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, 1994
[ ] 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 Percent Debentures due
July 1, 1999 New York Stock Exchange
9 1/2 Percent 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, 1995: $961,673,725
The number of shares outstanding of the issuer's classes of common stock as
of February 28, 1995: 34,654,909
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 26, 1995, to be filed with the Commission within 120 days after the
close of the Company's fiscal year ended December 31, 1994.
Index to Exhibits - Page 54.
<PAGE>
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 51
Index to Financial Statements and Financial Statement
Schedules Covered by Report of Independent
Auditors 52
Index to Exhibits 54
Signatures 58
<PAGE>
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 operating 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.
(b) and (b) (1) Beginning in 1994, the Company expanded the reporting
of its business operations to four business segments: exploration and
production, natural gas marketing, natural gas distribution and natural gas
transmission. Financial information by business segment is presented in
Note L to the consolidated financial statements contained in Part II.
(b)(2) Not applicable.
(c)(1) EXPLORATION AND PRODUCTION. Exploration and production
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 sells
natural gas and oil, extracts and markets natural gas liquids and performs
contract drilling and well maintenance services.
The exploration and production segment 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 the Southwest and Gulf Coast offshore areas, this segment
participates in exploration and development of gas and oil projects.
Exploration and production 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.
NATURAL GAS MARKETING. Natural gas marketing activiites are conducted
by ERMCO and its subsidiaries. Its activities include marketing of natural
gas, extraction, and sale of natural gas liquids and intrastate
transportation.
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. In 1994, ERMCO was granted a Federal Energy Regulatory
Commission (FERC) certificate for electricity wholesaling.
In Louisiana, LIG provides intrastate transportation of gas and
extracts and markets natural gas liquids.
NATURAL GAS DISTRIBUTION. Natural gas distribution activities
comprise the operations of Equitable Gas Company, the Company's state-
regulated natural gas utility.
Equitable Gas is 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.
Natural gas distribution services 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 the natural gas transmission segment.
NATURAL GAS TRANSMISSION. Natural gas transmission activities are
conducted by three FERC-regulated gas pipelines: Kentucky West, Equitrans,
and Nora. Activities include gas transportation, gathering, storage, and
marketing activities.
Kentucky West is an open access natural gas pipeline company. Prior
to restructuring pursuant to FERC Order 636, Kentucky West purchased gas
from the exploration and production 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 the natural gas marketing
segment. With the FERC Order 636 restructuring, which was effective July
1, 1993, Kentucky West provides open-access transportation service.
Transportation service is provided to Equitable Gas, Equitrans, the
exploration and production segment, 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 has 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 and markets natural gas. 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 transports the exploration and production segment's gas produced
in Virginia and Kentucky.
(c) (1) (i) Operating revenues as a percentage of total operating
revenues for each of the four business segments during the years 1992
through 1994 are as follows:
1994 1993 1992
Exploration and Production:
Natural gas production 9 percent 10 percent 10 percent
Oil 2 3 5
Natural gas liquids 1 2 3
Contract drilling 1 1 3
Other - 1 1
--- --- ---
Total Exploration
and Production 13 17 22
--- --- ---
Natural Gas Marketing:
Natural gas marketing 51 45 32
Natural gas liquids 4 2 -
Transportation 1 1 -
--- --- ---
Total Natural Gas Marketing 56 48 32
--- --- ---
Natural Gas Distribution:
Residential 19 23 30
Commercial 5 5 7
Industrial and utility 2 1 1
Transportation 2 2 2
--- --- ---
Total Natural
Gas Distribution 28 31 40
--- --- ---
Natural Gas Transmission:
Industrial and utility - - 1
Marketed gas 1 1 -
Transportation 1 2 4
Storage 1 1 1
--- --- ---
Total Natural
Gas Transmission 3 4 6
--- --- ---
Total Revenues 100 percent 100 percent 100 percent
=== === ===
See Note L to the Consolidated Financial Statements in Part II
regarding financial information by business segment.
(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 1992 through 1994.
<PAGE>
<TABLE>
<CAPTION>
1994
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 62,507 143 1,871 64,521
------- -------- ------ ------- ------- -------
Purchased:
Other producers 389,710 45,632 7,263 442,605
Inter-segment purchases 2,523 47,920 12,963 472 (63,878)
------- ------- ------ ------- ------- -------
Total purchases 2,523 437,630 58,595 7,735 (63,878) 442,605
------- ------- ------ ------- ------- -------
Total produced and purchased 65,030 437,630 58,738 9,606 (63,878) 507,126
Deduct:
Net increase (decrease) in gas in storage 241 (181) 60
Extracted natural gas liquids
(equivalent gas volumes) 1,546 6,377 7,923
System use and unaccounted for 480 1,602 6,391 268 8,741
------- ------- ------ ------- ------- -------
Total 63,004 429,651 52,106 9,519 (63,878) 490,402
======= ======= ====== ======= ======= =======
Gas Sales (MMcf):
Residential 29,570 29,570
Commercial 9,681 9,681
Industrial and Utility 12,855 388 (3,576) 9,667
Production 62,507 (7,237) 55,270
Marketing 497 429,651 9,131 (53,065) 386,214
------- ------- ------ ------- ------- -------
Total 63,004 429,651 52,106 9,519 (63,878) 490,402
======= ======= ====== ======= ======= =======
Natural Gas Transported (MMcf) 103,726 8,611 123,472 (100,472) 135,337
======= ====== ======= ======== =======
Oil Produced and Sold (thousands of bls) 1,986 1,986
Natural Gas Liquids Sold
(thousands of gallons) 51,032 194,493 245,525
Average Selling Price:
Residential Gas Sales (per Mcf) $8.974
Commercial Gas Sales 6.916
Industrial and Utility Gas Sales 2.478 $5.951
Produced Natural Gas $1.949
Marketed Natural Gas 1.873 $1.932 2.327
Oil (per barrel) 14.723
Natural Gas Liquids (per gallon) .299 .263
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1993
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 53,550 144 1,828 55,522
------ ------- ------ ------ ------- -------
Purchased:
Other producers 221,948 21,583 30,287 273,818
Inter-segment purchases 3,598 35,531 24,773 6,227 (70,129)
------ ------- ------ ------ ------- -------
Total purchases 3,598 257,479 46,356 36,514 (70,129) 273,818
------ ------- ------ ------ ------- -------
Total produced and purchased 57,148 257,479 46,500 38,342 (70,129) 329,340
Deduct:
Net increase in gas in storage 3,904 2,300 6,204
Extracted natural gas liquids
(equivalent gas volumes) 3,005 3,162 6,167
System use and unaccounted for 294 801 2,614 5,645 9,354
------ ------- ------ ------ ------- -------
Total 53,849 253,516 39,982 30,397 (70,129) 307,615
====== ======= ====== ====== ======= =======
Gas Sales (MMcf):
Residential 29,980 29,980
Commercial 8,235 8,235
Industrial and Utility 1,767 25,387 (23,872) 3,282
Production 53,550 (3,719) 49,831
Marketing 299 253,516 4,052 (41,580) 216,287
------ ------- ------ ------ ------- -------
Total gas sales 53,849 253,516 39,982 29,439 (69,171) 307,615
Processed gas extracted 958 (958)
------ ------- ------ ------ ------- -------
Total 53,849 253,516 39,982 30,397 (70,129) 307,615
====== ======= ====== ====== ======= =======
Natural Gas Transported (MMcf) 50,659 10,986 88,550 (67,892) 82,303
======= ====== ====== ======= =======
Oil Produced and Sold (thousands of bls) 2,112 2,112
Natural Gas Liquids Sold
(thousands of gallons) 60,973 101,218 162,191
Average Selling Price:
Residential Gas Sales (per Mcf) $8.247
Commercial Gas Sales 7.171
Industrial and Utility Gas Sales 4.537 $4.237
Produced Natural Gas $2.236
Marketed Natural Gas 2.659 $2.231 2.517
Oil (per barrel) 16.182
Natural Gas Liquids (per gallon) .321 .272
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1992
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 48,243 225 2,473 50,941
------ ------- ------ ------ ------- -------
Purchased:
Other producers 131,711 11,037 31,938 174,686
Inter-segment purchases 3,137 30,424 30,918 8,489 (72,968)
------ ------- ------ ------ ------- -------
Total purchases 3,137 162,135 41,955 40,427 (72,968) 174,686
------ ------- ------ ------ ------- -------
Total produced and purchased 51,380 162,135 42,180 42,900 (72,968) 225,627
Deduct:
Net increase (decrease) in gas in storage 677 (4,381) (3,704)
Extracted natural gas liquids
(equivalent gas volumes) 2,061 2,061
System use and unaccounted for 593 2,596 10,584 13,773
------ ------- ------ ------ ------- -------
Total 48,726 162,135 38,907 36,697 (72,968) 213,497
====== ======= ====== ====== ======= =======
Gas Sales (MMcf):
Residential 30,089 30,089
Commercial 8,097 8,097
Industrial and Utility 721 34,636 (31,511) 3,846
Production 48,243 (4,491) 43,752
Marketing 483 162,135 (34,905) 127,713
------ ------- ------ ------ ------- -------
Total gas sales 48,726 162,135 38,907 34,636 (70,907) 213,497
Processed gas extracted 2,061 (2,061)
------ ------- ------ ------ ------- -------
Total 48,726 162,135 38,907 36,697 (72,968) 213,497
====== ======= ====== ====== ======= =======
Natural Gas Transported (MMcf) 13,080 79,015 (56,382) 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:
Residential Gas Sales (per Mcf) $8.021
Commercial Gas Sales 7.334
Industrial and Utility Gas Sales 6.370 $4.115
Produced Natural Gas $1.884
Marketed Natural Gas 2.184 $1.938
Oil (per barrel) 18.067
Natural Gas Liquids (per gallon) .327
</TABLE>
<PAGE>
During 1994, a total of 507,126 MMcf of gas was produced and purchased
by the Companies compared with 325,377 MMcf in 1993. The increase reflects
greater marketing activity, including the full-year effect of the LIG
acquisition, and increased production.
GAS PURCHASES. Total purchases in 1994 amounted to 442,605 MMcf, of
which 386,214 MMcf was applicable to marketing operations and 56,391 MMcf
was for system supply, compared with 216,287 MMcf for marketing operations
and 53,568 MMcf for system supply in 1993. 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 the
exploration and production segment in 1994 of 62,507 MMcf increased 8,957
MMcf over the 1993 total of 53,550 MMcf. Other production by transmission
and distribution segments in 1994 was 2,014 MMcf compared with the 1993
total of 1,972 MMcf.
Production of crude oil in 1994 was 1,986,000 barrels, compared with
2,112,000 barrels in 1993.
In 1994, the Company drilled 198 gross wells (144.9 net wells). The
primary focus of drilling activity was in Virginia
for gas and coalbed methane and in the Rockies for oil.
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 all gas production at a profit.
NATURAL GAS AND OIL RESERVES. The Company's estimate of proved
developed and undeveloped gas reserves for the exploration and production
segment comprised 875.0 Bcf as of December 31, 1994. These reserves
included 771.7 Bcf of proved developed reserves. The Company's oil
reserves at December 31, 1994 consisted of 18.3 million barrels of proved
developed and undeveloped reserves; proved developed oil reserves amounted
to 18.1 million barrels. Of the total reserves, 77 percent is in the
Appalachian area, 18 percent in the Rockies and 5 percent in the Gulf. 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 1993-94
heating season were 7.1 Bcf, compared with 11.0 Bcf the previous heating
season. Net withdrawals for storage service customers of 14.1 Bcf were
made during the 1993-94 heating season compared with 12.8 Bcf the previous
heating season.
SUPPLY OUTLOOK. The Company's near-term gas supply for distribution
operations 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.
The natural gas marketing segment has also been in a favorable supply
position and reserves for the exploration and production segment have
continued to increase. However, the rate of purchase of future supplies or
development of reserves 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 natural gas
distribution 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.
The exploration and production and natural gas marketing segments'
revenues are not subject to seasonal variation to the same degree as
natural gas distribution revenues. However, they are subject to price
fluctuations, particularly during the summer months.
(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 marketed natural gas available to existing or potential
customers.
The natural gas distribution segment 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 natural gas transmission
companies.
(c) (1) (xi) Not material.
(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 2,171 regular employees at the end
of 1994.
(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 1995
through 2014. All leases contain adequate renewal options for various
periods. A minor portion of equipment is also leased. With few
exceptions, 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.
NATURAL GAS DISTRIBUTION. Equitable Gas owns and operates natural gas
distribution properties as well as other general property and equipment in
Pennsylvania, West Virginia and Kentucky.
NATURAL GAS TRANSMISSION. 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.
NATURAL GAS MARKETING. This segment owns an intrastate pipeline
system and four hydrocarbon extraction plants in Louisiana. It also has a
high-deliverability gas storage project under development in Louisiana.
EXPLORATION AND PRODUCTION. 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 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 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.
Gas and Oil Production (Exploration and Production):
1994 1993 1992
Gas - MMcf 62,507 53,550 48,243
Oil - Thousands of Barrels 1,986 2,112 2,406
Natural Gas:
Average field sales price of natural gas produced during 1994, 1993
and 1992 was $1.95, $2.24 and $1.88 per Mcf, respectively.
Average production cost (lifting cost) of natural gas during 1994,
1993 and 1992 was $.424, $.458 and $.443 per Mcf, respectively.
Oil:
Average sales price of oil produced during 1994, 1993 and 1992 was
$14.72, $16.18 and $18.07 per barrel, respectively.
Average production cost (lifting cost) of oil during 1994, 1993 and
1992 was $3.73, $4.30 and $3.75 per barrel, respectively.
Gas Oil
Total productive wells at December 31, 1994:
Total gross productive wells 5,542 952
Total net productive wells 4,085 489
Total acreage at December 31, 1994:
Total gross productive acres 713,000
Total net productive acres 588,000
Total gross undeveloped acres 3,087,000
Total net undeveloped acres 2,217,000
Number of net productive and dry exploratory wells and number of net
productive and dry development wells drilled:
1994 1993 1992
Exploratory wells:
Productive 7.0 12.0 11.6
Dry 5.7 6.7 6.3
Development wells:
Productive 126.9 123.4 134.1
Dry 5.3 10.6 12.0
As of December 31, 1994, the Company had 2 gross wells (1.8 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 M 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, 1994.
<PAGE>
Item 10. Directors and Executive Officers of the Registrant
(b) Identification of executive officers
Name and Age
Title
Business Experience
Donald I. Moritz (67)
Chairman and Chief Executive Officer
(Retired December 31, 1994)
First elected to present position
December 17, 1993; President and
Chief Executive Officer from
August 1, 1978.
Frederick H. Abrew (57)
President and Chief Operating Officer
(Elected Chief Executive Officer effective January 1, 1995)
First elected to present position
December 17, 1993; Executive Vice
President and Chief Operating
Officer from June 1, 1992;
Executive Vice President from
June 1, 1991; Executive Vice
President - Utility Services from
June 1, 1988.
A. Mark Abramovic (46)
Vice President and Chief Financial Officer
First elected to present position
November 1, 1994; Vice President -
Corporate Development from June 1,
1994; Assistant to the President
from November 1993; Vice President
- - Finance and Chief Financial
Officer of Connecticut Natural Gas
Corporation, Hartford, CT, from
January 1991; Vice President -
Finance of the Peoples Natural Gas
Company, Pittsburgh, PA, from
September 1986.
Jeremiah J. Ayres (62)
Senior Vice President - Environment and Technology
(Retired July 1, 1994)
First elected to present position
February 1, 1991; Vice President -
Corporate Services from March 26,
1987.
Robert E. Daley (55)
Vice President and Treasurer
First elected to present position May 22, 1986.
Harry E. Gardner, Jr. (57)
Vice President - Energy Resources
(Retired December 31, 1994)
First elected to present position
June 1, 1992; President - Equitable
Resources Energy Company since
January 1, 1991; President
Equitable Resources Exploration
Division from July 1, 1987.
Joseph L. Giebel (64)
Vice President - Accounting and Administration
First elected to present position
February 1, 1991; Vice President -
Accounting from May 1, 1981.
John C. Gongas, Jr. (50)
Vice President - Utility Group
First elected to present position
January 1, 1994; Vice President -
Utility Services from June 1, 1992;
President of Kentucky West Virginia
Gas Company since April 20, 1992;
President of Equitrans, Inc. from
February 26, 1988.
Augustine A. Mazzei, Jr. (58)
Senior Vice President and General Counsel
First elected to present position
June 1, 1988.
Audrey C. Moeller (59)
Vice President and Corporate Secretary
First elected to present position
May 22, 1986.
Richard Riazzi (40)
Vice President - Energy Group
First elected to present position
January 1, 1994; Vice President -
Corporate Development from
August 1, 1991; Director - Special
Projects from October 1, 1990;
President - Equitable Resources
Marketing Company from February 27,
1989.
Gregory R. Spencer (46)
Vice President - Human Resources
First elected to present position
October 10, 1994; Vice President of
Human Resources Administration of
AMSCO International, Inc.,
Pittsburgh, PA, from May 1993
(integrated manufacturer of
sterilization and decontamination
equipment for health care and
scientific customers); General
Manager - Human Resources of U.S.
Steel Group of USX Corporation,
Pittsburgh, PA, from October 1991;
Director - Personnel, U.S. Steel
Group of USX Corporation,
Pittsburgh, PA, from July 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 27,
1994.
<PAGE>
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:
1994 1993
High Low Dividend High Low Dividend
1st Quarter 38 3/4 34 $.285 41 1/2 33 $.270
2nd Quarter 37 32 1/4 .285 * 40 3/4 36 7/8 .270 *
3rd Quarter 35 5/8 29 .285 44 1/4 35 1/4 .270
4th Quarter 31 1/8 25 1/2 .295 42 3/4 35 1/4 .285
* Actually declared near the end of the preceding quarter.
(b) As of December 31, 1994, there were 8,686 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, $408,797,000 of the Company's consolidated retained earnings at
December 31, 1994, 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.
<PAGE>
<TABLE>
Item 6. Selected Financial Data
<CAPTION>
1994 1993 1992 1991 1990
(Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Operating
revenues $1,397,280 $1,094,794 $ 812,374 $ 679,631 $ 659,216
Net income $60,729 $73,455 $60,026 $64,168 $58,949
Earnings per
share of
common stock $1.76 $2.27 $1.92 $2.05 $1.88
Total assets $2,019,122 $1,946,907 $1,468,424 $1,440,593 $1,229,154
Long-term debt $398,282 $378,845 $346,693 $346,818 $254,725
Cash dividends
paid per share of
common stock $1.15 $1.10 $1.04 $1.00 $.91
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
OVERVIEW
Equitable's consolidated net income for 1994 was
$60.7 million or $1.76 per
share, compared with $73.5 million or $2.27 per share for 1993,
and $60.0 million or $1.92 per share for 1992.
While natural gas production reached a record high for 1994, an increase of
17 percent over 1993, income was adversely impacted by
a 13 percent decline in average wellhead
prices for natural gas, increased operating and interest expense, and lower
margins from the Company's Louisiana Intrastate Gas subsidiary.
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 natural
gas distribution and transmission 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.
RESULTS OF OPERATIONS
Beginning in 1994, the Company expanded the reporting of operations to
comprise four segments--Exploration and Production, Natural Gas Marketing,
Natural Gas Distribution and Natural Gas Transmission. This discussion
supplements the detailed financial information by business segment presented in
Note L to the consolidated financial statements.
EXPLORATION AND PRODUCTION
Operating revenues, which are derived primarily from the sale of produced
natural gas, oil and natural gas liquids and
from contract drilling, were $195.8 million in 1994 compared
with $202.4 million in 1993 and $191.5 million in 1992. The decrease in
revenues for 1994 compared to 1993 is due primarily to lower wellhead prices
for natural gas and oil, and lower selling prices and production of
natural gas liquids which were partially offset by increased gas production.
The increase in revenues for 1993 compared to 1992 is due primarily to
increases in average wellhead prices and production of natural gas.
Exploration and Production 1994 1993 1992
Operating Revenues (thousands):
Natural Gas . . . . . . . . . $121,810 $119,746 $ 90,886
Oil . . . . . . . . . . . 29,239 34,176 43,469
Natural Gas Liquids . . . . . 15,244 19,545 21,256
Contract Drilling . . . . . . 15,427 14,611 19,924
Direct Billing Settlements. . 7,815 7,815 7,815
Other . 6,260 6,529 8,128
------- ------- -------
Total Revenues . . . . $195,795 $202,422 $191,478
======= ======= =======
Sales Quantities:
Natural Gas (MMcf). . . . . . 62,507 53,550 48,243
Oil (MBls). . . . . . . . . . 1,986 2,112 2,406
Natural Gas Liquids (thousands
of gallons) . . . . . . . . 51,032 60,973 64,938
Gas purchased amounted to $10.6 million in 1994 compared with $17.0 million
in 1993 and $15.3 million in 1992. The decrease in gas purchased for 1994
compared to 1993 is due to the lower requirements attributed to decreased
production of natural gas liquids. The increase in gas purchased for 1993
compared to 1992 is due to higher costs for purchased gas.
Other operating expenses were $154.4 million in 1994, $142.9 million in
1993, and $139.8 million in 1992. Increases for the respective years are
attributed to increased production expenses and depreciation and depletion
related to the higher level of natural gas production.
Operating income was $30.8 million in 1994, $42.5 million in 1993, and
$36.4 million in 1992. The decrease in operating income for 1994 compared to
1993 reflects lower wellhead prices for natural gas and oil, and lower selling
prices and production of natural gas liquids which were partially offset by
increased gas production. The increase in operating income for
1993 compared to 1992 reflects primarily the increase in average
wellhead prices and production of natural gas.
Average wellhead natural gas prices for 1994 decreased 13 percent from the
1993 level, which was the highest level that had been experienced since 1988.
Thus far in 1995, the wellhead prices have shown
little sign of improving. Prices for oil and natural gas liquids
continued the decline that began as far back as 1991.
Natural gas production continued to increase in 1994
reflecting the on-going development of Appalachian properties,
which are the foundation of the segment's
activities, as well as expansion in the off-shore Gulf Coast area.
The 1995 capital expenditure program of $71.0 million for exploration and
production includes $15.4 million for development of Appalachian
holdings, $18.3 million for the Rocky Mountain area,
$32.3 million for off-shore drilling in the
Gulf of Mexico, and $2.7 million for exploration in South America.
Market and price trends will continue to be the
principal factors for the economic
justification of drilling investments under the 1995 program.
NATURAL GAS MARKETING
Operating revenues, which are derived primarily from the marketing of
natural gas, sale of produced natural gas liquids, and
intrastate transportation of natural gas in Louisiana,
were $890.8 million in 1994 compared with $599.6
million in 1993 and $314.6 million in 1992.
The increase in revenues between the
years is attributed primarily to the acquisition of Louisiana Intrastate Gas
Company (LIG) on June 30, 1993, as more fully described in Note M to the
consolidated financial statements.
Natural Gas Marketing 1994 1993 1992
Operating Revenues (thousands):
Natural Gas Marketing . . . . $830,082 $565,605 $ 314,276
Natural Gas Liquids . . . . . 51,113 27,576 --
Transportation. . . . . . . . 9,266 6,247 --
Other . 317 196 350
------- ------- -------
Total Revenues . . . . $890,778 $599,624 $314,626
======= ======= =======
Sales Quantities:
Marketed Natural Gas (MMcf) . 429,651 253,516 162,135
Natural Gas Liquids (thousands
of gallons) . . . . . . . . 194,493 101,218 --
Gas purchased amounted to $857.4 million in 1994 compared with $575.7
million in 1993 and $305.9 million in 1992. The increased cost between the
years reflects the increase in volume of marketed natural gas and requirements
for the higher production levels of natural gas liquids.
Other operating expenses were $29.3 million in 1994, $12.2 million in 1993,
and $3.8 million in 1992. Increases for the respective years reflect the
acquisition of LIG.
Operating income was $4.1 million in 1994, $11.7 million in 1993, and $4.9
million in 1992. The decrease in operating income for 1994 compared to 1993
reflects lower prices for natural gas liquids. The increase in operating
income for 1993 compared to 1992 reflects primarily the acquisition of LIG.
Gas marketing activities continued to expand during 1994. However, the
impact of lower energy prices overshadowed the nearly
seventy percent increase in marketed volumes.
LIG, which contributed to the increase in marketed services,
fell below profit expectations because of the substantial decline in liquids
processing margins. This is attributed
to the competitive pressure of lower oil
prices during most of the year. Nevertheless, the acquisition of LIG has
positioned the Company's marketing activities in the Gulf Coast area where it
also has expanding exploration and production activities. The Company is
developing gas storage and interchange facilities which will connect with the
Henry Hub as well as LIG's system of pipelines, gas processing facilities, and
multiple interconnections with major pipelines. This integration and expansion
of services is the foundation for developing a Gulf Coast market center.
The 1995 capital expenditure program of $25.2 million for marketing
operations includes $19.0 million for development of the gas
storage system, $5.0 million for improvement of LIG's
pipeline and gathering system, and $1.2 million
for development of information systems to
support the expanded services expected to be offered.
NATURAL GAS DISTRIBUTION
Operating revenues, which are derived from the sale and transportation of
natural gas primarily to retail customers at state regulated rates,
were $390.5 million in 1994 compared with $335.1 million in 1993
and $328.0 million in 1992.
The increase in revenues for 1994 compared to 1993 is due primarily to higher
retail rates to pass through increased purchased gas costs to customers,
increased sales to utilities, and increased commercial and industrial sales
reflecting some transportation customers switching service. The increase in
revenues for 1993 compared to 1992 is due to the full-year impact of a retail
rate increase for Pennsylvania customers, which went into ,
effect in July of 1992 offset by lower retail rates
to pass through decreased purchased gas costs to
customers.
Natural Gas Distribution 1994 1993 1992
Operating Revenues (thousands):
Residential Gas Sales . . . . $265,356 $247,238 $241,331
Commercial Gas Sales. . . . . 66,956 59,057 59,386
Industrial and Utility Gas Sales . 31,853 8,017 4,593
Transportation Service. . . . 21,750 16,526 17,967
Other . 4,560 4,311 4,745
------- ------- -------
Total Revenues. . . . . . . $390,475 $335,149 $328,022
======= ======= =======
Sales Quantities (MMcf):
Residential Gas Sales . . . . 29,570 29,980 30,089
Commercial Gas Sales. . . . 9,681 8,235 8,097
Industrial and Utility Gas Sales 12,855 1,767 721
Transportation Deliveries . . 8,611 10,986 13,080
Heating Degree Days
(Normal - 5,968). . . . . . 5,607 5,628 5,629
Gas purchased amounted to $232.9 million in 1994, $182.8 million in 1993,
and $179.4 million in 1992. The increase in gas costs for
1994 compared to 1993
reflects the pass-through of higher costs in rates to
retail customers and the increase in sales
to commercial, industrial, and utility customers. The increase
in gas costs for 1993 compared to 1992
reflects increased sales to commercial, industrial, and utility customers
partially offset by the pass-through of lower
costs in rates to retail customers.
Other operating expenses amounted to $114.4 million in 1994, $106.6
million in 1993, and $97.2 million in 1992. The increase between the years is
due principally to increased labor, sales and marketing, distribution, and
uncollectible account expenses.
Operating income was $43.2 million in 1994 compared with $45.7 million in
1993 and $51.4 million in 1992. The decrease in operating income between the
years is due primarily to increased operating expenses, which more than offset
the higher margins being realized.
The operating results of the distribution operations continue to be
impacted by the effects of weather on gas sales, primarily to residential
customers. However, increased sales to utility customers and the continuing
expansion of new gas-using technologies such as co-generation, natural gas
vehicles, and natural gas-fired cooling have served to
retain system throughput. In addition, new services
for customers, such as energy management, have helped
to offset the effects of weather that continues to be warmer than normal.
The 1995 capital expenditure program of $25.1 million for distribution
operations includes $17.1 million for the distribution system, $5.7 million for
development of information systems and $2.3 million for other items.
NATURAL GAS TRANSMISSION
Operating revenues, which are derived from the interstate transportation,
storage and sale of natural gas subject to federal regulation,
and the marketing of natural gas, were $116.8
million in 1994 compared with $188.9 million in 1993 and $203.4 million
in 1992. The decrease in revenues between the years reflects
the effects of FERC Order 636 restructuring which took
effect in the middle of 1993.
Natural Gas Transmission 1994 1993 1992
Operating Revenues (thousands):
Industrial and Utility
Gas Sales . . . $ 2,309 $114,867 $155,271
Marketed Gas Sales. . . . . . 21,244 10,200 --
Transportation Service. . . . 69,958 47,534 34,779
Storage Service . . . . . . . 16,993 10,014 6,693
Other . 6,265 6,267 6,658
------- ------- -------
Total Revenues. . . . . . . $116,769 $188,882 $203,401
======= ======= =======
Sales Quantities (MMcf):
Industrial and Utility
Gas Sales . . . 388 26,345 36,697
Marketed Gas Sales. . . . . . 9,131 4,052 --
Transportation Deliveries . . 123,472 88,550 79,015
Gas purchased amounted to $18.2 million in 1994, $95.9 million in 1993,
and $127.4 million in 1992. The decrease
in gas costs between the years reflects the elimination
of pipeline gas sales pursuant to FERC Order 636 restructuring.
Other operating expenses amounted to $66.4 million in 1994, $62.3 million
in 1993, and $54.0 million in 1992. The increase in expenses between the years
is due primarily to provisions for possible refunds to customers.
