SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1994
Commission file number 1-8223
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
(Title of Plan)
National Gas & Oil Company
1500 Granville Road
P.O. Box 4970
Newark, Ohio 43058-4970
(Address of Plan)
National Gas & Oil Company
(Name of issuer of securities held pursuant to the Plan)
Page 1. Item 1. Changes in the Plan.
The National Gas & Oil Company Salary Deferral Plan (Plan) was
established effective January 1, 1987, with the first employee
deferrals commencing on February 27, 1987. The initial Plan
documents were filed during the Plan year ended December 31, 1987.
Item 2. Changes in Investment Policy.
Subsequent to the establishment of the Plan, there have been no
material changes during Plan year ended December 31, 1994, in the
investment policy with respect to the kind of securities or other
investments in which funds held under the Plan may be invested.
Item 3. Contributions under the Plan.
All contributions made under the Plan by the issuer are measured
by reference to the employees' contributions. No such
contributions were made by the issuer in 1994.
Item 4. Participating Employees.
At December 31, 1994 and 1993, there were 125 and 123 respectively,
employees participating in the Plan.
Item 5. Administration of the Plan.
(a) The Trustee of the Plan is:
John B. Denison
Vice President and Secretary
National Gas & Oil Company
1500 Granville Road
P.O. Box 4970
Newark, Ohio 43058-4970
The Administrator of the Plan is:
The Retirement/Employee Benefits Committee of
the Board of Directors of
National Gas & Oil Company
1500 Granville Road
P.O. Box 4970
Newark, Ohio 43058-4970
c/o John B. Denison
Secretary and Agent
(b) There was no compensation paid from the Plan to any of the
Plan Administrators for services in any capacity during the
Plan year ended December 31, 1994.
Item 6. Custodian of Investments.
(a) The Principal Mutual Life Insurance Company (Principal), 711
High Street, Des Moines, Iowa 50309, an insurance company,
Park National Bank, Trustee, 50 North 3rd Street, P.O. Box 850
Newark, Ohio 43058-0850 and John B. Denison, Trustee, address
set forth above, an individual and executive officer of the
Company, acted as custodian of the securities, investments and
assets of the Plan.
(b) The Trustees did not receive any fee or compensation from the
Plan during the Plan year ended December 31, 1994. The
Principal received $2,564 in recordkeeping and administrative
fees during the Plan year ended December 31, 1994.
(c) The Trustees and Plan Administrators are covered by a blanket
crime bond with a primary limit of $350,000 and an excess
limit of $10,000,000.
Item 7. Reports to Participating Employees.
During the Plan year ended December 31, 1994, each Plan participant
received quarterly and annual statements reflecting the status of
each participating employee's account at the end of each quarter
or the year, respectively. A Summary Annual Report will be made
available to all participants.
Item 8. Investment of Funds.
(a) The Plan does not pay any brokerage commissions.
(b) Not applicable.
Item 9. Financial Statement and Exhibit Index.
(a) Financial Statements PAGE
The following are attached and included herein
as Financial Statements of the Planas of and
for the three years endedDecember 31, 1994:
Report of Independent Accountants. 6
Statement of Financial Position at December 31, 1994 and
1993. 7
Statement of Income and Changes in Plan Equity
for the years ended December 31, 1994, 1993 and 1992. 8
Notes to Financial Statements. 9-13
(b)Exhibits
Transactions Involving an Amount in Excess of 5% of
the Current Value of Plan Assets for the Year Ended
December 31, 1994. 14
Consent of Independent Accountants. 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Administrator of the Plan has duly caused this Annual
Report to be signed by the undersigned thereunto duly authorized.
