<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 10, 1996) Rule 424(b)(2)
Registration No. 333-06839
EQUITABLE RESOURCES, INC.
$150,000,000
7 3/4% Debentures due July 15, 2026
Interest payable January 15 and July 15
ISSUE PRICE: 99.601%
Interest on the Debentures is payable semiannually on January 15 and July 15 of
each year, commencing January 15, 1997. The Debentures are not redeemable prior
to maturity and will not be subject to any sinking fund. The Debentures will
initially be represented by one or more Global Securities registered in the
name of The Depository Trust Company (the "Depositary") or its nominee.
Interests in the Global Securities will be shown on and transfers thereof will
be effected only through the records maintained by the Depositary and its
participants. Except as provided herein, Debentures in definitive form will not
be issued. See "Description of the Debentures."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1) (3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture 99.601% .875% 98.726%
- --------------------------------------------------------------------------------
Total $149,401,500 $1,312,500 $148,089,000
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from July 29, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $250,000.
The Debentures are offered, subject to prior sale, when, as and if accepted by
the Underwriters and subject to approval of certain legal matters by
Kirkpatrick & Lockhart LLP, counsel for the Underwriters. It is expected that
delivery of the Debentures will be made on or about July 29, 1996 through the
facilities of the Depositary, against payment therefor in same-day funds. As
July 29, 1996 is the fourth business day following the date hereof, purchasers
of the Debentures should be aware that trading of the Debentures on the date
hereof and the next succeeding business day may be affected by such four-day
settlement.
J.P. MORGAN & CO.
NATIONSBANC CAPITAL MARKETS, INC.
July 23, 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE DEBENTURES
OFFERED HEREBY AND OUTSTANDING DEBENTURES OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus
Supplement and the accompanying Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized by the Company or any underwriter, dealer or agent. Neither the
delivery of this Prospectus Supplement and the accompanying Prospectus nor any
sale made hereunder or thereunder shall, under any circumstances, create an
implication that the information contained herein and in the accompanying
Prospectus is correct as of any date subsequent to the date hereof or that
there has been no change in the affairs of the Company since the date hereof.
This Prospectus Supplement and the accompanying Prospectus do not constitute
an offer to sell or a solicitation of an offer to buy Debt Securities in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to
any person to whom it is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Company............................................................ S-3
Use of Proceeds........................................................ S-4
Capitalization......................................................... S-5
Selected Financial Information......................................... S-6
Description of the Debentures.......................................... S-7
Underwriting........................................................... S-8
<CAPTION>
PROSPECTUS
<S> <C>
Available Information.................................................. 2
Incorporation of Certain Documents by Reference........................ 2
The Company............................................................ 3
Use of Proceeds........................................................ 3
Ratio of Earnings to Fixed Charges..................................... 3
Description of the Debt Securities..................................... 3
Plan of Distribution................................................... 12
Experts................................................................ 13
Validity of the Debt Securities........................................ 13
</TABLE>
S-2
<PAGE>
THE COMPANY
Equitable Resources, Inc. (the "Company" or "Equitable") is a diversified
energy company. The principal executive office of the Company is located at
420 Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (Telephone: (412)
261-3000). As used herein, the term the "Company" includes the Company's
consolidated subsidiaries unless the context requires otherwise. The Company's
business is comprised of three segments: supply and logistics, utilities and
energy services.
SUPPLY AND LOGISTICS
ERI Supply & Logistics is comprised of natural gas and oil exploration and
production, and logistical functions including natural gas storage, intrastate
transmission services, physical and financial trading and electric power
services. This segment's objective is to aggregate and deliver all types of
energy in the most cost effective manner.
EXPLORATION AND PRODUCTION
Exploration and production activities are conducted by two of Equitable's
wholly owned subsidiaries, Equitable Resources Energy Company ("EREC") and
Andex Energy, Inc. ("Andex"). EREC's 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.
The exploration and production segment 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. Proved natural gas reserves were 846
billion cubic feet and proved oil reserves were 18 million barrels at year end
1995, of which 739 billion cubic feet and 17 million barrels were proved
developed reserves. Substantially all of the Company's reserves are located in
the United States.
LOGISTICS
The Company's logistical activities are conducted by Equitable Storage
Company, by Louisiana Intrastate Gas Company LLC, by a division of ERI
Services Inc. and by Equitable Power Services Company. These activities
include marketing of natural gas and electricity, extraction and sale of
natural gas liquids and intrastate transportation. This segment operates
nationwide as a full service natural gas marketing and supply company
providing a full range of energy services, including monthly "spot" and
longer-term contracts, peak shaving, and transportation arrangements. In
Louisiana, Louisiana Intrastate Gas Company LLC provides intrastate
transportation of gas and extracts and markets natural gas liquids, and
Equitable Storage Company provides underground gas storage services. Equitable
Power Services Company has been granted a Federal Energy Regulatory Commission
("FERC") certificate for electricity wholesaling.
UTILITIES
ERI Utilities is comprised of the Company's regulated businesses,
principally natural gas distribution and transmission. This segment's
objective is to maximize earnings within regulatory constraints via improved
efficiencies and reduced costs.
NATURAL GAS DISTRIBUTION
Natural gas distribution activities comprise the operations of Equitable Gas
Company ("Equitable Gas"), the Company's state-regulated local distribution
company. 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. Equitable Gas
serves more than 266,000 industrial, commercial and residential customers
located principally in the city of Pittsburgh and surrounding municipalities
in southwestern Pennsylvania as well as a few municipalities in northern West
Virginia and eastern Kentucky.
S-3
<PAGE>
NATURAL GAS TRANSMISSION
Natural gas transmission activities are conducted by three FERC regulated
gas pipelines: Kentucky West Virginia Gas Company, L.L.C. ("Kentucky West"),
Equitrans, L.P., and Nora Transmission Company ("Nora"). Their activities
include gas transportation, gathering, storage and marketing. Kentucky West is
an open access natural gas pipeline company which provides transportation
service to Equitable Gas, EREC and industrial end-users. Marketed gas sales
are to ERI Supply & Logistics and nonaffiliated customers. Kentucky West's
pipelines are not physically connected with those of Equitrans, L.P. or
Equitable Gas and deliveries are made to Columbia Gas Transmission
Corporation, a nonaffiliate, which in turn delivers like quantities to
Equitrans, L.P. in West Virginia and Pennsylvania under a Transportation and
Exchange Agreement. Equitrans, L.P. has production, storage and transmission
facilities in Pennsylvania and West Virginia. Equitrans, L.P. provides
transportation service for Equitable Gas and nonaffiliates including customers
in off-systems markets. Storage services are provided for Equitable Gas and
nine nonaffiliated customers. Nora transports the gas produced in Virginia and
Kentucky by ERI Supply & Logistics.
ENERGY SERVICES
ERI Services is the Company's most recently formed business segment and is
comprised of merchant services and resource management. This segment's
objective is to be a premier marketer of innovative energy solutions.