Operating income was $32.2 million in 1994 compared with $30.7 million in
1993 and $22.0 million in 1992. The increase in operating income between the
years is due primarily to the restructuring of tariff rates pursuant to FERC
Order 636 whereby all fixed costs are now recovered in the demand portion of
pipeline rates.
The 1995 capital expenditure program of $19.6 million for transmission
operations includes $12.3 million for maintaining and
expanding the transmission system, $4.0 million for expansion
of gas storage facilities, and $3.3 million for other items.
CAPITAL RESOURCES AND LIQUIDITY
Operating Activities
Cash required for operations is impacted primarily by the seasonal nature
of the Company's distribution 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. In addition, short-
term loans are 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 its distribution and transmission
plant and continuing development and expansion of its resource production
activities. Such expenditures during 1994 were $146.2 million. A total of
$140.9 million has been authorized for the 1995 capital expenditure program.
Short-term loans are also used as interim financing for a portion of
capital expenditures. The Company expects to finance its 1995 capital
expenditures with cash generated from operations and temporarily
with short-term loans.
Capital expenditures, including acquisitions, totaled about $922 million
during the five-year period ended December 31, 1994, of which 45 percent was
financed from operations.
Financing Activities
The Company 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 2.99 percent to 6.80 percent during 1994. At
December 31, 1994, $256.0 million of commercial paper and $13.3 million of bank
loans were outstanding at an average interest rate of 5.94 percent.
In January 1995, the Company established
a five-year revolving Credit Agreement with a group
of banks providing $500 million
of available credit. The agreement requires a
facility fee of one-tenth of one percent. Adequate credit is 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.
During the first quarter of 1994, the Company issued the remaining $43.5
million of Medium-Term Notes--Series B which were available under a shelf
registration filed in March 1992 covering $100 million of medium-term notes.
The Company filed a new shelf registration effective June 9, 1994, for the
issuance of $100 million of Medium-Term Notes--Series C to be used to retire
short-term loans. No Series C Notes have been issued.
Federal Income Tax Provisions
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 1994. 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, 1994, the Company has available $82.9 million of AMT credit
carryforwards. The impact of AMT on
future cash flow will depend on the level of taxable income.
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
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 as the related reserves
are depleted. The credits recorded in 1994, 1993,
and 1992 reduced the Company's federal income
tax provisions by $16.4 million, $20.6 million, and $14.1
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 $6.5 million is accrued at December 31,
1994. The portion of amounts expensed through
1994 that have been deferred, pending recovery in
future rates, and included in regulatory assets amounts to
$3.5 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 costs
generally do not affect results of operations due to regulatory procedures for
purchased gas cost recovery in rates. The increase in refunds due customers
reflects provisions for refund of a portion of Equitrans' current rates
that are in effect subject to approval by the FERC.
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.
<PAGE>
Item 8. Financial Statements and Supplementary Data
Page Reference
Report of Independent Auditors 24
Statements of Consolidated Income
for each of the three years in
the period ended December 31, 1994 25
Consolidated Balance Sheets
December 31, 1994 and 1993 26 & 27
Statements of Consolidated Cash Flows
for each of the three years in the
period ended December 31, 1994 28
Statements of Common Stockholders'
Equity for each of the three
years in the period ended
December 31, 1994 29
Long-term Debt, December 31,
1994 and 1993 30
Notes to Consolidated Financial
Statements 31 - 48
<PAGE>
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, 1994 and 1993, 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, 1994. Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule 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, 1994 and 1993,
and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1994 in conformity
with generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
As described in Note E to the consolidated financial statements, the
Company changed its method of accounting for postretirement benefits in
1993.
s/ Ernst & Young LLP
Ernst & Young LLP
Pittsburgh, Pennsylvania
February 13, 1995
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
(Thousands Except Per Share Amounts)
<S> <C> <C> <C>
Operating Revenues $1,397,280 $1,094,794 $812,374
Cost of Gas Purchased 926,905 644,157 407,055
--------- --------- -------
Net operating revenues 470,375 450,637 405,319
--------- --------- -------
Operating Expenses:
Operation 192,799 174,420 161,972
Maintenance 31,737 29,024 26,327
Depreciation and depletion 93,347 76,894 65,940
Taxes other than income 42,244 39,802 36,654
--------- --------- -------
Total operating expenses 360,127 320,140 290,893
--------- --------- -------
Operating Income 110,248 130,497 114,426
Other Income 3,163 1,706 1,781
Interest Charges 43,905 38,728 37,411
--------- --------- -------
Income Before Income Taxes 69,506 93,475 78,796
Income Taxes 8,777 20,020 18,770
--------- --------- -------
Net Income $ 60,729 $ 73,455 $ 60,026
========= ========= =======
Average Common
Shares Outstanding 34,509 32,359 31,342
Earnings Per Share
of Common Stock $1.76 $2.27 $1.92
See notes to consolidated financial statements Pages 31 to 48, inclusive
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1994 AND 1993
<CAPTION>
ASSETS
1994 1993
(Thousands)
<S> <C> <C>
Property, Plant and Equipment:
Exploration and production
(successful efforts method) $ 983,328 $ 905,856
Natural gas marketing 309,579 297,743
Natural gas distribution 552,789 523,497
Natural gas transmission 387,921 379,741
--------- ---------
Total 2,233,617 2,106,837
Less accumulated depreciation
and depletion 637,951 558,413
--------- ---------
Net property, plant and
equipment 1,595,666 1,548,424
--------- ---------
Current Assets:
Cash and cash equivalents 23,415 15,037
Accounts receivable (less
accumulated provision for
doubtful accounts: 1994,
$10,890;
1993, $10,106) 172,178 171,626
Unbilled revenues 25,794 27,853
Gas stored underground
- current inventory 15,101 18,059
Material and supplies 12,876 12,261
Deferred purchased gas cost 24,890 17,148
Prepaid expenses and other 33,569 23,977
--------- ---------
Total current assets 307,823 285,961
--------- ---------
Other Assets:
Regulatory assets 88,387 87,024
Other 27,246 25,498
--------- ---------
Total other assets 115,633 112,522
--------- ---------
Total $2,019,122 $1,946,907
========= =========
See notes to consolidated financial statements Pages 31 to 48, inclusive
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1994 AND 1993
<CAPTION>
CAPITALIZATION AND LIABILITIES
1994 1993
(Thousands)
<S> <C> <C>
Capitalization:
Common stockholders' equity $ 750,002 $ 728,030
Long-term debt 398,282 378,845
--------- ---------
Total capitalization 1,148,284 1,106,875
--------- ---------
Current Liabilities:
Long-term debt payable
within one year 24,500 1,971
Short-term loans 269,300 253,900
Accounts payable 123,394 143,808
Accrued taxes 19,588 15,358
Accrued interest 13,032 12,338
Refunds due customers 22,255 14,206
Customer credit balances 10,427 7,578
Other 16,399 14,794
--------- ---------
Total current liabilities 498,895 463,953
--------- ---------
Deferred and Other Credits:
Deferred income taxes 326,597 331,140
Deferred investment tax credits 22,082 23,178
Other 23,264 21,761
--------- ---------
Total deferred and
other credits 371,943 376,079
--------- ---------
Commitments and Contingencies - -
--------- ---------
Total $2,019,122 $1,946,907
========= =========
See notes to consolidated financial statements Pages 31 to 48, inclusive
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
(Thousands)
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 60,729 $ 73,455 $ 60,026
------- ------- -------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 93,347 76,894 65,940
Deferred income taxes (5,059) 756 (2,015)
Other - net 1,566 1,319 1,435
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues 723 (22,352) (8,035)
Gas stored underground 2,958 (5,076) 3,990
Material and supplies (615) (709) (724)
Deferred purchased gas cost (7,742) (14,024) 4,915
Regulatory assets (1,363) (18,657) (2,870)
Accounts payable (20,414) 18,747 2,821
Accrued taxes 4,230 1,024 1,018
Refunds due customers 8,049 2,537 4,050
Other - net (1,274) (4,588) 3,965
------- ------- -------
Total adjustments 74,406 35,871 74,490
------- ------- -------
Net cash provided by
operating activities 135,135 109,326 134,516
------- ------- -------
Cash Flows from Investing Activities:
Capital expenditures (146,174) (339,411) (99,589)
Proceeds from sale of property 1,195 1,270 6,872
------- ------- -------
Net cash used in
investing activities (144,979) (338,141) (92,717)
------- ------- -------
Cash Flows from Financing Activities:
Issuance of common stock 1,791 112,412 1,427
Purchase of treasury stock (395) (28) (226)
Dividends paid (39,686) (35,279) (32,595)
Proceeds from issuance of long-term debt 43,083 31,702 24,359
Repayments and retirements of long-term debt (1,971) (16,445) (15,995)
Increase (decrease) in short-term loans 15,400 139,900 (15,500)
------ ------- -------
Net cash provided (used)
by financing activities 18,222 232,262 (38,530)
------- ------- -------
Net Increase in Cash and Cash Equivalents 8,378 3,447 3,269
Cash and Cash Equivalents at Beginning of Year 15,037 11,590 8,321
------- ------- -------
Cash and Cash Equivalents at End of Year $ 23,415 $ 15,037 $ 11,590
======= ======= =======
Cash Paid During the Year for:
Interest (net of amount capitalized) $ 40,105 $ 34,592 $ 31,304
Income taxes $ 13,098 $ 27,547 $ 17,587
See notes to consolidated financial statements Pages 31 to 48, inclusive
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<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, 1992 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 percent
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 (581)
Stock issued:
New stock issuance 3,000 111,570
Conversion of 9 1/2 percent
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) 34,465 208,178 520,433 (581) 728,030
Net income for the year 1994 60,729
Dividends ($1.15 per share) (39,686)
Foreign currency translation (923)
Stock issued:
Conversion of 9 1/2 percent
debentures 31 345
Restricted stock option plan 8 313
Dividend reinvestment plan 47 1,504
Treasury stock (10) (310)
------ ------ ------- ------
Balance, December 31, 1994 (b)(c)(d) 34,541 $210,030 $541,476 $(1,504) $750,002
====== ======= ======= ======
(a) Shares authorized: Common - 80,000,000 shares,
Preferred - 3,000,000 shares.
(b) Net of treasury stock: 1994 - 632,000 shares ($14,933,000);
1993 - 622,000 shares ($14,623,000); 1992 - 621,000 shares ($14,595,000).
(c) A total of 2,870,000 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, the long-term incentive plan, the non-
employee directors' stock incentive plan, and
for issuance under the company's dividend reinvestment and
stock purchase plan.
(d) Retained earnings of $408,797,000 is available
for dividends on, or purchase of, common stock pursuant to
restrictions imposed by indentures securing long-term debt.
See notes to consolidated financial statements Pages 31 to 48, inclusive
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
LONG-TERM DEBT
DECEMBER 31, 1994 AND 1993
<CAPTION>
Annual Debt Maturities After
Maturities One Year
1994 1993 1994 1993
(Thousands)
<S> <C> <C> <C> <C>
8 1/4 percent Debentures, $ - $ - $ 75,000 $ 75,000
due July 1, 1996 (a)
7 1/2 percent Debentures, due July 1, 1999
($75,000 principal amount, net of
unamortized original issue discount)(a) - - 70,466 69,684
9 1/2 percent Convertible
subordinated debentures,
due January 15, 2006 - - 2,316 2,661
9.9 percent Debentures, due - - 75,000 75,000
April 15, 2013 (b)
Medium-term notes:
7.2 to 9.0 percent Series A,
due 1998 thru 2021 - - 100,000 100,000
5.1 to 7.6 percent Series B,
due 1995 thru 2023 24,500 - 75,500 56,500
Other - 1,971 - -
------ ----- ------- -------
Total $24,500 $1,971 $398,282 $378,845
====== ===== ======= =======
(a) Not redeemable prior to maturity.
(b) Annual sinking fund payments of $3,750,000 are required beginning in 1999.
See notes to consolidated financial statements Pages 31 to 48, inclusive
</TABLE>
<PAGE>
EQUITABLE RESOURCES, INC.
Notes to Consolidated Financial Statements
December 31, 1994
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 percent
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 $.9 million in 1994, $1.0 million in 1993 and $1.3 million in
1992. 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 $2.1 million in 1994, $1.8 million in 1993
and $1.3 million in 1992.
(4) INVENTORIES: Inventories are stated at cost which is below
market. Gas stored underground--current inventory is stated at cost under
the average cost method. 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 Companies establish 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.
(6) DEFERRED PURCHASED GAS COST: Where permitted by regulatory
authority under purchased gas adjustment clauses or similar tariff
provisions, the Company defers the difference between purchased gas cost,
less refunds, and the billing of such cost and amortizes 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) DERIVATIVE FINANCIAL INSTRUMENTS: The Company uses exchange-
traded natural gas and crude oil futures contracts to hedge exposures to
energy price changes. To qualify for hedge accounting, the Company must be
exposed to energy price risk and the futures contracts must be designated
and effective as hedges. Realized gains and losses on futures contracts
which qualify as hedges of firm commitments or anticipated transactions are
deferred and recognized in income when the hedged transactions occur. The
Company also trades natural gas futures. Realized and unrealized gains and
losses on such transactions are recorded in other income in the period in
which the changes occur. Margin requirements on futures contracts are
recorded in other current assets on the balance sheet.
(9) CASH FLOWS: The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash
equivalents.
(10) RECLASSIFICATION: Certain amounts contained in prior year
comparative information have been reclassified to conform with the 1994
presentation.
B. Direct Billing Settlements
Kentucky West Virginia Gas Company received FERC approval of settlement
agreements with all customers for the direct billing to recover the higher
Natural Gas Policy Act (NGPA) prices, which the FERC had denied on natural
gas produced from exploration and production properties between 1978 and
1983. The portion of the settlement with the Equitable Gas Division has been
subject to Pennsylvania Public Utility Commission (PUC) review. The PUC
approved the recovery of $7.8 million relating to the settlement in each of
the years 1992 to 1994, which increased net income reported for the third
quarter of each year by $4.7 million. Approximately $42 million from the
settlement remains to be recovered in future gas cost filings with the PUC
over the next six years.
The settlement with Columbia Gas Transmission Company for the
recovery of $19 million 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 following table summarizes the source and tax effects of temporary
differences between financial reporting and tax bases of assets and
liabilities:
December 31,
1994 1993
(Thousands)
Deferred tax liabilities (assets):
Exploration and development costs
expensed for income tax reporting . . . . $141,479 $138,089
Tax depreciation in excess of
book depreciation . . . . . . . 255,683 250,032
Regulatory temporary differences . . 37,319 36,841
Deferred purchased gas cost. . . . . 6,397 8,413
Alternative minimum tax. . . . . . . (82,925) (69,333)
Investment tax credit. . . . . . . . (9,306) (10,340)
Other. . . . . . . . . . . . . . . . (17,606) (21,829)
------- -------
Total (including amounts classified as
current liabilities of $4,444 for 1994
and $733 for 1993) . . $331,041 $331,873
======= =======
As of December 31, 1994 and 1993, $76.2 million and $76.4 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,
1994 1993 1992
(Thousands)
Current:
Federal. . . . . . . . . . $11,196 $15,577 $13,540
State. . . . . . . . . . . 2,640 3,687 7,245
Deferred:
Federal. . . . . . . . . . (6,848) (2,758) (4,547)
State. . . . . . . . . . . 1,789 3,514 2,532
----- ------ ------
Total . . . . . . . . $ 8,777 $20,020 $18,770
====== ====== ======
Provisions for income taxes are less than amounts computed at the
federal statutory rate of 35 percent for 1994 and 1993,
and 34 percent for 1992 on pretax
income. The reasons for the difference are summarized as follows:
Years Ended December 31,
1994 1993 1992
(Thousands)
Tax at statutory rate . $ 24,327 $ 32,716 $ 26,791
State income taxes . . . 3,069 4,332 6,453
Increase in federal
income tax rate. . . . - 5,070 -
Nonconventional fuels
tax credit . . . . . . (16,442) (20,600) (14,051)
Other . (2,177) (1,498) (423)
------- ------- -------
Income tax expense . . $ 8,777 $ 20,020 $ 18,770
======= ======= =======
Effective tax rate . . . 12.6 percent 21.4 percent 23.8 percent
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 percent. 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 $82.9 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
$14.9 million which begin to expire in 2006. The net operating loss
carryforwards apply to Louisiana Intrastate Gas.
Amortization of deferred investment tax credits amounted to $1.1
million for 1994, $1.4 million for 1993 and $1.1 million for 1992.
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.
The following table sets forth the plans' funded status and amounts
recognized in the Company's consolidated balance sheets:
December 31,
1994 1993
(Thousands)
Actuarial present value of benefit obligations:
Vested benefit obligation $120,763 $132,402
======= =======
Accumulated benefit obligation $123,877 $135,809
======= =======
Market value of plan assets $143,121 $159,433
Projected benefit obligation 134,111 148,265
------- -------
Excess of plan assets over projected
benefit obligation 9,010 11,168
Unrecognized net asset (2,905) (3,237)
Unrecognized net gain (15,606) (16,732)
Unrecognized prior service cost 9,512 10,403
------- -------
Prepaid pension cost recognized in
the consolidated balance sheets $ 11 $ 1,602
======= =======
At year-end the discount rate used in determining the actuarial present
value of benefit obligations was 8 1/4 percent for 1994, 7 1/4 percent for
1993 and 8 1/4 percent for 1992. The assumed rate of increase
in compensation levels was 4 1/2 percent for 1994 and 1993 and
5 percent for 1992.
The Companies' pension cost, using a 9 percent average rate
of return on plan assets, comprised the following:
Years Ended December 31,
1994 1993 1992
(Thousands)
Service cost benefits earned
during the period. $ 3,916 $ 2,806 $ 2,345
Interest cost on projected
benefit obligation 10,752 10,472 9,917
Actual loss (return) on assets. . . . . 2,757 (17,224) (18,214)
Net amortization and deferral. (14,680) 5,486 7,069
------ ------ ------
Net periodic pension cost . . $ 2,745 $ 1,540 $ 1,117
====== ====== ======
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. The Company's transition
obligation is being amortized over 20 years. In determining the accumulated
postretirement benefit obligation at December 31, 1994, the Company used a
beginning inflation factor of 10 1/2 percent decreasing
gradually to 4 3/4 percent after 15 years and
a discount rate of 8 1/4 percent. At December 31, 1993, the beginning
inflation factor was 11 percent decreasing
gradually to 4 3/4 percent after 16 years and the discount rate was
7 1/4 percent. The following summarizes the status of the
Company's accrued postretirement benefit costs (OPEBS):
December 31,
1994 1993
(Thousands)
Accumulated postretirement
benefit obligation:
Retired employees. . . . . . . . . $ 21,269 $ 23,078
Active employees:
Fully eligible . . . . . . . . . 9,158 8,942
Other. . . . . . . . . . . . . . 13,459 16,741
------- -------
Total obligation . . . . . . . 43,886 48,761
Unrecognized net gain . . . . . . . 5,160 40
Unrecognized transition obligation. (41,501) (43,806)
------- -------
Accrued postretirement
benefit cost . $ 7,545 $ 4,995
======= =======
The net periodic cost for postretirement health care and life insurance
benefits includes the following:
Years Ended December 31,
1994 1993
(Thousands)
Service cost. . . . . . . . . . . . $1,049 $1,065
Interest cost . . . . . . . . . . . 3,423 3,936
Amortization of transition obligation. . . 2,305 2,306
----- -----
Periodic cost. . . . . . . . . . . $6,777 $7,307
===== =====
As of December 31, 1994 and 1993, $3.5 million and $2.9 million,
respectively, of the accrued OPEBS related to rate regulated operations have
been deferred as regulatory assets. Rate filings have been undertaken to
seek recovery of accrued costs 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 7 percent
and would increase the periodic cost by 8 percent.
The cost of OPEBS for 1992 was recognized as paid and amounted to $2.9
million.
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
M.
(2) Key Employee Restricted Stock Option Plan
The Equitable Resources, Inc., Key Employee Restricted Stock Option and
Stock Appreciation Rights Incentive Compensation Plan is nonqualified and
provided for the granting of restricted stock awards or options to purchase
common stock of the Company at prices ranging
from 75 percent to 100 percent of market
value on the date of grant. 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.
The following schedule summarizes the stock option activity:
Years Ended December 31,
1994 1993 1992
Options outstanding January 1 . . 253,068 139,725 228,787
Granted . . . . . . . . . . . . . - 148,543 -
Exercised . . . . . . . . . . . . (7,650) (33,325) (89,062)
Canceled, forfeited, surrendered
or expired . . . . . . . . . . . (3,600) (1,875) -
------- ------- -------
Options outstanding December 31 . 241,818 253,068 139,725
======= ======= =======
Average price of options
exercised during the year . . . $22.48 $18.97 $17.07
At December 31:
Prices of options outstanding . $18.81 $17.50 $15.20
to to to
$36.50 $36.50 $20.13
Average option price . . . . . . $29.82 $29.69 $19.76
Shares reserved for issuance . . 663,699 671,349 705,209
No future grants may be made under the Plan which was replaced by the
Long-Term Incentive Plan effective May 27, 1994 as described below.
(3) Long-Term Incentive Plan
On May 27, 1994, shareholders approved the Equitable Resources, Inc.
Long-Term Incentive Plan which provides for the granting of shares of common
stock to officers and key employees of the Company. These grants may be
made in the form of stock options, restricted stock, stock appreciation
rights and other types of stock-based or performance-based awards as
determined by the Compensation Committee of the Board of Directors at the
time of each grant. Stock awarded under the Plan, or purchased through the
exercise of options, and the value of stock appreciation units, are
restricted and subject to forfeiture should an optionee terminate employment
prior to specified vesting dates. The maximum number of shares which could
have been granted under the Plan during 1994 was 763,500 shares. In each
subsequent year, an additional number of shares equal to 1 percent of the total
outstanding shares as of the preceding December 31 will be available for
grant. In no case may the number of shares granted under the Plan exceed
1,725,500 shares. No awards may be made under the Plan after May 27, 1999.
In May 1994, 363,400 stock options were granted to purchase common stock at
$33.81 per share, which was the mean of the high and the low trading prices
of the common stock on the date of grant. These options expire five years
from the date of grant. At December 31, 1994, 1,725,500 shares of common
stock were reserved for issuance under the Plan.
(4) Non-Employee Directors' Stock Incentive Plan
On May 27, 1994, shareholders approved the Equitable Resources, Inc.
Non-Employee Directors' Stock Incentive Plan which provides for the granting
of up to 80,000 shares of common stock in the form of stock option grants
and restricted stock awards to non-employee directors of the Company. Each
Director received 450 shares of restricted stock on February 3, 1994. On
June 1, 1994, each director was granted an option for 500 shares of common
stock at $34.625 per share. On the first business day of June,
in each year from 1995 through
1998, each Director will be granted an option for 500 additional shares of
common stock. The exercise price for each share is
100 percent of the mean of the high and the
low trading prices of the common stock
on the date of grant. Each option is exercisable upon the earlier of three
years from the date of grant or a Director's retirement, disability or
death. No option may be exercised more than five years after date of grant.
At December 31, 1994, 76,400 shares of common stock were reserved for
issuance under the Plan.
(5) Dividend Reinvestment and Stock Purchase Plan
Pursuant to this plan, stockholders may reinvest dividends and make
limited additional cash investments to purchase shares of common stock.
Shares issued through the Plan may be acquired on the open market or by
issuance of previously unissued shares. At December 31, 1994, 194,183
shares of common stock were reserved for issuance under the Plan.
G. Short-Term Loans
Maximum lines of credit available to the Company were $325 million
during 1994, $360 million during 1993 and $140 million during 1992. The
Company is not required to maintain compensating bank balances. Commitment
fees averaging one-tenth of one percent were paid to maintain credit
availability. In January 1995, the Company established a five-year
revolving Credit Agreement with a group of banks providing $500 million of
available credit. The agreement requires a facility fee of one-tenth of one
percent.
At December 31, 1994, short-term loans consisted of $256.0 million of
commercial paper and $13.3 million of bank loans at a weighted average
annual interest rate of 5.94 percent; and at December 31, 1993, $189.9 million
and $64.0 million, respectively, at a weighted average annual interest rate of
3.30 percent. The maximum amount of outstanding short-term loans was $269.3
million in 1994, $339.0 million in 1993 and $130.5 million in 1992. The
average daily total of short-term loans outstanding was approximately $204.6
million during 1994, $174.9 million during 1993 and $107.4 million during
1992; weighted average annual interest rates applicable thereto were
4.4 percent in 1994, 3.3 percent in 1993 and 3.8 percent in 1992.
H. Long-Term Debt
The Company filed a shelf registration with the Securities and Exchange
Commission effective June 9, 1994 to issue $100 million of Medium-Term
Notes--Series C to be used to retire short-term loans. No Series C Notes
have been issued.
During the first quarter of 1994, the Company issued the remaining
$43.5 million of Medium Term Notes--Series B under a shelf registration
filed with the Securities and Exchange Commission in March 1992. The Series
B Notes have maturity dates ranging from three to thirty years from date of
issuance and a weighted average interest rate of 6.60 percent.
The 9 1/2 percent Convertible Subordinated Debentures are convertible at any
time into common stock at a conversion price of $11.06 per share. During
1994, 1993 and 1992, $345,000, $564,000 and $259,000 of these debentures
were converted into 31,187 shares, 50,983 shares
and 23,399 shares of common stock, respectively. At December 31, 1994,
209,731 shares of common stock were reserved for conversions.
Interest expense on long-term debt amounted to $35.5 million in 1994,
$33.2 million in 1993 and $31.9 million in 1992. Aggregate maturities of
long-term debt will be $24.5 million in 1995, $75.0 million in 1996, none in
1997, $5.0 million in 1998 and $78.8 million in 1999.
I. Derivative Financial Instruments
The Company is exposed to risk from fluctuations in energy prices in
the normal course of business. The Company uses exchange-traded energy
futures contracts to hedge exposures to changes in energy prices, primarily
relating to its gas marketing operations. The Company also trades in energy
futures. Energy futures contracts are commitments to either purchase or
sell a designated commodity, generally natural gas or crude oil, at a future
date for a specified price and may be settled in cash or through delivery.
The contracts used by the
Company cover one-month periods from one to eighteen months in the future.
Initial margin requirements are met in cash or other instruments, and
changes in contract values are settled daily. Energy futures contracts have
minimal credit risk because futures exchanges are the counterparties.
At December 31, 1994, natural gas futures contracts for the purchase of
10.8 Bcf and the sale of 3.7 Bcf were outstanding as hedges on future
transactions. At December 31, 1994, deferrals related to hedging activities
include realized losses of $.2 million and unrealized losses of $1.5
million.
At December 31, 1994, there were no outstanding energy futures
contracts held for trading purposes. During 1994, the average fair value of
traded contracts was $30,000 and a net gain of $1.5 million was realized.
The value of these financial instruments is subject to fluctuations in
market prices for natural gas and crude oil. Exposure to this risk is
managed by maintaining open positions within defined trading limits.
J. 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.
The estimated fair value of long-term debt, including the portion due
within one year, at December 31, 1994 and 1993 would be $430.2 million and
$433.0 million, 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
percent Debentures and 7 1/2 percent
Debentures may not be redeemed prior to maturity. The
9.9 percent Debentures require payment of premiums
for early redemption, exclusive
of annual sinking fund requirements.
The futures described in Note I are reflected in other current assets
at fair value of $(1.5) million.
K. Concentrations of Credit Risk
Revenues and related accounts receivable from exploration and
production operations are generated primarily from the sale of produced
natural gas to utility and industrial customers located mainly in the
Appalachian area; the sale of produced oil to refinery customers in the
Rocky Mountain and Appalachian areas; and the sale of produced natural gas
liquids to a refinery customer in Kentucky.
Natural gas marketing operating revenues and related accounts
receivable are generated from the nationwide marketing of natural gas to
brokers and large volume utility and industrial customers; and the sale of
produced natural gas liquids and intrastate transportation of natural gas in
Louisiana.
Natural gas distribution operating revenues and related accounts
receivable are generated from state-regulated utility natural gas sales and
transportation 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.
Natural gas transmission operating revenues and related accounts
receivable are generated from FERC-regulated interstate pipeline
transportation and storage service for the affiliated utility, Equitable
Gas, as well as other utility and end-user customers located in nine mid-
Atlantic and northeastern states.
The Company is not aware of any significant credit risks which have not
been recognized in provisions for doubtful accounts.
L. Financial Information by Business Segment
Beginning in 1994, the Company expanded the reporting of operations to
comprise four segments. Exploration and production acitivities comprise the
exploration, development, production and sale of natural gas and oil,
extraction and sale of natural gas liquids and contract drilling. Natural
gas marketing activities comprise marketing of natural gas, extraction and
sale of natural gas liquids and intrastate transportation. Natural gas
distribution activities comprise the operations of the Company's state-
regulated natural gas utility. Natural gas transmission activities comprise
gas transportation, gathering, storage and marketing activities involving
the Company's three FERC-regulated gas pipelines.
