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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1993 or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to _____________________
Commission file number 1-7320
ANR PIPELINE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 38-1281775
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 RENAISSANCE CENTER,
DETROIT, MICHIGAN 48243-1902
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (313) 496-0200
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of each exchange
Title of each class on which registered
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9-5/8% Debentures, due 2021 New York Stock Exchange
7-3/8% Debentures, due 2024
$2.675 Series, Cumulative Preferred Stock ($1 par value)
$2.12 Series, Cumulative Preferred Stock ($1 par value)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /x/
As of March 16, 1994, there were outstanding 1,000 shares of common stock of
the Registrant, $100 par value per share, its only class of common stock. None
of the voting stock of the Registrant is held by non-affiliates.
DOCUMENTS INCORPORATED BY REFERENCE: None
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TABLE OF CONTENTS
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ITEM NO. PAGE
<S> <C> <C>
Glossary............................................................................ (ii)
PART I
1. Business............................................................................. 1
Introduction..................................................................... 1
Natural Gas System............................................................... 1
Operations.................................................................... 1
General.................................................................... 1
Gas Sales for Resale and Transportation.................................... 2
Gas Purchases.............................................................. 2
Gas Storage................................................................ 3
Competition................................................................ 3
Gas System Reserves and Availability.......................................... 4
Reconciliation with FERC Form 15 Report....................................... 4
Supply Area Deliverability.................................................... 4
Regulations Affecting Gas System.............................................. 4
General.................................................................... 4
Rate Matters............................................................... 5
Environmental................................................................. 6
Other Developments............................................................ 6
2. Properties........................................................................... 7
3. Legal Proceedings.................................................................... 7
4. Submission of Matters to a Vote of Security Holders.................................. 7
PART II
5. Market for the Registrant's Common Equity and Related Stockholder Matters.............. 8
6. Selected Financial Data................................................................ 8
7. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 8
8. Financial Statements and Supplementary Data............................................ 9
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure... 9
PART III
10. Directors and Executive Officers of the Registrant.................................... 10
11. Executive Compensation................................................................ 11
12. Security Ownership of Certain Beneficial Owners and Management........................ 16
13. Certain Relationships and Related Transactions........................................ 20
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................... 22
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(i)
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GLOSSARY
"ANR" means American Natural Resources Company
"ANR Pipeline" or the "Company" means ANR Pipeline Company
"ANR Storage" means ANR Storage Company
"Bcf" means billion cubic feet
"Coastal" means The Coastal Corporation
"Coastal Natural Gas" means Coastal Natural Gas Company
"Colorado" means Colorado Interstate Gas Company
"Empire" means Empire State Pipeline
"EPA" means Environmental Protection Agency
"FAS" means Statement of Financial Accounting Standards
"FASB" means Financial Accounting Standards Board
"FERC" means Federal Energy Regulatory Commission
"GIC" means Gas Inventory Charge
"Great Lakes" means Great Lakes Gas Transmission Limited Partnership
"HIOS" means High Island Offshore System
"Interim Settlement" means the Company's Stipulation and Agreement submitted to
the FERC which is more fully described in Item 1, Business, Regulations
Affecting Gas System - Rate Matters
"Mcf" means thousand cubic feet
"MMcf" means million cubic feet
"NEB" means Canadian National Energy Board
"NGA" means Natural Gas Act of 1938, as amended
"NGPA" means Natural Gas Policy Act of 1978
"NGWDA" means Natural Gas Wellhead Decontrol Act of 1989
"OFE" means Office of Fossil Energy of the Department of Energy
"Order 636" means the FERC Order No. 636 series of orders which is more fully
described in Item 1, Business, Regulations Affecting Gas System - General
"Production Company" means ANR Production Company
"TransCanada" means TransCanada PipeLines Limited
"UTOS" means U-T Offshore System
NOTE: All natural gas volumes presented in this Annual Report are stated at a
pressure base of 14.73 pounds per square inch absolute and 60 degrees
Fahrenheit.
(ii)
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PART I
ITEM 1. BUSINESS.
INTRODUCTION
ANR Pipeline is a Delaware corporation organized in 1945. All of ANR
Pipeline's outstanding common stock is owned by ANR. ANR is a direct, wholly-
owned subsidiary of Coastal Natural Gas, and an indirect subsidiary of Coastal.
ANR Pipeline owns and operates an interstate natural gas pipeline system. At
December 31, 1993, the Company had 2,126 employees engaged in the operation of
ANR Pipeline and 149 employees engaged in the operation of HIOS, UTOS and
Empire.
NATURAL GAS SYSTEM
OPERATIONS
GENERAL
The Company is involved in the storage, transportation and balancing of
natural gas. ANR Pipeline provides these services for various customers through
its facilities located in Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Michigan, Mississippi, Missouri, Nebraska, New Jersey, Ohio,
Oklahoma, Tennessee, Texas, Wisconsin, Wyoming and offshore in federal waters.
Prior to November 1, 1993, the Company was also engaged in the sale for resale
of natural gas. With the Company's implementation of Order 636 effective
November 1, 1993, ANR Pipeline no longer provides a merchant service. However,
former gas sales customers of ANR Pipeline have largely retained their firm
storage and transportation service levels previously included in their "bundled"
gas sales services. The Company will auction gas on the open market as part of
its gas restructuring program designed to handle the continuation of certain gas
purchase contracts pending renegotiation or expiration of such contracts. The
Company's gas sales for resale customers previously included 51 local
distributors in Michigan, Wisconsin, Illinois, Indiana, Iowa, Kansas, Missouri,
Ohio and Tennessee. The Company operates two major offshore gas pipeline systems
in the Gulf of Mexico which are owned by HIOS and UTOS, general partnerships
composed of ANR Pipeline subsidiaries and subsidiaries of other pipeline
companies. The Company also operates Empire, a 156-mile pipeline extending from
Niagara Falls to Syracuse, New York, in which an affiliate of the Company has a
45% interest.