MERCHANT SERVICES
Merchant services involves the delivery of energy to large and middle market
energy consumers. Commodity procurement, billing, collections and customer
service are all part of the package offered by this segment.
RESOURCE MANAGEMENT
Resource management focuses on energy consulting and engineering services.
This segment offers total energy solutions to its clients, including energy
use analysis, customized energy systems, facilities management, energy
procurement, risk management services and financing solutions.
USE OF PROCEEDS
The Company will apply the net proceeds from the sale of the Debentures to
the reduction of outstanding commercial paper obligations. Such commercial
paper obligations were incurred for general corporate purposes, including
repayment of the $75 million principal amount of the Company's 8 1/4%
Debentures due July 1, 1996, and the repurchase through a tender offer of
approximately $59 million principal amount of the Company's 9.9% Debentures
due April 15, 2013. At July 15, 1996, the Company's outstanding commercial
paper obligations bore interest at an average rate of 5.41%.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth the historical consolidated capitalization of
the Company at March 31, 1996, as adjusted for the issuance of the Debentures
offered hereby.
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------
AS
OUTSTANDING ADJUSTED
----------- --------
(DOLLARS IN
MILLIONS)
<S> <C> <C>
Common shareholders' equity:
Common stock (authorized 80,000,000 shares,
issued 35,440,185 shares)......................... $ 735.7 $ 735.7
-------- --------
Long-term debt
9 1/2% Convertible Subordinated Debentures due
January 15, 2006.................................. $0.7 $0.7
Debentures and other unsecured indebtedness:
8 1/4% Debentures, due July 1, 1996.............. 75.0 0.0/(1)/
7 1/2% Debentures, due July 1, 1999.............. 71.5 71.5
9.9% Debentures, due April 15, 2013.............. 75.0 15.9/(2)/
Medium-Term Notes:
7.2% to 9.0% Series A, due 1998 through 2021... 100.0 100.0
5.1% to 7.6% Series B, due 2003 through 2023... 75.5 75.5
6.8% to 7.6% Series C, due 2007 through 2018... 18.0 18.0
The Debentures offered hereby: 0.0 150.0
-------- --------
Total long-term debt......................... 415.7 431.6
-------- --------
Total capitalization................................. $1,151.4 $1,151.4
======== ========
Short-term debt and current maturities of long-term
debt................................................ $ 131.3 $ 122.9
</TABLE>
- --------
/(1)/ The 8 1/4% Debentures were repaid with the proceeds of the sale of
commercial paper. Such commercial paper will in turn be repaid from the
net proceeds of the sale of the Debentures.
/(2)/ Approximately $59.1 million principal amount of the Company's 9.9%
Debentures have been repurchased. In connection with the repurchase, the
Company incurred expenses and a premium cost of approximately $5.6
million. The repurchase and those costs were funded with the proceeds of
the sale of commercial paper, which will in turn be repaid from the net
proceeds of the sale of the Debentures. Pursuant to accounting practices
for regulated industries, those costs will be deferred and amortized over
the life of the Debentures.
S-5
<PAGE>
SELECTED FINANCIAL INFORMATION
The selected consolidated financial data presented below for each of the five
years in the period ended December 31, 1995 have been derived from the
consolidated financial statements of the Company, which statements have been
audited by Ernst & Young LLP, independent auditors. The data for the three-
month periods ended March 31, 1996 and March 31, 1995 have been derived from
the unaudited consolidated financial statements of the Company for such periods
and, in the opinion of management, include all adjustments (consisting only of
normal recurring adjustments) necessary to state fairly the information
included therein in accordance with generally accepted accounting principles
for interim financial information. The data should be read in conjunction with
the financial information and related notes included or incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 and the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1996 incorporated by reference herein. Results
for the three months ended March 31, 1996 are not necessarily indicative of
results for any other interim period or for the year as a whole. Due to
acquisitions and dispositions, data may not be comparable from year to year.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement
Operating revenues....................... $ 640.3 $ 404.7 $1,426.0/(1)/ $1,397.3 $1,094.8 $ 812.4 $ 679.6
475.5 258.6 911.4 926.9 644.2 407.1 290.6
Purchased energy......................... -------- -------- -------- -------- -------- -------- --------
164.8 146.1 514.6 470.4 450.6 405.3 389.0
Net operating revenues................. -------- -------- -------- -------- -------- -------- --------
Operating expenses:
Operation and maintenance.............. 58.6 55.2 225.1 224.5 203.4 188.3 183.6
Depreciation and depletion............. 21.6 28.6 104.6 93.4 76.9 65.9 54.6
Impairment of assets................... 0 0 121.1/(1)/ 0 0 0 0
15.2 13.9 41.8 42.3 39.8 36.7 34.2
Taxes other than income................ -------- -------- -------- -------- -------- -------- --------
95.4 97.7 492.6 360.2 320.1 290.9 272.4
Total operating expenses............. -------- -------- -------- -------- -------- -------- --------
Operating income......................... 69.4 48.4 22.0 110.2 130.5 114.4 116.6
Other income............................. 2.2 (0.) 0.4 3.2 1.7 1.8 (0.5)
10.5 12.9 50.1 43.9 38.7 37.4 32
Interest charges......................... -------- -------- -------- -------- -------- -------- --------
Income before income taxes............... 61.1 34.9 (27.7) 69.5 93.5 78.8 84.1
Income taxes (benefits).................. 22.4 7.1 (29.3) 8.8 20.0 18.8 19.9
$ 38.7 $ 27.8 $ 1.6 $ 60.7 $ 73.5 $ 60.0 $ 64.2
Net income............................... ======== ======== ======== ======== ======== ======== ========
Average common shares outstanding
(in thousands).......................... 36,035 34,635 34,793 34,509 32,359 31,342 31,253
Earnings per share of common stock....... $1.11 $0.80 $0.04 $1.76 $2.27 $1.92 $2.05
Dividends paid per share of common
stock.................................... $0.59 $0.59 $1.18 $1.15 $1.10 $1.04 $1.00
Balance Sheet Data
Net property, plant and equipment........ $1,452.0 $1,596.0 $1,457.6 $1,595.7 $1,548.4 $1,175.2 $1,156.1
Total assets............................. 2,073.6 1,992.8 1,961.8 2,019.1 1,945.9 1,469.2 1,441.4
Common shareholders' equity.............. 735.7 759.3 715.1 750.0 728.0 578.1 549.2
Long-term debt (excluding
current maturities)..................... 415.7 397.0 415.5 398.3 378.9 346.7 346.8
Short-term debt.......................... 131.3 240.9 135.0 269.3 253.9 114.0 129.5
Other Financial Data
Net cash flow from operations
(excluding changes in working capital).. $ 75.9 $ 49.3 $ 152.1 $ 150.8 $ 152.4 $ 124.3 $ 123.4
Capital expenditures..................... 18.8 30.7 118.1 146.2 339.4 99.6 235.2
Long-term debt to total capitalization... 36.1% 34.3% 36.8% 34.7% 34.2% 37.5% 38.7%
</TABLE>
- --------
/(1)/ Earnings for 1995 include an after-tax charge of $74.2 million or $2.12
per share due to the recognition of impairment of assets of $121.1 million
pursuant to the methodology of Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of," as more fully described in Note B to the
Consolidated Financial Statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995. The results for 1995
also include a non-recurring after-tax gain of $29.1 million or $.83 per
share related to the Columbia Gas Transmission bankruptcy settlement and
$6.6 million or $.19 per share resulting from regulatory approval for
accelerated recovery of future gas costs, as described in Notes D and C,
respectively, to those consolidated financial statements.
