall be
binding and conclusive on all persons for all purposes. The
Committee members shall not be liable to any person for any
action taken or omitted in connection with the interpretation and
administration of this Agreement unless attributable to his/her
own willful misconduct or lack of good faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement
to be executed by its duly authorized officers and the Partici-
pant has hereunto set his/her hand as of the date first above
written.
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ D. I. Moritz
Vice President and President and
Corporate Secretary Chief Executive Officer
WITNESS: (Participant)
s/ Marianne Espey s/ Daniel M. Rooney
Marianne Espey Daniel M. Rooney
Exhibit 11.01
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991
Earnings:
Net income . . . . . . . . . . . . . $73,455 $60,026 $64,168
Interest net of applicable income
taxes on 9 1/2% convertible
subordinated debentures . . . . . 89 208 229
Adjusted earnings . . . . . . . . $73,544 $60,234 $64,397
Shares:
Average common shares outstanding . 32,359 31,342 31,253
Dilutive effect of conversion of 9 1/2%
convertible subordinated debentures 257 305 339
Dilutive effect of stock
options outstanding . . . . . . . . 1 61 70
Total . . . . . . . . . . . . . 32,677 31,708 31,662
Primary Earnings Per Share . . . . . . $2.27 $1.92 $2.05
Fully Diluted Earnings Per Share . . . $2.25 $1.90 $2.03
Exhibit 21
EQUITABLE RESOURCES, INC.
Subsidiaries of the Registrant
December 31, 1993
Percentage of
Voting
State of Securities
Name of Subsidiary Incorporation Owned by
Immediate
Parent Company
Equitable Resources, Inc.
(also d/b/a Equitable Gas Company) Pennsylvania
EQT Capital Corporation Delaware 100
Equitable Gas-Energy Company Pennsylvania 100
Kentucky West Virginia Gas Company West Virginia 100
Equitrans, Inc. Delaware 100
ET Storage Company Pennsylvania 100
Nora Transmission Company Delaware 100
EREC Capital Corporation Delaware 100
Equitable Resources Energy Company West Virginia 100
Equitable Resources Marketing Company Delaware 100
Equitable Storage Company Delaware 100
Equitable Pipeline Company Delaware 100
Louisiana Intrastate Gas Company LLC Delaware 100
LIG, Inc. Delaware 100
LIG Liquids Company LLC Delaware 100
LIG Chemical Company Louisiana 100
Tuscaloosa Pipeline Company Louisiana 100
Equitable Resources
(Canada) Limited Alberta, Canada 100
Hershey Oil Corporation California 100
Andex Energy, Inc. Delaware 100
ERI Realty, Inc. Pennsylvania 100
Equitable Argentina
Note: All subsidiaries are included in the consolidated financial
statements
of the Registrant. See Note A to Financial Statements, Page 29.
Exhibit 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report
dated February 22, 1994, with respect to the consolidated
financial statements and schedules of Equitable Resources, Inc.
included in this Annual Report (Form 10-K) for the year ended
December 31, 1993 in the Prospectus part of the following
Registration Statements:
Registration Statement No. 33-52151 on Form S-8
pertaining to the 1994 Equitable Resources, Inc. Long-
Term Incentive Plan;
Registration Statement No. 33-52137 on Form S-8
pertaining to the 1994 Equitable Resources, Inc. Non-
Employee Directors' Stock Incentive Plan;
Post-Effective Amendment No. 2 to Registration
Statement No. 2-69010 on Form S-8 pertaining to the
Equitable Resources, Inc. Key Employee Restricted Stock
Option and Stock Appreciation Rights Incentive
Compensation Plan;
Post-Effective Amendment No. 1 to Registration
Statement No. 33-00252 on Form S-8 pertaining to the
Equitable Resources, Inc. Employee Savings Plan;
Post-Effective Amendment No. 1 to Registration
Statement No. 33-10508 on Form S-8 pertaining to the
Equitable Resources, Inc. Key Employee Restricted Stock
Option and Stock Appreciation Rights Incentive
Compensation Plan.