During 1993, approximately 62% of the Company's gas supply was purchased from
gas producers and marketers in Illinois, Indiana, Kansas, Louisiana, Michigan,
Mississippi, Oklahoma, Texas, Wisconsin, Wyoming and the Texas and Louisiana
offshore areas; approximately 32% was obtained from three Canadian suppliers;
and approximately 6% was purchased from the Dakota Gasification Company in North
Dakota.
The Company's two interconnected, large-diameter multiple pipeline systems
transport gas to the Midwest from (a) the Hugoton Field and other fields in the
Anadarko Basin in Texas and Oklahoma and (b) the Louisiana onshore and Louisiana
and Texas offshore areas. Gas from Wyoming and Canada is obtained by the Company
through transportation and exchange agreements with other companies.
The Company's principal pipeline facilities at December 31, 1993 consisted of
12,657 miles of pipeline and 97 compressor stations with 1,069,788 installed
horsepower. At December 31, 1993, the design peak day delivery capacity of the
transmission system, considering supply sources, storage, markets and
transportation for others, was approximately 5.6 Bcf per day.
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GAS SALES FOR RESALE AND TRANSPORTATION
ANR Pipeline transports gas to markets on its system and other markets under
transportation and exchange arrangements with other companies, including
distributors, intrastate and interstate pipelines, producers, brokers, marketers
and end-users. Typically, these arrangements call for ANR Pipeline to transport
such gas to points of interconnection with local distribution companies or other
interstate pipelines. Transportation service revenues provided by ANR Pipeline
amounted to $533 million for 1993 compared to $463 million for 1992 and $382
million for 1991.
During the period January through October of 1993, ANR Pipeline sold 228 Bcf
of gas, of which approximately 71% was sold to its three largest customers:
Michigan Consolidated Gas Company, Wisconsin Gas Company and Wisconsin Natural
Gas Company. Michigan Consolidated Gas Company serves the City of Detroit and
certain surrounding areas, the industrial cities of Grand Rapids and Muskegon,
the communities of Ann Arbor and Ypsilanti and numerous other communities in
Michigan. Wisconsin Gas Company serves the Milwaukee metropolitan area and
numerous other communities in Wisconsin. Wisconsin Natural Gas Company serves
the industrial cities of Racine, Kenosha, Appleton and their surrounding areas
in Wisconsin. In 1993, ANR Pipeline provided 71% and 33% of the total gas
requirements for Wisconsin and Michigan, respectively. Gas sales for resale by
ANR Pipeline amounted to $604 million for 1993, compared to $635 million for
1992 and $641 million for 1991.
ANR Pipeline's deliveries for the years 1993, 1992 and 1991 are as follows:
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Total System Daily Average
Year Deliveries System Deliveries
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(Bcf) (MMcf)
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1993 1,336 3,660
1992 1,335 3,648
1991 1,324 3,627
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On November 1, 1992, as part of its Interim Settlement, ANR Pipeline
implemented a restructuring of its traditional sales service by replacing
existing services with a combination of competitive service alternatives. This
restructuring provided a number of options for pipeline customers and was
designed to enhance competition in ANR Pipeline's service areas. Under this
restructuring, the sales service was "unbundled" on an interim basis into firm
sales, transportation, flexible storage and flexible delivery services. Prior to
the restructuring, the cost of providing transportation services for sales
customers was recovered as part of ANR Pipeline's total resale rate and
therefore, was classified as part of gas sales revenue. Under the restructuring,
these costs were recovered through a separate rate and were included in
transportation revenue. Additional information concerning the restructuring is
set forth in "Regulations Affecting Gas System - Rate Matters" included herein.
Effective November 1, 1993, the Company implemented Order 636. This Order
required significant changes in the services provided by ANR Pipeline and
resulted in the elimination of the Company's merchant service. The Company now
offers an array of "unbundled" storage, transportation and balancing service
options. Additional information concerning Order 636, including transportation
and storage, is set forth in "Regulations Affecting Gas System - General"
included herein.
GAS PURCHASES
Effective November 1, 1993, as a result of the elimination of ANR Pipeline's
merchant service, as mentioned above, the Company's gas purchases decreased
substantially. However, the Company still purchases gas under a number of gas
purchase contracts. The Company's Order 636 restructured tariff provides
mechanisms for the purpose of recovering from or refunding to its customers any
pricing differential between costs incurred to purchase this gas and the amount
the Company recovers through auctioning of gas on the open market.
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Of ANR Pipeline's gas purchases in 1993, approximately 62% was obtained
directly from producers, including 17% from affiliates. In addition, ANR
Pipeline received approximately 32% of its gas supply from Canadian suppliers
and 6% from a producer of synthetic fuels. The border price of gas originating
in Canada has been based on policies, established in 1984 by the NEB and the
OFE, allowing exporters and importers to negotiate market-responsive prices.
Gas purchase contracts with producers generally provide for minimum purchase
obligations based on estimated reserves under the well, the well's ability to
produce or allowable gas takes set by state regulatory agencies. The prices paid
depend upon, among other things, contractual requirements, market conditions,
and the quality, condition of delivery and location of the gas. Under the NGWDA,
effective July 26, 1989, all gas which would otherwise continue to be subject to
price controls under the NGPA was deregulated over a three-year period and
complete deregulation became effective January 1, 1993.
Some of ANR Pipeline's remaining gas purchase contracts with independent
producers contain provisions which require taking minimum volumes and/or making
prepayments for volumes not taken if purchases fall below specified levels
during the contract year ("take-or-pay"). Additional information on take-or-pay
matters is set forth in Note 6 of Notes to Consolidated Financial Statements
included herein.
GAS STORAGE
ANR Pipeline owns seven and leases eight underground storage facilities in
Michigan. The total working storage capacity of the system is approximately 193
Bcf, with a maximum day delivery capacity of 2 Bcf as late as the end of
February. However, of the 193 Bcf, the Company has proposed to the FERC to
reclassify 62.1 Bcf of working gas to recoverable base gas. The Company also has
the contract rights for 42 Bcf of storage capacity provided by Blue Lake Gas
Storage Company, 30 Bcf of storage capacity provided by ANR Storage and 10 Bcf
of storage capacity provided by Michigan Consolidated Gas Company. The contract
with Michigan Consolidated Gas Company expires in March, 1994. Underground
storage services of up to 166 Bcf of gas are provided by the Company to
customers on a firm basis. The Company also provides interruptible storage
services for customers on a short-term basis.