S-6
<PAGE>
DESCRIPTION OF THE DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to in the Prospectus as "Offered Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set
forth in the accompanying Prospectus, to which description reference is hereby
made. Any capitalized terms used herein without definition have the same
meanings as set forth in the Prospectus.
GENERAL
The Debentures will be limited to $150,000,000 aggregate principal amount
and will mature on July 15, 2026. The Debentures will bear interest at 7 3/4%
per annum from July 29, 1996 or from the most recent interest payment date to
which interest has been paid or provided for, payable semiannually on January
15 and July 15 of each year, commencing January 15, 1997, to the persons in
whose names the Debentures are registered at the close of business on the
December 31 or June 30, as the case may be, immediately preceding that
interest payment date.
The Debentures will not be redeemable prior to maturity and will not be
subject to any sinking fund. The Debentures will be defeasable in accordance
with Article Thirteen of the Indenture. See "Description of the Debt
Securities--Discharge or Defeasance of Debt Securities in Certain
Circumstances" in the accompanying Prospectus.
BOOK-ENTRY SYSTEM
Upon issuance, the Debentures will be represented by a Global Security
deposited with, or on behalf of, the Depositary. The Global Security
representing the Debentures will be registered in the name of a nominee of the
Depositary. Except under the circumstances described in the accompanying
Prospectus under "Description of the Debt Securities--Book-Entry Securities,"
the Debentures will not be issuable in definitive form. So long as the
Debentures are represented by a Global Security, the Depositary's nominee will
be considered the sole Holder of the Debentures for all purposes of the
Debentures and under the Indenture, and the beneficial owners of the
Debentures will be entitled only to those rights and benefits afforded to them
in accordance with the Depositary's operating procedures and industry
practices. See "Description of the Debt Securities--Book-Entry Securities" in
the accompanying Prospectus.
The Company understands that the Depositary, upon receipt of any payment of
principal of or interest on the Debentures represented by a Global Security,
will credit immediately participants' accounts with that payment in amounts
proportionate to their respective beneficial interests in the principal amount
of that Global Security as shown on the records of the Depositary. The Company
also understands that payments by participants to owners of beneficial
interests in the Global Security held through those participants will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the sole responsibility of those participants.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary was created to hold securities for its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in those securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. The Depositary's
participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to other
entities, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant, either
directly or indirectly.
S-7
<PAGE>
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be
made by the Company in immediately available funds so long as the Debentures
are represented by Global Securities. The Debentures will trade in the
Depositary's Same-Day Funds Settlement System, and secondary market trading
activity in the Debentures will therefore be required by the Depositary to be
settled in immediately available funds.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below severally, and each of the Underwriters has severally
agreed to purchase, the principal amount of the Debentures set forth opposite
its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITERS DEBENTURES
------------ ------------
<S> <C>
J.P. Morgan Securities Inc................................... $71,250,000
NationsBanc Capital Markets, Inc............................. 71,250,000
Nesbitt Burns Securities Inc................................. 7,500,000
------------
Total.................................................... $150,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obliged to take and pay for all of the Debentures offered
hereby if any are taken.
The Underwriters initially propose to offer the Debentures directly to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession
not in excess of .50% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of .25% of the principal amount of the Debentures to certain other
dealers. After the initial public offering, the public offering price and such
concessions may from time to time be changed.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act or contribute to
payments which the Underwriters may be required to make in respect thereof.
In the ordinary course of their respective businesses, J.P. Morgan
Securities Inc. and NationsBanc Capital Markets, Inc. have provided, and in
the future may provide, investment banking services for the Company.
Additionally, in the ordinary course of their respective businesses,
affiliates of J.P. Morgan Securities Inc. and NationsBanc Capital Markets,
Inc. have provided, and in the future may provide, commercial banking services
for the Company.
S-8
<PAGE>
PROSPECTUS
EQUITABLE RESOURCES, INC.
Debt Securities
Equitable Resources, Inc. (the "Company") intends to offer from time to time,
in one or more series, non-convertible, senior, unsecured debt securities (the
"Debt Securities") with an aggregate initial public offering price or purchase
price of up to $250,000,000. The Debt Securities of each series will be offered
on terms to be determined at the time of sale. The specific terms of the Debt
Securities in respect of which this Prospectus is being delivered, including,
where applicable, the designation, aggregate principal amount, denominations,
purchase price, maturity, interest rate (which may be fixed or variable), if
any, time of payment of interest, if any, any terms for mandatory or optional
redemption, any terms for sinking fund payments, any listing on a securities
exchange and any other specific terms in connection with the sale of those Debt
Securities will be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Debt Securities may be offered through agents designated from time to time,
through dealers or through underwriters also to be so designated or directly to
purchasers. See "Plan of Distribution." The names of any such agents, dealers
or underwriters will be set forth in the applicable Prospectus Supplement.
The date of this Prospectus is July 10, 1996
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
OR THE APPLICABLE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR IN THAT PROSPECTUS SUPPLEMENT IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF OR THEREOF OR THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THEREOF. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY DEBT SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company, a Pennsylvania corporation, is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy and information
statements and other information with the Securities and Exchange Commission
(the "Commission"), all of which may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Chicago Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained upon written request from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
upon payment of prescribed rates. Such material can also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005, on which exchange the Common Stock of the Company is listed.
This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3, of which this Prospectus is a part, and
the exhibits thereto (together with all amendments thereto, the "Registration
Statement"), which the Company has filed with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), certain portions of
which have been omitted pursuant to the rules and regulations of the
Commission, and to which reference is hereby made for further information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents, which
also have been or will be filed with the Commission:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995 filed on March 26, 1996, and the Company's Amendment No. 1 to
the Company's Annual Report on Form 10-K/A filed on April 26, 1996;
(b) the Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1996 filed on May 14, 1996;
(c) the Company's Current Report on Form 8-K dated March 21, 1996;
(d) the Company's definitive Proxy Statement dated April 9, 1996 for the
Annual Meeting of Shareholders held on May 23, 1996;
(e) the Company's Registration Statement on Form 8-A registering Preferred
Stock Purchase Rights filed on April 16, 1996; and
(f) all documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to
the termination of the offering of the Debt Securities.