The following table sets forth financial information for each of the
business segments:
Years Ended December 31,
1994 1993 1992
(Thousands)
Operating Revenues:
Exploration and production $ 195,795 $ 202,422 $ 191,478
Natural gas marketing 890,778 599,624 314,626
Natural gas distribution 390,475 335,149 328,022
Natural gas transmission 116,769 188,882 203,401
Sales between segments (196,537) (231,283) (225,153)
--------- --------- ----------
Total $1,397,280 $1,094,794 $ 812,374
========= ========= ==========
Operating Income:
Exploration and production $ 30,843 $ 42,453 $ 36,348
Natural gas marketing 4,089 11,700 4,850
Natural gas distribution 43,180 45,714 51,372
Natural gas transmission 32,136 30,630 21,856
--------- --------- ---------
Total $ 110,248 $ 130,497 $ 114,426
========= ========= =========
Identifiable Assets:
Exploration and production $ 724,144 $ 699,322 $ 666,924
Natural gas marketing 396,166 386,040 33,092
Natural gas distribution 690,068 660,889 610,830
Natural gas transmission 297,140 302,102 278,109
Eliminations (88,396) (101,446) (120,531)
--------- --------- ---------
Total $2,019,122 $1,946,907 $1,468,424
========= ========= =========
Depreciation and Depletion:
Exploration and production $ 57,196 $ 47,645 $ 45,569
Natural gas marketing 11,702 5,778 69
Natural gas distribution 15,196 14,624 12,425
Natural gas transmission 9,253 8,847 7,877
--------- --------- ---------
Total $ 93,347 $ 76,894 $ 65,940
========= ========= =========
Capital Expenditures:
Exploration and production $ 84,460 $ 101,203 $ 52,719
Natural gas marketing 15,765 195,042 204
Natural gas distribution 32,712 26,077 22,593
Natural gas transmission 13,237 17,089 24,073
--------- --------- ---------
Total $ 146,174 $ 339,411 $ 99,589
========= ========= =========
M. 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 any losses resulting from claims of liability under the 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 natural gas marketing segment and exploration and production
segment, respectively. 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 million 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.
N. Commitments and Contingencies
Rent expense was $9.7 million in 1994, $9.8 million in 1993 and $9.3
million in 1992. Long-term leases are principally for division operating
headquarters and warehouse buildings and computer hardware and have renewal
options ranging to 19 years from December 31, 1994. Future minimum rentals
for all noncancelable long-term leases at December 31, 1994 are as follows:
1995, $5.9 million; 1996, $5.3 million; 1997, $4.6 million; 1998, $3.2
million; 1999, $2.6 million, and $15.7 million thereafter for a total of
$37.3 million.
The Company has annual commitments of approximately $31 million for
demand charges under existing long-term contracts with pipeline suppliers
for periods extending up to 8 years at December 31, 1994, which relate to
gas distribution operations. 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. The
estimated costs associated with identified situations that require remedial
action are accrued.
However, certain of these costs are deferred as regulatory assets when
recoverable through regulated rates. 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 and
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 M.
March June September December
31 30 30 31
(Thousands except per share amounts)
1994
Operating revenues $439,538 $316,122 $297,712 $343,908
Operating income 60,979 10,054 12,847 26,368
Net income 36,359 6,057 2,381 15,932
Earnings per share $1.05 $.18 $.07 $.46
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
P. Natural Gas and Oil Producing Activities
The supplementary information summarized below presents the results of
natural gas and oil activities for the exploration and production segment in
accordance with Statement of Financial Accounting Standards 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 percent of total Company proved reserves
for the years presented.
(1) Production Costs
The following table presents the costs incurred relating to natural gas
and oil production activities:
1994 1993 1992
(Thousands)
At December 31:
Capitalized costs. . . . . $909,443 $836,638 $748,325
Accumulated depreciation
and depletion . . . . 304,835 256,508 216,005
------- ------- -------
Net capitalized costs. . . . $604,608 $580,130 $532,320
======= ======= =======
Costs incurred :
Property acquisition . .. $ 8,335 $ 29,345 $ 663
Exploration. . . . . . . . 22,783 13,928 13,166
Development. . . . . . . . 60,690 62,336 46,321
(2) Results of Operations for Producing Activities
The following table presents the results of operations related to
natural gas and oil production:
1994 1993 1992
(Thousands)
Revenues:
Affiliated . . . . . . . .$ 16,564 $ 15,467 $ 8,964
Nonaffiliated . . . . . . 136,029 140,380 127,369
Production costs . . . . . . 33,891 33,620 30,385
Exploration expenses . . . . 16,634 13,559 16,439
Depreciation and depletion . 52,505 43,841 40,744
Income tax expense . . . . . 3,602 5,039 5,221
------- ------- -------
Results of operations from
producing activities
(excluding corporate
overhead). . . . . . . . .$ 45,961 $ 59,788 $ 43,544
======= ======= =======
(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 1994 1993 1992
(Millions of Cubic Feet)
Proved developed and
undeveloped reserves:
Beginning of year. . . . . . . 822,583 720,032 695,898
Revision of previous estimates. 18,663 9,399 25,736
Purchase of natural gas
in place - net (a) . . . . . 6,307 86,113 434
Extensions, discoveries and
other additions. . . . . . . 89,918 60,589 46,207
Production . . . . . . . . . . (62,507) (53,550) (48,243)
------- ------- -------
End of year (b). . . . . . . . 874,964 822,583 720,032
======= ======= =======
Proved developed reserves:
Beginning of year. . . . . . . 759,282 665,194 621,846
End of year (c). . . . . . . . 771,635 759,282 665,194
(a) Includes purchases in Canada of 68,000 Mmcf in 1993.
(b) Includes proved reserves in Canada of 67,000 MMcf in 1994 and 70,000
MMcf in 1993.
(c) Includes proved developed reserves in Canada of 43,000 MMcf in 1994 and
46,000 MMcf in 1993.
Oil 1994 1993 1992
(Thousands of Barrels)
Proved developed and
undeveloped reserves:
Beginning of year . . . . . 16,468 20,023 19,427
Revision of previous estimates 2,601 (4,876) 951
Purchase (sale) of oil
in place - net (a) . . . . (169) 418 (138)
Extensions, discoveries and
other additions. . . . . . 1,369 3,015 2,189
Production. . . . . . . . . (1,986) (2,112) (2,406)
------ ------ ------
End of year (b) . . . . . . 18,283 16,468 20,023
====== ====== ======
Proved developed reserves:
Beginning of year . . . . . 16,442 18,540 17,072
End of year (c) . . . . . . 18,110 16,442 18,540
(a) Includes purchases in Canada of 68,000 barrels in 1993.
(b) Includes proved reserves in Canada of 75,000 barrels in 1994 and 65,000
barrels in 1993.
(c) Includes proved developed reserves in Canada of 50,000 barrels in 1994
and 39,000 barrels in 1993.
(4) Standard Measure of Discounted Future Cash Flow (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 percent. 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:
1994 1993 1992
(Thousands)
Future cash inflows . . . . $1,983,757 $2,140,151 $2,058,973
Future production costs . . (562,841) (598,707) (551,987)
Future development costs. . (46,985) (24,579) (41,612)
Future income tax expenses. (361,486) (434,362) (409,970)
--------- --------- ---------
Future net cash flow. . . . 1,012,445 1,082,503 1,055,404
10 percent annual discount for
estimated timing of cash flows. . (471,778) (515,023) (507,082)
--------- --------- ---------
Standardized measure of discounted
future net cash flows (a). . . $ 540,667 $ 567,480 $ 548,322
========= ========= =========
(a) Includes $10,043,000 in 1994 and $31,267,000 in 1993 related to Canada.
Summary of changes in the standardized measure of discounted future net
cash flows:
1994 1993 1992
(Thousands)
Sales and transfers of gas
and oil produced - net. . $(118,702) $(122,227) $(105,948)
Net changes in prices, production
and development costs . . (135,742) (80,256) 11,370
Extensions, discoveries, and
improved recovery, less
related costs . . . . . 74,900 90,035 77,759
Development costs incurred. 16,037 18,482 27,807
Purchase (sale) of
minerals in place - net . 9,627 62,843 (142)
Revisions of previous
quantity estimates. . . . 19,189 (14,910) 1,709
Accretion of discount . . . 72,058 69,284 62,548
Net change in income taxes. 45,012 (8,584) (21,093)
Other . . (9,192) 4,491 (7,747)
-------- ------- -------
Net increase (decrease) . . (26,813) 19,158 46,263
Beginning of year . . . . . 567,480 548,322 502,059
-------- ------- -------
End of year . . . . . . . . $ 540,667 $ 567,480 $ 548,322
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable.
<PAGE>
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 26, 1995, which will be
filed with the Commission within 120 days after the close of the Company's
fiscal year ended December 31, 1994.
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 26, 1995.
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 26, 1995.
Item 13. Certain Relationships and Related Transactions
Information required by Item 13 is incorporated herein by reference
to the section describing "Certain Relationships and Related Transactions"
in the Company's Definitive Proxy Statement relating to the annual meeting
of stockholders to be held on May 26, 1995.
<PAGE>
PART IV
Item 14. Exhibits and Reports on Form 8-K
(a) 1. Financial statements
The financial statements listed in the accompanying index to
financial statements (page 52) are filed as part of this
annual report.
2. Financial Statement Schedule
The financial statement schedule listed in the accompanying
index to financial statements and financial schedule (page 53)
is filed as part of this annual report.
3. Exhibits
The exhibits listed on the accompanying index to exhibits
(pages 54 through 57) are filed as part of this annual report.
(b) Reports on Form 8-K filed during the quarter ended December 31,
1994.
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.
<PAGE>
EQUITABLE RESOURCES, INC.
INDEX TO FINANCIAL STATEMENTS 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, 1994 25
Consolidated Balance Sheets
December 31, 1994 and 1993 26 & 27
Statements of Consolidated Cash Flows
for each of the three years in the
period ended December 31, 1994 28
Statements of Common Stockholders'
Equity for each of the three years in the
period ended December 31, 1994 29
Long-term Debt, December 31, 1994 and 1993 30
Notes to Consolidated Financial Statements 31 thru 48
2. Schedule for the Years Ended December 31,
1994, 1993 and 1992 included in Part IV:
II - Valuation and Qualifying
Accounts and Reserves 53
All other schedules are omitted since the subject matter thereof
is either not present or is not present in amounts sufficient to
require submission of the schedules.
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1994
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)
1994
Accumulated
Provision
for Doubtful
Accounts $10,106 $10,010 $9,226(A) $10,890
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
Note:(A) Customer accounts written off, less recoveries.
2.01 (a)
Stock Purchase Agreement dated May 5,
1993 among Arkla, Inc., Arkla Finance
Corporation and Equitable Pipeline Company
for the purchase of Louisiana Intrastate Gas
Company
Filed as Exhibit 2.1 (a) to Form 8-K Dated
June 30, 1993
2.01 (b)
Schedule 4.1.11 to the Stock Purchase
Agreement pertaining to outstanding
litigation claims
Filed as Exhibit 2.1 (b) to Form 8-K Dated
June 30, 1993
2.01 (c)
Schedule 4.1.15 to the Stock Purchase
Agreement pertaining to environmental
matters
Filed as Exhibit 2.1 (c) to Form 8-K Dated
June 30, 1993
2.01 (d)
Letter Agreement Dated June 30, 1993
amending the Stock Purchase Agreement
Filed as Exhibit 2.1 (d) to Form 8-K Dated
June 30, 1993
3.01
Restated Articles of Incorporation of the
Company dated May 21, 1993 (effective
May 27, 1993)
Filed as Exhibit 3.01 to Form 10-K for the
year ended December 31, 1993.
3.02
By-Laws of the Company (amended through
December 16, 1994)
Filed herewith as Exhibit 3.02
4.01 (a)
Indenture dated as of April 1, 1983 between
the Company and Pittsburgh National Bank
relating to Debt Securities
Filed as Exhibit 4.01 (Revised) to Post-
Effective Amendment No. 1 to Registration
Statement (Registration No. 2-80575)
4.01 (b)
Instrument appointing Bankers Trust
Company as successor trustee to Pittsburgh
National Bank
Filed as Exhibit 4.01 (b) to Form 10-K for
the year ended December 31, 1993
4.01 (c)
Resolution adopted June 26, 1986 by the
Finance Committee of the Board of Directors
of the Company establishing the term of the
$75,000,000 of debentures, 8 1/4% Series
due July 1, 1996
Filed as Exhibit 4.01 (c) to Form 10-K for
the year ended December 31, 1993
4.01 (d)
Resolutions adopted June 22, 1987 by the
Finance Committee of the Board of Directors
of the Company establishing the terms of
the 75,000 units (debentures with warrants)
issued July 1, 1987
Filed as Exhibit 4.01 (d) to Form 10-K for
the year ended December 31, 1993
4.01 (e)
Resolution adopted April 6, 1988 by the Ad
Hoc Finance Committee of the Board of
Directors of the Company establishing the
terms and provisions of the 9.9%
Debentures issued April 14, 1988
Filed as Exhibit 4.01 (e) to Form 10-K for
the year ended December 31, 1993
4.01 (f)
Supplemental indenture dated March 15,
1991 with Bankers Trust Company
eliminating limitations on liens and additional
funded debt
Filed as Exhibit 4.3 to Form S-3
(Registration Statement 33-39505) filed
August 21, 1991
4.01 (g)
Resolution adopted August 19, 1991 by the
Ad Hoc Finance Committee of the Board of
Directors of the Company Addenda Nos. 1
thru 27, establishing the terms and
provisions of the Series A Medium-Term
Notes
Filed as Exhibit 4.05 to Form 10-K for the
year ended December 31, 1991
4.01 (h)
Resolutions adopted July 6, 1992 and
February 19, 1993 by the Ad Hoc Finance
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
Filed as Exhibit 4.05 to Form 10-K for the
year ended December 31, 1992
* 10.01
Equitable Resources, Inc. Key Employee
Restricted Stock Option and Stock
Appreciation Rights Incentive Compensation
Plan (as amended through March 17, 1989)
Refiled herewith as Exhibit 10.01 pursuant
to Rule 24 of SEC's Rules of Practice
* 10.02 (a)
Employment Agreement dated as of
March 18, 1988 with Frederick H. Abrew
Filed as Exhibit 10.02 (a) to Form 10-K for
the year ended December 31, 1993
* 10.02(b)
Amendment effective June 1, 1989 to
Employment Agreement with Frederick H.
Abrew
Filed as Exhibit 10.02 (b) to Form 10-K for
the year ended December 31, 1993
* 10.03 (a)
Employment Agreement dated as of
March 18, 1988 with Augustine A. Mazzei,
Jr.
Filed as Exhibit 10.03 (a) to Form 10-K for
the year ended December 31, 1993
* 10.03 (b)
Amendment effective June 1, 1989 to
Employment Agreement with Augustine A.
Mazzei, Jr.
Filed as Exhibit 10.03 (b) to Form 10-K for
the year ended December 31, 1993
* 10.04 (a)
Agreement dated December 15, 1989 with
Barbara B. Sullivan for deferred payment of
1990 director fees
Refiled herewith as Exhibit 10.04 (a)
pursuant to Rule 24 of SEC's Rules of
Practice
* 10.04 (b)
Agreement dated December 21, 1990 with
Barbara B. Sullivan for deferred payment of
1991 director fees
Filed as Exhibit 10.16 to Form 10-K for the
year ended December 31, 1990
* 10.04 (c)
Agreement dated December 13, 1991 with
Barbara B. Sullivan for deferred payment of
1992 director fees
Filed as Exhibit 10.16 to Form 10-K for the
year ended December 31, 1991
* 10.04 (d)
Agreement dated December 28, 1993 with
Barbara B. Sullivan for deferred payment of
1994 director fees
Filed as Exhibit 10.04 (d) to Form 10-K for
the year ended December 31, 1993
* 10.04 (e)
Agreement dated December 16, 1994 with
Barbara B. Sullivan for deferred payment of
1995 director fees
Filed herewith as Exhibit 10.04 (e)
* 10.05
Supplemental Executive Retirement Plan (as
amended and restated through December
16, 1994)
Filed herewith as Exhibit 10.05
* 10.06
Retirement Program for the Board of
Directors of Equitable Resources, Inc. (as
amended through August 1, 1989)
Refiled herewith as Exhibit 10.06 pursuant
to Rule 24 of SEC's Rules of Practice
* 10.07
Supplemental Pension Plan (as amended and
restated through December 16, 1994)
Filed herewith as Exhibit 10.07
* 10.08
Policy to Grant Supplemental Deferred
Compensation Benefits in Selected Instances
to a Select Group of Management or Highly
Compensated Employees (as amended and
restated through August 1, 1989)
Refiled herewith as Exhibit 10.08 pursuant
to Rule 24 of SEC's Rules of Practice
* 10.09 (a)
Equitable Resources, Inc. and Subsidiaries
Short-Term Incentive Compensation Plan
dated January 18, 1988
Refiled herewith as Exhibit 10.09 pursuant
to Rule 24 of SEC's Rules of Practice
* 10.09 (b)
Amendment dated February 17, 1993 to
Equitable Resources, Inc. and Subsidiaries
Short-Term Incentive Compensation Plan
Filed as Exhibit 10.22 to Form 10-K for the
year ended December 31, 1992
* 10.10 (a)
Agreement dated December 31, 1987 with
Malcolm M. Prine for deferred payment of
1988 director fees
Filed as Exhibit 10.10 (a) to Form 10-K for
the year ended December 31, 1993
* 10.10 (b)
Agreement dated December 30, 1988 with
Malcolm M. Prine for deferred payment of
1989 director fees
Filed as Exhibit 10.10 (b) to Form 10-K for
the year ended December 31, 1993
* 10.11 (a)
Agreement dated September 30, 1986 with
Daniel M. Rooney for deferred payment of
1986 and 1987 director fees
Filed as Exhibit 10.11 (a) to Form 10-K for
the year ended December 31, 1993
* 10.11 (b)
Agreement dated December 21, 1987 with
Daniel M. Rooney for deferred payment of
1988 director fees
Filed as Exhibit 10.11 (b) to Form 10-K for
the year ended December 31, 1993
* 10.11 (c)
Agreement dated December 30, 1988 with
Daniel M. Rooney for deferred payment of
1989 director fees
Filed as Exhibit 10.11 (c) to Form 10-K for
the year ended December 31, 1993
* 10.11 (d)
Agreement dated December 15, 1989 with
Daniel M. Rooney for deferred payment of
1990 director fees
Refiled herewith as Exhibit 10.11 (d)
pursuant to Rule 24 of SEC's Rules of
Practice
* 10.11 (e)
Agreement dated December 21, 1990 with
Daniel M. Rooney for deferred payment of
1991 director fees
Filed as Exhibit 10.27 to Form 10-K for the
year ended December 31, 1990
* 10.11 (f)
Agreement dated December 13, 1991 with
Daniel M. Rooney for deferred payment of
1992 director fees
Filed as Exhibit 10.27 to Form 10-K for the
year ended December 31, 1991
* 10.11 (g)
Agreement dated December 18, 1992 with
Daniel M. Rooney for deferred payment of
1993 director fees
Filed as Exhibit 10.27 to Form 10-K for the
year ended December 31, 1992
* 10.11 (h)
Agreement dated December 14, 1993 with
Daniel M. Rooney for deferred payment of
1994 director fees
Filed as Exhibit 10.11 (h) to Form 10-K for
the year ended December 31, 1993
* 10.11 (i)
Agreement dated December 15, 1994 with
Daniel M. Rooney for deferred payment of
1995 director fees
Filed herewith as Exhibit 10.11 (i)
10.12
Trust Agreement with Pittsburgh National
Bank to act as Trustee for Supplemental
Pension Plan, Supplemental Deferred
Compensation Benefits, Retirement Program
for Board of Directors, and Supplemental
Executive Retirement Plan
Refiled herewith as Exhibit 10.12 pursuant
to Rule 24 of SEC's Rules of Practice
* 10.13
Equitable Resources, Inc. Non-Employee
Directors' Stock Incentive Plan
Filed herewith as Exhibit 10.13
* 10.14
Equitable Resources, Inc. Long-Term
Incentive Plan
Filed herewith as Exhibit 10.14
* 10.15
Agreement dated December 31, 1994 with
Donald I. Moritz for consulting services
Filed herewith as Exhibit 10.15
11.01
Statement re Computation of Earnings Per
Share
Filed herewith as Exhibit 11.01
21
Schedule of Subsidiaries
Filed herewith as Exhibit 21
23.01
Consent of Independent Auditors
Filed herewith as Exhibit 23.01
99.01
Equitable Resources, Inc. Employees Savings
Plan Form 11-K Annual Report
Filed herewith as Exhibit 99.01
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:
(Frederick H. Abrew)
President and Chief Executive Officer
Date: March 17, 1995
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.
President and Chief Executive
Officer and Director
s/ Frederick H. Abrew (Principal Executive Officer) March 17, 1995
Frederick H. Abrew
Vice President and
s/ A. Mark Abramovic Chief Financial Officer March 17, 1995
A. Mark Abramovic
Vice President - Accounting
and Administration
s/ Joseph L. Giebel (Chief Accounting Officer) March 17, 1995
Joseph L. Giebel
s/ Clifford L. Alexander, Jr. Director March 17, 1995
Clifford L. Alexander, Jr.
s/ Merle E. Gilliand Director March 17, 1995
Merle E. Gilliand
s/ E. Lawrence Keyes, Jr. Director March 17, 1995
E. Lawrence Keyes, Jr.
s/ Thomas A. McConomy Director March 17, 1995
Thomas A. McConomy
s/ Donald I. Moritz Director March 17, 1995
Donald I. Moritz
s/ Malcolm M. Prine Director March 17, 1995
Malcolm M. Prine
Director
Daniel M. Rooney
s/ David S. Shapira Director March 17, 1995
David S. Shapira
s/ Barbara Boyle Sullivan Director March 17, 1995
Barbara Boyle Sullivan
EQUITABLE RESOURCES, INC. Exhibit 3.02
BY-LAWS
(Amended through December 16, 1994)
EFFECTIVE JANUARY 1, 1995
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
Pennsylvania, 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.
<PAGE>
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 President of the Company shall preside and the
Secretary shall take the minutes at all meetings of the
shareholders. In the absence of the President, the Chairman
of the Executive Committee 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
<PAGE>
shareholders shall constitute a quorum except as otherwise
provided by law or by the Restated Articles of the Company.
If a meeting is not organized 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 execution 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
<PAGE>
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 President, 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.
<PAGE>
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 or the President.
Section 2.02 The Company shall have a corporate
seal which shall contain within a circle the following words:
"Equitable 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
calendar 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 dividend or distribution, or the date for any
<PAGE>
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
Directors 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.
<PAGE>
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
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 President, or the Chairman of the
Executive Committee in the absence of 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
<PAGE>
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.
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.
<PAGE>
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.
<PAGE>
Section 3.07 Only persons who are nominated in
accordance with the following procedures shall be eligible
for election as directors. Nomination for election to the
Board of Directors of the Company at a meeting of share-
holders 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 disclosure was made, whichever occurs
<PAGE>
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 shareholder. 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.
<PAGE>
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 defective 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
<PAGE>
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.
<PAGE>
ARTICLE IV
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 4.01 Directors, officers, agents, and
employees 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.
<PAGE>
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
indemnification 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.
<PAGE>
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 advisable, 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.
<PAGE>
ARTICLE VI
OFFICERS
Section 6.01 The officers of the Company shall be
chosen by the Board of Directors and shall be 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
principal 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 President and Secretary.
<PAGE>
Section 6.04 The salaries of all officers of the
Company, other than Assistant Secretaries and Assistant
Treasurers, 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.
PRESIDENT
Section 6.06 The President shall be the Chief
Executive Officer of the Company; shall preside at all
meetings of the shareholders and at all meetings of the Board
of Directors; shall have general and active management of the
<PAGE>
business of the Company; and shall see that all orders and
resolutions of the Board of Directors are carried into
effect. 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.
SECRETARY
Section 6.07 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 attested by the signature
of the Secretary or by the signature of the Treasurer or an
Assistant Secretary. The Secretary shall have custody of all
<PAGE>
contracts, leases, assignments, and all other valuable
instruments unless the Board of Directors or the President
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 general, 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 or the
President.
Section 6.08 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 President, or the Secretary may
from time to time designate.
<PAGE>
TREASURER
Section 6.09 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
Disbursements or such other employee of the Company (other
than the Cashier) as may be designated by the Treasurer from
<PAGE>
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 Assistant 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 President or the Chief Financial
Officer.
Section 6.10 No notes or similar obligations
shall be made except jointly by the President or the Chief
Financial Officer and the Treasurer or an Assistant
Treasurer, except as otherwise authorized by the Board of
Directors.
Section 6.11 The Board of Directors may elect one
(1) or more Assistant Treasurers who shall perform the duties
<PAGE>
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 President, the Chief Financial Officer or
the Treasurer may from time to time designate.
VICE PRESIDENTS
Section 6.12 Vice Presidents shall perform such
duties as may be assigned to them from time to time by the
Board of Directors or the President as their positions are
established or changed. During the absence or inability of
the President to serve, an Executive Vice President 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 6.13 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.
<PAGE>
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 President or a Vice President, and
countersigned by the Secretary or an Assistant Secretary or
the Treasurer 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 certificate 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.
<PAGE>
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
<PAGE>
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 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 majority 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.
<PAGE>
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 16, 1994)
(Effective January 1, 1995)
Exhibit 10.01
EQUITABLE RESOURCES, INC.
KEY EMPLOYEE RESTRICTED STOCK OPTION AND STOCK APPRECIATION
RIGHTS INCENTIVE COMPENSATION PLAN
(As amended, effective March 17, 1989)
Purpose of the Plan
This Key Employee Restricted Stock Option and Stock
Appreciation Rights Incentive Compensation Plan (the "Plan")
has been established in order to further the success and
interests of Equitable Resources, Inc. and its Subsidiaries
(collectively the "Company"), and its shareholders by a long-
term incentive program offering to key employees of the
Company an opportunity to acquire a direct economic interest
in the growth and prosperity of the Company through common
stock ownership in the manner and under the terms and
conditions of the Plan.
Thus the Plan will enable the Company to retain key
employees who are presently in the employ of the Company and
to create incentive for persons of high managerial and
administrative skills to become attracted to the employment
opportunities of the Company, thereby enhancing the Company's
continued success and progress.
ARTICLE I
Eligibility
1.1 Participation in the Plan is limited to key employees
of the Company, including those who are officers and directors
who, in the judgment of the Committee hereinafter established,
contribute materially to the growth and prosperity of the
Company.
1.2 All benefits provided under the Plan to which a key
employee may become entitled will be conditioned upon the key
employee's remaining in the employ of the Company for a period
of three years from the date the benefit is provided (except
to the extent otherwise set forth in the Plan), except in the
case of retirement, death or disability as hereinafter
expressly provided.
ARTICLE II
Authorized Stock
2.1 The stock to be subject to the options, the related
Stock Appreciation Rights and the restricted stock grants
under the Plan shall be shares of the Common Stock, without
par value, of the Company (the "Common Stock") and may be
authorized but unissued shares or treasury shares held in
the treasury. The total amount of Common Stock which may be
issued or delivered under the Plan shall not exceed 1,025,496
shares, subject to adjustment as provided in Article VII.
ARTICLE III
Administration
3.1 The Board of Directors of the Company ("Board")
shall, by resolution, establish a Compensation Committee (the
"Committee"), comprised of those directors (exclusive of
directors who are or were officers or employees of the Company
on the effective date of the Plan) chosen by the Board as set
forth in the resolution. The members of the Committee shall
serve at the pleasure of the Board.
3.2 The duties of the Committee shall be to select those
employees of the Company whom it deems to have earned, by
their work performance during the previous year, the
opportunity to acquire the Common Stock and benefit from the
appreciation in Common Stock during the period set forth in
the Plan. In making such selection of key employees,
consideration shall be given to the position of the individual
and the performance of that individual as to the duties the
position entails and the effect that such position has on the
growth and prosperity of the Company.
3.3 The Committee shall have the sole right to interpret
the Plan and to establish rules for the Plan's operation.
In the performance of these duties, the Committee shall
establish rules and regulations for the conduct of its affairs
and where, in the Plan, the Committee is authorized or
directed to take action, the Committee shall establish such
forms, notices or procedures as it deems necessary.
3.4 In the administration of the Plan, the Committee
may appoint any agents or other persons for the purpose of
administration and may delegate such ministerial duties to
them as the Committee deems appropriate; provided, however,
the Committee may not delegate the determination and selection
of the key employees to whom options or restricted stock will
be granted, nor may the Committee delegate the establishment
of the number of shares of Common Stock to which each option
or restricted stock grant shall apply. In addition, the
Committee shall make the sole determination as to the exercise
price of any granted option.
3.5 The Company shall reimburse the Committee members
for all out-of-pocket expenses incurred in the performance of
their duties.
3.6 Any decision made or action taken by the Committee
arising out of, or in connection with, the construction,
interpretation and administration of the Plan and rules and
regulations adopted by the Committee pursuant hereto shall lie
within the absolute discretion of the Committee and shall be
conclusive and binding upon all parties, including the
Company, the shareholders, the key employees, and any and all
persons claiming under or through any key employee. No member
of the Board or of the Committee and no officer of the Company
shall be liable for any act or action hereunder, whether of
commission or omission, taken by any other member, or by any
officer, agent or employee; nor, except in circumstances
involving his bad faith and to the extent permitted by law,
for anything done or omitted to be done by himself.
ARTICLE IV
Options
4.1 Upon selection by the Committee, a key employee
may be granted an option to purchase such number of shares of
Common Stock as the Committee shall determine.
4.2 The Committee shall establish an exercise price
under each option granted of not less than 75 percent or more
than
100 percent of the fair market value on the shares on the date
the
option is granted, but in no event less than the par value of
the Common Stock. "Fair market value" shall mean the closing
sales price of shares of Common Stock as reported on the New
York Stock Exchange's consolidated transaction reporting
system on the date the option is granted.