Coastal's independent engineers, Huddleston & Co., Inc., have estimated that
the Company's gas storage reserves as of December 31, 1993, 1992 and 1991 were
106.5 Bcf, 128 Bcf and 134 Bcf, respectively. The 1993 gas storage reserves are
comprised of 19.4 Bcf of natural gas, maintained under the Company's own account
as working gas for system balancing and no-notice storage services; 25 Bcf of
recoverable base gas reserves in seven owned storage fields; and 62.1 Bcf of
working gas which the Company has proposed to the FERC to reclassify as
recoverable base gas. The decrease in the gas storage reserves between 1993 and
1992 reflects the Company's elimination of its merchant service. Effective
November 1, 1993, Company storage reserves are solely used to facilitate the
overall operations of the system.
COMPETITION
ANR Pipeline has historically competed with interstate pipeline companies in
the sale, storage and transportation of gas and with independent producers,
brokers, marketers and other pipelines in the gathering and sale of gas within
its service areas. On November 1, 1993, the Company implemented Order 636 on its
system. As a consequence, the Company is no longer a seller of natural gas to
resale customers. Order 636 also mandated implementation of capacity release and
secondary delivery point options allowing a pipeline's firm transportation
customers to compete with the pipeline for interruptible transportation, which
may result in reduced interruptible transportation revenue of pipelines.
Additional information on this subject is included under "Regulations Affecting
Gas System" included herein.
Natural gas competes with other forms of energy available to customers,
primarily on the basis of price. These competitive forms of energy include
electricity, coal, propane and fuel oils. Changes in the availability or price
of natural gas or other forms of energy, as well as changes in business
conditions, conservation, legislation or
3
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governmental regulations, capability to convert to alternate fuels, changes in
rate structure, taxes and other factors may affect the demand for natural gas in
the areas served by ANR Pipeline.
ANR Pipeline's storage, transportation and balancing services are influenced
by its customers' access to alternative providers of such services. The Company
competes directly with Panhandle Eastern Pipe Line Company, Trunkline Gas
Company, Northern Natural Gas Company, Natural Gas Pipeline Company of America,
Michigan Consolidated Gas Company and CMS Energy Company in its principal market
areas of Michigan and Wisconsin for its storage, transportation and balancing
business.
GAS SYSTEM RESERVES AND AVAILABILITY
With the termination of its merchant service, the Company no longer reports
on gas system reserves and availability and, therefore, this report has been
replaced by a general discussion set forth in "Supply Area Deliverability,"
presented below.
RECONCILIATION WITH FERC FORM 15 REPORT
The FERC Form 15 Annual Report of Gas Supplies is no longer required pursuant
to FERC Order No. 554 issued July 13, 1993.
SUPPLY AREA DELIVERABILITY
Shippers on ANR Pipeline have direct access to the two most prolific gas
supply areas in the United States, the Gulf Coast and Midcontinent. Statistics
published by the Energy Information Agency, Office of Oil and Gas, U. S.
Department of Energy, indicate that approximately 82% of all natural gas in the
lower 48 states is produced from these two supply areas. Interconnecting
pipelines provide shippers with access to all other major gas supply areas in
the United States and Canada.
Gas deliverability available to shippers on ANR Pipeline's system from the
Midcontinent and Gulf Coast supply areas through direct connections and
interconnecting pipelines and gatherers is approximately 3,800 MMcf per day. An
additional 275 MMcf per day of deliverability is accessible to shippers on
Company-owned, or partially owned, pipeline segments not directly connected to a
Company mainline.
The Company remains active in locating and connecting new gas supply sources
to facilitate transportation arrangements made by third party shippers. During
1993, field development, newly connected supply sources and pipeline
interconnections contributed 515 MMcf per day to total deliverability accessible
to shippers on ANR Pipeline.
REGULATIONS AFFECTING GAS SYSTEM
GENERAL
Under the NGA, the FERC has jurisdiction over ANR Pipeline as to sales,
storage, transportation and balancing of gas, rates and charges, construction of
new facilities, extension or abandonment of service and facilities, accounts and
records, depreciation and amortization policies and certain other matters. ANR
Pipeline, where required, holds certificates of public convenience and necessity
issued by the FERC covering its jurisdictional facilities, activities and
services. The OFE regulates the price and other terms of imports of natural gas.
ANR Pipeline is also subject to regulation with respect to safety
requirements in the design, construction, operation and maintenance of its
interstate gas transmission and storage facilities by the Department of
Transportation. Operations on United States government land are regulated by the
Department of the Interior.
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On November 1, 1990, the FERC issued Order No. 528 in which it sets forth
guidelines for an acceptable allocation method for a fixed direct charge to
collect take-or-pay settlement costs. Pursuant to Order No. 528, the Company has
filed for and received approval to recover 75% of expenditures associated with
resolving producer claims and renegotiating gas purchase contracts. The approved
filings provide for recovery of 25% of such expenditures via a direct bill to
the Company's former sales for resale customers and 50% via a surcharge on all
transportation volumes. Contract reformation and take-or-pay costs incurred as a
result of the mandated Order 636 restructuring will be recovered under the
transition cost mechanisms of Order 636 as well as through negotiated agreements
with the Company's customers.
On April 8, 1992, the FERC issued Order 636 which required significant
changes in the services provided by interstate natural gas pipelines. The
Company and numerous other parties have sought judicial review of aspects of
Order 636. ANR Pipeline placed its restructured services under Order 636 into
effect on November 1, 1993. The Company now offers a wide range of "unbundled"
storage, transportation and balancing services. Several persons, including ANR
Pipeline, have sought judicial review of aspects of the FERC's orders approving
the Company's restructuring filings. Order 636 also provides mechanisms for
recovery of transition costs associated with compliance with that Order. These
transition costs include gas supply realignment costs, the cost of stranded
pipeline investment and the cost of new facilities required to implement Order
636. The Company expects that it will incur transition costs of approximately
$150 million. As a result of the recovery mechanisms provided under Order 636,
the Company anticipates that these transition costs will not have a material
adverse effect on its consolidated financial position or its results of
operations.