We also consent to the incorporation by reference in the
Registration Statement No. 33-46207 on Form S-3 pertaining to the
registration of $100,000,000 Medium Term Notes, Series B of
Equitable Resources, Inc. and in the related Prospectus of our
report dated February 22, 1994, with respect to the consolidated
financial statements and schedules of Equitable Resources, Inc.
included in this Annual Report (Form 10-K) for the year ended
December 31, 1993.
We also consent to the incorporation by reference of our
report dated March 4, 1994 with respect to the financial
statements and schedules of the Equitable Resources, Inc.
Employee Savings Plan included in the Annual Report (Form 11-K)
for the year ended October 31, 1993, included in Exhibit 99.01 to
this Annual Report (Form 10-K) into Post-Effective Amendment No.
1 to Registration Statement No. 33-00252 on Form S-8 pertaining
to the Equitable Resources, Inc. Employee Savings Plan.
By
___________________________
Ernst & Young
Pittsburgh, Pennsylvania
March 21, 1994
Exhibit 99.01
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X]ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 1993
[ ]
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-3551
EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN
(Full title of the Plan and address of the Plan,
if different from that of the issuer named below)
EQUITABLE RESOURCES, INC.
420 Boulevard of the Allies,
Pittsburgh, Pennsylvania 15219
(Name of issuer of the securities held pursuant to the
plan and the address of principal executive office)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the members of the Administrative Committee of the Plan
have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
(Name of Plan)
By s/ Joseph L. Giebel
Joseph L. Giebel
Member of Administrative
Committee
March 4, 1994
REPORT OF INDEPENDENT AUDITORS
Administrative Committee
Equitable Resources, Inc. Employee Savings Plan
We have audited the accompanying statements of plan equity
of the Equitable Resources, Inc. Employee Savings Plan (the Plan)
as of October 31, 1993 and 1992, and the related statements of
income and changes in plan equity for the years then ended.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the plan equity of the
Equitable Resources, Inc. Employee Savings Plan as of October 31,
1993 and 1992, and the income and changes in plan equity for the
years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
accompanying supplemental schedules of assets held for investment
as of October 31, 1993, and transactions or series of
transactions in excess of 5% of the current value of plan assets
for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, and are not a required part of the basic
financial statements. The supplemental schedules have been
subjected to the auditing procedures applied in our audit of the
1993 financial statements and, in our opinion, are fairly stated
in all material respects in relation to the 1993 basic financial
statements taken as a whole.
s/ Ernst & Young
Ernst & Young
Pittsburgh, Pennsylvania
March 4, 1994
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF PLAN EQUITY
OCTOBER 31, 1993
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insurance Clearing Combined
Fund Fund Fund Fund Fund Fund Fund Account Funds
<S> <C> <C> <C> <C> <C> <C>
Investments:
Equitable
Resources, Inc.