4.3 The Committee shall not grant to any key employee
an option or options on Common Stock for an aggregate number
of shares (when added to the number of shares granted under
Article VI) in excess of 10 percent of the total number of
shares which may be issued under the Plan. For this purpose,
if shares have been issued under the Plan and the shares which
may yet be issued under the Plan are adjusted under Article
VIII, the shares already issued shall be deemed to have been
similarly adjusted and considered as having been issued under
the Plan.
4.4 Any unexercised option outstanding for a period
of 18 months or less at the time the key employee holding such
option retires shall be subject to forfeiture at the sole
discretion of the Committee and, for a period of 30 days after
such retirement, the Company shall have the right, exercisable
in the sole discretion of the Committee, to repurchase all or
any part of the shares of such key employee attributable to
the exercise of such option which are held in escrow, in
accordance with the repurchase provisions of Section 4.8.
4.5 Except as otherwise provided in Sections 4.8, 4.9
and 10.2, an option granted under the Plan shall expire five
years from the date of grant. Except as provided in Section
4.11, the key employee may exercise the option at any time
after the date of grant and prior to the expiration date as to
all or any part of the whole shares of Common Stock to which
the option applies by delivery to the Committee of an
appropriate notice of exercise and a payment in an amount
equal to the total option price for the number of shares for
which the exercise is to be effective. Payment may be made in
cash or shares of Common Stock (except for shares held in
escrow under the terms of the Plan) or any combination thereof
and if payment is made in shares of Common Stock, such Common
Stock shall be valued at the closing sales price of shares of
Common Stock as reported on the New York Stock Exchange's
consolidated transaction reporting system on the date of
exercise.
4.6 Upon the exercise of an option, the Committee
shall authorize the issue of the number of whole shares of
Common Stock for which full payment has been made. Except in
the case of the exercise of an option following retirement or
death as provided in Section 4.9, or the exercise of an option
occurring after the end of the escrow period applicable to
such option, the Committee shall further issue instructions
that such shares, when issued, shall bear the following
restriction:
"These shares are subject to the covenant that, should
the registered owner's employment be terminated with the
Company, including successors by reason of merger or
consolidation, prior to [Date three years from grant of
option to purchase applicable to such shares; five years
in the case of options granted prior to March 18, 1986],
these shares are subject to repurchase in accordance
with Section 4.8 of the Equitable Resources, Inc. Key
Employee Restricted Stock Option and Stock Appreciation
Rights Incentive Compensation Plan."
and that such shares shall be held by the Company in escrow.
4.7 Any restricted shares held in escrow shall be issued
in the name of the key employee and shall not be physically
transferred to the key employee until the third anniversary of
the date of grant of the option (the fifth anniversary date in
the case of options granted prior to March 18, 1986), except
as provided in Section 4.9. While shares are held by the
Company in escrow, the key employee shall be entitled to all
dividends (both cash and securities, except for dividends paid
in Common Stock which are charged to earned surplus) and
voting rights, but shall not have power to transfer in any
manner the legal or equitable ownership of such shares. Common
Stock distributed as a result of an adjustment under Section
8.2 shall be added to the shares held in escrow.
4.8 Upon the termination of the key employee's employment
for any reason other than retirement or death, all options
which have not been exercised will be forfeited. In addition,
for a period of 30 days after such termination of employment
for any reason other than retirement or death, the Company
shall have the option, exercisable in the sole discretion of
the Committee, to repurchase all or any part of the shares of
such key employee which are held in escrow.
The repurchase price for shares acquired through the
exercise of options granted prior to March 18, 1986 shall be
the exercise price which was paid by the key employee to
acquire such shares. In the case of options granted on or
after March 18, 1986, the Committee, in its sole discretion,
may reduce the repurchase price by the exercise value of any
SAR units (as set forth in Section 5.3 of the Plan) associated
with the shares being repurchased. If the exercise price was
paid in cash, the shares shall be repurchased by the Company
for cash. If the exercise price was paid in Common Stock, an
appropriate number of shares shall be returned to the key
employee from the escrow. If the exercise price was paid
partly in cash and partly in shares of Common Stock, the key
employee will receive a proportionate amount of cash and a
proportionate number of shares shall be returned to the key
employee from the escrow. In any case, no payment shall be
made to the key employee if the repurchase price is calculated
to be equal to, or less than, zero.
All shares of Common Stock under an unexercised option
forfeited by reason of this Section, together with all
repurchased shares of Common Stock, shall again be available
for the grant of future options under the Plan. In the event
the Company does not exercise the option to repurchase, the
shares held in escrow will be transferred to the key employee
free of further restrictions.
4.9 In the event of the termination of employment of the
key employee by reason of retirement or death, the key
employee or the person or persons entitled to do so under the
Will of the key employee, or, if the key employee shall fail
to make testamentary disposition of said option or shall die
intestate, the legal representative of the key employee may,
within 90 days after such termination, exercise the options
outstanding at the time of such termination regardless of
whether the five-year option period expires within the 90
days. In addition, in the event of death during the 90-day
period following termination of employment by reason of
retirement, the option may be exercised within 90 days after
such death regardless of whether the five-year option period
expires within the additional 90-day period. In any event, all
options remaining outstanding at the end of such periods shall
expire. In addition, all shares held in escrow shall be
transferred unrestricted as of the key employee's retirement
date or date of death, whichever is applicable. The Committee
may elect to treat the total and permanent disability of a key
employee as a retirement. "Total and permanent disability"
shall mean any physical or mental condition which is
determined by the Committee to have rendered the key employee
incapable of employment with the Company and has substantially
impaired and will continue to impair his or her earning
ability.
4.10 In lieu of exercising an option, any key employee or
other person entitled to exercise an option shall have the
right to cancel, in whole or in part, any option that has not
been exercised by filing with the Committee a notice of
cancellation containing the number of shares of Common Stock
that are affected by the option cancelled and the date such
option was granted.
4.11 Options may be exercised or cancelled only in
the order of date of grant except that this Section shall not
apply in the event of the exercise or cancellation of an
option following termination of employment of the key employee
by reason of retirement or death.
4.12 The Committee shall not grant any options in any
calendar year in which the Company does not pay a cash
dividend on the Common Stock.
ARTICLE V
Stock Appreciation Rights Units
5.1 The Committee may, in its discretion, establish or
cause to be established in the name of a key employee, on the
same date as such key employee is granted an option to acquire
Common Stock, an account to which will be credited the same
number of units of Stock Appreciation Rights as the number of
shares of Common Stock that are subject to the key employee's
granted option. The base price for each Stock Appreciation
Rights unit shall be the fair market value (as defined in
Section 4.2) of a share of Common Stock on the date of grant
of the related option.
5.2 Upon the termination of the key employee's employment
for any reason other than retirement or death, all Stock
Appreciation Rights units shall be forfeited.
5.3 Except as provided in Section 5.5, upon the exercise,
cancellation or expiration of an option granted under Article
IV, the value of related Stock Appreciation Rights units equal
in number to the number of shares of Common Stock affected by
such exercise, cancellation or expiration shall become due and
payable. The amount to be paid by reason of the exercise,
cancellation or expiration of an option shall be determined by
subtracting the Stock Appreciation Rights unit base price from
the closing sales price of the Common Stock as
reported on the New York Stock Exchange's consolidated
transaction reporting system for the date of the exercise,
cancellation or expiration of the option and multiplying this
amount, if positive, by the number of Stock Appreciation
Rights units that are equivalent to the number of shares of
Common Stock affected by the exercise, cancellation or
expiration of the option. Upon determination of the amount
payable or in the event the difference is negative, all Stock
Appreciation Rights units utilized in the calculation shall be
cancelled.
5.4 The amount determined to be payable under Section 5.3
shall be paid in shares of Common Stock, cash, or partly in
shares and partly in cash as the Committee in its sole
discretion may determine at the time of the exercise,
cancellation or expiration of the related option. In
determining the number of whole shares of Common Stock to be
issued, the closing sales price of shares of Common Stock as
reported on the New York Stock Exchange's consolidated
transaction reporting system on the date of exercise,
cancellation or expiration of the related option, as the case
may be, shall be used.
5.5 Upon the cancellation of an option during the
employment of a key employee, the value of related Stock
Appreciation Rights units equal in number to the number of
shares of Common Stock affected by such cancellation shall be
determined as set forth in Section 5.3 and the amount which
would otherwise be payable in shares of Common Stock, cash or
partly in shares and partly in cash shall be held by the
Company in escrow and not physically transferred to the key
employee until the earlier of the fifth anniversary of the
date of grant of the related option and the second anniversary
of the date of cancellation of the related option, except that
the escrow shall be forfeited upon the termination of the key
employee's employment during the escrow period for any reason
other than retirement or death and except that the escrow
shall be transferred unrestricted as of the key employee's
retirement date or date of death, whichever is applicable.
Shares of Common Stock held in escrow shall be issued in the
name of the key employee and shall bear the following
restriction:
"These shares are subject to the covenant that should
the registered owner's employment be terminated with the
Company, including successors by reason of merger or
consolidation, prior to [insert applicable date], these
shares are subject to forfeiture in accordance with
Section 5.5 of the Equitable Resources, Inc. Key
Employee Restricted Stock Option and Stock Appreciation
Rights Incentive Compensation Plan."
While shares are held by the Company in escrow the key
employee shall be entitled to the same dividend and voting
rights as set forth in Section 4.7 and any shares distributed
as a result of an adjustment under Section 8.2 shall be added
to the shares held in escrow. Cash held in escrow for a key
employee shall not bear interest. All shares of Common Stock
forfeited under this provision shall again be available for
the grant of future options under the Plan.
ARTICLE VI
Restricted Stock
6.1 Upon selection by the Committee, a key employee may be
granted an award of such number of shares of restricted Common
Stock as the Committee shall determine. The number of
restricted shares granted to any key employee shall not, when
added to the number of shares subject to options granted
pursuant to Article IV, exceed 10 percent of the total number
of shares which may be granted under the Plan. For this
purpose, if the shares have been issued under the Plan and the
shares which may yet be issued under the Plan are adjusted
under Article VIII, the shares already issued shall be deemed
to have been similarly adjusted and considered as having been
issued under the Plan.
6.2 All restricted stock shall be held by the Company
in escrow until such time as it becomes fully vested upon the
key employee's continued employment with the Company for the
period (not less than three, nor more than five, years)
established by the Committee at the time of grant.
6.3 Restricted stock held in escrow shall bear the
following instruction:
"These shares are subject to the covenant that, should
the registered owner's employment be terminated with the
Company, including successors, by reason of merger or
consolidation, prior to [date specified by the
Committee] these shares are subject to forfeiture at the
Committee's discretion."
6.4. Any restricted shares held in escrow shall be issued
in the name of the key employee and shall not be physically
transferred to the key employee until the date specified by
the Committee, except as provided in Section 6.7. While
shares are held by the Company in escrow, the key employee
shall be entitled to all dividends (both cash and securities,
except for dividends paid in Common Stock which are charged to
earned surplus) and voting rights, but shall not have power to
transfer in any manner the legal or equitable ownership of
such shares. Common Stock distributed as a result of an
adjustment under Section 8.2 shall be added to the shares held
in escrow.
6.5 Upon the termination of the key employee's employment
for any reason other than retirement or death, all restricted
shares held in escrow shall be subject to forfeiture at the
sole discretion of the Committee. All shares of Common Stock
forfeited by reason of this Section shall again be available
for the grant of future options under the Plan.
6.6 Any restricted stock held in escrow for a period
of 18 months or less at the time the key employee to whom such
restricted stock is granted retires shall be subject to
forfeiture at the sole discretion of the Committee.
6.7 In the event of the termination of employment of the
key employee by reason of retirement or death, all shares held
in escrow shall be transferred unrestricted as of the key
employee's retirement date or date of death whichever is
applicable. The Committee may elect to treat the total and
permanent disability of a key employee as a retirement. "Total
and permanent disability" shall mean any physical or mental
condition which is determined by the Committee to have
rendered the key employee incapable of employment with the
Company and has substantially impaired and will continue to
impair his or her earning ability.
6.8 The Committee shall not make any award of restricted
stock in any calendar year in which the Company does not pay a
cash dividend on the Common Stock.
ARTICLE VII
Key Employee Agreement
7.1 Upon the Committee's granting to a key employee any
option, Stock Appreciation Rights units or restricted stock
under the Plan, the Committee shall furnish to each such key
employee an agreement setting forth the basic terms of the
Plan which are applicable to him, together with a copy of the
Plan. The employee shall sign and return to the Committee,
within 10 days of receipt, a copy of the agreement. No
exercise or cancellation of any option will be accepted by the
Committee prior to the receipt by it of a signed agreement.
Should the key employee refuse to sign an agreement or fail to
return the agreement signed within such 10-day period, the
option or restricted stock that has been granted will be null
and void and deemed not to have been granted and any Stock
Appreciation Rights units credited as a result of an option
grant will be null and void and deemed not to have been
granted or credited.
7.2 The Committee, in its sole discretion, may waive the
requirements of this Article in the event of the death of the
key employee during such 10-day period or waive such
requirements or extend the period for return of the signed
agreement in the event of the death or illness of the key
employee during such 10-day period. Should the Committee
extend the 10-day period for acceptance of the signed
agreement, it shall notify the key employee and establish a
new return date. No more than one extension will be granted as
to any one option.
ARTICLE VIII
Adjustment of Common Stock
8.1 The Company will at all times during the term of the
Plan reserve and keep available the number of shares
sufficient to satisfy the requirements of the Plan.
8.2 The 1,025,496 shares of Common Stock authorized in
Article II, including any shares held in escrow and including
any number of shares of Common Stock which shall at any time
be subject to options which have been granted but which have
not been exercised and the exercise price thereof (and the
base price of Stock Appreciation Rights units), shall be
adjusted in the event that there occurs a capital adjustment.
[For the purposes of the Plan, a capital adjustment shall
include any stock dividend (except a dividend paid in Common
Stock which is charged to earned surplus), stock split,
combination or division, conversion or exchange of shares of
Common Stock pursuant to a merger or consolidation,
recapitalization, separation, reorganization, or other similar
change in the capital structure of the Company.] The
adjustment of the Common Stock to which this subsection
applies shall be in the same manner, number and amount as all
outstanding Common Stock is adjusted, as determined by the
Committee, except that all fractional shares which may result
from such adjustment shall be disregarded.
8.3 No cash or other form of dividends shall be paid
or reserved on any shares reserved for the purpose of the
Plan, nor on any shares which are subject to any outstanding
option unless and until such option is exercised and the
Common Stock issued in the name of the key employee, prior to
the record date for such dividend.
8.4 Should there occur a capital adjustment to the
Common Stock as provided in this Article, the Committee will
proportionately adjust all unpaid Stock Appreciation Rights
units and base price per unit to reflect such capital
adjustment.
8.5 All shares of Common Stock upon which an option
has expired or been terminated shall again be available for
the purposes of the Plan.
ARTICLE IX
Effective Date, Termination and Amendment
9.1 Upon the approval of the Plan by the holders of Common
Stock, the effective date shall be established thereafter by
the Board as soon as practical after all required approvals
and consents are obtained from those governmental agencies
having jurisdiction in these matters.
9.2 This program may be terminated at any time by the
action of the Board of Directors of Equitable Resources, Inc.,
but in no event shall options or Stock Appreciation Rights
units be granted fifteen years after the effective date of the
Plan.
9.3 The Plan may be amended from time to time by the
Board of Directors, provided, however, no amendment which
would increase the number of shares of Common Stock available
for the purposes of the Plan (exclusive of those due to
capital adjustment) shall be effective until approved by the
shareholders.
ARTICLE X
Spendthrift
10.1 No option granted pursuant to the Plan shall be
transferable except as hereinafter specifically authorized. No
option granted pursuant to the Plan shall be subject to
anticipation, alienation, sale, assignment, pledge,
encumbrance, charge, garnishment, execution, attachment, or
lien of any kind, either voluntary or involuntary, whether
arising at law or equity, including any claims arising in or
by reason of support or divorce proceedings or decrees.
10.2 Notwithstanding the provisions of Section 10.1 above,
a transfer by Will or through the operation of the laws of
descent and distribution shall be permitted. In addition, such
option may be exercised or cancelled by any personal
representative of the key employee who is declared incompetent
if the key employee was an employee within the 90 days
immediately preceding the exercise or cancellation in favor of
the personal representative, regardless of whether the
five-year option period expires within the 90 days.
ARTICLE XI
Miscellaneous
11.1 Neither the establishment of the Plan nor the
granting of any option or restricted stock hereunder shall
establish any right to be retained in the employ of the
Company nor in any way limit the rights of the Company to
terminate the employment of any key employee at any time. The
Plan shall not be deemed nor construed as a contract of
employment.
11.2 The Company shall have the right to withhold from any
payment to the key employee sufficient amounts to cover
withholding and employment tax resulting from the operation of
the Plan.
ARTICLE XII
Additional Rights in Certain Events
12.1 For purposes of this Article XII, the following
terms shall have the following meanings:
(a) The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(b) "Affiliate", "Associate" and "Parent" shall have the
respective meanings set forth in Rule 12b-2 under the
Exchange Act as in effect on the effective date of the
amendment adding Article XII to the Plan.
(c) The term "Person" shall be used as that term is used
in Sections 13(d) and 14(d) of the Exchange Act.
(d) "Beneficial Ownership" shall be determined as provided
in Rule 13d-3, or any successor rule, under the Exchange
Act.
(e) The term "Proxy Rules" shall mean regulation 14A, or
any successor rule or regulation, under the Exchange Act.
(f) "Voting Shares" shall mean all securities of a company
entitling the holders thereof to vote in an annual
election of directors (without consideration of the rights
of any class of stock other than Common Stock to elect
directors by a separate class vote); and a specified
percentage of "Voting Power" of a company shall mean such
number of the Voting Shares as shall enable the holders
thereof to cast such percentage of all the votes which
could be cast in an annual election of directors (without
consideration of the rights of any class of stock other
than Common Stock to elect directors by a separate class
vote).
(g) "Tender Offer" shall mean a tender offer or exchange
offer to acquire securities of the Company (other than
such an offer made by the Company or any Subsidiary),
whether or not such offer is approved or opposed by the
Board.
(h) "Article XII Event" shall mean the date upon which any
of the following events occurs:
(i) The Company acquires actual knowledge that any
Person [other than the Company, a Subsidiary, any
director of the Company on the effective date of the
amendment adding Article XII to the Plan, any Affiliate
or Associate of any such director, any member of the
family of any such director, any trust (including the
trustees thereof) established by or for the benefit of
any such Persons, any charitable foundation, whether a
trust or a corporation (including the trustees and
directors thereof) established by any such Persons or
any employee benefit plan(s) sponsored by the Company]
has acquired the Beneficial Ownership, directly or
indirectly, of securities of the Company entitling such
Person to 20 percent or more of the Voting Power of the
Company;
(ii) (A) A Tender Offer is made to acquire securities of
the Company entitling the holders thereof to 50 percent
or more of the Voting Power of the Company; or (B)
Voting Shares are first purchased pursuant to any other
Tender Offer;
(iii) At any time less than 51 percent of the members of
the Board of Directors shall be persons who were either
(A) directors on the effective date of the amendment
adding Article XII to the Plan; or (B) individuals whose
election, or nomination for election, was approved by a
vote of at least two-thirds of the directors then still
in office who were directors on the effective date of
the amendment adding Article XII to the Plan or who were
so approved;
(iv) The shareholders of the Company shall approve an
agreement or plan providing for the Company or all or
substantially all its assets or stock to be acquired by,
or merged, consolidated or otherwise combined with,
another corporation, as a consequence of which the
former shareholders of the Company will own, immediately
after such acquisition, merger, consolidation or
combination less than a majority of the Voting Power of
the surviving or acquiring corporation or the Parent
thereof; or
(v) The shareholders of the Company shall approve any
liquidation of all or substantially all of the assets of
the Company, or any distribution to security holders of
assets of the Company, having a value equal to 30
percent or more of the total value of all the assets of
the Company.
11.2 Notwithstanding anything to the contrary in the Plan
or in any stock option or restricted stock agreement in case
any Article XII Event occurs:
(a) All shares and cash held in escrow pursuant to
Sections 4.6 through 4.9, Section 5.5 and Article VI
shall be immediately transferred unrestricted to the
employee.
(b) Upon the exercise or cancellation of an option
within 60 days after the date of the Article XII Event,
the requirement that the shares issuable upon such
exercise be held in escrow pursuant to Sections 4.6
through 4.9 shall not be applicable, and the requirement
that the amount which would otherwise be payable with
respect to Stock Appreciation Rights units be held in
escrow pursuant to Section 5.5 upon such cancellation
shall not be applicable.
(c) The first two sentences of Section 4.8 and the first
sentence of Section 6.5 shall not be applicable to
options or shares held by an employee in the event of a
termination of such employee's employment within six
months after the date of the Article XII Event.
(d) Sections 4.11 and 5.2 shall not be applicable to
options and Stock Appreciation Rights units held by an
employee in the event of a termination of such
employee's employment within six months after the date
of the Article XII Event.
ARTICLE XIII
Tax Withholding
13.1 At the request of a key employee, the Company may, at
the Committee's discretion, reduce the number of shares to be
delivered to the key employee (from escrow or otherwise) in
connection with the exercise of a stock option, the payment of
a stock appreciation right or the release from escrow of
restricted stock by an amount sufficient to satisfy tax
withholding requirements.
13.2 If the key employee's tax liability is deferred
beyond the date shares are delivered to the key employee, upon
approval of the Committee the key employee shall be permitted
to tender back to the Company at the time such tax liability
is determined the number of shares necessary to satisfy tax
withholding requirements.
13.3 The fair market value of the shares withheld or
tendered back (calculated as of the date the tax liability is
determined) shall be transmitted by the Company to the
appropriate taxing authorities in satisfaction of tax
withholding requirements.
Exhibit 10.04 (a)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 15th day of
December, 1989 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, 1990, 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 1990.
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.
<PAGE>
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. 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 Participant to receive benefits provided
<PAGE>
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.
<PAGE>
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
<PAGE>
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
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.
<PAGE>
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.
<PAGE>
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/ Douglas Grymes s/ Barbara Sullivan
Exhibit 10.04 (e)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 16th day of
December, 1994, 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 December 16, 1994, 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
1995.
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.
<PAGE>
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 January 1, 1998 (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 Participant to receive benefits provided
<PAGE>
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.
<PAGE>
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
<PAGE>
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
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.
<PAGE>
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.
<PAGE>
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ Frederick H. Abrew
Vice President and President and
Corporate Secretary Chief Operating 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 16, 1994
<PAGE>
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 Compensation Committee of the
Company's Board of Directors. 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.
<PAGE>
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 any individual
Participant shall be an amount equal to the sum
of (a) [reduced by (b) and (c)] 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
<PAGE>
(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
<PAGE>
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. If
both the Member and his Beneficiary die prior to
their joint receipt of the full actuarial value
of such annuity determined at the time of
retirement, the remaining value of the annuity
shall be paid to the Member's estate.
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. If both the Member and his
Beneficiary die prior to their joint receipt of
the full actuarial value of such annuity
determined at the time of retirement, the
remaining value of the annuity
shall be paid to the Member's estate.
<PAGE>
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 his 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.
<PAGE>
(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
<PAGE>
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;
<PAGE>
(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
<PAGE>
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.
<PAGE>
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 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.
<PAGE>
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.
<PAGE>
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 10.06
RETIREMENT PROGRAM FOR THE BOARD OF
DIRECTORS OF EQUITABLE RESOURCES, INC.
I
BENEFITS
After the effective date of this program, any qualified
Director who (1) retires after reaching the mandatory
retirement age (at present, 72 years) with at least sixty
(60) months of service as a Director, or (2) retires prior
to the mandatory retirement age with at least 120 months of
service as a Director (including any service as a Director
prior to July 12, 1984) shall be entitled to receive a
benefit equal to the quarterly retainer paid to Directors
effective the date such Director's service terminates. The
benefit shall be paid quarterly for forty (40) quarters or
until death, whichever shall first occur.
Any qualified Director who retires prior to the
mandatory retirement age with less than 120 months of
service shall be entitled to receive a benefit payable for
forty (40) quarters or until death, whichever shall first
occur, equal to 50 percent of the quarterly retainer paid to
Directors effective the date such Director's service
terminates, plus 10 percent for each additional twelve
(12) months of service in excess of sixty (60) months as a
Director.
All rights of a Director under this program 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 program) superior
to that of any other general unsecured creditor.
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.
II
QUALIFICATIONS
All nonemployee Directors who have reached the age of
fifty-eight (58) years or older at the date of retirement as
a Director with at least sixty (60) months of service as a
Director. A Director's status as to being an employee
Director or a nonemployee Director shall be determined at
the date of retirement from the Board. Service shall include
the time Director was an employee Director.
III
PAYMENTS
Payments as set forth above shall continue as set forth
provided the nonemployee Director, if physically able,
remains available for consultative services.
IV
AMENDMENTS
The Company reserves the right to alter, amend or
discontinue this program at any time.
V
EFFECTIVE DATE
The effective date of this program shall be July 12,
1984. This program has been amended and restated through
August 1, 1989.
Exhibit 10.07
SUPPLEMENTAL PENSION PLAN
EQUITABLE RESOURCES, INC.
Effective Date: January 1, 1984
As Amended and Restated
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
the pension paid to the Member) made after
December 31, 1984 shall be effective only if the
Member obtains his spouse's consent thereto. If
both the Member and his Beneficiary die prior to
their joint receipt of the full actuarial value
of such annuity determined at the time of
retirement, the remaining value of the annuity
shall be paid to the Member's estate.
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. If both the Member and his
Beneficiary die prior to their joint receipt of
the full actuarial value of such annuity
determined at the time of retirement, the
remaining value of the annuity shall be paid to
the Member's estate.
<PAGE>
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.
<PAGE>
(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).
<PAGE>
(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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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 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.
<PAGE>
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.
<PAGE>
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 10.08
POLICY TO GRANT SUPPLEMENTAL
DEFERRED COMPENSATION BENEFITS IN
SELECTED INSTANCES TO
A SELECT GROUP OF
MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES
As Amended and Restated
Through August l, 1989
I. Effective Date:
1.1 The effective date of this Policy (sometimes referred
to as "the Plan") is January 1, 1984.
1.2 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 Gas-Energy, Equitable Resources Energy
Company, Eastern Kentucky Production Company and PECO
Resources, Inc., as amended and restated effective
January 1, 1984 (Plan A).
II. Authorization:
2.1 Authority is hereby granted to the Chief Executive
Officer of the Company to grant supplemental benefits
to a select group of management or highly compensated
employees who will retire from the Company, or a
related Company, with a benefit based upon less than
thirty (30) years of continuous service.
III. Implementation:
3.1 The decision to implement a benefit under this policy
will be made by means of a Contract entered into
between the designated employee ("Member") and the
Company.
IV. Amount of Benefit:
4.1 The benefit will be in a monthly amount specified in
such Contract, the same having been established by
the Chief Executive Officer of the Company, but in no
event will the amount payable be more than the
benefit to which the employee would be entitled under
the Company's Qualified Defined Benefit Plan if the
employee were to retire at age sixty-five (65) with a
benefit based upon thirty (30) years of service, and
reduced by (a) and (b) below:
(a) The amount of the employee's benefit under the
Company's Defined Benefit Plan, plus
(b) The amount of deferred vested benefit, if any, to
which the employee is entitled on account of his
service with other employers preceding his
employment with the Company.
V. Form of Payment of Benefits:
5.1 Normal Form: The normal form of retirement benefit
payment shall be a single life annuity, payable
monthly, for the life of the Member.
5.2 Qualified Joint and Survivor Annuity: If a Member is
married on the later of his applicable Retirement
Date or the date of 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 as provided in
Section 5.5 herein 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 5.3 to
receive a monthly benefit after the death of the
Member equal to 75 percent or 100 percent 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 as provided in Section
5.5(c) herein.
5.3 Survivorship Options: A Member may elect in the
manner hereinafter provided to have the value of this
retirement benefit payment apply to the payment of a
reduced pension to him during this life, and after
his death to his designated surviving Joint Annuitant
in an amount equal to 100 percent of, or 75 percent
of, or 50 percent of, or 25 percent 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 election must be made
before the commencement of the service to be
performed. 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 percent) 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. Except as otherwise provided in Section 5.2
all elections hereunder are subject to the provisions
of Section 5.5 relating to election periods and
spousal consents; 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.
5.4 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 percent) 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.
5.5 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 should 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 5.4 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 the 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 commence and 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.
5.6 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 of other person entitled to benefits.
5.7 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).
5.8 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.
VI. Death Benefits:
6.1 In the event of the death, after age fifty-five (55)
but prior to retirement, of an employee to whom a
benefit has been granted under this Policy, the
amount payable under the Contract to the employee's
surviving spouse, if any, would be calculated as
under the provisions of the Company's Qualified
Pension Plan, but based upon the benefit provided
under this Policy.
VII. Termination:
7.1 In the event that an employee who has been granted a
benefit under this Policy leaves the employ of the
Company prior to age sixty-two 62 for any reason
other than death or disability, the benefits
described in this employee's Contract may be
forfeited at the discretion of the Chief Executive
Officer of the Company.
VIII. Costs of the Policy:
8.1 The entire cost of benefits and administrative
expenses for benefits granted under this Policy shall
be paid for by the Company as incurred.