RATE MATTERS
All of the Company's 1993 service options were subject to rate regulation by
the FERC. Under the NGA, ANR Pipeline must file with the FERC to establish or
adjust its service rates. The FERC may also initiate proceedings to determine
whether the Company's rates are "just and reasonable."
On March 10, 1992, the Company submitted to the FERC a comprehensive Interim
Settlement designed to resolve all outstanding issues resulting from its 1989
rate case and its 1990 proposed service restructuring proceeding. The Interim
Settlement involved, inter alia, an array of new sales, delivery, transportation
and storage service alternatives and the implementation of a GIC, designed to
compensate the Company for the costs of standing ready to serve its sales
customers. The Interim Settlement reflected a decrease in cost of service of
approximately $45 million, which was largely attributable to a reduction in
depreciation rates from 3.4% to 1.82%. Also included was a provision which
allowed the Company to direct bill its customers for its remaining unrecovered
purchased gas costs. The Interim Settlement became effective November 1, 1992
and expired with the Company's implementation of Order 636 on November 1, 1993.
Specific provisions of the Interim Settlement relating to the deferral and
future recovery of certain costs remain in effect.
On December 17, 1992, the FERC issued a policy statement that outlined
changes on how pipelines may recover the costs of employees' postretirement
benefits other than pensions. The FERC's policy will be to recognize, as a
component of jurisdictional cost-based rates, allowances for FAS No. 106 costs
of company employees when determined on an accrual basis, provided certain
conditions are met.
On November 1, 1993, the Company filed a general rate increase with the FERC.
The proposed rates reflect a $121 million increase in the Company's cost of
service from that approved in the Interim Settlement and a $218 million increase
over the Company's approved rates for its restructured services. The increase
represents higher plant investment, Order 636 restructuring costs, rate of
return and tax rate changes and increased costs related to the required adoption
of recent accounting rule changes, i.e., FAS Nos. 106 and 112 (see Note 10 of
Notes to Consolidated Financial Statements for a discussion of FAS Nos. 106 and
112). The FERC has permitted the Company to place its new rates into effect on
May 1, 1994, subject to refund and subject to certain required compliance
changes and the outcome of an evidentiary hearing on all remaining issues.
5
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Certain regulatory issues remain unresolved among the Company, its customers,
its suppliers, and the FERC. The Company has made provisions which represent
management's assessment of the ultimate resolution of these issues. While the
Company estimates the provisions to be adequate to cover potential adverse
rulings on these and other issues, it cannot estimate when each of these issues
will be resolved.
ENVIRONMENTAL
Information concerning environmental matters is set forth in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Note 7 of Notes to Consolidated Financial Statements included herein.
OTHER DEVELOPMENTS
The Empire State Pipeline Project, in which an affiliate of the Company has a
45% interest and the Company is the operator, was placed in service on November
1, 1993. The 156-mile pipeline system, extending from Niagara Falls to Syracuse,
New York, will carry up to 570 MMcf per day to western and central New York
State and provide the Company access to markets in the Northeastern United
States.
In August 1993, the Company and Arkla, Inc. ("Arkla") announced execution of
a restructured agreement under which the Company will purchase an ownership
interest in 250 MMcf per day of capacity in existing natural gas transmission
facilities from Arkla. The restructured agreement resolved certain conditions
imposed by the FERC in its October 1, 1992 authorization of the original
purchase and sale agreement. Financing for this acquisition will be provided
from internally generated funds. The capital expenditure of approximately $90
million is expected to be incurred in 1994, after FERC approval is received. The
reduction in value of the facilities from the original purchase and sale
agreement is the result of negotiations between the Company and Arkla in light
of the FERC's orders.
The Company is a partner in the SunShine Pipeline Project which is designed
to capture a share of the growing Florida power generation market, as well as
markets located in Mississippi, Alabama and the Florida Panhandle. SunShine
Interstate Transmission Company ("SITCO"), the interstate pipeline segments of
this project, will extend 170 miles from Pascagoula, Mississippi to Okaloosa,
Florida where it will connect with Sunshine Pipeline Company, ("SunShine") the
intrastate segment of this project. SunShine will be a 545-mile pipeline
starting in Okaloosa and extending down Florida's west coast to the Tampa area.
The Company, through a wholly-owned subsidiary, will have a 40% interest in
SITCO and an affiliate of the Company will have a 40% interest in SunShine.
Florida Power Corporation and TransCanada will both hold a 30% equity interest
in each of the two projects. SITCO will have an initial capacity of 329.5 MMcf
per day and SunShine will have an initial capacity of 249.5 MMcf per day. Both
SITCO and SunShine have signed precedent agreements for a portion of their
initial pipeline capacity. SITCO, which will be subject to FERC jurisdiction,
has filed with the FERC to obtain a Certificate of Public Convenience and
Necessity. FERC approval is expected in March 1995. SunShine, which will be
subject to the jurisdiction of the Florida Public Service Commission ("FPSC"),
has received approval of its request for a Determination of Need from the FPSC.
SunShine also expects environmental approval, in early 1995, under the
procedures set forth in Florida's Natural Gas Transmission Pipeline Siting Act.
Both projects are targeted to be placed into service in December 1995. The SITCO
pipeline is expected to cost $188 million, with the Company's share of this cost
approximating $75 million.
A subsidiary of the Company will have a 25% equity interest in the proposed
Liberty Pipeline project, a 38-mile pipeline extending from New Jersey across
New York Harbor to Long Island with a potential capacity of 500 MMcf per day.
The pipeline is expected to serve local distribution company participants and
independent power producers. A filing to obtain a Certificate of Public
Convenience and Necessity has been made and is currently pending before the
FERC. Subject to receiving applicable government approvals, an in-service date
of late 1995 is possible, at an estimated cost of $160 million.