Common Stock,
at market $ $ $4,923,135 $ $ $ $ $ $4,923,135
Fixed Income
Fund 3,840,103 3,840,103
Balanced Fund 4,839,462 4,839,462
Aggressive Stock
Fund 1,741,574 1,741,574
Common Stock Fund 1,938,484 1,938,484
Bond Fund 1,913,017 1,913,017
Short-term
investments 22 334,977
334,999
Total
______
investments 3,840,103 4,839,462 4,923,135 1,741,574 1,938,484 1,913,017 22 334,977
19,530,774
___________
Receivables:
Contributions 23,456 9,783 4,994 8,211 12,619 1,452 60,515
Participant
loans 663,931 663,931
Interest 808 14 106 8 10 3 949
Total
receivables 688,195 9,797 5,100 8,219 12,629 1,455 725,395
Transfers due
from (to) funds 68,751 (12,288) 107,979 69,207 72,963 22,137 6,228 (334,977)
Total
assets 4,597,049 4,836,971 5,036,214 1,819,000 2,024,076 1,936,609 6,250 20,256,169
Payables:
Participants 128,132 102,940 64,620 8,950 8,807 42,748 356,197
Others 27 6,250 6,277
Total
payables 128,159 102,940 64,620 8,950 8,807 42,748 6,250 362,474
Plan equity $4,468,890$4,734,031 $4,971,594 $1,810,050 $2,015,269 $1,893,861 $ $ $19,893,695
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF PLAN EQUITY
OCTOBER 31, 1992
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insurance Clearing Combined
Fund Fund Fund Fund Fund Fund Fund Account Funds
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments:
Equitable Resources,
Inc. Common Stock,
at market $ $ $3,849,823 $ $ $ $ $ $3,849,823
Fixed Income
Fund 2,818,617 2,818,617
Balanced Fund 4,143,836 4,143,836
Aggressive Stock
Fund 1,158,765 1,158,765
Common Stock Fund 1,163,764 1,163,764
Bond Fund 1,381,015 1,381,015
Short-term
investments 13,681 194,380 208,061
Total
______
investments 2,818,617 4,143,836 3,849,823 1,158,765 1,163,764 1,381,015 13,681 194,380 14,723,881
___________
Receivables:
Participant
loans 518,042 518,042
Interest 488 15 3 12 18 26 562
Total
receivables 518,530 15 3 12 18 26 518,604
Transfers due from
(to) funds (104,503) (128,892) 253,381 (23,524) 82,147 117,174 (1,403) (194,380)
Total
assets 3,232,644 4,014,944 4,103,219 1,135,244 1,245,923 1,498,207 12,304 15,242,485
Payables:
Participants 59,476 55,023 171,120 5,335 12,991 303,945
Others 12,304 12,304
Total
payables 59,476
55,023 171,120 5,335 12,991 12,304 316,249
Plan equity $3,173,168 $3,959,921 $3,932,099 $1,129,909 $1,232,932 $1,498,207 $ $ $14,926,236
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED OCTOBER 31, 1993
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insurance Combined
Fund Fund Fund Fund Fund Fund Fund Funds
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to plan equity
attributed to:
Investment income:
Interest and dividends $ 2,261 $1,680 $132,137 $872 $1,064 $480 $ $138,494
Interest on participant
loans 52,557 52,557
Total investment
income 54,818 1,680 132,137 872 1,064 480 191,051
Gain realized on sale or
distribution of Equitable
Resources, Inc. Common Stock 130,345 130,345
Unrealized appreciation of
investment in Equitable
Resources, Inc. Common Stock 732,815 732,815
Unrealized appreciation
in value of investment 241,751 713,069 376,015 412,637 181,411 1,924,883
Contributions 493,957 612,647 339,519 319,420 358,549 196,744 36,238 2,357,074
Participant rollovers 200,102
62,170 11,344 43,550 37,040 14,586 368,792
Total additions 990,628 1,389,566 1,346,160 739,857 809,290 393,221 36,238 5,704,960
Deductions from plan
equity atributed to:
Withdrawals by
participants 239,795 127,477 179,058 13,035 14,068 42,779 616,212
Purchase of life
insurance 36,238 36,238
Expenses 10,798 36,341 11 11,624 12,387 13,890 85,051
Total deductions 250,593 163,818 179,069 24,659 26,455 56,669 36,238 737,501
Transfers from
(to) funds 555,687 (451,638) (127,596) (35,057) (498) 59,102
Net increase
in plan equity 1,295,722 774,110 1,039,495 680,141 782,337 395,654 4,967,459
Plan equity:
At beginning of year 3,173,168 3,959,921 3,932,099 1,129,909 1,232,932 1,498,207 14,926,236
At end of year $4,468,890$4,734,031 $4,971,594 $1,810,050 $2,015,269 $1,893,861 $ $19,893,695
See accompanying notes.
