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, 1995
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>
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, 1995 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 1995.
Item 4. Participating Employees.
At December 31, 1995 and 1994, there were 135 and 125 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, 1995.
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<PAGE>
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, 1995. The Principal received
$291 and $2,564 in recordkeeping and administrative fees during the Plan
year ended December 31, 1995 and 1994, respectively.
(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, 1995, 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 Supplemental Schedule.
(a) Financial Statements PAGE
------
The following are attached and included herein
as Financial Statements of the Plan as of and
for the three years ended December 31, 1995:
Report of Independent Accountants .................................. 6
Statement of Net Assets Available for Benefits at
December 31, 1995 and 1994 ......................................... 7
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 1995, 1994 and 1993 .............. 8
Notes to Financial Statements ................................... 9-13
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<PAGE>
(b) Supplemental Schedule
Item 27(d) - Schedule of 5% Reportable Transactions
for the Year Ended December 31, 1995 ............................. 14
Item 10. Consent of Independent Accountants. ............................. 15
- --------------------------------------------
Note: All other schedules required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because
the conditions under which they are required are not present.
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<PAGE>
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 /s/ John B. Denison
________________________
John B. Denison
Trustee, Secretary and Agent To
The Retirement/Employee Benefits
Committee
Date: May 31, 1996
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<PAGE>
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 accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available
for benefits of the National Gas & Oil Company Salary Deferral Plan (the
"Plan") at December 31, 1995 and 1994, and the changes in net assets available
for benefits for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting prin- ciples. These
financial statements are the respon- sibility 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.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedule 1 is presented for purpose of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PRICE WATERHOUSE LLP
Cleveland, Ohio
May 31, 1996
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<PAGE>
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
1995 1994
ASSETS ______ ______
Guaranteed Interest Accounts,
at market value, and at various
interest rates (See Note 2) ................... $ 499,026 $ 408,919
Money Market Account, at market value .......... 35,201 8,695
Bond and Mortgage Account, at market
value ......................................... 57,290 44,335
National Gas & Oil Company Common
Stock, at market value (cost
$377,557 and $404,695, respectively) .......... 597,209 803,963
U.S. Common Stock Account,
at market value (cost $192,641 and
$162,390, respectively) ....................... 302,626 201,365
TRASOP National Gas & Oil Company
Common Stock, at market value
(cost $254,305 and $267,373,
respectively) (See Note 5) .................... 438,512 547,835
---------- ----------
Total assets ............................... $1,929,864 $2,015,112
========== ==========
Net Assets Available for Benefits .............. $1,929,864 $2,015,112
========== ==========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years Ended December 31,
1995 1994 1993
------ ------ ------
Contributions from participants ... $ 146,052 $ 116,075 $ 132,071
Rollovers into Plan ............... 16,022 1,936 --
Dividend and interest income ...... 64,626 46,914 48,451
Change in unrealized appreciation
(See Note 3) ..................... (201,745) 60,304 292,523
----------- ----------- -----------
24,955 225,229 473,045
Amounts withdrawn by participants . (109,912) (67,748) (14,927)
Administrative expenses ........... (291) (2,564) (5,043)
----------- ----------- -----------
Increase (decrease) in net assets
available for benefits ........... (85,248) 154,917 453,075
Beginning of year .............. 2,015,112 1,860,195 1,407,120
----------- ----------- -----------
End of year .................... $ 1,929,864 $ 2,015,112 $ 1,860,195
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
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 significant
administrative and recordkeeping expenses were paid by the Company. Expenses
from January 1, 1994 to June 30, 1994 were paid by the Plan.
The Company paid $9,710, $4,507 and $78 of Plan expenses for the year ended
December 31, 1995, 1994 and 1993, 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.
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<PAGE>
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 1995 and 1994. 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.
Additionally, participants may roll over distributions from other qualified
pension or profit sharing plans. All salary deferrals, voluntary after tax
contributions and roll over 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, 1995, 1994 and 1993.
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,
1995 and 1994, are listed below:
Guaranteed Interest Accounts:
1995 1994
------ ------
- December 31, 1994, 9.14% $ - $ 82,907
- December 31, 1995, 8.96% 77,851 83,019
- December 31, 1996, 9.22% 72,291 77,141
- December 31, 1997, 8.57% 103,248 14,838
- December 31, 1998, 7.30% 22,907 22,013
- December 31, 1999, 6.28% 70,608 67,083
- December 31, 2000, 6.80% 64,652 61,918
- December 31, 2001, 6.80% 87,469 -
-------- --------
$499,026 $408,919
======== ========
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<PAGE>
The $82,907 of Guaranteed Interest Accounts which matured on December 31, 1994
was reinvested in the Guaranteed Interest Accounts maturing on December 31,
1997 and December 31, 2001, the Bond and Mortgage Account and the National Gas
& Oil Common Stock Account in the following amounts: $59,467, $14,069, $2,690
and $6,681, 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.
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<PAGE>
NOTE 3 - SUMMARY OF CHANGES IN PLAN EQUITY BY INVESTMENT ACCOUNT:
The balances in each of the investment accounts at December 31, 1995, 1994 and
1993 and the changes in these investment accounts during the periods then
ended are as follows:
<TABLE>
TRASOP
National
Gas & Oil
Guaranteed Money Bond and National Gas Company Cash and
Interest Market Mortgage & Oil Company U.S. Common Common Short-term
Account Account Account Common Stock Stock Account Stock Deposits Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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/(decrease) in net
assets available for benefits ..... 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/(decrease) in net
assets available for benefits ..... 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
========= ======== ======== ========= ========= ========= == ===========
Contributions from
participants ...................... $ 35,373 $ 3,545 $ 9,930 $ 68,140 $ 29,064 $- $- $ 146,052
Rollovers into Plan ................ 9,614 1,602 -- 3,204 1,602 -- - 16,022
Investment transfers, net .......... 78,750 17,970 9,408 (103,040) 28 (3,116) - 0
Dividend and interest
income ............................ 28,473 3,401 7,360 15,051 -- 10,341 - 64,626
Change in unrealized
appreciation ...................... -- -- -- (179,616) 71,010 (93,139) - (201,745)
Amounts withdrawn by
participants ...................... (62,043) -- (13,565) (10,493) (402) (23,409) - (109,912)
Administrative expenses ............ (60) (12) (178) -- (41) -- - (291)
--------- -------- -------- --------- --------- -------- -- -----------
Increase/(decrease) in net
assets available for benefits ..... 90,107 26,506 12,955 (206,754) 101,261 (109,323) - (85,248)
--------- -------- -------- --------- --------- -------- -- -----------
Balance at December 31, 1995 ....... $ 499,026 $ 35,201 $ 57,290 $ 597,209 $ 302,626 $ 438,512 $0 $ 1,929,864
========= ======== ======== ========= ========= ========= == ===========
</TABLE>
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<PAGE>
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 distributions 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 merger will have no effect on existing
or current operations of the merged Plans.
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<PAGE>
SCHEDULE I
NATIONAL GAS & OIL COMPANY
SALARY DEFERRAL PLAN
SCHEDULE OF 5% REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
Purchase Selling
Price Price Cost
-------- -------- ------
Guaranteed Interest Account
Total value of purchases ............ $209,091 $ - $209,091
Total value of sales ................ $ - $147,458 $ -
National Gas & Oil
Company - Common Stock
Total value of sales ................ $ - $127,241 $ -
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<PAGE>
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 31, 1996 appearing on page 6 of this
Form 11-K for the year ended December 31, 1995.
PRICE WATERHOUSE LLP
Cleveland, Ohio
May 31, 1996
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