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The Company (20% equity interest) and Interprovincial Pipe Line System Inc.
plan to participate in the construction of InterCoastal Pipe Line, a project
designed to serve incremental markets in southern Ontario and potentially Quebec
and the Northeastern United States. The project will involve converting
approximately 130 miles of existing oil pipeline to natural gas service,
originating in Sarnia, Ontario and extending to Toronto, and the construction of
approximately 25 miles of new pipeline. In connection with the project,
facilities in Michigan will be constructed by the Company to deliver gas from
domestic sources. The project, which will have a maximum capacity of 175 MMcf
per day, is projected to cost $37.6 million. The InterCoastal Pipe Line is
subject to regulatory approval in Canada, and the ANR Pipeline facilities are
subject to regulatory approvals in the United States. Filings seeking necessary
authorizations from the NEB were made in the second quarter of 1993, and with
the FERC on July 19, 1993. The project could be in service as early as November
1, 1994.
A subsidiary of the Company and affiliates of TransCanada and Brooklyn Union
Gas Company have entered into a partnership agreement for the construction of
the Mayflower Pipeline, which is expected to expand natural gas transportation,
sales and storage services to markets in the Northeastern United States. The
Company will have a 45% interest in this project. The proposed 240-mile pipeline
will extend east from the Iroquois Gas Transmission System at Canajoharie, New
York to a location near Boston, Massachusetts and have an initial design
capacity of 350 MMcf per day. The total project cost is expected to be $540
million. The pipeline is expected to be in service in late 1997. Construction of
the project is subject to receipt of all federal regulatory approvals.
Funding for certain pending and proposed natural gas pipeline projects is
anticipated to be provided through non-recourse financings in which the
projects' assets and contracts will be pledged as collateral. This type of
financing typically requires the participants to make equity investments
totaling approximately 20% to 30% of the cost of the project, with the remainder
financed on a long term basis.
ITEM 2. PROPERTIES.
Information on properties of ANR Pipeline is in Item 1, "Business," included
herein.
The real property owned by the Company in fee consists principally of sites
for compressor and metering stations and microwave and terminal facilities. With
respect to the seven owned storage fields, the Company holds title to gas
storage rights representing ownership of, or has long-term leases on, various
subsurface strata and surface rights and also holds certain additional gas
rights. Under the NGA, the Company may acquire by the exercise of the right of
eminent domain, through proceedings in United States District Courts or in state
courts, necessary rights-of-way to construct, operate and maintain pipelines and
necessary land or other property for compressor and other stations and equipment
necessary to the operation of pipelines.
All of the principal properties of the Company are subject to the lien of its
Mortgage and Deed of Trust dated as of September 1, 1948, securing its First
Mortgage Pipe Line Bonds, and some of such properties are subject to "permitted
liens" as defined in such Mortgage and Deed of Trust. The First Mortgage Pipe
Line Bonds were retired in 1993 and the Company is in the process of terminating
the associated Mortgage and Deed of Trust.
ITEM 3. LEGAL PROCEEDINGS.
Numerous lawsuits and other proceedings which have arisen in the ordinary
course of business are pending or threatened against the Company or its
subsidiaries. Although no assurances can be given and no determination can be
made at this time as to the outcome of any particular lawsuit or proceeding, the
Company believes there are meritorious defenses to substantially all such claims
and that any liability which may finally be determined should not have a
material adverse effect on the Company's consolidated financial position.
Additional information regarding legal proceedings is set forth in Notes 6 and 7
of Notes to Consolidated Financial Statements included herein.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
All common stock of ANR Pipeline is owned by ANR.
Under the terms of the most restrictive of the Company's financing
agreements, approximately $454 million was available at December 31, 1993 for
payment of dividends on the Company's common and preferred stock. In March 1994,
the Company paid a $255 million dividend on its common stock, which leaves
approximately $199 million of dividend capacity.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data (in millions of dollars) is derived
from the Consolidated Financial Statements included herein and Item 6 of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1992. The Notes to Consolidated Financial Statements included herein contain
information relating to this data.
<TABLE>
<CAPTION>
1993(2) 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Operating Revenues:
Gas sales............................. $ 603.5 $ 634.5 $ 641.2 $ 628.5 $ 877.4
Storage and transportation............ 634.7 534.0 441.4 366.5 333.0
Other................................. 33.6 23.3 31.8 81.8 48.4
-------- -------- -------- -------- --------
Total............................... $1,271.8 $1,191.8 $1,114.4 $1,076.8 $1,258.8
======== ======== ======== ======== ========
Net Earnings........................... $ 157.0 $ 151.0 $ 148.4 $ 148.1 $ 167.2
======== ======== ======== ======== ========
Dividends Declared on Common Stock..... $ 33.7 $ 28.6 $ 320.0 $ 46.9 $ 215.0
======== ======== ======== ======== ========
Total Assets........................... $1,920.3 $1,968.0 $1,905.1 $2,056.0 $2,059.6
======== ======== ======== ======== ========
Capital Structure:
Common stock and other stockholder's
equity/(1)/.......................... $ 970.3 $ 851.2 $ 734.0 $ 912.1 $ 812.9
Mandatory redemption cumulative
preferred stock...................... 26.0 36.1 48.3 61.2 74.0
Long-term debt and obligation under
capital leases....................... 374.0 435.1 482.6 436.8 495.8
-------- -------- -------- -------- --------
Total............................... $1,370.3 $1,322.4 $1,264.9 $1,410.1 $1,382.7
======== ======== ======== ======== ========
</TABLE>
- ------------
(1) Includes unamortized investment tax credit, consistent with ratemaking
treatment.
(2) See Item 5 above for a discussion concerning a 1994 common stock dividend
payment.
All of the outstanding common stock of ANR Pipeline is owned by ANR;
therefore, earnings and cash dividends per common share have no significance and
are not presented.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Management's Discussion and Analysis of Financial Condition and Results
of Operations is presented on pages F-1 through F-4 herein.