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<PAGE>
Any statement contained herein, in any Prospectus Supplement or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of the Registration
Statement and this Prospectus to the extent that a statement contained herein,
in that Prospectus Supplement or in any subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY AND ALL OF THE DOCUMENTS THAT HAVE BEEN OR MAY BE INCORPORATED HEREIN
BY REFERENCE (NOT INCLUDING EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS
ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS
SHOULD BE DIRECTED TO: AUDREY C. MOELLER, VICE PRESIDENT AND CORPORATE
SECRETARY, EQUITABLE RESOURCES, INC., 420 BOULEVARD OF THE ALLIES, PITTSBURGH,
PENNSYLVANIA 15219 (TELEPHONE: (412) 553-5877).
THE COMPANY
The Company is a diversified energy company engaged 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, contract drilling,
and the marketing of electricity and cogeneration development. The Company's
principal executive office is located at 420 Boulevard of the Allies,
Pittsburgh, Pennsylvania 15219.
USE OF PROCEEDS
Except as set forth in the Prospectus Supplement for any particular series
of Debt Securities, the Company intends to use the net proceeds from the sale
of Debt Securities for general corporate purposes, including working capital,
capital expenditures and the repayment or reduction of outstanding
indebtedness, including commercial paper obligations.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS YEARS ENDED DECEMBER 31,
ENDED -------------------------------------------------------------------------
MARCH 31, 1996 1995 1994 1993 1992 1991
-------------- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
6.06x .46x 2.37x 3.09x 2.86x 3.30x
</TABLE>
Earnings used to compute the ratio of earnings to fixed charges represent
the aggregate of net income, income taxes and fixed charges. Income taxes
include current and deferred income taxes and amortization of deferred
investment tax credits. Fixed charges consist of interest, including
amortization of debt expense less premium, and one-third of all rental
expenses. Reference is made to Exhibit 12.1 to the Registration Statement of
which this Prospectus is a part for the detailed calculation of the above
ratios.
DESCRIPTION OF THE DEBT SECURITIES
The following is a description of certain general provisions of the Debt
Securities to be offered pursuant to this Prospectus. The particular terms of
the Debt Securities offered pursuant to any Prospectus Supplement (the
"Offered Debt Securities") and the extent, if any, to which such general
provisions may not apply thereto will be described in the Prospectus
Supplement relating to such Offered Debt Securities.
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<PAGE>
The Debt Securities are to be issued under an Indenture, dated as of July 1,
1996, between the Company and Bank of Montreal Trust Company, as Trustee (the
"Trustee").
The following summary of certain provisions of the Debt Securities and the
Indenture does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all of the provisions of the Indenture,
including the definitions therein of certain terms. Whenever particular
provisions of or defined terms in the Indenture are referred to herein, such
provisions or defined terms are incorporated by reference herein. Section
references used herein are references to the Indenture.
GENERAL
The Debt Securities will be senior, unsecured obligations of the Company and
will rank on a parity with all other outstanding unsecured and unsubordinated
indebtedness of the Company.
The Debt Securities of any series will be issued in definitive form or, if
provided in the Prospectus Supplement relating thereto, will be represented in
whole or in part by a Global Security or Securities, which will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York (the
"Depositary"), and registered in the name of the Depositary's nominee. Each
Debt Security represented by a Global Security is referred to herein as a
"Book-Entry Security."
The Indenture does not limit the amount of Debt Securities or of any
particular series of Offered Debt Securities that may be issued thereunder and
provides that Debt Securities may be issued thereunder from time to time in
one or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms or
additional provisions of the Offered Debt Securities: (i) the title of the
Offered Debt Securities; (ii) any limit on the aggregate principal amount of
the Offered Debt Securities; (iii) the Person to whom any interest on an
Offered Debt Security will be payable, if other than the Person in whose name
that Offered Debt Security is registered; (iv) the date or dates on which the
principal of the Offered Debt Securities will be payable; (v) the rate or
rates (which may be fixed or variable) at which the Offered Debt Securities
will bear interest, if any, or the method of determination of such rate or
rates; (vi) the date or dates from which such interest, if any, on the Offered
Debt Securities will accrue or the method of determination of such date or
dates, the dates on which such interest, if any, will be payable, and the
regular record dates for such interest payment dates, if any; (vii) the place
or places where the principal of and any premium and interest on the Offered
Debt Securities will be payable; (viii) the period or periods within which,
the price or prices at which and the terms and conditions upon which the
Offered Debt Securities may be redeemed, in whole or in part, at the option of
the Company; (ix) the obligation, if any, of the Company to redeem or purchase
Offered Debt Securities pursuant to any sinking fund or analogous provisions
or at the option of a Holder, and the periods within which, the price or
prices at which, and the terms and conditions upon which, such Offered Debt
Securities will be so redeemed or purchased; (x) if other than denominations
of $1,000 and any integral multiple thereof, the denominations in which the
Offered Debt Securities will be issuable; (xi) if other than U.S. dollars, the
currency, currencies or currency units in which payment of the principal of
and any premium and interest on the Offered Debt Securities will be payable
and the manner of determining the equivalent thereof in U.S. dollars for
purposes of the definition of "Outstanding" in the Indenture; (xii) if the
amount of payments of principal of or any premium or interest on the Offered
Debt Securities may be determined with reference to an index, the manner in
which such amounts will be determined; (xiii) if the principal of or any
premium or interest on the Offered Debt Securities will be payable, at the
election of the Company or a Holder thereof, in one or more currencies or
currency units other than that in which the Offered Debt Securities are stated
to be payable, the currency, currencies or currency units in which those
payments will be payable, and the periods within which and the terms and
conditions upon which such election is to be made; (xiv) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Debt Securities which will be payable upon declaration of acceleration of the
maturity thereof; and (xv) any other terms of the series (which will not be
inconsistent with the provisions of the Indenture, except as otherwise
permitted). (Section 301)
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<PAGE>
Unless otherwise provided and except with respect to Book-Entry Securities,
principal of and premium, if any, and interest, if any, on Debt Securities
will be payable, and the transfer of Debt Securities will be registrable, at
the Corporate Trust Office of the Trustee, except that, at the option of the
Company, interest may be paid by mailing a check to, or by wire transfer to,
the Holders entitled thereto. (Sections 301 and 305)
For a description of payments of principal of, and premium, if any, and
interest on, and transfer of, Book-Entry Securities, and exchanges of Global
Securities representing Book-Entry Securities, see "Book-Entry Securities."