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED OCTOBER 31, 1992
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insurance Combined
Fund Fund Fund Fund Fund Fund Fund Funds
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to plan
equity attributed to:
Investment income:
Interest and dividends $3,172 $2,070 $125,959 $864 $1,034 $454 $317 $133,870
Interest on
participant loans 40,098 40,098
Total investment income 43,270 2,070 125,959 864 1,034 454 317 173,968
Gain realized on sale or
distribution of Equitable
Resources, Inc. Common Stock 196,116 196,116
Unrealized appreciation of
investment in Equitable
Resources, Inc. Common Stock 447,506 447,506
Unrealized appreciation
(depreciation) in
value of investment 314,175 160,179 (115,614) (56,034) 99,916 402,622
Contributions 418,696 542,020 219,290 239,396 234,422 103,844 51,898 1,809,566
Participant rollovers 25,314 25,904 12,632 4,680 14,532 3 83,065
Total additions 801,455 730,173 1,001,503 129,326 193,954 204,217 52,215 3,112,843
Deductions from plan
equity atributed to:
Withdrawals by participants 734,199 305,879 481,616 7,638 5,329 50,850 1,585,511
Purchase of life insurance 41,341 41,341
Expenses 13,693 33,005 7,522 7,512 7,449 69,181
Total deductions 747,892 338,884 481,616 15,160 12,841 58,299 41,341 1,696,033
Transfers from
(to) funds (3,383,582) 552,539 98,379 601,597 790,443 1,352,289 (11,665)
Net increase (decrease)
in plan equity (3,330,019) 943,828 618,266 715,763 971,556 1,498,207 (791) 1,416,810
Plan equity:
At beginning of year 6,503,187 3,016,093 3,313,833 414,146 261,376 791 13,509,426
At end of year $3,173,168 $3,959,921 $3,932,099 $1,129,909 $1,232,932 $1,498,207 $ $14,926,236
See accompanying notes.
</TABLE>
1. Description of the Plan
The following description of the Equitable Resources, Inc.
Employee Savings Plan (Plan) provides only general
information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution profit sharing and savings
plan, with a 401(k) salary reduction feature, implemented on
September 1, 1985 by Equitable Resources, Inc. and certain
subsidiaries (the Company or Companies).
All regular, full-time, non-union employees of the Companies
who complete a certain service requirement are eligible to
participate. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
The Companies make contributions to the Plan equal to the
amount by which participants agree to reduce their salaries
(Contract Contributions). These contributions are considered
to be Company (as opposed to employee) contributions to the
Plan. In addition, the Companies may, at their discretion,
contribute an additional amount to the Plan (Discretionary
Contributions). All contributions are allocated to
individual participant accounts.
The Company made a Discretionary Contribution to the Plan for
the Plan year ended October 31, 1993. The amount of the
contribution was $162,173 and was allocated based upon each
participant's contribution during the calendar year 1992 up
to a maximum of six percent. Discretionary Contributions
were invested in the same manner as participant's Contract
Contributions.
As a result of the purchase of Louisiana Intrastate Gas
Corporation (LIG) by Equitable Resources, Inc., employees of
LIG became participants in the Plan in July 1993. As part of
the purchase of LIG, the Company agreed to continue, through
December 1993, discretionary contributions matching
contributions made by LIG employees up to a maximum of six
percent of gross earnings. For the period July 1, 1993 to
October 31, 1993, such discretionary contributions were
$112,225.
Rollover Contributions
Participants are allowed to make rollover contributions
(contributions transferred to the Plan from other qualified
retirement plans), subject to certain requirements.
1. Description of Plan (Continued)
Vesting
Participants are 100% vested in the value of Contract
Contributions made, and any rollover contributions.
If employment is terminated for any reason other than
retirement, death, or total and permanent disability, a
participant is entitled to receive the vested value of any
Discretionary Contributions, as determined in accordance with
the following schedule:
Years of Continuous Service Vested Interest
Less than five years 0%
Five years or more 100%
Amounts forfeited by participants upon termination will be
used to reduce the amount of future Discretionary
Contributions to the Plan.
Upon retirement, death, total and permanent disability or
termination of the Plan, a participant is entitled to receive
the full value of any Discretionary Contributions, regardless
of years of continuous service.