8
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Financial Statements and Supplementary Data required hereunder are
included in this Annual Report as set forth in Item 14(a) herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
9
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The directors and executive officers of ANR Pipeline as of March 22, 1994,
were as follows:
<TABLE>
<CAPTION>
NAME (AGE), YEAR FIRST ELECTED
DIRECTOR AND/OR OFFICER POSITIONS AND OFFICES WITH THE REGISTRANT
- ------------------------------ -----------------------------------------
<C> <S>
James F. Cordes (53), 1982 Chairman of the Board of Directors and Chief
Executive Officer
David A. Arledge (49), 1985 Senior Executive Vice President
Richard A. Lietz (48), 1984 Executive Vice President and Chief Operating
Officer
Jeffrey A. Connelly (47), 1988 and 1983 Executive Vice President, Treasurer
and Director
Daniel F. Collins (52), 1988 and 1986 Senior Vice President and Director
Rebecca H. Noecker (42), 1989 Senior Vice President and General Counsel
Austin M. O'Toole (58), 1987 and 1985 Senior Vice President, Assistant
Secretary and Director
Wilbur A. Hitchcock (45), 1994 Senior Vice President
Pamela L. Prairie (39), 1989 Senior Vice President
William L. Johnson (36), 1991 Vice President and Controller
Scott P. Anger (49), 1990 Vice President
Stanley A. Babiuk (42), 1989 Vice President
Robert G. Holsclaw (59), 1990 Vice President
John D. Kobasa (53), 1988 Vice President
Richard H. Leehr (44), 1991 Vice President
Michael B. Lobin (44), 1991 Vice President
John P. Lucido (46), 1988 Vice President
Lawrence R. Marantette (44), 1992 Vice President
Michael E. Maslyn (53), 1986 Vice President
Thomas L. Miller (38), 1989 Vice President
Dennis J. Paruch (48), 1984 Vice President
Elias A. Shaptini (63), 1981 Vice President
C. D. Wilkerson (60), 1987 Vice President
Frederick H. Clark (65), 1984 Secretary
</TABLE>
The above named persons bear no family relationship to each other. Their
respective terms of office expire coincident with ANR Pipeline's Annual Meeting
of the Sole Stockholder and Annual Meeting of the Board of Directors to be held
in May 1994. Each of the directors and officers named above have been officers
or employees of ANR Pipeline, Colorado and/or Coastal for five years or more
except for the following:
Mr. Hitchcock was elected a Senior Vice President of ANR Pipeline in March
1994. He previously served as a Vice President of Northern Indiana Public
Service Company, where he had been employed since 1990. From 1984 to 1990, he
was employed by Natural Gas Pipeline Company in various positions.
Ms. Prairie was elected a Senior Vice President in March 1994. She had been a
Vice President of ANR Pipeline since October 1989. Prior to that time she was an
Executive Director of Gas Supply for Michigan Consolidated Gas Company from
October 1987 to October 1989. She was an attorney for the law firm of John,
Hengerer & Esposito in Washington, D.C. from October 1986 to August 1987 and an
attorney for Michigan Consolidated Gas Company from January 1985 to September
1986.
Mr. Anger was elected a Vice President of ANR Pipeline in July 1990. From
October 1987 to 1989, he was an independent consultant to Coastal. Prior thereto
he worked in the Federal Affairs department of Coastal.
10
<PAGE>
Mr. Johnson was elected a Vice President and Controller of ANR Pipeline in
August 1991. Prior thereto he was employed by Great Lakes Gas Transmission
Company from 1982 until 1991. He became an Assistant Controller for Great Lakes
in 1987 and served as their Controller from 1989 to 1991.
Mr. Leehr was elected a Vice President of ANR Pipeline in July 1991. Prior
thereto he held various positions with ANR Pipeline.
Mr. Marantette was elected a Vice President of ANR Pipeline in May 1992. He
has held various positions with other subsidiaries of ANR, including President
of ANR Development Corporation since 1985.
ITEM 11. EXECUTIVE COMPENSATION.
ANR Pipeline is an indirectly wholly-owned subsidiary of Coastal. Information
concerning the cash compensation and certain other compensation of the directors
and officers of Coastal is contained in this section.
The following table sets forth information for the fiscal years ended
December 31, 1993, 1992 and 1991 as to cash compensation paid by Coastal and
its subsidiaries, as well as certain other compensation paid or accrued for
those years, to Coastal's Chief Executive Officer ("CEO") and its four most
highly compensated executive officers other than the CEO (the "Named Executive
Officers"). The table also sets forth the cash compensation paid to James R.
Paul, CEO through July 20, 1993, including Long Term Incentive Plan ("LTIP")
cash compensation.
11
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION
------------------------------------------- -------------------------
AWARDS PAYOUTS
----------- ----------
SECURITIES ALL OTHER
UNDERLYING LTIP COMPEN-
NAME AND OPTIONS/ PAYOUTS SATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(3) SARs (#)(4) ($) $(5)
- ----------------------- -------- ------------- ----------------- -------------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
O. S. Wyatt, Jr., 1993 896,120 (3) -0- -0- 138,065
Chairman of the Board 1992 949,678(2) -0- -0- 164,474
(and CEO commencing 1991 849,093 300,000 -0- 156,427
July 20, 1993)
David A. Arledge, 1993 455,211 (3) 38,848 -0- 60,042
President, Chief 1992 445,858(2) 60,000 35,000 72,794
Operating Officer 1991 398,635 140,000 35,000 79,328
and Director
James R. Paul, 1993 658,664 -0- 45,000 76,000
President, CEO and 1992 648,724(2) -0- 40,000 159,148
Director (through 1991 580,015 266,666 40,000 172,401
July 20, 1993)
James F. Cordes, 1993 558,300 (3) 32,094 -0- 114,789
Executive V.P. 1992 507,721(2) 60,000 25,000 136,618
and Director 1991 453,946 160,000 25,000 136,816
Sam F. Willson, Jr., 1993 334,062 (3) 15,000 -0- 28,600
Executive V.P. 1992 344,603(2) 60,000 15,000 29,443
1991 334,062 150,000 15,000 31,225
Harold Burrow, 1993 292,614 52,000 14,189 -0- 80,033
Vice Chairman of 1992 359,117(2) -0- -0- 104,229
the Board 1991 345,816 -0- -0- 103,165
</TABLE>
- ------------------------
(1) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not exceed
the lesser of $50,000 or 10 percent of annual salary and bonus for any
named individual.