IX. Administration:
9.1 Contracts granted under this Policy 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 the employee's Contract.
X. General Provisions:
10.1 This Policy is intended to provide supplemental
benefits for "a select group of management or highly
compensated employees" as that term is used in
Section 201(2) of ERISA.
10.2 These Contracts are purely voluntary on the part of
the Company. The Company expects and intends to
continue each Contract for life, but necessarily
reserves the right to amend, alter, suspend or
terminate any or all Contracts, in whole or in part,
at any time.
10.3 All rights of a Participant of 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.
10.4 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 10.09 (a)
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Short-Term Incentive Compensation Plan
Administrative Procedures
1. For each plan calendar year 1/, the Compensation Committee
(Committee) shall determine:
Participants eligible for awards,
Estimated maximum awards for each participant; and
An estimate of the maximum incentive fund required
based on the aggregate estimated maximum awards for
the participants for that year.
2. Each participant's estimated maximum award shall be
allocated to various performance segments. Objectives
and/or goals shall be established for each performance
segment consistent with Equitable Resources' business
plan. In determining actual incentive awards for each
participant for the plan calendar year, each performance
segment shall be expressed in a range of dollars from
zero to a maximum as determined by the Committee.
3. Following the close of the plan calendar year and after
adjusting the estimated maximum awards to reflect the
actual salaries earned by each participant during the plan
calendar year, each participant's performance shall be
evaluated resulting in a recommended award for each
participant.
The Committee and the Chief Executive Officer shall review
the recommended awards to ensure that each participant's
performance is objectively and consistently evaluated.
________________
1/ The plan calendar year is the calendar year, except for
the initial year which is applicable to the six months ending
December 31, 1984.
4. Following the publication of the Company's consolidated
financial statements for the calendar year, the incentive
fund shall be determined based upon the Company's
financial performance (measured by the rate of return that
net income bears to average capitalization 2/ for the
year). In no event will the incentive fund exceed 2.5
percent of net income. In addition, return on
capitalization goals should be assessed annually to
preserve consistency with peer companies' performance
opportunities.
Should the Company's financial performance be less than
the minimum rate of return as determined by the Committee,
there shall be no incentive fund for that plan calendar
year and no incentive awards shall be authorized.
Should the Company's financial performance be equal to or
higher than the minimum rate of return as determined by
the Committee, the sum of the recommended awards shall be
compared to the incentive fund.
Should the sum of the recommended awards be less than
or equal to the incentive fund, then the recommended
award shall be the actual incentive award for each
participant.
Should the sum of the recommended awards exceed the
incentive fund, each participant's actual incentive
award shall be derived by reducing the participant's
recommended award by the percentage which the sum of
the recommended awards exceed the incentive fund.
The Committee, after reviewing these procedures, shall
authorize the actual incentive award for each participant.
___________
2 / Effective with the plan calendar year 1986, rate of
return will be measured by average capitalization in lieu of
average stockholders' equity. Average capitalization is
defined as the average balance, as of the beginning and
end of the calendar year, applicable to the capitalization
and short-term loans for construction in current liabilities
as recorded in the certified consolidated balance sheet of
Equitable Resources, Inc.
5. The actual incentive award shall be paid to each
participant at such time and in such periodic amount
as the Committee shall, from time to time, determine,
provided however, that in no event shall the payments
extend beyond twenty-four(24) months from the date
the Committee authorizes the actual incentive awards.
6. The actual incentive award, once authorized by the
Committee, may be subsequently revoked should the
participant's employment with the Company terminate;
provided however, that upon normal retirement or
death, all authorized actual incentive awards become
due and payable; and provided further, that
revocation shall not be applicable where the
participant's termination of employment is caused
directly or indirectly by a change in control of the
Company. (Change in control of the Company is defined
as the acquisition of 10 percent or more of the
Company's outstanding voting shares and/or a change
in the majority of the Board of Directors as a result
of a cash tender offer or exchange offer, merger or
other business combination, sale of assets or
contested election, or any combination of these
transactions without the prior consent of the Board
of Directors.)
7. The Company's Short-Term Incentive Compensation Plan
may be cancelable at the discretion of the Board of
Directors, but such cancellation shall not affect
actual incentive awards previously authorized.
January 18, 1988
Exhibit 10.11 (d)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 15th day of
December, 1989, 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, 1990, 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 1990.
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.
<PAGE>
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. 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 Participant to receive benefits provided
under this Agreement. Such designation shall be in writing
filed
<PAGE>
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.
<PAGE>
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
<PAGE>
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
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.
<PAGE>
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.
<PAGE>
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/ David S. Shapiro s/ Daniel M. Rooney
Exhibit 10.11 (i)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 15th day of
December, 1994, 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, 1995, 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 1995.
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.
<PAGE>
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. 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 Participant to receive benefits provided
under this Agreement. Such designation shall be in writing
filed
<PAGE>
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.
<PAGE>
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
<PAGE>
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
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.
<PAGE>
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.
<PAGE>
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ Frederick H. Abrew
Vice President and President and
Corporate Secretary Chief Operating Officer
WITNESS: (Participant)
s/ Marianne Espy s/ Daniel M. Rooney
Exhibit 10.12
TRUST AGREEMENT
This Agreement made as of the day of ,
1989, by and between EQUITABLE RESOURCES, INC., a corporation
duly established and existing under the laws of the
Commonwealth of Pennsylvania (hereinafter referred to as the
"Company"), and Pittsburgh National Bank (hereinafter
referred to as the "Trustee").
WITNESSETH
WHEREAS, the Company established the Equitable Gas
Company Supplemental Pension Plan (the "Supplemental Pension
Plan") effective January 1, 1984, as a nonqualified,
deferred, unfunded, excess benefits plan to provide benefits
to employees of the Company (at that time named Equitable Gas
Company) and its affiliated companies in amounts equal to
those they would be entitled to under any defined pension
benefit plan of the Company or its affiliates except for the
maximum benefit limitations of Section 415 of the Internal
Revenue Code; and
WHEREAS, the Company established a Policy to Grant
Supplemental Deferred Compensation Benefits in Selected
Instances to a Select Group of Management or Highly
Compensated Employees (the "Supplemental Deferred
Compensation Policy"), effective January 1, 1984, to enable
the Company to contract with certain designated employees in
order to provide them with benefits equivalent to those that
they would be entitled to receive had they retired at age 65
after 30 years of service with the Company; and
WHEREAS, the Company established a nonqualified, unfunded
Retirement Program for the Board of Directors of the Company
(the "Directors' Retirement Program") effective July 12,
1984, to pay retirement benefits to members of the Board of
Directors; and
WHEREAS, the Company has entered into a Supplemental
Executive Retirement Plan (the "Supplemental Executive Plan")
effective January 1, 1989, as a nonqualified, deferred,
unfunded plan to provide benefits to employees of the Company
and its affiliated companies in amounts equal to those they
would be entitled to under any defined pension benefit plan
of the Company or its affiliates except for the maximum
benefit limitations of Section 401(a)(17) of the Internal
Revenue Code and the maximum years of service limitation of
Section 401(1) of the Internal Revenue code; and
WHEREAS, the Company desires to establish an irrevocable
trust (hereinafter referred to as the "Trust") and to
transfer to the Trust assets which shall be held there in
order to fund the Company's obligations under the
Supplemental Pension Plan, the Supplemental Deferred
Compensation Policy, the Directors' Retirement Program and
the Supplemental Executive Plan (the Supplemental Pension
Plan, the Supplemental Deferred Compensation Policy, the
Directors' Retirement Program and the Supplemental Executive
Plan hereinafter jointly referred to as the "Deferral
Agreements") subject to the claims of the Company's general
creditors in the event of the Company's bankruptcy or
insolvency, until paid as provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein and intending to be legally
bound hereby, the Company and the Trustee do hereby covenant
and agree as follows:
SECTION 1
TRUST FUND
(A) The Trustee shall receive for deposit in the Trust
such cash or other property as shall be transferred to the
Trustee by the Company and thereupon the Trust shall be
established. All cash or other property so received, together
with the income therefrom and any other increment thereon
shall be held, managed and administered by the Trustee
pursuant to the terms of this Agreement without distinction
between principal and income. The Company may make, from time
to time, additional deposits of cash or other property to the
Trust to be held and administered and disposed of by the
Trustee as provided in this Agreement.
(B) The Trust is intended to be a "grantor trust," within
the meaning of Section 671 of the Internal Revenue Code of
1986, and shall be construed accordingly.
(C) For accounting purposes only, a separate account
shall be established for each individual participant in the
Supplemental Pension Plan, for each individual participant in
the Supplemental Deferred Compensation Policy, for each
individual participant in the Directors' Retirement Program,
and for each individual participant in the Supplemental
Executive Plan. Monies allocated to any of these individual
accounts (hereinafter the "Trust Accounts") shall be
distributable only to the beneficiary of such account (or to
the appropriate beneficiaries of such beneficiary pursuant to
the provisions of the Deferral Agreements) subject to the
provisions set forth below. Such Trust Accounts are
collectively designated hereinafter as the "Trust Fund."
(D) The Trust Fund shall be held separate and apart from
other funds of the Company and shall be used exclusively for
the purpose of assuring payment by the Company of future
obligations of the Company under the Deferral Agreements,
except to the extent otherwise set forth herein.
SECTION 2
DISTRIBUTIONS FROM TRUST FUND
(A) The Company's Board of Directors' Compensation
Committee in the case of Trust Accounts relating to the
Directors' Retirement Program and the Company's Employee
Pension Committee in the case of Trust Accounts relating to
the Supplemental Pension Plan; the Supplemental Executive
Plan and the Supplemental Deferred Compensation Policy shall
each designate to the Trustee one or more representatives
(hereinafter individually or collectively the "Designated
Representatives") who shall direct the Trustee, by express
written instructions, with respect to all distributions from
the Trust Fund, including the amounts, dates and party or
parties, which may include the Company, to whom such
distribution shall be made. All such distributions shall be
made to such party as absolute owner, free and clear of the
Trust.
(B) The Company shall provide the Trustee with a
certified list of the names and specimen signatures of the
Designated Representatives. The Company shall also notify the
Trustee in writing from time to time of any changes in the
Designated Representatives. Until such times as the Trustee
is notified by the Company of any such change, the Trustee
may continue to rely on instructions from such Designated
Representatives.
(C) No person, including any participant in the Deferral
Agreements, shall have any preferred claim on, or any
beneficial ownership interest in, the Trust Fund prior to the
time payment from the Trust Fund is made to such person, and
all rights created under the Deferral Agreements or the Trust
shall be mere unsecured contractual rights against the
Company.
(D) The Trustee shall make distributions from the Trust
Fund pursuant to the written instructions received by the
Trustee in accordance with paragraph (A) above (provided that
at the time of payment the Trustee has not made a
determination in accordance with the provisions of Section 3
below that the Company is Insolvent), and the Trustee shall
have no liability for any distributions made by it pursuant
to such written instructions. The Trustee shall have no duty
to make inquiries as to whether any distribution in
accordance with this paragraph (D) is made pursuant to the
provisions of the Deferral Agreements. In no event shall the
Trustee be obligated or liable to make payments to any
participant in excess of the value of the assets held in
the applicable Trust Accounts.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
FROM TRUST FUND WHEN COMPANY INSOLVENT
(A) This Agreement and the Trust shall be irrevocable;
provided, however, that at all times during the continuance
of this Agreement and the Trust, the Trust Fund shall be
subject to the claims of the creditors of the Company as
hereinafter set forth.
(B) The Company shall be considered Insolvent for
purposes of this Agreement if it is:
(i) unable to pay its debts as they mature; or
(ii) subject to a pending proceeding as a debtor
under the Bankruptcy Code.
(C) At any time the Trustee has actual knowledge, or has
determined in accordance with paragraph (D) below, that the
Company is Insolvent, the Trustee shall hold for the benefit
of, or deliver upon the order of a court of competent
jurisdiction, any undistributed portion of the Trust Fund to
satisfy the claims of the Company's general creditors.
(D) The Board of Directors of the Company and the Chief
Executive Officer of the Company shall have the duty to
inform the Trustee of the Company's Insolvency. If the
Company or a person claiming to be a creditor of
the Company alleges in writing to the Trustee that the
Company has become Insolvent, the Trustee shall independently
determine, within thirty (30) days after receipt of such
notice whether the Company is Insolvent, and pending such
notice whether the Company is Insolvent, and pending such
determination, shall discontinue all payments from the Trust
Fund. The Trustee shall resume payments in accordance with
Section 2 of this Agreement only after the Trustee
has determined that the Company is not Insolvent (or is no
longer Insolvent, if the Trustee initially determined the
Company to be Insolvent). Nothing in this Agreement shall in
any way diminish any rights of any participant in the
Deferral Agreements to pursue his or her rights as a general
creditor of the Company with respect to benefits under the
Deferral Agreements.
(E) Unless the Trustee has received notice or otherwise
has actual knowledge of the Company's Insolvency or alleged
Insolvency, the Trustee shall have no duty to inquire as to
whether the Company is Insolvent. The Trustee may in all
events rely on evidence concerning the Company's solvency
which will give the Trustee a reasonable basis for making a
determination concerning the Company's solvency.
(F) If the Trustee discontinues payments to a person from
the Trust Fund pursuant to paragraph (D) above and
subsequently resumes such payments, the first payment to such
person following the discontinuance shall include the
aggregate amount of all payments which would have been made
to such person in accordance with Section 2 of this Agreement
during the period of such discontinuance less the aggregate
amount of payments made to such person by the Company in lieu
of payment hereunder for such period of discontinuance, as
specified in writing to the Trustee by the Designated
Representatives.
SECTION 4
PAYMENTS TO COMPANY
Neither the Designated Representatives nor the Company
shall have any power or right to direct the Trustee to return
to the Company or to divert to others (other than
participants in the Deferral Agreements) any portion of the
Trust Fund prior to the complete satisfaction of the
Company's obligations to participants in the Deferral
Agreements. If the Company determines that a portion of the
Trust Fund will clearly never be required to satisfy such
obligations, such portion may be returned to the Company if
the Trustee is directed to make such payment by the
Designated Representatives in accordance with Section 2(A)
above; the Trustee shall be entitled to rely on the written
direction of the Designated Representatives and shall have no
duty or obligation to inquire about or challenge such
determination by the Company. In addition, on termination of
the Trust as provided in Section 9(B) of this Agreement, any
remaining assets shall be returned to the Company as provided
in Section 9(C). Notwithstanding the foregoing, the
Designated Representatives may direct the Trustee to
reimburse the Company for payments made by the company to
participants in the Deferral Agreements in satisfaction
of its obligations thereunder.
SECTION 5
INVESTMENT AND ADMINISTRATION OF TRUST
(A) The Trustee shall invest and reinvest the assets in
the Trust Fund in accordance with the directions of the
Treasurer or Assistant Treasurer of the Company.
(B) The Trustee shall have the following powers and
authority in the administration and investment of the Trust,
to be exercised as provided in Section 6 of this Agreement:
(i) to exercise (subject to Company direction) any and
all investment powers that would be possessed if
it were the sole and absolute owner of all
securities or other property forming the Trust
Fund and to purchase or subscribe for any
securities or other property and to retain in the
Trust such securities or other property;
(ii) to settle, compromise or submit to arbitration,
any claims, debts or damages, due or owing to or
from the Trust, to commence or defend suits or
legal proceedings and to represent the Trust in
all suits or legal proceedings; provided,
however, that the Trustee shall not be required
to undertake or to defend any litigation arising
in connection with this Agreement, the Trust or
the Trust Fund (other than litigation between
the Company and the Trustee or in connection
with any alleged negligence or gross or willful
misconduct by the Trustee with respect thereto)
unless it is first indemnified by the Company
against its prospective costs, expenses and
liability;
SECTION 6
ACCOUNTING BY TRUSTEE
(A) The Trustee shall keep accurate and detailed records
of all investments, receipts, disbursements and all other
transactions required to be done, including such specific
records as shall be agreed upon in writing from time to time
between the Company and the Trustee. All such accounts, books
and records shall be open to inspection and audit at all
reasonable times by the Company, and the Designated
Representatives. Within sixty (60) days following the close
of each calendar year (or such other date as shall be agreed
upon in writing between the Company and the Trustee) and
within sixty (60) days after the removal or resignation of
the Trustee, the Trustee shall deliver to the Company a
written account of its administration of the Trust during
such year or during the period from the close of the last
preceding year to the date of such removal or resignation,
setting forth all receipts, investment earnings,
disbursements and other transactions effected by it and
showing all cash and other property held in the Trust
Accounts and Trust Fund at the end of such year or as of the
date of such removal or resignation, as the case may be, and
certified as to the accuracy of the information set forth
therein. In the absence of the filing in writing with the
Trustee by the Company of exceptions or objections to any
such account within ninety (90) days, the Company shall be
deemed to have approved such account; and in such case, or
upon the written approval of the Company of any such account,
the Trustee shall be released, relieved and discharged with
respect to all matters and things set forth in such account
as though such account had been settled by the decree of a
court of competent jurisdiction.
SECTION 7
RESPONSIBILITY OF TRUSTEE
(A) The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a
like character and with like aims; provided, however, that
the Trustee shall incur no liability to anyone for any action
taken pursuant to a direction, request or approval given by
the Company or the Designated Representatives, contemplated
by and complying with the terms of this Agreement. The
Company hereby agrees to indemnify the Trustee and hold it
harmless from and against any claim or liability which may be
asserted against the Trustee by reason of any such action.
(B) The Trustee may consult with legal counsel (who may
also be counsel for the Trustee generally) with respect to
any of its duties or obligations hereunder, and shall be
fully protected in acting or refraining from acting in
accordance with the advice of such counsel.
(C) The Trustee shall exercise the powers listed in
Section 5 of this Agreement at all times in a fiduciary
capacity primarily in the interest of the Company.
(D) In addition to the powers and authority granted to
the Trustee pursuant to Section 4(B) of this Agreement, the
Trustee shall have, without exclusion, all powers conferred
on Trustees by the laws of the Commonwealth of Pennsylvania
unless expressly provided otherwise herein.
SECTION 8
COMPENSATION AND EXPENSES OF TRUSTEE
The Trustee shall be entitled to receive such reasonable
compensation for its services as shall from time to time be
agreed upon by the Company and the Trustee. The Trustee shall
also receive reimbursement for reasonable expenses incurred
by it with respect to the administration of the Trust. Such
compensation and expenses, and all income taxes and other
taxes of any and all kinds levied or assessed under existing
or future laws against the Trustee on behalf of the Trust or
against the Trust Fund shall be a charge on the Trust Fund to
the extent not paid by the Company.
SECTION 9
REPLACEMENT OF TRUSTEE
The Trustee may be removed at any time by action of the
Board of Directors of the Company and written notice to the
Trustee. The Trustee may resign at any time by giving at
least thirty (30) days' advance written notice to the
Company. In the case of resignation or removal of the Trustee
as provided above, or in the case of any other inability of
the Trustee to serve, a new trustee, which shall be
independent and not subject to control of the Company, shall
be appointed by the Board of Directors of the Company. Any
successor Trustee shall have the same powers and duties as
those conferred upon the Trustee hereunder and a new
agreement shall be entered into between the Company and the
new Trustee.
SECTION 10
AMENDMENT OR TERMINATION
(A) This Agreement may be amended at any time and to any
extent by a written instrument executed by the Company and
the Trustee, except to make the Trust revocable or to
adversely affect the interest of any Deferral Agreement
participant in funds held in his or her Trust Account.
(B) The Trust shall terminate on the date on which the
Company notifies the Trustee in writing that:
(i) all benefits due under the Deferral Agreements
have been paid by the Company to or on behalf of
all participants in the Deferral Agreements; or
(ii) that the Internal Revenue Service or the
Department of Labor has determined that the
Deferral Agreements are "funded" for ERISA
purposes.
(C) Upon termination of the Trust as provided in
paragraph (B) above, any assets remaining in the Trust Fund
shall be first used to pay any fees and expenses of the Trust
and the remainder shall be returned to the Company.
(D) The existence of the Trust shall not preclude the
Company from amending or terminating the Supplemental Pension
Plan or the Supplemental Deferred Compensation Policy (or
contracts entered into thereunder) or the Directors'
Retirement Program or the Supplemental Executive Plan;
provided, however, that the rights of any Deferral Agreement
participant in his or her respective Trust Account shall not
be adversely affected by such action.
SECTION 11
SEVERABILITY AND ALIENATION
(A) Any provision of this Agreement prohibited by law
shall be ineffective to the extent of any such prohibition
without invalidating the remaining provisions hereof.
(B) To the extent permitted by law, benefits to which any
person is entitled under the Deferral Agreements or the Trust
Fund may not be anticipated, assigned (either at law or in
equity), pledged or alienated and are not subject to
attachment, garnishment, levy, execution or other legal or
equitable process and no benefit actually paid to or on
behalf of such a person by the Trustee shall be subject to
any claim for repayment by the Company or the Trustee;
provided, however, that the Company or the Trustee may
make a claim for repayment of any amount paid in error.
SECTION 12
CONSTRUCTION
(A) This Agreement and the Trust shall be governed,
construed and administered in accordance with the laws of the
Commonwealth of Pennsylvania except to the extent preempted
by applicable federal law.
(B) This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
IN WITNESS WHEREOF, the Company and the Trustee have
caused this Agreement to be executed by their duly authorized
officers as of the date first written above.
ATTEST: EQUITABLE RESOURCES, INC.
_________________________ By _______________________
Corporate Secretary
Title ____________________
[Seal]
WITNESS: PITTSBURGH NATIONAL BANK
_________________________ By _______________________
Title ____________________
7/89
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
On this ________ day of ______________, 1989, before me
personally came _______________________, to me known, who,
being duly sworn, did depose and say that he is the
_________________________ of the Company described in and
which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said
instrument is such corporate seal; and that he signed his
name thereto.
_________________________
Notary Public
My Commission Expires:
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
On this ___________ day of __________________,1989,
before me personally came __________________________, to me
known, who, being duly sworn, did depose and say that he is
the _________________________ of the Trustee described in and
which executed the foregoing instrument; that he knows the
seal of said Trustee; that the seal affixed to said
instrument is such corporate seal; and that he signed his
name thereto.
_________________________
Notary Public
My Commission Expires:
7/89
Exhibit 10.13
EQUITABLE RESOURCES, INC.
NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
Section 1. Purpose
1.01 The purpose of the 1994 Equitable Resources, Inc.
Non-Employee Directors' Stock Incentive Plan (the "Plan") is to
assist Equitable Resources, Inc. (together with any successor
thereto, the "Company") in attracting and retaining the
services of non-employee directors who exhibit a high degree of
business responsibility, personal integrity and
professionalism.
Section 2. Definitions; Construction
2.01 Definitions. In addition to the terms defined
elsewhere in the Plan, the following terms as used in the Plan
shall have the following meanings when used with initial
capital letters:
2.01.1 "Award" means any Option or Restricted Stock
granted under the Plan.
2.01.2 "Award Agreement" means any written agreement,
contract or other instrument or document evidencing an
Award.
2.01.3 "Board" means the Company's Board of Directors.
2.01.4 "Code" means the Internal Revenue Code of 1986,
as amended from time to time, together with rules,
regulations and interpretations promulgated thereunder.
2.01.5 "Committee" means the Compensation Committee or
such other Committee of the Board as may be designated by
the Board to administer the Plan, as referred to in Section
3.01 hereof.
2.01.6 "Common Stock" means the shares of the common
stock, without par value, and such other securities of the
Company as may be substituted for Shares pursuant to
Section 8.01 hereof.
2.01.7 "Disability" means that a Participant is
disabled within the meaning of Section 422 (c) (6) of the
Code.
2.01.8 "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
2.01.9 "Fair Market Value" of shares of any stock,
including but not limited to Common Stock, or
units of any other securities (herein "shares"), shall be
the mean between the following prices, as applicable, for
the date as of which Fair Market Value is to be determined
as quoted in The Wall Street Journal (or in such other
reliable publication as the Committee, in its discretion,
may determine to rely upon): (a) if the shares are listed
on the New York Stock Exchange, the highest and lowest
sales prices per share as quoted in the NYSE-Composite
Transactions listing for such date, (b) if the shares not
listed on such exchange, the highest and lowest sales
prices per share for such date on (or on any composite
index including) the principal United States securities
exchange registered under the Exchange Act on which the
shares are listed, or (c) if the shares are not listed on
any such exchange, the highest and lowest sales prices per
share for such date on the National Association of
Securities Dealers Automated Quotations System or any
successor system then in use ("NASDAQ"). If there are no
such sale price quotations for the date as of which Fair
Market Value is to be determined but there are such sale
price quotations within a reasonable period both before and
after such date, then Fair Market Value shall be determined
by taking a weighted average of the means between the
highest and lowest sales prices per share as so quoted on
the nearest date before and the nearest date after the date
as of which Fair Market Value is to be determined. The
average should be weighted inversely by the respective
numbers of trading days between the selling dates and the
date as of which Fair Market Value is to be determined. If
there are no such sale price quotations on or within a
reasonable period both before and after the date as of
which Fair Market Value is to be determined, then Fair
Market Value of the shares shall be the mean between the
bona fide bid and asked prices per share as so quoted for
such date on NASDAQ, or if none, the weighted average of
the means between such bona fide bid and asked prices on
the nearest trading date before and the nearest trading
date after the date as of which Fair Market Value is to be
determined, if both such dates are within a reasonable
period. The average is to be determined in the manner
described above in this Section 2.01.9. If the Fair Market
Value of shares on the date as of which Fair Market Value
is to be determined cannot be determined on the basis
previously set forth in this Section 2.01.9, or if a
determination is required as to the Fair Market Value on
any date of property other than shares, the Committee shall
in good faith determine the Fair Market Value of such
shares or other property on such date. Fair Market Value
shall be determined without regard to any restriction other
than a restriction which, by its terms, will never
lapse.
2.01.10 "Option" means a right, granted under Section
6.04 hereof, to purchase Shares at a specified price during
specified time periods as provided in Section 6.03. Each
Option shall be a nonstatutory stock option, which is an
Option not intended to meet the requirements of Section 422
of the Code or any successor provision thereto.
2.01.11 "Participant" means at any time any person who
is a member of the Board, but who is not at the time a
full-time employee of the Company or any Subsidiary nor has
been a full-time employee during the preceding 12-month
period. The term "Participant" does not include advisory,
emeritus or honorary directors.
2.01.12 "Person" shall have the meaning assigned in the
Exchange Act.
2.01.13 "Restricted Stock" means Shares, granted under
Section 6.04 hereof, that are subject to restrictions as
provided in Section 6.02.
2.01.14 "Retirement" means that a Participant ceases to
be a member of the Board for any reason on or after
reaching the age of fifty-eight (58) years with at least
sixty (60) months of service as a Director. Service shall
include the time a Director was an employee Director.
2.01.15 "Rule 16b-3" means Rule 16b-3 under the
Exchange Act, as amended from time to time, or any
successor to such Rule promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
2.01.16 "Shares" means the common stock of the
Company, without par value, and such other securities of
the Company as may be substituted for Shares pursuant to
Section 8.01 hereof
2.01.17 "Subsidiary" means any corporation in an
unbroken chain of corporations beginning with the Company,
if each of the corporations other than the last corporation
in the chain owns stock possessing at least 50% of the
total combined voting power of all classes of stock in one
of the other corporations in the chain.
Definitions of the terms "Change of Control," "Change of
Control Price," "Potential Change of Control...... Related
Party," "Voting Securities or Security" and "Beneficial
Ownership" are set forth in Section 9.03 hereof
2.02 Construction. For purposes of the Plan, the
following rules of construction shall apply:
2.02.1 The word "or" is disjunctive but not
necessarily exclusive.
2.02.2 Words in the singular include the plural;
words in the plural include the singular, words in the
neuter gender include the masculine and feminine genders,
and words in the masculine or feminine gender include the
other and neuter genders.
Section 3. Administration
3.01 The Plan shall be administered by the Committee,
members of which receive no additional compensation for such
administrative service. All Awards will be automatic and
nondiscretionary pursuant to the terms of the Plan. The
Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with
the provisions of the Plan:
(i) to interpret and administer the Plan and any
instrument or agreement relating to, or Award granted
under, the Plan;
(ii) to adopt, amend, suspend, waive and rescind such
rules and regulations as the Committee may deem necessary
or advisable to administer the Plan;
(iii) to correct any defect or supply any omission or
reconcile any inconsistency, and to construe and interpret
the Plan, the rules and regulations, any Award Agreement or
other instrument entered into or Award granted under the
Plan; and
(iv) to make all other decisions and determinations as
may be required under the terms of the Plan or as the
Committee may deem necessary or advisable for the
administration of the Plan.
Any action of the Committee with respect to the Plan shall
be final, conclusive and binding on all Persons, including the
Company, Participants, any Person claiming any rights under the
Plan from or through any Participant and shareholders. The
express grant of any specific power to the Committee, and the
taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company
the authority, subject to such terms as the Committee shall
determine, to perform administrative functions under the Plan.
Each member of the Committee shall be entitled to, in good
faith, rely or act upon any report or other information
famished to him by any officer, manager or other employee of
the Company, the Company's independent certified public
accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the
administration of the Plan. Any and all powers, authorizations
and discretion s granted by the Plan to the Committee shall
likewise be exercisable at any time by the Board.