Unless otherwise indicated in the Prospectus Supplement relating thereto and
except with respect to Book-Entry Securities, Debt Securities will be issued
only in fully registered form without coupons and only in denominations of
$1,000 and any integral multiple thereof. No service charge will be made for
any registration of transfer or exchange of Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Sections 302 and 305)
Debt Securities may be issued under the Indenture as Original Issue Discount
Securities to be offered and sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will
be described in the Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any Debt Security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof. (Section 101)
CERTAIN COVENANTS OF THE COMPANY
Restriction on Liens
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, issue, assume or guarantee any Debt which is secured
by a mortgage, pledge, security interest or lien (any mortgage, pledge,
security interest or lien being hereinafter referred to as a "lien" or
"liens") upon any Principal Property of the Company or of any Restricted
Subsidiary or upon any shares of stock or Debt issued by any Restricted
Subsidiary, whether now owned or hereafter acquired, without effectively
providing that the Debt Securities entitled to the benefits of this covenant
(together with, if the Company so determines, any other indebtedness of or
guaranty by the Company or such Restricted Subsidiary then existing or
thereafter created which is not subordinated to the Debt Securities) will be
secured equally and ratably with (or at the Company's option, prior to) such
secured Debt so long as such Debt is so secured; provided, however, that the
foregoing will not restrict or apply to Debt secured by (a) liens on property
of, or shares of stock or Debt issued by, any Subsidiary existing at the time
such Subsidiary becomes a Restricted Subsidiary; provided, that such lien has
not been incurred in connection with the transfer by the Company or a
Restricted Subsidiary of a Principal Property to such Subsidiary unless the
Company, within 180 days of the effective date of such transfer, applies or
causes a Restricted Subsidiary to apply an amount equal to the fair value, as
determined by the Board of Directors, of such Principal Property at the time
of such transfer, to the retirement of Debt Securities or other Debt of the
Company (other than Debt subordinated to the Debt Securities), or Debt of any
Restricted Subsidiary (other than Debt owed to the Company or any Restricted
Subsidiary), having a stated maturity (i) more than 12 months from the date of
such application or (ii) which is extendable at the option of the obligor
thereon to a date more than 12 months from the date of such applications; (b)
liens on any property or shares of stock or Debt existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary, or liens to
secure the payment of all or any part of the purchase price or construction
cost thereof or to secure any Debt incurred prior to, at the time of, or
within 180 days after, the acquisition of such property, shares of stock or
Debt or the completion of any such construction, whichever is later, for the
purpose of financing all or any part of the purchase price or construction
cost thereof; (c) liens on any property to secure all or any part of the cost
of development, construction, alteration, repair or improvement of all or any
part of such property, or to secure Debt incurred prior to, at the time of, or
within 180 days after, the completion of such development, construction,
alteration, repair or improvement, whichever is later, for the purpose of
financing all or any part of such cost; (d) liens which secure
5
<PAGE>
Debt owing by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary or by the Company to a Restricted Subsidiary so long as the Debt is
held by the Company or a Restricted Subsidiary; (e) liens securing Debt of a
corporation or other Person which becomes a successor of the Company in
accordance with the terms of the Indenture other than Debt incurred by such
corporation or other Person in connection with a consolidation, merger or sale
of assets in accordance with the terms of the Indenture; (f) liens on property
of the Company or a Restricted Subsidiary in favor of the United States or any
state thereof, or any department, agency or instrumentality or political
subdivision of the United States or any state thereof, or in favor of any
other country or any political subdivision thereof, to secure partial,
progress, advance or other payments pursuant to any contract or statute or to
secure any Indebtedness incurred or guaranteed for the purpose of financing
all or any part of the purchase price or the cost of construction, alteration,
repair or improvement of the property subject to such liens (including, but
not limited to, liens incurred in connection with pollution control,
industrial revenue or similar financing), or in favor of any trustee or
mortgagee for the benefit of holders of indebtedness of any such entity
incurred for any such purpose; (g) liens securing Debt which is payable, both
with respect to principal and interest, solely out of the proceeds of oil,
gas, coal or other minerals to be produced from the property subject thereto
and to be sold or delivered by the Company or a Subsidiary, including any
interest of the character commonly referred to as a "production payment"; (h)
liens created or assumed by a Subsidiary on oil, gas, coal or other mineral
property, owned or leased by a Subsidiary, to secure Debt of such Subsidiary
for the purpose of developing such property, including any interest of the
character commonly referred to as a "production payment"; provided, however,
that neither the Company nor any Subsidiary shall assume or guarantee such
Debt or otherwise be liable in respect thereof; (i) any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or
in part, of any lien referred to in the foregoing clauses (a) to (h),
inclusive, or of any Debt secured thereby; provided, that such extension,
renewal or replacement lien is limited to all or any part of the same property
that secured the lien extended, renewed or replaced (plus any improvements and
construction on such property) and will secure at the time of such extension,
renewal or replacement no larger amount of Debt and, in the case of clause
(d), that the Debt being secured thereby is being secured for the same type of
Person as the Debt being replaced; and (j) liens not permitted by clauses (a)
through (i) above if at the time incurring such lien, the aggregate amount of
the related Debt plus all other Debt of the Company and its Restricted
Subsidiaries secured by liens which would otherwise be subject to the
foregoing restrictions after giving effect to the retirement of any Debt which
is currently being retired (not including Debt permitted to be secured under
clauses (a) through (i) above), plus the aggregate Attributable Debt
(determined as of the time of incurring such lien) of Sale and Leaseback
Transactions (other than Sale and Leaseback Transactions permitted by
subsections (a) and (b) of Section 1005 of the Indenture) entered into after
July 1, 1996 and in existence at time of incurring such lien (less the
aggregate amount of proceeds of such Sale and Leaseback Transactions which has
been applied in accordance with subsection (c) of Section 1005 of the
Indenture), does not exceed 10% of Consolidated Net Tangible Assets. (Section
1004)
Restriction on Sale and Leaseback Transactions
The Indenture further provides that the Company will not, and will not
permit any Restricted Subsidiary to, enter into any arrangement after July 1,
1996 with any bank, insurance company or other lender or investor (other than
the Company or another Restricted Subsidiary) providing for the leasing as
lessee by the Company or a Restricted Subsidiary of any Principal Property
(except a lease for a term not to exceed three years by the end of which term
it is intended that the use of such Principal Property by the lessee will be
discontinued and a lease which secures or relates to industrial revenue or
pollution control bonds or similar financing), which was or is owned by the
Company or a Restricted Subsidiary and which has been or is to be sold or
transferred by the Company or a Restricted Subsidiary to such Person more than
180 days after the completion of construction and commencement of full
operation of such property by the Company or such Restricted Subsidiary, to
such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such Principal Property
(herein referred to as a "Sale and Leaseback Transaction"), unless (a) the
Company or such Restricted Subsidiary would, at the time of entering into such
Sale and Leaseback Transaction, be entitled as described in clauses (a)
through (i) set forth under "Restrictions on Liens" above, without equally and
ratably securing the Debt Securities to issue, assume or guarantee Debt
secured by a lien on such Principal
6
<PAGE>
Property in the amount of the Attributable Debt arising from such Sale and
Leaseback Transaction without equally and ratably securing the Debt Securities
pursuant to the Indenture; or (b) the Attributable Debt of the Company and its
Restricted Subsidiaries in respect of such Sale and Leaseback Transaction and
all other Sale and Leaseback Transactions entered into after July 1, 1996
(other than such Sale and Leaseback Transactions as are permitted as described
in clause (a) above or clause (c) below), plus the aggregate principal amount
of Debt secured by liens on Principal Properties then outstanding (not
including any such Debt secured by liens described in clauses (a) through (i)
set forth under "Restrictions on Liens" above) which do not equally and
ratably secure the Debt Securities, would not exceed 10% of Consolidated Net
Tangible Assets; or (c) the Company, within 180 days after any such sale or
transfer, applies or causes a Restricted Subsidiary to apply an amount equal
to the greater of the net proceeds of such sale or transfer or the fair value,
as determined by the Board of Directors, of the Principal Property so sold and
leased back at the time of entering into such Sale and Leaseback Transaction
to the retirement of Debt Securities or other Debt of the Company (other than