(2) Due to Coastal's practice of paying bi-weekly, there is one extra pay
period reflected in the 1992 salary. Normally there are 26 pay periods, but
approximately once every 11 years there are 27 pay periods; 1992 was such a
year.
(3) The bonuses shown in the table represent the amount awarded for performance
in the year indicated. With the exception of Mr. Burrow, bonuses for 1993
will not be finalized until after preliminary results for the 1994 first
quarter are known. These bonuses will be reported in the Coastal Proxy
Statement for the 1995 Annual Meeting. Mr. Burrow's bonus was paid in full
in 1993. Bonuses for 1992 were paid or are payable in equal installments
over a three-year period, provided the employee is still employed on the
anniversary date of the award. The 1991 bonuses were payable in equal
installments in 1992 and 1993.
12
<PAGE>
(4) The options do not carry any stock appreciation rights.
(5) All Other Compensation for 1993 consists of: (i) directors' fees paid by
Coastal, ANR and Colorado (O. S. Wyatt, Jr. $66,375; David A. Arledge
$18,000; James R. Paul $51,625; James F. Cordes $66,375; Sam F. Willson, Jr.
$-0-; and Harold Burrow $56,624); (ii) cash payments for relinquishing
certain stock appreciation rights (O. S. Wyatt, Jr. $ -0-; David A. Arledge
$5,625; James R. Paul $9,375; James F. Cordes $3,750; Sam F. Willson, Jr.
$1,875; and Harold Burrow $-0-); (iii) Coastal contributions to the Coastal
Thrift Plan (O. S. Wyatt, Jr. $15,000; David A. Arledge $15,000; James R.
Paul $15,000; James F. Cordes $15,000; Sam F. Willson, Jr. $15,000; and
Harold Burrow $15,000); and (iv) certain payments in lieu of Thrift Plan
contributions (O. S. Wyatt, Jr. $56,690; David A. Arledge $21,417; James R.
Paul $-0-; James F. Cordes $29,664; Sam F. Willson, Jr. $11,725; and Harold
Burrow $8,409).
Mr. Cordes is employed pursuant to a five-year employment contract expiring
in 1995, which provides that if he is terminated for a reason not permitted by
the employment contract, he will be entitled to receive for the remainder of the
term the salary, employee benefits, perquisites, salary increases, bonuses and
other incentive compensation which he would have received had he not been
terminated. Such reasons are a significant change in title, duties, authorities
or reporting responsibilities, a reduction in salary or benefits or a move of
the location of his office to a location not acceptable to him.
STOCK OPTIONS
The following table sets forth information with respect to stock options
granted on November 4, 1993 and December 8, 1993 for the fiscal year ended
December 31, 1993 to the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1993)
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR(4) ($/SH) DATE VALUE ($)(5)
- ---- ------------- ----------------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
O. S. Wyatt, Jr. -0- -0- -0- -0-
David A. Arledge 3,848(2) 1.25 27.00 11/3/2003 44,156
35,000(3) 11.40 26.50 12/7/2003 370,072
James R. Paul -0- -0- -0- -0-
James F. Cordes 7,094(2) 2.31 27.00 11/3/2003 81,404
25,000(3) 8.14 26.50 12/7/2003 264,337
Sam F. Willson, Jr. 15,000(3) 4.88 26.50 12/7/2003 158,602
Harold Burrow 14,189(2) 4.62 27.00 11/3/2003 162,819
</TABLE>
- ------------------
(1) Options expire ten years from the date of issuance and are granted at the
fair market value of the Common Stock of Coastal on the date of grant.
Options granted on November 4, 1993 vested in full immediately. Options
granted on December 8, 1993, vest in full on the second anniversary of the
date of grant.
(2) Granted November 4, 1993 as a one-time grant for relinquishment of
directors fees.
13
<PAGE>
(3) Granted December 8, 1993.
(4) The options do not carry any stock appreciation rights. The option
information included in the table does not include grants made on March 4,
1993 for the fiscal year ended December 31, 1992 which (except for Mr.
Willson) were reported in the Coastal 1993 Proxy Statement. These grants
were at $26.06 per share as follows: O. S. Wyatt, Jr. -0-; David A. Arledge
35,000 shares; James R. Paul 40,000 shares; James F. Cordes 25,000 shares;
Sam F. Willson, Jr. 15,000 shares; and Harold Burrow -0-.
(5) Based on the Black-Scholes option pricing model expressed as a ratio (.425
for options granted on November 4, 1993; .399 for options granted on
December 8, 1993) x exercise price x number of shares. The actual value, if
any, an executive may realize will depend on the excess of the stock price
over the exercise price on the date the option is exercised, so that there
is no assurance the value realized by an executive will be at or near the
value estimated by the Black-Scholes model. The estimated values under that
model are based on assumptions that include (i) a stock price volatility of
.2786, calculated using monthly stock prices for the three years prior to
the grant date, (ii) an interest rate of 6.10%, (iii) a dividend yield of
1.44% and (iv) an option exercise term of ten years. No adjustments were
made for the non-transferability of the options or to reflect any risk of
forfeiture prior to vesting. The Securities and Exchange Commission
requires disclosure of the potential realizable value or present value of
each grant. The Company's use of the Black-Scholes model to indicate the
present value of each grant is not an endorsement of this valuation, which
is based on certain assumptions, including the assumption that the option
will be held for the full ten-year term prior to exercise. Studies
conducted by the Company's independent consultants indicate that options
are usually exercised before the end of the full ten-year term.
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers, concerning the exercise of options during the last fiscal
year and unexercised options and SARs held as of the fiscal year ("FY") ended
December 31, 1993.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES (1993)
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)(1)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- --------------- --------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
O. S. Wyatt, Jr. -0- -0- -0- / -0- -0- / -0-
David A. Arledge -0- -0- 154,372 / 116,001 682,448 / 120,400
James R. Paul 330,917 2,950,384 42,750 / -0- -0- / -0-
James F. Cordes -0- -0- 89,786 / 82,001 307,534 / 86,000
Sam F. Willson, Jr. -0- -0- 22,149 / 51,000 16,380 / 51,600
Harold Burrow 23,750 454,813 14,189 / -0- 14,189 / -0-
</TABLE>
- ------------------
(1) $-based on the market price of $28.00 at December 31, 1993.