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
By ________________________
John B. Denison
Trustee, Secretary and Agent To
The Retirement/Employee Benefits
Committee
Date: May 19, 1995
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
National Gas & Oil Company and
the Participants of the Salary
Deferral Plan:
In our opinion, the financial statements listed in the
index, appearing under Item 9, on page 3 present
fairly, in all material respects, the financial
position of the National Gas & Oil Company Salary
Deferral Plan (the "Plan") at December 31, 1994 and
1993, and the results of its operations and the
changes in its plan equity for each of the three years
in the period ended December 31, 1994, in conformity
with generally accepted accounting principles. 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 of these statements
in accordance with generally accepted auditing
standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating
the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
May 19, 1995
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
STATEMENT OF FINANCIAL POSITION
December 31,
1994 1993
ASSETS
Guaranteed Interest Accounts,
at market value, and at various
interest rates (See Note 2) $408,919 $380,346
Money Market Account, at market value 8,695 9,188
Bond and Mortgage Account, at market
value 44,335 34,579
National Gas & Oil Company Common
Stock, at market value (cost
$404,695 and $401,596, respectively) 803,963 764,095
U.S. Common Stock Account,
at market value (cost $162,390 and
$104,922, respectively) 201,365 143,337
TRASOP National Gas & Oil Company
Common Stock, at market value
(cost $267,373 and $271,163,
respectively) (See Note 5) 547,835 528,650
Total assets $2,015,112 $1,860,195
========== ==========
Plan Equity $2,015,112 $1,860,195
========== ==========
The accompanying notes are an integral part of these financial
statements.
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Years Ended December 31,
1994 1993 1992
Contributions from participants $116,075 $132,071 $140,075
Rollovers into Plan 1,936 - 17,938
Dividend and interest income 46,914 48,451 41,795
Change in unrealized appreciation
(See Note 3) 60,304 292,523 163,340
225,229 473,045 363,148
Amounts withdrawn by participants (67,748) (14,927) (239,422)
Administrative expenses (2,564) (5,043) (1,633)
Increase in Plan equity 154,917 453,075 122,093
Plan Equity:
Beginning of year 1,860,195 1,407,120 1,285,027
End of year $2,015,112 $1,860,195 $1,407,120
========== ========== ==========
The accompanying notes are an integral part of these financial
statements.
NATIONAL GAS & OIL COMPANY SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The financial statements of the Salary Deferral Plan (Plan) have
been prepared on the accrual basis of accounting.
Valuation of Investments
Investments in the Common Stock Account and The National Gas & Oil
Company (Company) Common Stock Accounts are stated at market value
as determined from quoted market prices for the last business day
of the year.
Investments in the Guaranteed Interest Accounts, Money Market
Account and Bond and Mortgage Account are stated at their estimated
market value, which approximates cost.
Plan Expenses
Beginning July 1, 1994, under a new Plan Amendment, all
administrative and recordkeeping expenses were paid by the Company.
Certain expenses from January 1, 1994 to June 30, 1994 were paid
by the Plan.
The Company paid $4,507, $78 and $28,003 of Plan expenses for the
year ended December 31, 1994, 1993 and 1992, respectively.
NOTE 2 - SUMMARY DESCRIPTION OF THE PLAN:
The following is a summary of certain provisions of the Plan. A
more complete description of the Plan provisions may be found in
the Plan documents.
All employees of the Company and its subsidiaries who were full-
time employees on November 1, 1986 were eligible to participate in
the plan at its inception, January 1, 1987. Any other employee may
become a participant on January 1, or July 1 of any year after
having attained the age of 21 and completed one year of service as
an employee of the Company. Participation is voluntary.
The Company, having final authority to administer the Plan, has
established a Trust to receive and invest contributions made to the
Plan and to pay and distribute benefits due participants. The Vice
President and Secretary of the Company and Park National Bank are
Trustees of the Plan. The Plan permits participants to make
contributions which qualify under Section 401(k) of the Internal
Revenue Code and accordingly, these contributions reduce
participants' taxable income for Federal and State purposes.
Through the Principal Mutual Life Insurance Company (Principal),
participants can direct contributions to be invested in Guaranteed
Interest Accounts, a Common Stock Account, a Money Market Account,
and a Bond and Mortgage Account. Through Park National Bank,
participants can invest in a National Gas & Oil Company Common
Stock Account. In 1992 Park National Bank was appointed co-
trustee to handle the buying, selling, holding, and voting of the
common stock of the Company held by the Plan.