Withdrawals by Participants
Payments to participants are made in one of two ways: a
single cash payment or distribution of stock (mandatory for
participants who are terminated for a reason other than
retirement, death or disability) or equal periodic payments
over the lesser of:
a) the life expectancy of the participant and beneficiary or
b) twenty (20) years.
Loans to Participants
A participant may borrow money from the Plan in amounts up to
50 percent of the value of the participant's account, plus
the vested portion of Discretionary Contributions, subject to
certain limitations. All loans are at a rate consistent with
rates charged by commercial lenders for similar loans. One
half of the participant's nonforfeitable interest in the Plan
at the time of the loan is pledged as collateral. As of
October 31, 1993 and 1992, collateral for participant loans
amounted to $2,372,188 and $1,767,495, respectively.
1. Description of the Plan (Continued)
Investment of Contributions
Contributions are initially deposited with Pittsburgh
National Bank (Trustee), and are invested in a short-term
fund until allocated. The Plan authorizes the participants
to direct the Trustee to invest their accounts in various
combinations of the investment funds described below:
a) The Fixed Income Fund - comprised of a single type of
fixed income investment where the principal and interest
are fixed. The Company entered into an ongoing contract
with Equitable Life Assurance Society (Equitable Life) to
provide this and other investment vehicles and manage the
respective funds.
b) The Balanced Fund - invests in various types of
securities: primarily common stocks, securities
convertible into common stocks, publicly traded bonds, and
short-term money market investments. The Company's
contract with Equitable Life provides this investment
vehicle and fund management.
c) The Employer Stock Fund - invests in the Common Stock of
the Company. This fund is managed by the Plan trustee.
d) The Aggressive Stock Fund - invests primarily in common
stocks of medium and smaller sized companies and also in
securities not generally defined as growth stocks, but
with unusual value or potential. The Company's contract
with Equitable Life provides this investment vehicle and
fund management.
e) The Common Stock Fund - invests primarily in common stocks
and other equity-type securities. The Company's contract
with Equitable Life provides this investment vehicle and
fund management.
f) The Bond Fund - invests primarily in publicly-traded fixed
income securities, such as bonds, debentures and notes.
The Company's contract with Equitable Life provides this
investment vehicle and fund management.
g) The Life Insurance Fund - comprised solely of life
insurance contracts issued on the lives of participants.
This option is subject to a limitation that no more than
25% of the contributions allocated to a participant may be
allocated to the purchase of insurance. The Company's
contract with Equitable Life provides this investment
vehicle and fund management.
2. Summary of Significant Accounting Policies
Investments
Short-term investments are valued at cost, which approximates
market. The fixed income fund contract is valued at face
value, which approximates market. Other investments are
valued at market.
3. Investments
Investments at October 31, 1993 and 1992 are comprised of:
<TABLE>
<CAPTION>
1993 1992
Fair Fair
Market Original Market Original
Shares Value Cost Shares Value Cost
<S> <C> <C> <C> <C> <C> <C>
Equitable Resources,
Inc., Common Stock 124,987 $ 4,923,135 $ 2,667,541 119,681 $ 3,849,823 $ 2,332,777
Fixed Income Fund* - 3,840,103 3,840,103 - 2,818,617 2,818,617
Balanced Fund* - 4,839,462 4,839,462 - 4,143,836 4,143,836
Aggressive Stock Fund* - 1,741,574 1,741,574 - 1,158,765 1,158,765
Common Stock Fund* - 1,938,484 1,938,484 - 1,163,764 1,163,764
Bond Fund* - 1,913,017 1,913,017 - 1,381,015 1,381,015
Short-Term investment - 334,999 334,999 - 208,061 208,061
Total $19,530,774 $17,275,180 $14,723,881 $13,206,835
<F/N>
The interest rate for the Fixed Income Fund was 6.75% for the 1993 fiscal year and 8.00%
for the 1992 fiscal year.
*Securities investments are provided by contract through a pooled investment account; fair
market value is used as original cost.
</F/N>
</TABLE>
4. Gain Realized on Sale/Distribution of Stock
During the year ended October 31, 1993, 8,680 shares of
Equitable Resources, Inc. Common Stock with a market value of
$304,717 were sold at an average price of $35.11 per share.