Notwithstanding the above or any provisions of the Plan to
the contrary, (1) the selection of Participants to whom Awards
are to be granted, the number of shares subject to any Award,
the exercise price of any Option, the periods during which any
Option may be exercised, the term of any Option, the minimum
restrictions to which Restricted Stock shall be subject and the
duration of such restrictions shall be as hereinafter provided,
and the Committee shall have no discretion as to such matters
and (2) in no event shall the Committee or the Board have any
power of authority which would cause the Plan to fail to be a
plan described in Rule 16b-3 (c) (2) (ii).
Section 4. Shares Subject to the Plan
4.01 The maximum number of shares of Common Stock in
respect of which Awards may be granted under the Plan, subject
to adjustment as provided in Section 8.01 of the Plan, shall be
80,000.
For purposes of this Section 4.01, the number of Shares to
which an Award relates shall be counted against the number of
Shares reserved and available under the Plan at the time of
grant of the Award. If any Award is forfeited, or an Option
otherwise terminates without being exercised in full, any
Shares counted against the number of Shares reserved and
available under the Plan with respect to such Award shall, to
the extent of any such forfeiture or termination, again be
available for Awards under the Plan; provided, however, that
forfeited Shares of Restricted Stock may not again be made
available to the extent the Participant received dividends or
other benefits of ownership (not including voting rights) prior
to such forfeiture. The payment of the exercise price of an
Option in Shares shall not increase the number of Shares
available under the Plan.
Any Shares distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Shares or of
treasury Shares, including Shares repurchased by the Company
for purposes of the Plan.
Section 5. Eligibility
5.01 Awards shall be granted only to Participants as
defined in Section 2.01.1 1.
Section 6. Specific Terms of Awards
6.01 General Awards shall be granted only as set forth in
this Section 6. Awards shall be granted for no consideration
other than prior and future services.
6.02 Terms of Restricted Stock. Restricted Stock shall be
granted to Participants on the following terms and conditions:
(i) Restriction Period. Shares of Restricted Stock
shall be subject to the restrictions provided in this
Section 6.02 during the period (the "Restriction Period")
commencing on the date of grant and ending six months after
the date of approval of the Plan by the shareholders of the
Company as provided in Section 12.01.
(ii) Restrictions. During the Restriction Period,
Shares of Restricted Stock may not be sold, assigned,
transferred or encumbered by the Participant, and
certificates for such Shares shall be deposited with the
Company in escrow. Subject to the foregoing restrictions,
from the date of grant of Restricted Stock, and unless and
until such Shares are deemed forfeited to the Company as
provided herein, the Participant shall be a shareholder
with respect to the Restricted Stock, and shall have all of
the rights of a shareholder with respect to such Shares,
including the right to vote such Shares and to receive all
dividends and other distributions paid with respect to such
Shares, except that any dividend or distribution payable
during the Restriction Period in Common Stock shall be
added to the Restricted Stock awarded and held by the
Company in escrow subject to the same restrictions.
(iii) Forfeiture of restricted Stock. If during the
Restriction Period a Participant shall cease to be a member
of the Board for any reason other than death or Disability
on or after the date of shareholder approval of the Plan,
the Shares of Restricted Stock granted to the Participant
shall be deemed forfeited to the Company.
(iv) Lapse of Restrictions. The restrictions on Shares
of Restricted Stock provided herein shall lapse upon the
earlier of (1) expiration of the Restriction Period or (2)
the death or Disability of the Participant while a member
of the Board during the Restriction Period and on or after
the date of shareholder approval of the Plan. As promptly
as practicable following the lapse of the restrictions,
certificates for such Shares shall be delivered to the
Participant or his estate or beneficiary.
6.03 Terms of Options. The Options shall be granted to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per Share of
an Option shall be 100% of the Fair Market Value of a Share
on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be
five (5) years from the date of grant, provided however,
that the Option shall expire upon the Participant's
termination of service as a director of the Company for any
reason other than Retirement, Disability or death.
(iii) Exercisability. The Option shall become
exercisable upon the expiration of three years from the
date of grant or, if earlier, upon the Participant's
termination of service as a director of the Company by
reason of Retirement, Disability or death.
(iv) Methods of Exercise. The exercise price of any
Option may be paid in cash or Shares, or any combination
thereof, having a Fair Market Value on the date of exercise
equal to the exercise price, provided, however, that (1)
any portion of the exercise price representing a fraction
of a Share shall in any event be paid in cash and (2) no
Shares which have been held for less than six months may be
delivered in payment of the exercise price of an Option.
Delivery of Shares in payment of the exercise price of an
Option may be accomplished through the effective transfer
to the Company of Shares held by a broker or other agent.
The Company will also cooperate with any person exercising
an Option who participates in a cashless exercise program
of a broker or other agent under which all or part of the
Shares received upon exercise of the Option are sold
through the broker or other agent, or under which the
broker or other agent makes a loan to such person, for the
purpose of paying the exercise price of an Option.
Notwithstanding the preceding sentence, the exercise of the
Option shall not be deemed to occur, and no Shares will be
issued by the Company upon exercise of an Option, until the
Company has received payment in full of the exercise price.
6.04 Grant of Awards. Subject to Section 12.01 hereof-.
6.04.1 Initial Restricted Stock Grants. Upon the
effectiveness of a Registration Statement with respect to
such shares under the Securities Act of 1933 and the
furnishing to such Participants of an appropriate
prospectus with respect thereto, each Person who is then a
Participant shall automatically be granted 450 Shares of
Restricted Stock.
6.04.2 Initial Option Grants. On the first day of
June (or if not a day on which the New York Stock Exchange
is open for trading, then on the first such trading day
thereafter) in each year during the term of the Plan, any
Person who is then a Participant and who has not previously
been granted Restricted Stock under Section 6.04.1 or an
Option under this Section 6.04.2 shall automatically be
granted an Option for 2,500 Shares, which shall be in
addition to the Option granted to the Participant on such
date under Section 6.04.3.
6.04.3 Annual Option Grants. On the first day of
June (or if not a day on which the New York Stock Exchange
is open for trading, then on the first such trading day
thereafter) in each year during the term of the Plan, each
Person who is then a Participant shall automatically be
granted an Option for 500 Shares.
6.04.4 Allocation of shore. If on any date on which
Awards would otherwise be granted under this Section 6.04
the number of Shares remaining available under Section 4.01
is not sufficient for each Participant otherwise entitled
to the grant of an Award to be granted an Award for the
full number of Shares provided in this Section 6.04, then
each such Participant shall automatically be granted an
Award for the number of whole Shares (if any) equal to (a)
the number of Shares then remaining available under the
Plan, multiplied by (b) a fraction of which (1) the
numerator is the number of Shares for which such
Participant would otherwise be granted an Award on such
date and (2) the denominator is the number of Shares for
which all Participants would otherwise be granted Awards on
such date, with any fractional shares being disregarded.
6.04.5 Nature of Award Grants; Award Agreements. The
grant of the Awards provided for in this Section 6.04 shall
be automatic and not subject to the discretion of the
Committee or any other Person. However, the Committee may
condition the right of Participant to be granted an Award
upon the execution and delivery by the Participant of an
Award Agreement setting forth the terms and conditions of
the Award as provided herein and such other terms,
conditions and restrictions, not inconsistent with the
provisions of the Plan, as the Committee in its discretion
may determine.
Section 7. General Terms of Awards
7.01 Certain Restrictions Under Rule 16b-3. Upon the
effectiveness of any amendment to Rule 16b-3, this Plan and any
Award Agreement for an outstanding Award held by a Participant
then subject to Section 16 of the Exchange Act shall be deemed
to be amended, without further action on the part of the
Committee, the Board or the Participant, to the extent
necessary for Awards under the Plan or such Award Agreement to
qualify for the exemption provided by Rule 16b-3, as so
amended, except to the extent any such amendment requires
shareholder approval.
7.01.1 Six-Month Limitations on Sales. Except in the
case of death, Shares underlying any Award granted under
the Plan may not be sold for at least six months after the
later of (1) the date of approval of the Plan by the
shareholders of the Company as provided in Section 12.01
and (2) the date of grant of the Award; provided, that
these limitations shall not apply to the extent such
limitations are not at the time required for the grant of
the Award to continue to qualify for the exemption provided
by Rule 16b-3. Certificates issued for Shares subject to
limitations under this Section 7.01.1 may be made subject
to stop-transfer orders and/or legended as provided in
Section 7.04.
7.01.2 Nontransferability. Options shall not be
transferable by a Participant except by will or the laws of
descent and distribution and shall be exercisable during a
Participant's lifetime only by such Participant or his
guardian or legal representative; provided, that these
restrictions on transferability shall not apply to the
extent such restrictions are not at the time required for
the Plan to continue to meet the requirements of Rule 16b-
3. Notwithstanding the preceding sentence and
notwithstanding the restrictions on transfer of Restricted
Stock, if so determined by the Committee, a Participant
may, in the manner established by the Committee, designate
a beneficiary or beneficiaries to exercise the rights of
the Participant, and to receive any distribution with
respect to any Award, upon the death of the Participant.
7.02 Limits on Transfer of Awards,- Beneficiaries. No
right or interest of a Participant in any Option or Restricted
Stock shall be pledged, encumbered or hypothecated to or in
favor of any Person other than the Company, or shall be subject
to any lien, obligation or liability of such Participant to any
Person other than the Company. A beneficiary, guardian, legal
representative or other Person claiming any rights under the
Plan from or through any Participant shall be subject to all
the terms and conditions of the Plan and any Award Agreement
applicable to such Participant as well as any additional
restrictions or limitations deemed necessary or appropriate by
the Committee.
7.03 Registration and Listing Compliance. No Shares shall
be distributed with respect to any Award in a transaction
subject to the registration requirements of the Securities Act
of 1933, as amended, or any state securities law or subject to
a listing requirement under any listing agreement between the
Company and any National securities exchange, and no Award
shall confer upon any Participant rights to such delivery or
distribution until such laws and contractual obligations of the
Company have been complied with in all material respects.
Neither the grant of any Award nor anything else contained
herein shall obligate the Company to take any action to comply
with any requirements of any such securities laws or
contractual obligations relating to the registration (or
exemption therefrom) or listing of any Shares or other
securities, whether or not necessary in order to permit any
such delivery or distribution.
7.04 Stock Certificates. All certificates for Shares
delivered under the terms of the Plan shall be subject to such
stop-transfer orders and other restrictions as the Committee
may deem advisable under federal or state securities laws,
rules and regulations thereunder, and the rules of any National
securities exchange or automated quotation system on which
Shares are listed or quoted. The Committee may cause a legend
or legends to be placed on any such certificates to make
appropriate reference to such restrictions or any other
restrictions or limitations that may be applicable to Shares.
Section 8. Adjustment Provisions
8.01 In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, exchange of Shares or other securities
of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of Participants' rights under the Plan, then the
Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of Shares which
may thereafter be issued in connection with Awards; (ii) the
number and kind of Shares issued or issuable in respect of
outstanding Options; and (iii) the exercise price of
outstanding Options.
Section 9. Change of Control Provisions
9.01 Acceleration of Exercisability and Lapse of
Restrictions; Automatic Cash-Out of Awards. In the event of a
Change of Control, the following acceleration and cash-out
provisions shall apply:
(i) All outstanding Options shall become fully
exercisable, and all restrictions (other than those
contained in Section 7.01.1) on outstanding Restricted
Stock shall immediately lapse.
(ii) All outstanding Awards not subject to limitations
under Section 7.01.1 shall be automatically surrendered,
and the Participants shall receive, in full satisfaction
therefor, cash payments equal to the Change of Control
Price of the Shares subject to the Award, reduced in the
case of Options by the exercise price thereof In no event
will an Award be automatically surrendered or a Participant
have the right to receive cash under this Section 9.01 (ii)
with respect to an Award (a) if at least six months shall
not have elapsed from the date on which the Participant was
granted the Award (or, if later, from the date of
shareholder approval of the Plan)before the date of the
Change of Control (unless this restriction is not at such
time required under Rule 16b-3(c)(1) or Rule 16b-3(e)) or
(b) if the Participant is subject to Section 16 of the
Exchange Act and had the power to control the occurrence or
timing of the Change of Control such that the surrender and
right to receive cash under this Section 9.01 (ii) would
fail to be exempt pursuant to Rule 16b-3(e).
(iii) In the event that any Award is subject to
limitations under Section 7.01.1 at the time of a Change of
Control, then, solely for the purpose of determining the
rights of the Participant with respect to such Award, a
Change of Control shall be deemed to occur at the close of
business on the first business day following the date on
which the limitations on such Award under Section 7.01.1
have expired; provided, however, that this Section 9.01
(iii) shall not apply if its application would cause the
surrender of the Award and the receipt of cash under
Section 9.01 (ii) to fail to be exempt pursuant to Rule
16b3 (e).
(iv) In the discretion of the Committee, the Committee
may permit any Participant not subject to Section 16 of the
Exchange Act on the date of a Change of Control to elect,
in such manner and at such time or times or within such
periods as the Committee may determine (whether before or
after a Change of Control), and subject to such other
terms, conditions or restrictions, if any, as the Committee
may determine to impose, not to surrender for cash pursuant
to Section 9.01 (ii) all or any portion of any Award held
by the Participant; provided, however, that such election
may not be made available if to do so would cause the grant
of the Award to fail to qualify for the exemption provided
by Rule 16b3 (c) (2) (ii).
9.02 Creation and Funding of Trust. Upon the occurrence
of a Potential Change of Control, the Company shall deposit
with the trustee of a trust for the benefit of Participants
monies or other property having a Fair Market Value at least
equal to the Fair Market Value of the Shares subject to the
Awards outstanding at that date, reduced in the case of Options
by the aggregate exercise price thereof The trust shall be a
grantor trust which shall preserve the "unfunded" status of
Awards under the Plan. Subsequent to a Potential Change of
Control which is no longer continuing and prior to a Change of
Control and termination of the trust, upon the request of the
Company, the trustee shall deliver the monies or other property
held in the trust to the Company. In the discretion of the
Committee, moneys or other property may also be deposited in
the trust created under this Section 9.02 for the benefit of
participants in any other compensation or benefit plan,
program, contract or arrangement of the Company or any
Subsidiary.
9.03 Definition of Certain Terms. For purposes of this
Section 9, the following definitions, in addition to those set
forth in Section 2.01, shall apply:
9.03.1 "Change of Control" means and shall be deemed
to have occurred if (i) any Person, other than the Company
or a Related Party, purchases or otherwise acquires, under
a tender offer or otherwise, Beneficial Ownership of any
Voting Securities which, when combined with other Voting
Securities then Beneficially Owned by such Person,
represent twenty percent (20%) or more of the total voting
power of all the then outstanding Voting Securities; or
(ii) the individuals (a) who as of the effective date of
the Plan constitute the Board or (b) who thereafter are
elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least
two-thirds of the directors then still in office who either
were directors as of the effective date of the Plan or
whose election or nomination for election was previously so
approved (the "Continuing Directors"), cease for any reason
to constitute a majority of the members of the Board; or
(iii) the Company is a party to a merger, consolidation,
share exchange, recapitalization or reorganization of the
Company or an acquisition of securities or assets by the
Company, other than any such transaction (a) which would
result in the Voting Securities outstanding immediately
prior thereto continuing to represent either by remaining
outstanding or by being converted into Voting Securities of
the surviving or acquiring entity, at least fifty percent
(50%) of the total voting power represented by the Voting
Securities of such surviving or acquiring entity
outstanding immediately after such transaction and (b) in
or as a result of which the voting rights of each Voting
Security relative to the voting rights of all other Voting
Securities are not altered other than through the exercise
of dissenters' rights; or (iv) the shareholders of the
Company approve a plan of complete liquidation of the
Company; or (v) the Company shall sell or otherwise dispose
of, other than to a Related Party, in a single or a series
of related transactions otherwise than in the ordinary
course of business, assets of the Company and/or stock or
assets of any Subsidiary, having a book value equal to 50%
or more of the consolidated total assets of the Company, in
each case measured as the date of the most recent quarterly
or annual balance sheet of the Company required to be
included or incorporated by reference in any proxy or
information statement of the Company famished to the
shareholders of the Company in connection with such
transaction, or if no such proxy or information statement
is famished to shareholders or no such balance sheet is
required to be included or incorporated by reference
therein, as of the date of the most recent quarterly or
annual balance sheet of the Company required to be filed
with the Securities and Exchange Commission prior to the
date of any such transaction;
9.03.2 "Change of Control Price" means, with respect
to a Share, the higher of (i) the highest reported sales
price of Shares on the New York Stock Exchange's
consolidated transaction reporting system (or if the Common
Stock is not then listed on such Exchange, on or on any
composite index including the principal United States
securities exchange on which the Common Stock is then
listed, or if none, on NASDAQ or any similar system then in
use, and in the absence of any such reported sales prices,
the highest publicly reported bid price for Shares) during
the 30 calendar days preceding the date of a Change of
Control or (ii) the highest price paid or offered in a
transaction which either (a) results in a Change of Control
or (b) would be consummated but for another transaction
which results in a Change of Control and, if it were
consummated, would result in a Change of Control. With
respect to clause (ii) in the preceding sentence, the
"price paid or offered" will be equal to the sum of (a) the
face amount of any portion of the consideration consisting
of cash or cash equivalents and (b) the fair market value
of any portion of the consideration consisting of real or
personal property other than cash or cash equivalents, as
established by an independent appraiser selected by the
Committee.
9.03.3 "Potential Change of Control" means and shall
be deemed to have arisen if (i) the Company enters into an
agreement, the consummation of which would result in the
occurrence of the Change of Control; or (ii) any Person
(including the Company) publicly announces an intention to
take or to consider taking actions which if consummated
would constitute a Change of Control; or (iii) any Person,
other than a Related Party, files with the Securities and
Exchange Commission a Schedule 13D pursuant to Rule 13d-I
under the Exchange Act with respect to Voting Securities;
or (iv) any Person, other than the Company or a Related
Party, files with the Federal Trade Commission a
notification and report form pursuant to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 with respect to
any Voting Securities or any assets of the Company or a
Subsidiary; or (v) the Board or a committee thereof adopts
a resolution to the effect that, for purposes of the Plan,
a Potential Change of Control has arisen. A Potential
Change of Control will be deemed to continue (a) with
respect to an agreement within the purview of clause (i) of
the preceding sentence, until the agreement is canceled or
terminated; or (b) with respect to an announcement within
the purview of clause (ii) of the preceding sentence, until
the Person making the announcement publicly abandons the
stated intention or fails to act on such intention for a
period of 12 calendar months; or (c) with respect to the
filing of a Schedule 13D within the purview of clause (iii)
of the preceding sentence, until the Person involved
publicly announces that its ownership or acquisition of the
Voting Securities is for investment purposes only and not
for the purpose of seeking a Change of Control or such
Person disposes of all Voting Securities exceeding 5% of
the outstanding shares of any class; or (d) with respect to
the filing of a notification and report form within the
purview of clause (iv) of the preceding sentence with
respect to Voting Securities or assets, until the person
publicly abandons the transaction which was the subject of
such filing or fails to act thereon for a period of 12
calendar months or, in the case of a filing with respect to
Voting Securities, until the Person involved (1) publicly
announces that its ownership or acquisition of the Voting
Securities is for investment purposes only and not for the
purpose of seeking a Change of Control or (2) following
completion of such transaction disposes of all Voting
Securities exceeding 5% of the outstanding shares of any
class; or (e)until a Change of Control has occurred if the
majority of the Continuing Directors, on reasonable belief
after due investigation, adopts a resolution that either
(1) the Potential Change of Control has ceased to exist or
(2) the Potential Change of Control is believed to be not
reasonably likely to result in a Change of Control.
9.03.4 "Related Party" means (i) a Subsidiary; or
(ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any Subsidiary;
or (iii) a Company owned directly or indirectly by the
shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities.
9.03.5 "Voting Securities or Security" means any
securities of the Company which carry the right to vote
generally in the election of directors.
9.03.6 "Beneficial Ownership" shall be determined in
accordance with Regulation 13D-G under the Exchange Act, as
in effect on the effective date of the Plan.
Section 10. Amendments to and Termination of the Plan
10.01 The Board may amend, alter, suspend, discontinue or
terminate the Plan without the consent of shareholders or
Participants, except that, without the approval of the
shareholders of the Company, no amendment, alteration,
suspension, discontinuation or termination shall be made if
shareholder approval is required by any federal or state law or
regulation, or if the Board determines that obtaining such
shareholder approval is for any reason advisable; provided,
however, that (1) except as provided in Section 7.01, without
the consent of the Participant, no amendment, alteration,
suspension, discontinuation or termination of the Plan may
materially and adversely affect the rights of such Participant
under any Award theretofore granted to him and (2) no provision
of the Plan referred to in Rule 16b-3 (c) (2) (ii) (A) may be
amended more than once every six months other than to comport
with changes in the Code or the rules thereunder.
Section 11. General Provisions
11.01 No Shareholder Rights. No Option shall confer on any
Participant any of the rights of a shareholder of the Company
unless and until Shares are in fact issued to such Participant
in connection with such Option.
11.02 No Right to Directorship. Nothing contained in the
Plan or any Award Agreement shall confer, and no grant of an
Award shall be construed as conferring, upon any Participant
any right to continue as a director of the Company or interfere
in any way with the rights of the shareholders of the Company
or the Board to elect and remove directors.
11.03 Unfunded Status of Awards,-Creation of Trusts. The
Plan is intended to constitute an unfunded" plan for incentive
compensation. With respect to any Shares not yet issued to a
Participant pursuant to an Award, nothing contained in the Plan
or any Award Agreement shall give any such Participant any
rights that are greater than those of a general unsecured
creditor of the Company; provided, however, that, in addition
to the requirements of Section 9.02, the Committee may
authorize the creation of trusts or make other arrangements to
meet the Company's obligations under the Plan to deliver Shares
pursuant to any Award, which trusts or other arrangements shall
be consistent with the "unfunded" status of the Plan unless the
Committee otherwise determines.
11.04 No Limit on Other Compensatory Arrangements. Nothing
contained in the Plan shall prevent the Company from adopting
other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable
only in specific cases. To the extent consistent with the
Plan, the terms of each Award shall be construed so as to be
consistent with such other arrangements in effect at the time
the Award is granted.
11.05 No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award.
11.06 Governing Law. The validity, interpretation,
construction and effect of the Plan and any rules and
regulations relating to the Plan shall be governed by the laws
of the Commonwealth of Pennsylvania (without regard to the
conflicts of laws thereof), and applicable federal law.
11.07 Severability. If any provision of the Plan or any
Award Agreement is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan
or any Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform
to applicable laws or if it cannot be construed or deemed
amended without, in the determination of the Committee,
materially altering the intent of the Plan, it shall be deleted
and the remainder of the Plan shall remain in full force and
effect; provided, however, that, unless otherwise determined by
the Committee, the provision shall not be construed or deemed
amended or deleted with respect to any Participant whose rights
and obligations under the Plan are not subject to the law of
such jurisdiction or the law deemed applicable by the
Committee.
Section 12. Effective Date and Term of the Plan
12.01 The effective date and date of adoption of the Plan
shall be January 21, 1994, the date of adoption of the Plan by
the Board, provided that such adoption of the Plan is approved
by the affirmative vote of a majority of the shares of Common
Stock present in person or represented by proxy and entitled to
vote at a duly held meeting of shareholders of the Company held
on or prior to December 31, 1994. Notwithstanding anything
else contained in the Plan or in any Award Agreement, no Option
granted under the Plan may be exercised, and no certificates
for Shares of Restricted Stock may be delivered, prior to such
shareholder approval or prior to any required approval or
consent from those governmental agencies having jurisdiction in
these matters. In the event such shareholder or regulatory
approval is not obtained, all Options granted under the Plan
shall automatically be deemed void and of no effect, and all
Shares of Restricted Stock granted under the Plan shall be
deemed forfeited to the Company. No Award may be granted under
the Plan subsequent to June 2, 1998.
Exhibit 10.14
EQUITABLE RESOURCES, INC.
LONG-TERM INCENTIVE PLAN
EXHIBIT B
Section 1. Purposes
1.01 The purpose of the 1994 Equitable Resources, Inc.
Long-Term Incentive Plan (the "Plan") is to enable Equitable
Resources, Inc. (together with any successor thereto, the
"Company") to focus key executives' efforts on performance
which will increase the value of the Company for its
shareholders. The Plan is intended to align the interests of
key executives with those of the shareholders by encouraging
share ownership. The Plan is also intended to help to attract
and retain key executives.
Section 2. Definitions; Construction
2.01 Definitions. In addition to the terms defined
elsewhere in the Plan, the following terms as used in the Plan
shall have the following meanings when used with initial
capital letters:
2.01.1 "Award" means any Option, Stock Appreciation
Right, Restricted Stock, Deferred Stock, Performance
Award, Dividend Equivalent, or Other Stock-Based Award, or
any other right or interest relating to Shares or cash
granted under the Plan.
2.01.2 "Award Agreement" means any written agreement,
contract or other instrument or document evidencing an
Award.
2.01.3 "Board" means the Company's Board of Directors.
2.01.4 "Code" means the Internal Revenue Code of 1986,
as amended from time to time, together with rules,
regulations and interpretations promulgated thereunder.
2.01.5 "Committee" means the Compensation Committee or
such other Committee of the Board as may be designated by
the Board to administer the Plan, as referred to in
Section 3.01 hereof; provided however, that the Committee
shall qualify to administer the Plan as contemplated by
Rule 16b3 (c) (2) (i) of the Exchange Act or any successor
and by Section 162 (m) (4) (C) of the Code or any
successor.
2.01.6 "Common Stock" means shares of the common
stock without par value, and such other securities of the
Company as may be substituted for Shares pursuant to
Section 8.01 hereof.
2.01.7 "Covered Employee" shall have the meaning
provided in Section 162(m) (3) of the Code.
2.01.8 "Deferred Stock" means Shares, granted under
Section 6.05 hereof, receipt of which is deferred for a
specified deferral period.
2.01.9 "Dividend Equivalent" means a right, granted
under Section 6.07 hereof, to receive interest or
dividends, or interest or dividend equivalents.
2.01.10 "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
2.01.11 "Fair Market Value" of shares of any stock,
including but not limited to Common Stock, or units of any
other securities (herein "shares"), shall be the mean
between the following prices, as applicable, for the date
as of which Fair Market Value is to be determined as
quoted in The Wall Street Journal (or in such other
reliable publication as the Committee, in its discretion,
may determine to rely upon): (a) if the shares are listed
on the New York Stock Exchange, the highest and lowest
sales prices per share as quoted in the NYSE-Composite
Transactions listing for such date, (b) if the shares not
listed on such exchange, the highest and lowest sales
prices per share for such date on (or on any composite
index including) the principal United States securities
exchange registered under the Exchange Act on which the
shares are listed, or (c) if the shares are not listed on
any such exchange, the highest and lowest sales prices per
share for such date on the National Association of
Securities Dealers Automated Quotations System or any
successor system then in use ("NASDAQ"). If there are no
such sale price quotations for the date as of which Fair
Market Value is to be determined but there are such sale
price quotations within a reasonable period both before
and after such date, then Fair Market Value shall be
determined by taking a weighted average of the means
between the highest and lowest sales prices per share as
so quoted on the nearest date before and the nearest date
after the date as of which Fair Market Value is to be
determined. The average should be weighted inversely by
the respective numbers of trading days between the selling
dates and the date as of which Fair Market Value is to be
determined. If there are no such sale price quotations on
or within a reasonable period both before and after the
date as of which Fair Market Value is to be determined,
then Fair Market Value of the shares shall be the mean
between the bona fide bid and asked prices per share as so
quoted for such date on NASDAQ, or if none, the weighted
average of the means between such bona fide bid and asked
prices on the nearest trading date before and the nearest
trading date after the date as of which Fair Market Value
is to be determined, if both such dates are within a
reasonable period. The average is to be determined in the
manner described above in this Section 2.01.10. If the
Fair Market Value of shares on the date as of which Fair
Market Value is to be determined cannot be determined on
the basis previously set forth in this Section 2.01.10, or
if a determination is required as to the Fair Market Value
on any date of property other than shares, the Committee
shall in good faith determine the Fair Market Value of
such shares or other property on such date. Fair Market
Value shall be determined without regard to any
restriction other than a restriction which, by its terms,
will never lapse.
2.01.12 "Incentive Stock Option" means an Option that
is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto and is designated
as such in the Award Agreement relating thereto.
2.01.13 "Option" means a right, granted under Section
6.02 hereof, to purchase Shares at a specified price
during specified time periods. An Option may be either an
Incentive Stock Option or a nonstatutory stock option,
which is an Option not intended to be an Incentive Stock
Option.
2.01.14 "Other Stock-Based Award" means an Award,
granted under Section 6.08 hereof, that is denominated or
payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Shares.
2.01.15 "Participant" means a key employee of the
Company or any Subsidiary, including, but not limited to,
Covered Employees, who is granted an Award under the Plan.
2.01.16 "Performance Award" means a right, granted
under Section 6.06 hereof, to receive Awards based upon
performance criteria specified by the Committee.
2.01.17 "Person" shall have the meaning assigned in the
Exchange Act.
2.01.18 "Restricted Stock" means Shares, granted under
Section 6.04 hereof, that are subject to certain
restrictions.
2.01.19 "Rule 16b-3" means Rule 16b-3 under the
Exchange Act, as amended from time to time, or any
successor to such Rule promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
2.01.20 "Shares" means the common stock of the
Company, without par value, and such other securities of
the Company as may be substituted for Shares pursuant to
Section 8.01 hereof
2.01.21 "Stock Appreciation Right" means a right,
granted under Section 6.03 hereof, to be paid an amount
measured by the appreciation in the Fair Market Value of
Shares from the date of grant to the date of exercise.