Participants may elect for each Plan year to defer a portion of
their compensation, not to exceed the lesser of 15% of such compen-
sation or $9,240 for 1994 and $8,994 for 1993. A participant may
elect to make additional voluntary after tax contributions, in a
fixed whole percentage, from 1% to 10%, of his compensation,
determined after pretax contributions have been made. Additional-
ly, participants may rollover distributions from other qualified
pension or profit sharing plans. All salary deferrals, voluntary
after-tax contributions and rollover contributions are fully vested
and nonforfeitable at all times.
The Company may contribute an amount which equals a percentage of
the participant's contributions made to the Plan in a given year.
This percentage shall be determined at the discretion of the
Company's Board of Directors on a semiannual basis. Amounts
credited to a participant's employer matching contributions account
becomes fully vested after the participant has completed five years
of service. The Company made no such contributions to the Plan for
the years ending December 31, 1994, 1993 and 1992.
Withdrawal of contributions are permitted only to the extent
necessary to meet a financial hardship, unless a participant has
retired, died, become disabled, terminated or attained the age of
59-1/2 years, or upon termination of the Plan.
Contributions allocated to the Guaranteed Interest Accounts and
interest thereon are deposited by the Trustee with Principal.
These deposits are made under terms of contracts which guarantees
principal and interest rates. The interest rate, maturity date and
amounts of each account as of December 31, 1994 and 1993, are
listed below:
Guaranteed Interest Accounts:
1994 1993
- - - December 31, 1993, 9.29% $ - $ 80,950
- - - December 31, 1994, 9.14% 82,907 83,315
- - - December 31, 1995, 8.96% 83,019 79,724
- - - December 31, 1996, 9.22% 77,141 4,155
- - - December 31, 1997, 8.57% 14,838 13,704
- - - December 31, 1998, 7.30% 22,013 20,598
- - - December 31, 1999, 6.27% 67,083 97,900
- - - December 31, 2000, 6.82% 61,918 -
$408,919 $380,346
======== ========
The $80,950 of Guaranteed Interest Accounts which matured on
December 31, 1993 was reinvested in the Guaranteed Interest
Accounts maturing on December 31, 1996 and December 31, 2000, the
Bond and Mortgage Account, the National Gas & Oil Common Stock
Account and the U.S. Common Stock Account in the following amounts:
$51,172, $15,984, $2,118, $11,264 and $412, respectively.
Contributions allocated to the U.S. Common Stock Account and
earnings thereon are invested by the Principal in a pooled
investment account invested in U.S. securities, primarily common
stocks.
Contributions allocated to the Money Market Account and earnings
thereon are invested by Principal in a pooled investment account
which invests in money market instruments.
Contributions allocated to the Bond and Mortgage Fund are invested
by Principal in a pooled investment account invested in
intermediate-term, fixed-income loans.
Contributions allocated to the National Gas & Oil Company Common
Stock Account and earnings thereon are invested by the Trustee,
Park National Bank, in National Gas & Oil Company common stock.