Debt subordinated to the Debt Securities), or Debt of any Restricted
Subsidiary (other than Debt owed to the Company or any Restricted Subsidiary),
having a stated maturity (i) more than 12 months from the date of such
application or (ii) which is extendable at the option of the obligor thereon
to a date more than 12 months from the date of such application; provided,
that the amount to be so applied will be reduced by (x) the principal amount
of Debt Securities delivered to the Trustee for retirement and cancellation
within 180 days after such sale or transfer, and (y) the principal amount of
any such Debt of the Company or a Restricted Subsidiary other than Debt
Securities voluntarily retired by the Company or a Restricted Subsidiary
within 180 days after such sale or transfer. Notwithstanding the foregoing, no
retirement referred to in clause (c) of the preceding sentence may be effected
by payment at Maturity. (Section 1005)
Certain Definitions (Section 101)
"Attributable Debt" in respect of a Sale and Leaseback Transaction means, as
of any particular time, the present value (discounted at the rate of interest
implicit in the terms of the lease involved in such Sale and Leaseback
Transaction, as determined in good faith by the Company) of the obligation of
the lessee thereunder for net rental payments (excluding, however, any amounts
required to be paid by such lessee, whether or not designated as rent or
additional rent, on account of maintenance and repairs, services, insurance,
taxes, assessments, water rates or similar charges and any amounts required to
be paid by such lessee thereunder contingent upon monetary inflation or the
amount of sales, maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges) during the remaining term of such lease (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Consolidated Net Tangible Assets" means the aggregate amount of assets of
the Company and its consolidated subsidiaries (less applicable reserves) after
deducting therefrom (a) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles and (b) all
current liabilities except for current maturities of long-term debt, current
maturities of capitalized lease obligations, indebtedness for borrowed money
having a maturity of less than 12 months from the date of the most recent
audited consolidated balance sheet of the Company, but which by its terms is
renewable or extendable beyond 12 months from such date at the option of the
borrower, and deferred income taxes which are classified as current
liabilities, all as reflected in the audited consolidated balance sheet
contained in the Company's most recent annual report to its shareholders under
Rule 14a-3 of the Exchange Act, prior to the time as of which "Consolidated
Net Tangible Assets" is being determined.
"Debt" means indebtedness for borrowed money.
"Person" means, except as provided in Article Six of the Indenture, any
individual, corporation, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Principal Property" means any manufacturing plant or production,
transportation or marketing facility or other similar facility located within
the United States (other than its territories and possessions) and owned by,
or leased to, the Company or any Restricted Subsidiary, the book value of the
real property, plant and equipment
7
<PAGE>
of which (as shown, without deduction of any depreciation reserves, on the
books of the owner or owners) is not less than 1.5% of Consolidated Net
Tangible Assets as of the date on which such facility is acquired or a
leasehold interest therein is acquired.
"Restricted Subsidiary" means any Subsidiary substantially all the property
of which is located, or substantially all the business of which is carried on,
within the United States (other than its territories and possessions) which
shall at the time, directly or indirectly, through one or more Subsidiaries or
in combination with one or more other Subsidiaries or the Company, own or be a
lessee of a Principal Property.
"Subsidiary" means, with respect to the Company, a corporation of which more
than 50% of the total voting power of the capital stock entitled (without
regard to the occurrence of any contingency) to vote in the election of its
directors is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries or by the Company and one or more other Subsidiaries.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series is
defined in the Indenture as: (a) default in payment of interest on any Debt
Security of that series, which continues for 30 days; (b) default in payment
of principal of or premium, if any, on any Debt Security of that series at
maturity; (c) default in the deposit of any sinking fund payment when due in
respect of that series; (d) default in the performance or breach of any other
covenant of the Company in the Indenture (other than a default in the
performance or breach of a covenant included in the Indenture solely for the
benefit of a series of Debt Securities other than that series), which
continues for 60 days after due notice (as described in the Indenture) by the
Trustee or by Holders of at least 10% in principal amount of the Outstanding
Debt Securities of that series; (e) default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company (including a
default with respect to Debt Securities of any series other than that series)
or any Subsidiary in an aggregate principal amount of at least $25,000,000 or
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed
by the Company (including the Indenture) or any Subsidiary in an aggregate
principal amount of at least $25,000,000, whether such indebtedness now exists
or hereafter is created, which default constitutes a failure to pay any
portion of the principal of such indebtedness when due and payable after the
expiration of any applicable grace period with respect thereto or has resulted
in such indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without such
acceleration having been rescinded or annulled, or such indebtedness having
been discharged, within a period of 30 days after there shall have been given,
by registered or certified mail to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 10% in principal amount of
the Outstanding Securities of that series, a written notice specifying such
default and requiring the Company to cause such acceleration to be rescinded
or annulled or such indebtedness to be discharged and stating that such notice
is a Notice of Default under the Indenture; provided, however, that, subject
to the provisions of Sections 601 and 602 of the Indenture, the Trustee will
not be deemed to have knowledge of such default unless either (i) a
responsible officer of the Trustee has actual knowledge of such default or
(ii) the Trustee has received written notice of such default from the Company,
from any Holder, from the holder of any such indebtedness or from the trustee
under any such mortgage, indenture or other instrument; (f) certain events of
bankruptcy, insolvency or reorganization of the Company; and (g) any other
Event of Default provided with respect to Debt Securities of that series.
(Section 501)
The Indenture provides that, if any Event of Default with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing,
either the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Debt Securities of that series may declare the principal
amount (or, if any of the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount of such Debt
Securities as may be specified in the terms thereof) of (and all accrued and
unpaid interest on) all Debt Securities of that series to be due and payable
immediately, but under certain conditions such declaration may be rescinded
and annulled and past defaults (except, unless theretofore cured, a default in
payment of principal of or premium, if any, or interest, if any, on the Debt
Securities of that series and certain other specified defaults) may be waived
8
<PAGE>
by the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of that series on behalf of the Holders of all
Debt Securities of that series. (Sections 502 and 513)
The Indenture provides that if a default occurs under the Indenture with
respect to Debt Securities of any series at the time Outstanding, the Trustee
will give the Holders of the Outstanding Debt Securities of that series notice
of such default as and to the extent provided by the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); provided, however, that such
notice will not be given with respect to Outstanding Debt Securities of any
series until at least 30 days after the occurrence of that default if that
default is in the performance of a covenant in the Indenture other than for
the payment of the principal of or premium, if any, or interest on any Debt
Security of such series or the deposit of any sinking fund payment with
respect to the Debt Securities of such series. For the purpose of the
provision described in this paragraph, the term default with respect to any
series of Outstanding Debt Securities means any event which is, or after
notice or lapse of time or both would become, an "Event of Default" specified
in the Indenture with respect to Debt Securities of such series. (Section 602)
The Indenture contains a provision entitling the Trustee to be indemnified
by the Holders of any series of Outstanding Debt Securities before proceeding
to exercise any right or power vested in it under the Indenture at the request
or direction of the Holders of such series of Debt Securities. (Section 603)
The Trustee is required, during a default, to act with the standard of care
provided in the Trust Indenture Act. (Section 601) The Indenture provides that
the Holders of a majority in principal amount of Outstanding Debt Securities
of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series; provided, that the Trustee may decline to act if: (a) such direction
is contrary to law or the Indenture; or (b) the Trustee in good faith
determines that the action so directed would involve the Trustee in personal
liability for which it has not been adequately indemnified or would be unduly
prejudicial to Holders not joining in such direction. (Section 512)
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate concerning its compliance with the Indenture.