2.01.22 "Subsidiary" means any corporation in an
unbroken chain of corporations beginning with the Company,
if each of the corporations other than the last
corporation in the chain owns stock possessing at least
50% of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
Definitions of the terms "Change of Control," "Change of
Control Price," "Potential Change of Control," "Related
Party," "Voting Securities or Security" and "Beneficial
Ownership" are set forth in Section 9.03 hereof
2.02 Construction. For purposes of the Plan, the
following rules of construction shall apply:
2.02.1 The word "or" is disjunctive but not
necessarily exclusive.
2.02.2 Words in the singular include the plural; words
in the plural include the singular; words in the
neuter gender include the masculine and feminine genders,
and words in the masculine or feminine gender include the
other and neuter genders.
Section 3. Administration
3.01 The Plan shall be administered by the Committee.
The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with
the provisions of the Plan:
(i) to designate Participants;
(ii) to determine the type or types of Awards to be
granted to each Participant;
(iii) to determine the number of Awards to be
granted, the number of Shares or amount of cash or other
property to which an Award will relate, the terms and
conditions of any Award (including, but not limited to,
any exercise price, grant price or purchase price, any
limitation or restriction, any schedule for lapse of
limitations, forfeiture restrictions or restrictions on
exercisability or transferability, and accelerations or
waivers thereof, based in each case on such considerations
as the Committee shall determine), and all other matters
to be determined in connection with an Award;
(iv) to determine whether, to what extent and under
what circumstances an Award may be settled in, or the
exercise price of an Award may be paid in cash, Shares,
other Awards or other property, or an Award may be
accelerated, vested, canceled, forfeited, exchanged or
surrendered;
(v) to determine whether, to what extent and under
what circumstances cash, Shares, other Awards, other
property and other amounts payable with respect to an
Award shall be deferred, whether automatically or at the
election of the Committee or at the election of the
Participant;
(vi) to interpret and administer the Plan and any
instrument or agreement relating to, or Award made under,
the Plan;
(vii) to prescribe the form of each Award Agreement,
which need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive and rescind
such rules and regulations as the Committee may deem
necessary or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or
reconcile any inconsistency, and to construe and interpret
the Plan, the rules and regulations, any Award Agreement
or other instrument entered into or Award made under the
Plan;
(x) to make all other decisions and determinations
as may be required under the terms of the Plan or as the
Committee may deem necessary or advisable for the
administration of the Plan;
(xi) to submit for shareholder approval or not as
may be appropriate and to take such other actions and make
such other decisions as may be required by the Revenue
Reconciliation Act of 1993 with respect to the definition
of performance-based compensation as it may from time to
time be defined; and
(xii) to make such filings and take such actions as
may be required from time to time by appropriate state,
regulatory and governmental agencies.
Any action of the Committee with respect to the
Plan shall be final, conclusive and binding on all
Persons, including the Company, Subsidiaries,
Participants, any Person claiming any rights under the
Plan from or through any Participant, employees and
shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of
the Committee. The Committee may delegate to officers or
managers of the Company or any Subsidiary the authority,
subject to such terms as the Committee shall determine, to
perform administrative functions under the Plan and, with
respect to Participants who are not subject to Section 16 of
the Exchange Act, to take such actions and perform such
functions under the Plan as the Committee may specify. Each
member of the Committee shall be entitled to, in good faith,
rely or act upon any report or other information furnished to
him by an officer, manager or other employee of the Company or
a Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the
administration of the Plan.
Section 4. Shares Subject to the Plan
4.01 The maximum number of shares of Common Stock in
respect of which Awards may be granted under the Plan in any
calendar year, subject to adjustment as provided in Section
8.01 of the Plan, shall be (a) in 1994 the sum of (1) one
percent (I%) of the total number of issued and outstanding
shares of Common Stock as of December 31, 1993 and (2) the
number of shares of Common Stock which are reserved but not
subject to grants under the Company's Key Employee Restricted
Stock Option and Stock Appreciation Rights Incentive
Compensation Plan as of the date this Plan is approved by the
shareholders of the Company and (b) in each succeeding
calendar year the sum of (1) one percent (I%) of the total
number of issued and outstanding shares of Common Stock as of
the close of the preceding calendar year, (2) the number of
shares of Common Stock which were available for Awards under
this Section 4.01 as of the close of the preceding calendar
year and (3) any shares of Common Stock which are subject to
an outstanding Award at the beginning of such year but which
thereafter again become available for Awards under the Plan as
provided in the fourth paragraph of this Section 4.01;
provided, however, that in no event may:
(i) the sum of (x) the number of Shares subject to
all outstanding Awards under the Plan and (y) the number
of Shares previously issued under the Plan at any time
equal or exceed 5% of the total number of shares of Common
Stock outstanding on the date of shareholder approval of
the Plan; or
(ii) the sum of (x) the number of Shares subject to
all outstanding Options and Stock Appreciation Rights
granted under the Plan and held by any single Participant
and (y) the number of shares previously issued to such
Participant upon exercise of Options and Stock
Appreciation Rights granted under the Plan at any time
exceed 25% of the sum of (A) the total number of Shares
subject to all outstanding Awards under the Plan, (B) the
total number of Shares previously issued under the Plan
and (C) the total number of Shares then available for the
grant of additional Awards under the Plan. Subject to
subparagraphs (i) and (ii) above, but notwithstanding
anything else contained above in this Section 4.01, in the
event of a Change of Control, the maximum number of shares
of Common Stock available for Awards under the Plan shall
be 5% of the total number of shares of Common Stock issued
and outstanding on the date of shareholder approval of the
Plan, less (1) the number of Shares subject to outstanding
Awards under the Plan and (2) the number of Shares
previously issued under the Plan.
For purposes of this Section 4.01, the number of Shares to
which an Award relates shall be counted against the number of
Shares reserved and available under the Plan at the time of
grant of the Award, unless such number of Shares cannot be
determined at that time, in which case the number of Shares
actually distributed pursuant to the Award shall be counted
against the number of Shares reserved and available under the
Plan at the time of distribution; provided, however, that
Awards related to or retroactively added to, or granted in
tandem with, substituted for or converted into, other Awards
shall be counted or not counted against the number of Shares
reserved and available under the Plan in accordance with
procedures adopted by the Committee so as to ensure
appropriate counting but avoid double counting.
If any Shares to which an Award relates are forfeited, or
payment is made to the Participant in the form of cash, cash
equivalents or other property other than Shares, or the Award
otherwise terminates without payment being made to the
Participant in the form of Shares, any Shares counted against
the number of Shares reserved and available under the Plan
with respect to such Award shall, to the extent of any such
forfeiture, alternative payment or termination, again be
available for Awards under the Plan provided, however,
forfeited Shares may not again be made available to the extent
the Participant received dividends or other benefits of
ownership (not including voting rights) prior to such
forfeiture. The payment of the exercise price of an Award in
Shares shall not increase the number of Shares available under
the Plan. Any Shares distributed pursuant to an Award may
consist, in whole or part, of authorized and unissued Shares
or of treasury Shares, including Shares repurchased by the
Company for purposes of the Plan.
Section 5. Eligibility
5.01 Awards may be granted only to individuals who are
key full-time employees (including, without limitation,
employees who also are directors or officers and Covered
Employees) of the Company or any Subsidiary; provided,
however, that no Award shall be granted to any member of the
Committee.
Section 6. Specific Terms of Awards
6.01 GeneraL Subject to the terms of the Plan and any
applicable Award Agreement, Awards may be granted as set forth
in this Section 6. In addition, the Committee may impose on
any Award or the exercise thereof, at the date of grant or
thereafter (subject to the terms of Section 10.01), such
additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine,
including separate escrow provisions and terms requiring
forfeiture of Awards in the event of termination of employment
by the Participant. Except as provided in Section 7.01, or as
required by applicable law, Awards may be granted for no
consideration other than prior and/or future services.
6.02 Options. The Committee is authorized to grant
Options to Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per Share
of an Option shall be 100% of the Fair Market Value of a
Share on the date of grant of such Option, except as
otherwise provided in Section 7.01, and except that in the
case of an Incentive Stock Option granted to an employee
who, immediately prior to such grant, owns stock
possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any
Subsidiary (a "Ten Percent Employee") such exercise price
shall be I 10% of the Fair Market Value of a Share on the
date of grant. For purposes of the preceding sentence, an
individual (A) shall be considered as owning not only
shares of stock owned individually but also all shares of
stock that are at the time owned, directly or indirectly,
by or for the spouse, ancestors, lineal descendants and
brothers and sisters (whether by the whole or half blood)
of such individual and (B) shall be considered as owning
proportionately any shares owned, directly or indirectly,
by or for arty corporation, partnership, estate or trust
in which such individual is a shareholder, partner or
beneficiary.
(ii) Option Term. The term of each Option shall be
determined by the Committee, except that no Incentive
Stock Option shall be exercisable after the expiration of
ten years from the date of grant, and no Incentive Stock
Option granted to a Ten Percent Employee shall be
exercisable after the expiration of five years from the
date of grant.
(iii) Times and Methods of Exercise. The Committee
shall determine the time or times at which an Option may
be exercised in whole or in part, the methods by which
such exercise price may be paid or deemed to be paid, and
the form of such payment, including, without limitation,
cash, Shares, other outstanding Awards or other property
(including notes or other contractual obligations of
Participants to make payment on a deferred basis, to the
extent permitted by law) or any combination thereof,
having a Fair Market Value on the date of exercise equal
to the exercise price, provided, however, that (1) in the
case of a Participant who is at the time of exercise
subject to Section 16 of the Exchange Act, any portion of
the exercise price representing a fraction of a Share
shall in any event be paid in cash or in property other
than any equity security (as defined by the Exchange Act)
of the Company and (2) except as otherwise determined by
the Committee, in its discretion, at the time the Option
is granted, no shares which have been held for less than
six months may be delivered in payment of the exercise
price of an Option.
Delivery of Shares in payment of the exercise price of an
Option, if authorized by the Committee, may be accomplished
through the effective transfer to the Company of Shares held
by a broker or other agent. Unless otherwise determined by
the Committee, the Company will also cooperate with any person
exercising an Option who participates in a cashless exercise
program of a broker or other agent under which all or part of
the Shares received upon exercise of the Option are sold
through the broker or other agent, or under which the broker
or other agent makes a loan to such person, for the purpose of
paying the exercise price of an Option. Notwithstanding the
preceding sentence, unless the Committee, in its discretion,
shall otherwise determine, the exercise of the Option shall
not be deemed to occur, and no Shares will be issued by the
Company upon exercise of an Option, until the Company has
received payment in full of the exercise price.
Notwithstanding any other provision contained in the Plan
or in any Award Agreement, but subject to the possible
exercise of the Committee's discretion contemplated in the
last sentence of this Section 6.02 (iii), the aggregate Fair
Market Value, determined as of the date of grant, of the
Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any
calendar year under all plans of the corporation employing
such employee, any parent or subsidiary corporation of such
corporation and any predecessor corporation of any such
corporation shall not exceed $100,000. If the date on which
one or more of such Incentive Stock Options could first be
exercised would be accelerated pursuant to any provision of
the Plan or any Award Agreement, and the acceleration of such
exercise date would result in a violation of the restriction
set forth in the preceding sentence, then, notwithstanding any
such provision, but subject to the provisions of the next
succeeding sentence, the exercise dates of such Incentive
Stock Options shall be accelerated only to the date or dates,
if any, that do not result in a violation of such restriction
and, in such event, the exercise dates of the Incentive Stock
Options with the lowest option prices shall be accelerated to
the earliest such dales. The Committee may, in its
discretion, authorize the acceleration of the exercise date of
one or more Incentive Stock Options even if such acceleration
would violate the $ 1 00,000 restriction set forth in the
first sentence of this paragraph and even if such Incentive
Stock Options are thereby converted in whole or in part to
nonstatutory stock options.
6.03 Stock Appreciation Rights. The Committee is
authorized to grant Stock Appreciation Rights to Participants
on the following terms and conditions:
(i) Right to Payment. A Stock Appreciation Right
shall confer on the Participant to whom it is granted a
right to receive, upon exercise thereof, the excess of (A)
the Fair Market Value of a Share on the date of exercise
or, if the Committee shall so determine in the case of any
such right other than one related to any Incentive Stock
Option, at any time during a specified period before or
after the date of exercise, over (B) the grant price of
the Stock Appreciation Right as determined by the
Committee as of the date of grant of the Stock
Appreciation Right, which, except as provided in Section
7.01, shall be equal to the Fair Market Value of a Share
on the date of grant.
(ii) Other Terms. The term, methods of exercise,
methods of settlement and any other terms and conditions
of any Stock Appreciation Right shall be determined by the
Committee.
6.04 Restricted Stock. The Committee is authorized to
grant Restricted Stock to Participants on the following terms
and conditions:
(i) Issuance and Restrictions. Restricted Stock
shall be subject to such restrictions on transferability
and other restrictions as the Committee may impose
(including, without limitation, limitations on the right
to vote Restricted Stock or the right to receive dividends
thereon), which restrictions may lapse separately or in
combination at such times, under such circumstances, in
such installments or otherwise, as the Committee shall
determine at the time of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by
the Committee at the time of grant or thereafter, upon
termination of employment (as determined under criteria
established by the Committee) during the applicable
restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired
by the Company; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement,
that restrictions on Restricted Stock shall be waived in
whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other
cases waive in whole or in part restrictions on Restricted
Stock.
(iii) Certificates for Shares. Restricted Stock
granted under the Plan may be evidenced in such manner as
the Committee shall determine, including, without
limitation, issuance of certificates representing Shares.
Certificates representing Shares of Restricted Stock shall
be registered in the name of the Participant and shall
bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted
Stock.
6.05 Deferred Stock. The Committee is authorized to
grant Deferred Stock to Participants on the following terms
and conditions:
(i) Issuance and Limitations. Delivery of Shares
shall occur upon expiration of the deferral period
specified for the Award of Deferred Stock by the
Committee. In addition, an Award of Deferred Stock shall
be subject to such limitations as the Committee may
impose, which limitations may lapse at the expiration of
the deferral period or at other specified times,
separately or in combination, in installments or otherwise
as the Committee shall determine at the time of grant or
thereafter. A Participant awarded Deferred Stock shall
have no voting rights and shall have no rights to receive
dividends in respect of Deferred Stock, unless and only to
the extent that the Committee shall award Dividend
Equivalents in respect of such Deferred Stock.
(ii) Forfeiture. Except as otherwise determined by
the Committee upon termination of employment (as
determined under criteria established by the Committee)
during the applicable deferral period, Deferred Stock that
is at that time subject to deferral (other than a deferral
at the election of the Participant) shall be forfeited;
provided, however, that the Committee may provide, by rule
or regulation or in any Award Agreement, that forfeiture
of Deferred Stock shall be waived in whole or in part in
the event of terminations resulting from specified causes,
and the Committee may in other cases waive in whole or in
part the forfeiture of Deferred Stock.
6.06 Performance Awards. The Committee is authorized to
grant Performance Awards to Participants on the following
terms and conditions:
(i) Right to Payment. A Performance Award shall
confer upon the Participant rights, valued as determined
by the Committee, and payable to, or exercisable by, the
Participant to whom the Performance Award is granted, in
whole or in part, as the Committee shall establish. The
performance criteria and all other terms and conditions of
the Performance Award shall be determined by the Committee
upon the grant of each Performance Award or thereafter.
(ii) Other Terms. A Performance Award may be
denominated or payable in cash, deferred cash, Shares,
other Awards or other property, and other terms and
conditions of Performance Awards shall be as determined by
the Committee.
6.07 Dividend Equivalents. The Committee is authorized
to grant Dividend Equivalents to Participants. Dividend
Equivalents shall confer upon the Participant rights to
receive, currently or on a deferred basis, interest or
dividends, or interest or dividend equivalents, with respect
to a number of Shares, or otherwise, as determined by the
Committee. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall
be deemed to have been reinvested in additional Shares or
additional Awards or otherwise reinvested.
6.08 Other Stock-Based Awards. The Committee is
authorized, subject to limitations under applicable law, to
grant to Participants such other Awards that are denominated
or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan and,
with respect to Participants who are subject to Section 16 of
the Exchange Act, to comply with Rule 16b-3 and applicable law
including, without limitation, purchase rights, Shares awarded
which are not subject to any restrictions or conditions,
convertible securities, exchangeable securities or other
rights convertible or exchangeable into Shares, as the
Committee in its discretion may determine. In the discretion
of the Committee, such Other Stock-Based Awards, including
Shares, or other types of Awards authorized under the Plan,
may be used in connection with, or to satisfy obligations of
the Company or a Subsidiary under, other compensation or
incentive plans, programs or arrangements of the Company or
any Subsidiary for eligible Participants, including without
limitation 'the Short-Term Incentive Compensation Plan, the
Supplemental Executive Retirement Plan (SERP) and executive
contracts.
The Committee shall determine the terms and conditions of
Other Stock-Based Awards. Except as provided in Section 7.01,
Shares or securities delivered pursuant to a purchase right
granted under this Section 6.08 shall be purchased for such
consideration, paid for by such methods and in such forms,
including, without limitation, cash, Shares, outstanding
Awards or other property or any hereof, as the Committee shall
determine, but the value of such consideration shall not be
less than the Fair Market Value of such Shares or other
securities on the date of grant of such purchase right.
Delivery of Shares or other securities in payment of a
purchase right, if authorized by the Committee, may be
accomplished through the effective transfer to the Company of
Shares or other securities held by a broker or other agent.
Unless otherwise determined by the Committee, the Company will
also cooperate with any person exercising a purchase right who
participates in a cashless exercise program of a broker or
other agent under which all or part of the Shares or
securities received upon exercise of a purchase right are sold
through the broker or other agent, or under which the broker
or other agent makes a loan to such person, for the purpose of
paying the exercise price of a purchase right.
Notwithstanding the preceding sentence, unless the Committee,
in its discretion, shall otherwise determine, the exercise of
the purchase right shall not be deemed to occur, and no Shares
or other securities will be issued by the Company upon
exercise of a purchase right, until the Company has received
payment in full of the exercise price.
6.09 Exchange Provisions. The Committee may at any time
offer to exchange or buy out any previously granted Award for
a payment in cash, Shares, another Award or other property,
based on such terms and conditions as the Committee shall
determine and communicate to the Participant at the time that
such offer is made.
Section 7. General Terms of Awards
7.01 Stand-Alone, Tandem and Substitute Awards. Awards
granted under the Plan may, in the discretion of the
Committee, be granted either alone or in addition to, in
tandem with or in substitution for, any other Award granted
under the Plan or any award granted under the Management
Incentive Compensation Plan, or any other plan, program or
arrangement of the Company or any Subsidiary (subject to the
terms of Section 10.01) or any business entity acquired or to
be acquired by the Company or a Subsidiary. If an Award is
granted in substitution for another Award or award, the
Committee shall require the surrender of such other Award or
award in consideration for the grant of the new Award. Awards
granted in addition to or in tandem with other Awards or
awards may be granted either at the same time as or at a
different time from the grant of such other Awards or awards,
except that Awards may be granted in tandem with an Incentive
Stock Option only at the time the Incentive Stock Option is
granted. The exercise price of any Option, the grant price of
any Stock Appreciation Right or the purchase price of any
other Award conferring a right to purchase Shares:
(i) granted in substitution for an outstanding
Award or award shall be not less than the Fair Market
Value of Shares at the date such substitute Award is
granted; provided, however, that (1) except in the case of
(a) an Incentive Stock Option or (b) an Option or Stock
Appreciation Right granted to a Covered Employee, the
exercise, grant or purchase price per share of the
substituted Award may be reduced to reflect the Fair
Market Value of the Award or award required to be
surrendered by the Participant as a condition to receipt
of such substitute Award, and (2) in the case of any
Participant, the Committee may, in lieu of such price
reduction, make an additional Award or payment to the
Participant reflecting the Fair Market Value of the Award
or award required to be surrendered; or
(ii) retroactively granted in tandem with an
outstanding Award or award shall be not less than the
lesser of the Fair Market Value of Shares at the date of
grant of the later Award or the Fair Market Value of
Shares at the date of grant of the earlier Award.
7.02 Certain Restrictions Under Rule ]6b-3. Upon the
effectiveness of any amendment to Rule 16b-3, this Plan and
any Award Agreement for an outstanding Award held by a
Participant then subject to Section 16 of the Exchange Act
shall be deemed to be amended, without further action on the
part of the Committee, the Board or the Participant, to the
extent necessary for Awards under the Plan or such Award
Agreement to qualify for the exemption provided by Rule 16b-3,
as so amended, except to the extent any such amendment
requires shareholder approval.
7.02.1 Six-Month Limitations on Sales and Exercises.
Any equity security (as defined by the Exchange Act),
other than a derivative security, granted or awarded
pursuant to the Plan to a Participant who is at the time
of grant or award subject to Section 16 of the Exchange
Act must be held by the Participant for at least six
months after grant (or, if later, after the date of
shareholder approval of the Plan), except in the case of
death. If a derivative security is granted or awarded to
a Participant who is at the time of grant or award subject
to Section 16 of the Exchange Act, (1) the Participant may
not dispose of the derivative security (other than through
exercise or conversion or upon death) or of any equity
security acquired upon its exercise or conversion (other
than upon death) until six months have elapsed from the
date of grant or award of the derivative security (or, if
later, from the date of shareholder approval of the Plan)
and (2) except with respect to an Option, the derivative
security may not be exercised or converted within such
six-month period (other than upon death) unless such
exercise would not cause the grant or award of the
derivative security to cease to be exempt under Rule 16b-
3. The limitations in this Section 7.02.1 shall not apply
to the extent such limitations are not at the time
required for the grant of the Award to continue to qualify
for the exemption provided by Rule 16b-3. Certificates
issued for Shares subject to limitations under this
Section 7.02.1 may be made subject to stop-transfer
orders, legended and/or made subject to a custodial
arrangement as provided in Section 7.07.
7.02.2 Nontransferability. Awards which constitute
derivative securities shall not be transferable by a
Participant except by will or the laws of descent and
distribution and shall be exercisable during a
Participant's lifetime only by such Participant; provided,
however, that, if so determined by the Committee, a
Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any
distribution with respect to any Award (other than an
Incentive Stock Option), upon the death of the
Participant; and provided, further, that the Committee may
determine that these restrictions on transferability shall
not apply to Awards (other than an Incentive Stock Option)
granted to any Participant who, at the time of the initial
grant and the transfer, is not subject to Section 16 of
the Exchange Act or shall not apply to Awards (other than
an Incentive Stock Option) granted to a Participant
subject to Section 16 to the extent such restrictions are
not at the time required for the Plan to continue to meet
the requirements of Rule 16b-3.
7.02.3 Decisions Required to be Made by the
Committee. Other provisions of the Plan and any Award
Agreement notwithstanding, if any decision regarding an
Award or the exercise of any right by a Participant, at
any time such Participant is subject to Section 16 of the
Exchange Act, is required to be made or approved by the
Committee in order that the Plan will continue to meet the
requirements of Rule 16b-3 or in order that a transaction
by such Participant will be exempt under Rule 16b-3, then
the Committee shall retain full and exclusive power and
authority to make such decision or to approve or
disapprove any such decision by the Participant.
7.03 Term of Awards. The term of each Award shall be
for such period as may be determined by the Committee;
provided, however, that in no event shall the term of any
Incentive Stock Option, or a Stock Appreciation Right granted
in tandem therewith, exceed a period of ten years from the
date of its grant.
7.04 Form of Payment of Awards. Subject to the terms of
the Plan and any applicable Award Agreement, payments or
substitutions to be made by the Company upon the grant,
exercise or other payment or distribution of an Award may be
made in such forms as the Committee shall determine at the
time of grant or thereafter (subject to the terms of Section
10.01), including, without limitation, cash, Shares, other
Awards or other property or any combination thereof, and may
be made in a single payment or substitution, in installments
or on a deferred basis, in each case in accordance with rules
and procedures established, or as otherwise determined, by the
Committee. Such rules and procedures or determinations may
include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred
payments or the grant or crediting of Dividend Equivalents in
respect of installment or deferred payments.
7.05 Limits on Transfer of awards; Beneficiaries. No
right or interest of a Participant in any Award shall be
pledged, encumbered or hypothecated to or in favor of any
Person other than the Company, or shall be subject to any
lien, obligation or liability of such Participant to any
Person other than the Company or a Subsidiary. Unless
otherwise determined by the Committee (subject to the
requirements of Section 7.02.2), no Award and no rights or
interests therein shall be assignable or transferable by a
Participant otherwise than by will or the laws of descent and
distribution except to the Company or a Subsidiary under the
terms of the Plan; provided, however, that, if so determined
by the Committee, a Participant may, in the manner established
by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any
distribution with respect to any Award, upon the death of the
Participant. A beneficiary, guardian, legal representative or
other Person claiming any rights under the Plan from or
through any Participant shall be subject to all the terms and
conditions of the Plan and any Award Agreement applicable to
such Participant as well as any additional restrictions or
limitations deemed necessary or appropriate by the Committee.
7.06 Registration and Listing Compliance. No Award shall
be paid and no Shares or other securities shall be distributed
with respect to any Award in a transaction subject to the
registration requirements of the Securities Act of 1933, as
amended, or any state securities law or subject to a listing
requirement under any listing agreement between the Company
and any national securities exchange, and no Award shall
confer upon any Participant rights to such payment or
distribution until such laws and contractual obligations of
the Company have been complied with in all material respects.
Except to the extent required by the terms of an Award
Agreement or another contract between the Company and the
Participant, neither the grant of any Award nor anything else
contained herein shall obligate the Company to take any action
to comply with any requirements of any such securities laws or
contractual obligations relating to the registration (or
exemption therefrom) or listing of any Shares or other
securities, whether or not necessary in order to permit any
such payment or distribution.
7.07 Stock Certificates. All certificates for Shares
delivered under the terms of the Plan shall be subject to such
stop-transfer orders and other restrictions as the Committee
may deem advisable under federal or state securities laws,
rules and regulations thereunder, and the rules of any
national securities exchange or automated quotation system on
which Shares are listed or quoted. The Committee may cause a
legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions or any other
restrictions or limitations that may be applicable to Shares.
In addition, during any period in which Awards or Shares are
subject to restrictions or limitations under the terms of the
Plan or any Award Agreement, or during any period during which
delivery or receipt of an Award or Shares has been deferred by
the Committee or a Participant, the Committee may require any
Participant to enter into an agreement providing that
certificates representing Shares issuable or issued pursuant
to an Award shall remain in the physical custody of the
Company or such other Person as the Committee may designate.
Section 8. Adjustment Provisions
8.01 In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, exchange of Shares or other
securities of the Company, or other similar corporate
transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of Participants'
rights under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the
number and kind of Shares which may thereafter be issued in
connection with Awards; (ii) the number and kind of Shares
issued or issuable in respect of outstanding Awards; and (iii)
the exercise price, grant price or purchase price relating to
any Award or, if deemed appropriate, make provision for a cash
payment with respect to any outstanding Award; provided,
however, in each case, that (1) with respect to Incentive
Stock Options, no such adjustment shall be authorized to the
extent that such authority would cause the Plan to violate
Section 422(b) (1) of the Code or any successor provision
thereto and (2) with respect to Options and Stock Appreciation
Rights held by a Covered Employee, no such adjustment shall be
authorized to the extent that such authority would cause such
Awards to fail to qualify as "performance-based compensation"
under Section 162 (m) (4) (C) of the Code. In addition, the
Committee is authorized to make adjustments in the terms and
conditions of, and the criteria of, Awards in recognition of
unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence) affecting the
Company or the financial statements of the Company, or in
response to changes in applicable laws, regulations or
accounting principles; provided, however, that (1) with
respect to Incentive Stock Options, no such adjustment shall
be authorized to the extent that such authority would cause
the Plan to violate Section 422(b)(1) of the Code or any
successor provision thereto and (2) with respect to Options
and Stock Appreciation Rights held by a Covered Employee, no
such adjustment shall be authorized to the extent that such
authority would cause such Awards to fail to qualify as
"performance-based compensation" under Section 162 (m) (4) (C)
of the Code.
Section 9. Change of Control Provisions
9.01 Acceleration of Exercisability and Lapse of
Restrictions,- Automatic Cash-Out of Awards. In the event of
a Change of Control, the following acceleration and cash-out
provisions shall apply unless otherwise provided by the
Committee at the time of the Award grant:
(i) All outstanding Awards pursuant to which the
Participant may have rights, the exercise of which is
restricted or limited, shall become fully exercisable,
except as may be otherwise provided in Section 7.02. 1;
unless the right to lapse of restrictions or limitations
is waived or deferred by a Participant prior to such
lapse, all restrictions or limitations (including risks of
forfeiture and deferrals) on outstanding Awards subject to
restrictions or limitations under the Plan shall lapse,
except as may be otherwise provided in Section 7.02. 1;
and all performance criteria and other conditions to
payment of Awards under which payments of cash, Shares or
other property are subject to conditions shall be deemed
to be achieved or fulfilled and shall be waived by the
Company, except as may be otherwise required to comply
with Rule 16b-3.