The cost of the shares sold was $175,959 ($20.27 per share)
calculated using the "average cost" method. In addition, 109
shares of Equitable Resources, Inc. Common Stock with a
market value of $3,815 were distributed during the year ended
October 31, 1993. The cost of the shares distributed was
$2,228.
During the year ended October 31, 1992, 18,801 shares of
Equitable Resources, Inc. Common Stock with a market value of
$470,079 were sold at an average price of $25.00 per share.
The cost of the shares sold was $321,882 ($17.12 per share)
calculated using the "average cost" method. In addition,
4,237 shares of Equitable Resources, Inc. Common Stock with a
market value of $128,416 were distributed during the year
ended October 31, 1992. The cost of the shares distributed
was $80,497.
5. Plan Termination
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject
to the provisions of ERISA. In the event of Plan
termination, the interests of all affected participants will
become fully vested.
6. Income Tax Status of Plan
The Internal Revenue Service has determined that the Plan is
qualified under Section 401(a) of the Internal Revenue Code
and exempt under Section 501(a) of the Code. Future
amendments will be made to the Plan as necessary so that the
Plan remains qualified and tax exempt under the Code.
7. Federal Income Tax Status - Employee
Contributions by the employer to the Plan (including those
resulting from salary reduction) and all dividends and
interest earned on such contributions are not taxable to the
participant for federal income tax purposes until
distributed.
The tax consequences, to participants, of a distribution from
the Plan are dependent upon the circumstances existing at the
time of distribution. Delinquent and unpaid loans are
considered distributions from the Plan. In general, a
participant is subject to federal income tax on a
distribution in the year received. Special rules applicable
to lump sum distributions may result in deferral of taxation
in whole or in part.
SUPPLEMENTARY INFORMATION
<TABLE>
<CAPTION> EQUITABLE RESOURCES, INC.
Schedule 1
EMPLOYEE SAVINGS PLAN
ASSETS HELD FOR INVESTMENT
October 31, 1993
Current
Identity of Issue Description of Investment Cost Value
<S> <C> <C> <C>
Equitable Resources, Inc.1 124,987 shares common stock $2,667,541 $4,923,135
The Equitable Life Assurance
Society Fixed Income
Contract 6.75% per annum(2) $3,840,103(3) $3,840,103(3)
The Equitable Life Assurance
Society Retirement Investment
Accounts, Pooled Separate
Account No. 10,
"Balanced Account" 56,701 units $4,839,462(3) $4,839,462(3)
The Equitable Life Assurance
Society Retirement Investment
Accounts, Pooled Separate
Account No. 3, "Aggressive
Stock Account" 12,845 units $1,741,574(3) $1,741,574(3)
The Equitable Life Assurance
Society Retirement Investment
Accounts, Pooled Separate
Account No. 4, "Common Stock
Account" 5,552 units $1,938,484(3) $1,938,484(3)
The Equitable Life Assurance
Society Retirement Investment
Accounts, Pooled Separate
Account No 13,
"Bond Account" 44,213 units $1,913,017(3) $1,913,017(3)
____________________
1Party in interest to the Plan.
2Rate in effect for Plan year ended October 31, 1993.
3Fair market value is used as original cost.
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. Schedule 2
EMPLOYEE SAVINGS PLAN
TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5%
OF THE CURRENT VALUE OF PLAN ASSETS
Year Ended October 31, 1993
Party Description Number Total Number Total Original Net Gain
Involved of Investment of Purchases Of Sales Cost or (Loss)
Purchases Sales Proceeds
<S> <C> <C> <C> <C> <C> <C> <C>
Series
Transactions:
* Short-term
investments 250 $6,099,629 139 $5,962,970 $5,962,970 None
* Fixed income
mutual funds 15 $1,136,435 3 $115,451 $115,451 None
<F/N>
* The above transactions were carried out by the Trustee, Pittsburgh National Bank.
</F/N>
</TABLE>