(Section 1009)
MODIFICATION OF THE INDENTURE AND WAIVER OF COVENANTS
Modifications and amendments may be made by the Company and the Trustee to
the Indenture, without the consent of any Holder of any Debt Security of any
series, to add covenants and Events of Default, and to make provisions with
respect to other matters and issues arising under the Indenture, provided that
any such provision does not adversely affect the rights of the Holders of Debt
Securities of any series in any material respect. (Section 901)
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 66 2/3% in principal amount
of Outstanding Debt Securities of each series affected thereby, to execute
supplemental indentures adding any provisions to or changing or eliminating
any of the provisions of the Indenture or modifying the rights of the Holders
of Outstanding Debt Securities of such series, except that no such
supplemental indenture may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on, any Debt
Security, or reduce the principal amount thereof, the premium, if any, thereon
or the rate of interest thereon, of any Debt Security of any series, (b)
reduce the percentage in principal amount of Outstanding Debt Securities of
any series, the consent of the Holders of which is required for any
supplemental indenture or for waiver of compliance with certain provisions of
the Indenture or certain defaults thereunder or (c) effect certain other
changes. (Section 902) The Indenture also permits the Company to omit
compliance with certain covenants in the Indenture with respect to the Debt
Securities of any series upon waiver by the Holders of not less than 66 2/3%
in principal amount of Outstanding Debt Securities of such series. (Section
1010)
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CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person and the Company may not permit any Person to
consolidate with or merge into the Company, unless: (a) in case the Company
consolidates with or merges into another Person or conveys, transfers or
leases its properties and assets substantially as an entirety to any Person,
the Person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety is a
corporation, partnership or trust, organized and validly existing under the
laws of the United States, any state thereof or the District of Columbia and
expressly assumes the Company's obligations on the Outstanding Debt Securities
and under the Indenture; (b) immediately after giving effect to such
transaction and treating any indebtedness which is an obligation of the
successor Person or becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, would have happened and be continuing; (c) if, as a result of any
such consolidation or merger or such conveyance, transfer or lease, properties
or assets of the Company would become subject to a lien which would not be
permitted by the Indenture, the Company or such successor Person, as the case
may be, takes such steps as are necessary effectively to secure the Debt
Securities equally and ratably with (or prior to) all indebtedness secured
thereby; and (d) the Company delivers to the Trustee an officers' certificate
and an opinion of counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with the transaction, such supplemental indenture comply with the
Indenture and that all conditions precedent in the Indenture provided for
relating to such transaction have been complied with.
BOOK-ENTRY SECURITIES
The following description of Book-Entry Securities will apply to any series
of Debt Securities issued in whole or in part in the form of a Global Security
or Securities except as otherwise provided in the Prospectus Supplement
relating thereto.
Upon issuance, all Book-Entry Securities of like tenor and having the same
date of original issue will be represented by one or more Global Securities.
Each Global Security representing Book Entry Securities will be deposited
with, or on behalf of, the Depositary, which will be a clearing agent
registered under the Exchange Act. The Global Security will be registered in
the name of the Depositary or a nominee of the Depositary.
Ownership of beneficial interests in a Global Security representing Book-
Entry Securities will be limited to institutions that have accounts with the
Depositary or its nominee ("participants") or persons that may hold beneficial
interests through participants. In addition, ownership of beneficial interests
by participants in such a Global Security only will be evidenced by, and the
transfer of those ownership interests only will be effected through, records
maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such a Global Security by persons that
hold through participants only will be evidenced by, and the transfer of those
ownership interests within such participant only will be effected through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to transfer
beneficial interests in such a Global Security.
Payment of principal of and any premium and interest on Book-Entry
Securities represented by a Global Security registered in the name of or held
by the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner and holder of the Global
Security representing such Book-Entry Securities. None of the Company, the
Trustee or any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the Depositary's records or any
participant's records relating to, or payments made on account of, beneficial
ownership interests in a Global Security representing such Book-Entry
Securities or for maintaining, supervising or reviewing any of the
Depositary's records or any participant's
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records relating to such beneficial ownership interests. Payments by
participants to owners of beneficial interests in a Global Security held
through such participants will be governed by the Depositary's procedures, as
is now the case with securities held for the accounts of customers registered
in "street name," and will be the sole responsibility of such participants.
No Global Security described above may be transferred except as a whole by
the Depositary for such Global Security to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee of the Depositary to a
successor Depositary or a nominee of such successor Depositary.
A Global Security representing Book-Entry Securities is exchangeable for
definitive Debt Securities in registered form, of like tenor and of an equal
aggregate principal amount, if (a) the Depositary notifies the Company that it
is unwilling or unable to continue as depositary for such Global Security or
if at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act, (b) the Company in its sole discretion determines that such
Global Security shall be exchangeable for definitive Debt Securities in
registered form or (c) there shall have occurred and be continuing an Event of
Default with respect to the Debt Securities of such series. Any Global
Security that is exchangeable pursuant to the preceding sentence will be
exchangeable in whole for definitive Debt Securities in registered form, of
like tenor and of an equal aggregate principal amount, and, unless otherwise
specified in the Prospectus Supplement relating thereto, in denominations of
$1,000 and integral multiples thereof. Such definitive Debt Securities will be
registered in the name or names of such person or persons as the Depositary
instructs the Trustee. It is expected that such instructions may be based upon
directions received by the Depositary from its participants with respect to
ownership of beneficial interests in such Global Security.