(ii) All outstanding Awards not subject to
limitations under Section 7.02.1 shall be automatically
surrendered, and the Participants shall receive, in full
satisfaction therefor, cash payments equal to the value of
such outstanding Awards calculated on the basis of the
Change of Control Price of any Shares or the Fair Market
Value of any property other than Shares relating to such
Award; provided, however, that (a) in the case of a
nonstatutory stock option, or a Stock Appreciation Right
granted in tandem therewith, the cash payment shall be
equal to the Change of Control Price of the Shares subject
to the Option reduced by the exercise price thereof, (b)
in the case of an Incentive Stock Option, or a Stock
Appreciation Right granted in tandem therewith, the cash
payment shall be equal to the Fair Market Value of the
Shares subject to the Option on the date on which the
Change of Control occurred reduced by the exercise price
thereof, (c) in the case of a Stock Appreciation Right not
granted in tandem with another award, the cash payment
shall be equal to the Change of Control Price of the
Shares subject to the Stock Appreciation Right reduced by
the grant price thereof, and (d) in the case of any other
purchase right, the cash payment shall be reduced by the
Fair Market Value of the consideration otherwise required
to exercise such purchase right. In the event that an
Award is granted in tandem with another Award such that
the Participant's right to payment for such Award is an
alternative to payment of another Award, the Participant
shall surrender all alternative Awards and receive payment
for the Award which produces the highest payment to the
Participant. In no event will an Award be automatically
surrendered or a Participant have the right to receive
cash under this Section 9.02 (ii) with respect to an Award
(1) if the Participant is subject to Section 16 of the
Exchange Act (or was subject to Section 16 of the Exchange
Act at the date of grant of the Award) and at least six
months shall not have elapsed from the date on which the
Participant was granted the Award (or, if later, from the
date of shareholder approval of the Plan) before the date
of the Change of Control (unless this restriction is not
at such time required under Rule 16b-3 (c) (1) or Rule
16b-3 (e)) or (2) if the Participant is subject to Section
16 of the Exchange Act and had the power to control the
occurrence or timing of the Change of Control such that
the surrender and right to receive cash under this Section
9.01 (ii) would fail to be exempt pursuant to Rule 16b-
3(e).
(iii) In the event that any Award is subject to
limitations under Section 7.02.1 at the time of a Change
of Control, then, solely for the purpose of determining
the rights of the Participant under Section 9.02(ii) with
respect to such Award, a Change of Control shall be deemed
to occur at the close of business on the first business
day following the date on which the limitations on such
Award under Section 7.02.1 have expired; provided,
however, that this Section 9.01 (iii) shall not apply if
its application would cause the surrender of the Award and
the receipt of cash under Section 9.01 (ii) to fail to be
exempt pursuant to Rule 16b-3(e).
(iv) In the discretion of the Committee, the
Committee may permit any Participant not subject to
Section 16 of the Exchange Act on the date of a Change of
Control to elect, in such manner and at such time or times
or within such periods as the Committee may determine
(whether before or after a Change of Control), and subject
to such other terms, conditions or restrictions, if any,
as the Committee may determine to impose, not to surrender
for cash pursuant to Section 9.02(ii) all or any portion
of any Award or Awards held by the Participant.
9.02 Creation and Funding of Trust. Upon the occurrence
of a Potential Change of Control, the Company shall deposit
with the trustee of a trust for the benefit of Participants
monies or other property having a Fair Market Value at least
equal to the value of the cash, Shares and other property to
be paid or distributed in connection with Awards outstanding
at that date. The trust shall be a grantor trust which shall
preserve the "unfunded" status of Awards under the Plan.
Subsequent to a Potential Change of Control which is no longer
continuing and prior to a Change of Control and termination of
the trust, upon the request of the Company the trustee shall
deliver the monies or other property held in the trust to the
Company. In the discretion of the Committee, monies or other
property may also be deposited in the trust created under this
Section 9.02 for the benefit of participants in any other
compensation or benefit plan, program, contract or arrangement
of the Company or any Subsidiary.
9.03 Definition of Certain Terms. For purposes of this
Section 9, the following definitions, in addition to those set
forth in Section 2.01, shall apply:
9.03.1 "Change of Control" means and shall be deemed
to have occurred if (i) any Person, other than the Company
or a Related Party, purchases or otherwise acquires, under
a tender offer or otherwise, Beneficial Ownership of any
Voting Securities which, when combined with other Voting
Securities then Beneficially Owned by such Person,
represent twenty percent (20%) or more of the total voting
power of all the then outstanding Voting Securities; or
(ii) the individuals (a) who as of the effective date of
the Plan constitute the Board or (b) who thereafter are
elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least
two-thirds of the directors then still in office who
either were directors as of the effective date of the Plan
or whose election or nomination for election was
previously so approved (the "Continuing Directors"), cease
for any reason to constitute a majority of the members of
the Board; or (iii) the Company is a party to a merger,
consolidation, share exchange, recapitalization or
reorganization of the Company or an acquisition of
securities or assets by the Company, other than any such
transaction (a) which would result in the Voting
Securities outstanding immediately prior thereto
continuing to represent either by remaining outstanding or
by being converted into voting securities of the surviving
or acquiring entity, at least fifty percent (50%) of the
total voting power represented by the voting securities of
such surviving or acquiring entity outstanding immediately
after such transaction and (b) in or as a result of which
the voting rights of each Voting Security relative to the
voting rights of all other Voting Securities are not
altered other than through the exercise of dissenters'
rights; or (iv) the shareholders of the Company approve a
plan of complete liquidation of the Company; or (v) the
Company shall sell or otherwise dispose of, other than to
a Related Party, in a single or a series of related
transactions otherwise than in the ordinary course of
business, assets of the Company and/or stock or assets of
any Subsidiary, having a book value equal to 50% or more
of the consolidated total assets of the Company, in each
case measured as the date of the most recent quarterly or
annual balance sheet of the Company required to be
included or incorporated by reference in any proxy or
information statement of the Company furnished to the
shareholders of the Company in connection with such
transaction, or if no such proxy or information statement
is furnished to shareholders or no such balance sheet is
required to be included or incorporated by reference
therein, as of the date of the most recent quarterly or
annual balance sheet of the Company required to be filed
with the Securities and Exchange Commission prior to the
date of any such transaction;
9.03.2 "Change of Control Price" means, with respect
to a Share, the higher of (i) the highest reported sales
price of Shares on the New York Stock Exchange's
consolidated transaction reporting system (or if the
Common Stock is not then listed on such Exchange, on or on
any composite index including the principal United States
securities exchange on which the Common Stock is then
listed, or if none, on NASDAQ or any similar system then
in use, and in the absence of any such reported sales
prices, the highest publicly reported bid price for
Shares) during the 30 calendar days preceding the date of
a Change of Control or (ii) the highest price paid or
offered in a transaction which either (a) results in a
Change of Control or (b) would be consummated but for
another transaction which results in a Change of Control
and, if it were consummated, would result in a Change of
Control. With respect to clause (ii) in the preceding
sentence, the "price paid or offered" will be equal to the
sum of (a) the face amount of any portion of the
consideration consisting of cash or cash equivalents and
(b) the fair market value of any portion of the
consideration consisting of real or personal property
other than cash or cash equivalents, as established by an
independent appraiser selected by the Committee.
9.03.3 "Potential Change of Control" means and shall
be deemed to have arisen if (i) the Company enters into an
agreement, the consummation of which would result in the
occurrence of the Change of Control; or (ii) any Person
(including the Company) publicly announces an intention to
take or to consider taking actions which if consummated
would constitute a Change of Control; or (iii) any Person,
other than a Related Party, files with the Securities and
Exchange Commission a Schedule 13D pursuant to Rule 13d-I
under the Exchange Act with respect to Voting Securities;
or (iv) any Person, other than the Company or a Related
Party, files with the Federal Trade Commission a
notification and report form pursuant to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 with respect to
any Voting Securities or any assets of the Company or a
Subsidiary; or (v) the Board or a committee thereof adopts
a resolution to the effect that, for purposes of the Plan,
a Potential Change of Control has arisen. A Potential
Change of Control will be deemed to continue (a) with
respect to an agreement within the purview of clause (i)
of the preceding sentence, until the agreement is canceled
or terminated; or (b) with respect to an announcement
within the purview of clause (ii) of the preceding
sentence, until the Person making the announcement
publicly abandons the stated intention or fails to act on
such intention for a period of 12 calendar months; or (c)
with respect to the filing of a Schedule 13D within the
purview of clause (iii) of the preceding sentence, until
the Person involved publicly announces that its ownership
or acquisition of the Voting Securities is for investment
purposes only and not for the purpose of seeking a Change
of Control or such Person disposes of all Voting
Securities exceeding 5% of the outstanding shares of any
class; or (d) with respect to the filing of a notification
and report form within the purview of clause (iv) of the
preceding sentence with respect to Voting Securities or
assets, until the Person publicly abandons the transaction
which was the subject of such filing or fails to act
thereon for a period of 12 calendar months or, in the case
of a filing with respect to Voting Securities, until the
Person involved (1) publicly announces that its ownership
or acquisition of the Voting Securities is for investment
purposes only and not for the purpose of seeking a Change
of Control or (2) following completion of such transaction
disposes of all Voting Securities exceeding 5% of the
outstanding shares of any class; or (e) until a Change of
Control has occurred if the majority of the Continuing
Directors, on reasonable belief after due investigation,
adopts a resolution that either (1) the Potential Change
of Control has ceased to exist or (2) the Potential Change
of Control is believed to be not reasonably likely to
result in a Change of Control.
9.03.4 "Related Party" means (i) a Subsidiary; or (ii)
a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary; or
(iii) a Company owned directly or indirectly by the
shareholders of the Company in substantially the same
proportion as their ownership of Voting Securities.
9.03.5 "Voting Securities or Security" means any
securities of the Company which carry the right to vote
generally in the election of directors.
9.03.6 "Beneficial Ownership" shall be determined in
accordance with Regulation 13D-G under the Exchange Act,
as in effect on the effective date of the Plan.
Section 10. Amendments to and Termination of the Plan
10.01 The Board may amend, alter, suspend, discontinue or
terminate the Plan without the consent of shareholders or
Participants, except that, without the approval of the
shareholders of the Company, no amendment, alteration,
suspension, discontinuation or termination shall be made if
shareholder approval is required by any federal or state law
or regulation, or if the Board in its discretion determines
that obtaining such shareholder approval is for any reason
advisable; provided, however, that except as provided in
Section 7.02, without the consent of the Participant, no
amendment, alteration, suspension, discontinuation or
termination of the Plan may materially and adversely affect
the rights of such Participant under any Award theretofore
granted to him. The Committee may waive any conditions or
rights under, amend any terms of, or amend, alter, suspend,
discontinue or terminate, any Award theretofore granted,
prospectively or retrospectively; provided, however, that
except as provided in Section 7.02, without the consent of a
Participant, no amendment, alteration, suspension,
discontinuation or termination of any Award may materially and
adversely affect the rights of such Participant under any
Award theretofore granted to him.
Section 11. General Provisions
11.01 No Right to Awards,- No Shareholder Rights. No
Participant or employee shall have any claim to be granted any
Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees, except
as provided in any other compensation arrangement. No Award
shall confer on any Participant any of the rights of a
shareholder of the Company unless and until Shares are in fact
issued to such Participant in connection with such Award.
11.02 Withholding. To the extent required by applicable
Federal, state, local or foreign law, the Participant or his
successor shall make arrangements satisfactory to the Company,
in its discretion, for the satisfaction of any withholding tax
obligations that arise in connection with an Award. The
Company shall not be required to issue any Shares or make any
cash or other payment under the Plan until such obligations
are satisfied.
The Company is authorized to withhold from any Award
granted or any payment due under the Plan, including from a
distribution of Shares, amounts of withholding taxes due with
respect to an Award, its exercise or any payment thereunder,
and to take such other action as the Committee may deem
necessary or advisable to enable the Company and Participants
to satisfy obligations for the payment of such taxes. This
authority shall include authority to withhold or receive
Shares, Awards or other property and to make cash payments in
respect thereof in satisfaction of such tax obligations.
11.03 No Right to Employment. Nothing contained in the
Plan or any Award Agreement shall confer, and no grant of an
Award shall be construed as conferring, upon any Participant
any right to continue in the employ of the Company or to
interfere in any way with the right of the Company to
terminate his employment at any time or increase or decrease
his compensation from the rate in existence at the time of
granting of an Award, except as provided in any Award
Agreement or other compensation arrangement.
11.04 Unfunded Status of awards,- Creation of Trusts. The
Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a
general unsecured creditor of the Company; provided, however,
that, in addition to the requirements of Section 9.02, the
Committee may authorize the creation of trusts or make other
arrangements to meet the Company's obligations under the Plan
to deliver cash, Shares or other property pursuant to any
Award, which trusts or other arrangements shall be consistent
with the "unfunded" status of the Plan unless the Committee
otherwise determines.
11.05 No Limit on Other Compensatory Arrangements.
Nothing contained in the Plan shall prevent the Company from
adopting other or additional compensation arrangements (which
may include, without limitation, employment agreements with
executives and arrangements which relate to Awards under the
Plan), and such arrangements may be either generally
applicable or applicable only in specific cases.
Notwithstanding anything in the Plan to the contrary (other
than the provisions of Section 7.02), the terms of each Award
shall be construed so as to be consistent with such other
arrangements in effect at the time of the Award.
11.06 No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of fractional Shares
or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
11.07 Governing Law. The validity, interpretation,
construction and effect of the Plan and any rules and
regulations relating to the Plan shall be governed by the laws
of the Commonwealth of Pennsylvania (without regard to the
conflicts of laws thereof), and applicable Federal law.
11.08 Severability. If any provision of the Plan or any
Award is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the
Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended
to conform to applicable laws or if it cannot be construed or
deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or Award, it shall
be deleted and the remainder of the Plan or Award shall remain
in full force and effect; provided, however, that, unless
otherwise determined by the Committee, the provision shall not
be construed or deemed amended or deleted with respect to any
Participant whose rights and obligations under the Plan are
not subject to the law of such jurisdiction or the law deemed
applicable by the Committee.
Section 12. Effective Date and Term of the Plan
12.01 The effective date and date of adoption of the Plan
shall be January 21, 1994, the date of adoption of the Plan by
the Board, provided that such adoption of the Plan is approved
by the affirmative vote of a majority of the shares of Common
Stock present in person or represented by proxy and entitled
to vote at a duly held meeting of shareholders of the Company
held on or prior to December 31, 1994. Notwithstanding
anything else contained in the Plan or in any Award Agreement,
no Option, Stock Appreciation Right or other purchase right
granted under the Plan may be exercised, and no Shares may be
distributed pursuant to any Award granted under the Plan,
prior to such shareholder approval or prior to any required
approval or consent from those governmental agencies having
jurisdiction in these matters. In the event such shareholder
or regulatory approval is not obtained, all Awards granted
under the Plan shall automatically be deemed void and of no
effect. No Award may be granted under the Plan subsequent to
May 27, 1999.
Exhibit 10.15
AGREEMENT FOR CONSULTING SERVICES
Recommend to the Board for approval.
This Agreement is made as of this 31st day of December,
1994, between DONALD I. MORITZ ("Consultant") and EQUITABLE
RESOURCES, INC. ("Equitable") a Pennsylvania corporation.
WHEREAS, Consultant has served Equitable in a long and
successful term as Chief Executive Officer and has developed
a keen knowledge of the business operations of Equitable and
the natural gas industry in general; and
WHEREAS, it is desirable for Equitable to enter into a
Consulting Agreement with Consultant to continue to have the
benefit of his experience and knowledge.
NOW, THEREFORE, in consideration of the foregoing
premises and of other good and valuable consideration, the
receipt of which is hereby acknowledged and intending to be
legally bound, the parties agree as follows:
1. Consultant will provide advice and counsel from a
business and legal perspective for specific business
expansion opportunities in the United States and
internationally for existing operating units.
<PAGE>
2. Consultant will provide advice and counsel regarding
potential merger and acquisition opportunities and
specifically provide advice on negotiation strategy,
industry contacts, and financial and organization impact.
3. Consultant will provide advice and counsel
concerning potential organizational structural impacts
resulting from the reengineering of Equitable.
4. Consultant will provide advice and counsel in such
other areas as Equitable may request and Consultant agrees
to perform.
5. The term of this contract is for a maximum of three
(3) years.
6. Equitable shall pay Consultant a retainer of
$125,000 for the first year of this Agreement. This fee
shall be in addition to all applicable Board of Directors'
fees as long as Consultant is a member of the Board of
Directors.
7. At the end of calendar year 1995, the President and
CEO shall provide the Compensation Committee with an
evaluation of Consultant's performance as well as the
recommended services and retainer for the next twelve-month
period.
<PAGE>
8. A copy of the 1995 projects is attached hereto.
9. This Agreement shall be governed by the Laws of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first written above.
EQUITABLE RESOURCES, INC. CONSULTANT
By: s/ Frederick H. Abrew by: s/ Donald I. Moritz
<PAGE>
1995 Consultant Projects
a. Board Governance Research Project
Current interest suggests that Board Governance is an
important issue. Equitable Resources, while at the
forefront of many Board issues, has never undertaken a
comprehensive review of the matter with the intent of
informing the Board of pertinent issues and recommended
action. I have asked Don to study these Board Governance
and performance issues and present recommendations to the
Board of Directors for consideration.
b. Investor Relations
Don will be assigned the responsibility to research and
develop an overarching communication plan that will improve
the investment community's understanding of the values
contained in ERI's integrated business strategy.
c. L.I.G.
Recent acquisitions have not been well understood by
the investment community and, consequently, anticipated
shareholder value has not been achieved. Consequently, I
have assigned Don the responsibility to oversee the
implementation of current business plan for L.I.G. to ensure
that ERI achieves the maximum value of the plan that
management has prescribed.
d. Monumental Butte
Don will oversee a research and development project
intended to identify and develop a strategy that ERI
management can implement that will improve the economic
results of the Monumental Butte project. In our judgment,
the investment community has not given us the valuation that
we believe this project deserves suggesting that a different
approach be undertaken.
Exhibit 11.01
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
1994 1993 1992
Earnings:
Net income $60,729 $73,455 $60,026
Interest net of applicable
income taxes on 9 1/2%
convertible subordinated
debentures 146 89 208
Adjusted earnings $60,875 $73,544 $60,234
Shares:
Average common
shares outstanding 34,509 32,359 31,342
Dilutive effect of
conversion of 9 1/2%
convertible subordinated
debentures 220 257 305
Dilutive effect
of stock options
outstanding 11 61 61
Total 34,740 32,677 31,708
Primary Earnings
Per Share $1.76 $2.27 $1.92
Fully Diluted
Earnings Per Share $1.75 $2.25 $1.90
Exhibit 21
EQUITABLE RESOURCES, INC.
Subsidiaries of the Registrant
December 31, 1994
Percentage
of
Voting
Securities
State Owned by
of Immediate
Name of Subsidiary Incorporation 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
ET Blue Grass Company Delaware 100
EREC Capital Corporation Delaware 100
Equitable Power Services
Company 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
LIG, Inc. Delaware 100
Louisiana Intrastate
Gas Company LLC 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 Resources
(Argentina) Company Delaware 100
Note: All subsidiaries are included in the consolidated
financial statements of the Registrant. See Note A
to Financial Statements, Page 31.
Exhibit 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our
report dated February 13, 1995, with respect to the
consolidated financial statements and schedule of Equitable
Resources, Inc. included in this Annual Report (Form 10-K)
for the year ended December 31, 1994 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. 33-53703 on Form S-3 pertaining to
the registration of $100,000,000 Medium Term Notes, Series C
of Equitable Resources, Inc. and in the related Prospectus of
our report dated February 13, 1995, with respect to the
consolidated financial statements and schedule of Equitable
Resources, Inc. included in this Annual Report (Form 10-K)
for the year ended December 31, 1994.
We also consent to the incorporation by reference of our
report dated February 22, 1995 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, 1994, 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 s/ Ernst & Young LLP
Ernst & Young LLP
Pittsburgh, Pennsylvania
March 20, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 23,415
<SECURITIES> 0
<RECEIVABLES> 197,972
<ALLOWANCES> 10,890
<INVENTORY> 27,977
<CURRENT-ASSETS> 307,823
<PP&E> 2,233,617
<DEPRECIATION> 637,951
<TOTAL-ASSETS> 2,019,122
<CURRENT-LIABILITIES> 498,895
<BONDS> 398,282
<COMMON> 210,030
0
0
<OTHER-SE> 539,972
<TOTAL-LIABILITY-AND-EQUITY> 2,019,122
<SALES> 1,397,280
<TOTAL-REVENUES> 1,397,280
<CGS> 0
<TOTAL-COSTS> 1,287,032
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 10,010
<INTEREST-EXPENSE> 43,905
<INCOME-PRETAX> 69,506
<INCOME-TAX> 8,777
<INCOME-CONTINUING> 60,729
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,729
<EPS-PRIMARY> 1.76
<EPS-DILUTED> 1.75
</TABLE>
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, 1994
[ ] 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)
<PAGE>
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
February 22, 1995
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Administrative Committee
Equitable Resources, Inc. Employee Savings Plan
We have audited the accompanying statements of net assets available
for plan benefits of the Equitable Resources, Inc. Employee Savings Plan
(the Plan) as of October 31, 1994 and 1993, and the related statements of
changes in net assets available for plan benefits 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 net assets available for plan
benefits of the Plan as of October 31, 1994 and 1993, and the changes in
net assets available for plan benefits for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made 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, 1994, and
transactions or series of transactions in excess of 5 percent 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 1994 financial statements and, in our opinion,
are fairly stated in all material respects in relation to the 1994 basic
financial statements taken as a whole.
s/ Ernst & Young LLP
Ernst & Young LLP
Pittsburgh, Pennsylvania
February 22, 1995
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
OCTOBER 31, 1994
<CAPTION>
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insrnce 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 $ $ $4,143,410 $ $ $ $ $ $4,143,410
Fixed Income
Fund 4,813,884 4,813,884
Balanced Fund 4,689,620 4,689,620
Aggressive
Stock Fund 2,086,435 2,086,435
Common Stock Fund 2,647,575 2,647,575
Bond Fund 1,377,416 1,377,416
Short-term
investments 134 252,288 252,422
Total
investments 4,813,884 4,689,620 4,143,410 2,086,435 2,647,575 1,377,416 134 252,288 20,010,762
Receivables:
Participant loans 779,726 779,726
Interest 874 23 897
Total 780,600 23 780,623
receivables
Transfers due
from (to) funds 93,543 34,584 26,253 48,046 38,615 4,219 7,028 (252,288)
Total assets 5,688,027 4,724,204 4,169,686 2,134,481 2,686,190 1,381,635 7,162 20,791,385
Payables:
Participants 52,088 8,581 64,660 990 1,480 127,799
Others 7,162 7,162
Total payables 52,088 8,581 64,660 990 1,480 7,162 134,961
Net Assets
Available for
Plan Benefits $5,635,939 $4,715,623 $4,105,026 $2,133,491 $2,684,710 $1,381,635 $ $ $20,656,424
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
OCTOBER 31, 1993
<CAPTION>
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insrnce 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 $ $ $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 22 334,977 337,999
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
Net Assets
Available for
Plan Benefits $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>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED OCTOBER 31, 1994
<CAPTION>
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insrnce 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 $ 2,470 $ 2,587 $ 148,445 $ 1,793 $ 2,207 $ 889 $ $ 158,391
Interest on participant loans 60,485 60,485
Total investment income 62,955 2,587 148,445 1,793 2,207 889 218,876
Gain realized on sale or
distribution of Equitable
Resources, Inc. Common Stock 62,859 62,859
Unrealized depreciation of
investment in Equitable
Resources, Inc. Common Stock (1,194,729) (1,194,729)
Unrealized appreciation
(depreciation) in value
of investment 238,766 (233,804) (9,893) 97,686 (47,870) 44,885
Contributions 508,954 564,349 352,423 359,716 447,849 172,477 50,010 2,455,778
Participant rollovers 72,135 40,928 10,639 47,247 49,736 3,478 224,163
Total additions 882,810 374,060 (620,363) 398,863 597,478 128,974 50,010 1,811,832
Deductions from plan
equity atributed to:
Withdrawals by participants 163,103 242,256 170,233 56,150 82,937 202,419 917,098
Purchase of life insurance 54,711 54,711
Expenses 13,256 28,780 11,213 13,113 10,932 77,294
Total deductions 176,359 271,036 170,233 67,363 96,050 213,351 54,711 1,049,103
Transfers from (to) funds 460,598 (121,432) (75,972) (8,059) 168,013 (427,849) 4,701
Net increase (decrease)
in net assets available
for plan benefits 1,167,049 (18,408) (866,568) 323,441 669,441 (512,226) 762,729
Net assets available
for plan benefits:
At beginning of year 4,468,890 4,734,031 4,971,594 1,810,050 2,015,269 1,893,861 19,893,695
At end of year $5,635,939 $4,715,623 $4,105,026 $2,133,491 $2,684,710 $1,381,635 $ $20,656,424
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEAR ENDED OCTOBER 31, 1993
<CAPTION>
Fixed Employer Aggressive Common Life
Income Balanced Stock Stock Stock Bond Insrnce 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 net
assets available
for plan benefits 1,295,722 774,110 1,039,495 680,141 782,337 395,654 4,967,459
Net assets available
For plan benefits:
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>
<PAGE>
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 1993 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. Such discretionary contributions were $38,058 and
$112,225 for the plan years ended October 31, 1994 and 1993,
respectively.
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 percent 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 percent
Five years or more 100 percent
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, 1994 and 1993, collateral for participant loans amounted to
$2,780,245 and $2,372,188, respectively.
1. Description of the Plan (Continued)
Investment of Contributions
Contributions are initially deposited with PNC 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 percent 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
Equitable Resources, Inc. common stock is valued at market price as
quoted on the New York Stock Exchange. The fixed income fund contract is
valued at face value, which approximates market. Other investments are
valued at market.
3. Investments
<TABLE>
Investments at October 31, 1994 and 1993 are comprised of:
<CAPTION>
1994 1993
Fair Fair
Market Original Market Original
Shares Value Cost Shares Value Cost
<S> <C> <C> <C> <C> <C> <C>
Equitable Resources,
Inc.,
Common Stock 135,826 $ 4,143,410 $ 3,114,846 124,987 $ 4,923,135 $ 2,667,541
Fixed Income Fund(1) - 4,813,884 4,813,884 - 3,840,103 3,840,103
Balanced Fund(1) - 4,689,620 4,689,620 - 4,839,462 4,839,462
Aggressive Stock Fund(1) - 2,086,435 2,086,435 - 1,741,574 1,741,574
Common Stock Fund(1) - 2,647,575 2,647,575 - 1,938,484 1,938,484
Bond Fund(1) - 1,377,416 1,377,416 - 1,913,017 1,913,017
Short-Term investment - 252,422 252,422 334,999 334,999
Total $20,010,762 $18,982,198 $19,530,774 $17,275,180
The interest rate for the Fixed Income Fund was 6.00 percent for the 1994 fiscal year and 6.75 percent
for the 1993 fiscal year.
(1) Securities investments are provided by contract through a pooled investment account; fair market
value is used as original cost.
</TABLE>
<PAGE>
4. Gain Realized on Sale/Distribution of Stock
During the year ended October 31, 1994, 4,769 shares of Equitable
Resources, Inc. Common Stock with a market value of $168,878 were sold at
an average price of $35.41 per share. The cost of the shares sold was
$106,019 ($22.23 per share) calculated using the "average cost" method.
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.
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.
<PAGE>
SUPPLEMENTARY INFORMATION
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. Schedule 1
EMPLOYEE SAVINGS PLAN
ASSETS HELD FOR INVESTMENT
October 31, 1994
<CAPTION>
Current
Identity of Issue Description of Investment Cost Value
<S> <C> <C> <C>
Equitable Resources, Inc.(1) 135,826 shares common stock $3,114,846 $4,143,410
The Equitable Life Assurance Society
Fixed Income Contract 6 percent per annum(2) $4,813,884(3) $4,813,884(3)
The Equitable Life Assurance Society
Retirement Investment Accounts,
Pooled Separate Account No. 10,
"Balanced Account" 57,760 units $4,689,620(3) $4,689,620(3)
The Equitable Life Assurance Society
Retirement Investment Accounts,
Pooled Separate Account No. 3,
"Aggressive Stock Account" 15,566 units $2,086,435(3) $2,086,435(3)
The Equitable Life Assurance Society
Retirement Investment Accounts,
Pooled Separate Account No. 4,
"Common Stock Account" 7,348 units $2,647,575(3) $2,647,575(3)
The Equitable Life Assurance Society
Retirement Investment Accounts,
Pooled Separate Account No 13,
"Bond Account" 32,642 units $1,377,416(3) $1,377,416(3)
Participant Loans 8 to 10 percent N/A $779,726
PNC Bank STIF Institutional Fund(1) 252,422 units $252,422 $252,422
(1) Party in interest to the Plan.
(2) Rate in effect for Plan year ended October 31, 1994.
(3) Fair market value is used as original cost
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. Schedule 2
EMPLOYEE SAVINGS PLAN
TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5 PERCENT
OF THE CURRENT VALUE OF PLAN ASSETS
Year Ended October 31, 1994
<CAPTION>
Party Description Number of Total Number Total Sales Original Net Gain
Involved of Investment Purchases Purchases of Sales Proceeds Cost or (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Series
Transactions:
(1) Short-term investments 166 $4,085,099 96 $4,419,550 $4,419,550 None
(1) Fixed income mutual funds 16 $1,271,291 5 $ 320,447 $ 320,447 None
(1) The above transactions were carried out by the Trustee, PNC Bank.
</TABLE>