<PAGE>
NOTE 3 - SUMMARY OF CHANGES IN PLAN EQUITY BY INVESTMENT ACCOUNT:
The balances in each of the investment accounts at December 31,
1994, 1993 and 1992 and the changes in these investment accounts
during the periods then ended are as follows:
<TABLE>
<CAPTION>
TRASOP
Guaranteed Money Bond and National Gas National Gas Cash and
Interest Market Mortgage & Oil Company U.S. Common & Oil Company Short-term
Account Account Account Common Stock Stock Account Common Stock Deposits Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1991 $ 276,271 $ 9,656 $ 4,478 $ 450,937 $ 72,802 $ 394,254 $ 76,629 $ 1,285,027
Contributions from
participants 46,775 2,723 8,827 62,430 19,320 - - 140,075
Rollovers into Plan 14,830 - - - 1,054 2,054 - 17,938
Transfers, net (8,558) 7,722 6,700 28,806 35,413 6,546 (76,629) 0
Dividend and interest
income 18,384 290 985 12,856 - 9,280 - 41,795
Change in unrealized
appreciation - - - 92,301 7,753 63,286 - 163,340
Amounts withdrawn by
participants (63,650) (11,240) (1,711) (57,616) (38,515) (66,690) - (239,422)
Administrative
expenses (1,183) (55) (80) - (315) - - (1,633)
Increase in
Plan equity 6,598 (560) 14,721 138,777 24,710 14,476 (76,629) 122,093
Balance at December 31,
1992 282,869 9,096 19,199 589,714 97,512 408,730 0 1,407,120
Contributions from
participants 42,032 1,070 12,886 58,708 17,375 - - 132,071
Rollovers into
Plan - - - - - - - -
Transfers, net 41,104 7,230 133 (67,119) 18,652 - - 0
Dividend and interest
income 21,011 442 2,699 14,334 - 9,965 - 48,451
Change in unrealized
appreciation - - - 171,575 10,993 109,955 - 292,523
Amounts withdrawn by
participants (3,339) (8,471) - (3,117) - - - (14,927)
Administrative
expenses (3,331) (179) (338) - (1,195) - - (5,043)
Increase in
Plan equity 97,477 92 15,380 174,381 45,825 119,920 - 453,075
Balance at December 31,
1993 $ 380,346 $ 9,188 $ 34,579 $ 764,095 $ 143,337 $ 528,650 $ 0 $ 1,860,195
Contributions from
participants 30,273 740 8,657 53,206 23,199 - - 116,075
Rollovers
into Plan 484 - - 968 484 - - 1,936
Transfers, net 22,111 4,827 2,118 (63,533) 34,477 - - 0
Dividend and interest
income 21,864 331 (768) 15,051 - 10,436 - 46,914
Change in unrealized
appreciation - - - 36,769 560 22,975 - 60,304
Amounts withdrawn by
participants (44,602) (6,327) - (2,593) - (14,226) - (67,748)
Administrative
expenses (1,557) (64) (251) - (692) - - (2,564)
Increase in
Plan equity 28,573 (493) 9,756 39,868 58,028 19,185 - 154,917
Balance at December 31,
1994 $ 408,919 $ 8,695 $ 44,335 $ 803,963 $ 201,365 $ 547,835 $ - $ 2,015,112
</TABLE>
NOTE 4 - TAX STATUS OF THE SALARY DEFERRAL PLAN:
On May 2, 1995, The Internal Revenue Service issued a favorable
determination letter on the Plan, which indicates that the terms
of the Plan conform to the requirements of Section 401(a) of The
Internal Revenue Code. As such, the Plan is exempt from Federal
income taxes.
Generally, participants in the Plan are taxed at the time of dis-
tributions on the amount by which their total distributions from
the Plan exceed their total after-tax contributions to the Plan.
However, each participant's tax situation is based upon individual
circumstance.
NOTE 5 - MERGER OF PLANS:
Effective December 31, 1988, the National Gas & Oil Corporation Tax
Reduction Act Stock Ownership Plan was merged into the Plan. As
such, the fair market value of the accounts of TRASOP participants
were rolled over into the Plan on the effective date of the merger.
The Company believes this merger will have no effect on the tax
status of the Plan. The merger will have no effect on existing or
current operations of the merged Plans.
NOTE 6 - OTHER:
On March 18, 1991, the Company sold substantially all of the assets
of National Energy Service Company (NESC), a subsidiary of the
Company. The employees of NESC who were eligible to be partici-
pants of the Plan were terminated. The market value of the
distribution to the 27 terminated participants from NESC was
$79,478 during 1992.
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
TRANSACTIONS INVOLVING AN AMOUNT IN
EXCESS OF 5% OF THE CURRENT VALUE
OF PLAN ASSETS FOR THE YEAR ENDED DECEMBER 31, 1994
Purchase Selling
Price Price Cost
Guaranteed Interest Account
Aggregate of 1994 transfers
into account $133,964 N/A $133,964
Aggregate of 1994 transfers
from account $127,255 N/A $127,255
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (No. 33-55390) of the National
Gas & Oil Company Salary Deferral Plan of our report dated May 19,
1995 appearing on page 6 of this Form 11-K.
PRICE WATERHOUSE LLP
Houston, Texas
June 1, 1995