Except as provided above, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Debt Securities
in definitive form and will not be considered the Holders thereof for any
purpose under the Indenture and no Global Security representing Book-Entry
Securities will be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of the Depositary or its
nominee. Accordingly, each person owning a beneficial interest in a Global
Security must rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a Holder under the
Indenture. The Company understands that under existing industry practices in
the event that the Company requests any action of Holders or an owner of a
beneficial interest in such Global Security desires to give or take any action
that a Holder is entitled to give or take under the Indenture, the Depositary
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
DISCHARGE OR DEFEASANCE OF DEBT SECURITIES IN CERTAIN CIRCUMSTANCES
Defeasance and Discharge. The Indenture will cease to be of further effect
(except as to any surviving rights for the registration of the transfer or
exchange of Debt Securities expressly provided for in the Indenture) if: (a)
all Outstanding Debt Securities (other than destroyed, lost or stolen Debt
Securities which have been replaced or paid and Debt Securities, the payment
for which has been held in trust and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for
cancellation or (b) (1) all Debt Securities not previously delivered to the
Trustee for cancellation have become due and payable or are by their terms to
become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee and (2) the
Company has deposited with the Trustee, as trust funds, an amount sufficient
to pay and discharge the entire indebtedness on the Outstanding Debt
Securities for principal and any premium and interest to the date of such
deposit or to maturity or redemption, as the case may be. Such trust may only
be established if (a) the Company has paid or caused to be paid all other sums
payable by the Company under the Indenture and (b) the Company has delivered
to the Trustee an officers' certificate and an
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opinion of counsel, each stating that all conditions precedent provided for in
the Indenture relating to the satisfaction and discharge of the Indenture have
been complied with.
The Indenture provides that the terms of any series of Debt Securities may
provide the Company with the option to discharge its indebtedness represented
by such series of Debt Securities or to cease to be obligated to comply with
certain covenants under the Indenture. The Company, in order to exercise such
option, will be required to deposit with the Trustee money and/or U.S.
Government Obligations which, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an
amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification delivered
to the Trustee, to pay the principal of and premium, if any, and interest on,
and any mandatory sinking fund payments in respect of, the Debt Securities of
such series at the stated maturity of such payments in accordance with the
terms of the Indenture and such Debt Securities. Such trust may only be
established if (a) in the case of Debt Securities of any series which are then
listed on the New York Stock Exchange, the Company has delivered to the
Trustee an opinion of counsel, stating that the Company's exercise of this
defeasance option will not cause the Debt Securities to be delisted; (b) no
Event of Default or event (including such deposit in trust) that with notice
or lapse of time or both would become an Event of Default with respect to Debt
Securities of a series has occurred and is continuing on the date of such
deposit; (c) the Company has delivered to the Trustee (1) an opinion of
counsel, stating that the Holders of Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
the Company's exercise of this defeasance option and will be subject to
Federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if the Company had not exercised this option
and (2) in the case of Debt Securities of such series being discharged, either
a private letter ruling to that effect received from the U.S. Internal Revenue
Service (the "IRS") or a revenue ruling pertaining to a comparable form of
transaction to that effect published by the IRS or evidence of a change in
applicable Federal income tax law occurring after the date of the Indenture;
and (d) if the Company is to be discharged with respect to Debt Securities of
such series, no Event of Default or event that with notice or lapse of time or
both would become an Event of Default with respect to Debt Securities of such
series has occurred and is continuing at any time during the period ending on
the 123rd day after the date of deposit by the Company. (Section 1302) In the
event the Company exercises this option and the Debt Securities of a series
are declared due and payable because of the occurrence of any Event of
Default, the amount of money and U.S. Government Obligations, as the case may
be, on deposit with the Trustee will be sufficient to pay the amounts due on
the Debt Securities of a series at the time of their maturity but may not be
sufficient to pay the amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company will remain liable for such payments.
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed to act with respect
to such series. (Section 610) In the event that two or more persons are acting
as trustee with respect to different series of Debt Securities, each such
Trustee will be a trustee of a trust under the Indenture separate and apart
from the trust administered by any other such Trustee (Section 611), and any
action described herein to be taken by the "Trustee" may then be taken by each
such Trustee with respect to, and only with respect to, the one or more series
of Securities for which it is Trustee.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby in any of four
ways: (i) through agents, (ii) through underwriters, (iii) through dealers or
(iv) directly to purchasers.
Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent, who
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of Debt Securities in respect of which this
Prospectus is being delivered, will be named, and any commissions payable by
the Company to such agent will be set forth, in the
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applicable Prospectus Supplement. Unless otherwise indicated in that
Prospectus Supplement, any such agent will be acting on a reasonable efforts
basis for the period of its appointment. The Company will have the sole right
to accept offers to purchase Debt Securities and may reject any proposed offer
in whole or in part. Any such agent will have the right, in its sole
discretion, to reject any offer received by it to purchase Debt Securities in
whole or in part. Agents may be entitled under agreements which may be entered
into with the Company to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for the Company
in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale of Debt
Securities in respect of which this Prospectus is being delivered, the Company
will execute an underwriting agreement with such underwriters at the time of
the sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the applicable Prospectus Supplement, which
will be used by the underwriters to make resales of Debt Securities in respect
of which this Prospectus is being delivered to the public. The underwriters
may be entitled, under the relevant underwriting agreement, to indemnification
by the Company against certain liabilities, including liabilities under the
Securities Act.
If a dealer is utilized in the sale of Debt Securities in respect of which
this Prospectus is being delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities
to the public at varying prices to be determined by such dealer at the time of
resale. Dealers may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act.
If the Company offers and sells directly to a purchaser or purchasers Debt
Securities in respect of which this Prospectus is being delivered and such
purchasers are involved in the reoffer or resale of such Debt Securities, then
such purchasers in respect thereof may be deemed to be underwriters as that
term is defined in the Securities Act and will be named and the terms of such
reoffers or resales will be set forth in a Prospectus Supplement. Such
purchasers may then reoffer and resell such Debt Securities to the public or
otherwise at varying prices to be determined by such purchasers at the time of
resale or as otherwise described in the applicable Prospectus Supplement.
Purchasers of Debt Securities directly from the Company may be entitled under
agreements which they may enter into with the Company to indemnification by
the Company against certain liabilities, including liabilities under the
Securities Act, and may engage in transactions with or perform services for
the Company in the ordinary course of their business or otherwise.
The place and time of delivery for the Debt Securities in respect of which
this Prospectus is being delivered will be as set forth in the applicable
Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company at December 31, 1995
and 1994, and for each of the three years in the period ended December 31,
1995, incorporated by reference in this Prospectus and the Registration
Statement have been audited by Ernst & Young LLP, independent auditors, to the
extent indicated in their report thereon incorporated by reference. Such
consolidated financial statements have been incorporated herein and therein in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
VALIDITY OF THE DEBT SECURITIES
The validity of the Debt Securities offered hereby will be passed upon for
the Company by Augustine A. Mazzei, Jr., Esq., the Company's Senior Vice
President and Chief Legal Officer, and by Reed Smith Shaw & McClay,
Pittsburgh, Pennsylvania, counsel to the Company. On June 17, 1996, Mr. Mazzei
beneficially owned 13,468 shares of the Company's common stock and held stock
options to purchase an additional 18,500 shares of such stock. Certain legal
matters relating to the Debt Securities offered hereby will be passed upon for
any underwriter, dealer or agent by Kirkpatrick & Lockhart LLP, Pittsburgh,
Pennsylvania.
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