14
<PAGE>
PENSION PLAN
The following table shows for illustration purposes the estimated annual
benefits payable under the Pension Plan and Coastal's Replacement Pension
Plan described below upon retirement at age 65 based on the compensation and
years of credited service indicated.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
------------------------------------------------
5-YEAR FINAL
AVERAGE PAY 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000........ $34,403 $45,871 $ 57,339 $ 68,806 $ 68,118
150,000........ 41,903 55,871 69,839 83,806 83,118
175,000........ 49,403 65,871 82,339 98,806 98,118
200,000........ 56,903 75,871 94,839 113,806 113,118
225,000........ 62,610 83,480 104,351 125,221 124,532
250,000........ 62,610 83,480 104,351 125,221 124,532
</TABLE>
(A) Compensation covered under the Pension Plan for Employees of Coastal and
the Coastal Replacement Pension Plan generally includes only base salary and
is limited to $235,840 for 1993.
(B) At December 31, 1993 each of the individuals named in the Summary
Compensation Table had covered salary of $235,840 and the following years of
credited service: Mr. Wyatt, 38 years; Mr. Arledge, 13 years; Mr. Paul, 20
years; Mr. Cordes, 16 years; Mr. Willson, 21 years; and Mr. Burrow, 19
years.
(C) The normal form of retirement income is a straight life annuity. Benefits
payable under the Pension Plan are subject to offset by 1.5% of applicable
monthly social security benefits multiplied by the number of years of
credited service (up to 33 1/3 years).
The Employee Retirement Income Security Act of 1974, as amended by subsequent
legislation, limits the retirement benefits payable under the tax-qualified
Pension Plan. Where this occurs, Coastal will provide to certain executives,
including persons named in the Summary Compensation Table, additional
nonqualified retirement benefits under a Coastal Replacement Pension Plan. These
benefits, plus payments under the Pension Plan, will not exceed the maximum
amount which Coastal would have been required to provide under the Pension Plan
before application of the legislative limitations, and are reflected in the
above table.
15
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners.
The following is information, as of March 16, 1994, on each person known or
believed by ANR Pipeline to be the beneficial owner of 5% or more of any class
of its voting securities:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------- ------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock, American Natural Resources Company 1,000 shares direct 100%
$100 par value per share One Woodward Avenue
Detroit, Michigan 48226
</TABLE>
(b) Security ownership of management.
ANR Pipeline is an indirectly, wholly-owned subsidiary of Coastal.
Information concerning the security ownership of certain beneficial owners and
management of Coastal is contained in this section.
The total number of shares of stock of Coastal outstanding as of March 16,
1994 is 112,832,796: consisting of 64,403 shares of $1.19 Cumulative
Convertible Preferred Stock, Series A (the "Series A Preferred Stock"), 87,398
shares of $1.83 Cumulative Convertible Preferred Stock, Series B (the "Series B
Preferred Stock"), 35,252 shares of $5.00 Cumulative Convertible Preferred
Stock, Series C (the "Series C Preferred Stock"), and 8,000,000 non-voting
shares of $2.125 Cumulative Preferred Stock, Series H (the "Series H Preferred
Stock"), 104,218,335 shares of Common Stock, and 427,408 shares of Class A
Common Stock.
Each voting share of Common Stock or Preferred Stock entitles the holder to
one vote with respect to all matters to come before a shareholders' meeting
while each share of Class A Common Stock entitles the holder to 100 votes.
However, 25% of Coastal's directors standing for election at each annual meeting
will be determined solely by holders of the Common Stock and voting Preferred
Stock voting as a class.
16
<PAGE>
The following table sets forth information, as of March 16, 1994, with
respect to each person known or believed by Coastal to be the beneficial
owner, who has or shares voting and/or investment power (other than as set forth
below), of more than five percent (5%) of any class of its voting securities.
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENT (%)
OF BENEFICIAL OWNER TITLE OF CLASS NUMBER OF SHARES OF CLASS (1)
- ------------------- -------------- ----------------- -------------
<S> <C> <C> <C>
O. S. Wyatt, Jr. Class A Common Stock 154,577(2) 35.0
Chairman of the Board
of Coastal
Nine Greenway Plaza
Houston, Texas 77046-0995
Trustee/Custodian under the Common Stock 13,663,166(3) 13.0
Thrift, ESOP and Pension Plans Class A Common Stock 83,758(3) 18.9
of Coastal and its subsidiaries
Texas Commerce Bank
National Association
600 Travis, 10th Flr.
Houston, Texas 77002
The Prudential Insurance Common Stock 6,044,025 5.8
Company of America
Prudential Plaza
Newark, New Jersey 07102-3777
Isabel H. Long Series A Preferred 28,976 45.0
485 S. Parkview Ave., Stock
Columbus, Ohio 43209-1075
The DeZurik Family Series C Preferred 35,252(4) 100.0
c/o David DeZurik Stock
2460 S.E. 8th St.
Pompano Beach, Florida 33062
</TABLE>
__________
(1) Class includes presently exercisable stock options held by directors and
executive officers.
(2) Includes 7,354 shares of Class A Common Stock owned by the spouse and a
son of Mr. Wyatt, as to which shares beneficial ownership is disclaimed.
(3) The Trustee/Custodian is the record owner of these shares; and also is
the record owner of 969 shares of the Series B Preferred Stock, each of
which is convertible into 3.6125 shares of Common Stock and 0.1 share of
Class A Common Stock. Voting instructions are requested from each
participant in the Thrift Plan and ESOP and from the trustees under a
Pension Trust. Absent voting instructions, the Trustee is permitted to
vote Thrift Plan shares on any matter, but has no authority to vote ESOP
shares or Pension Plan shares. Nor does the Trustee/Custodian have any
authority to dispose of shares except pursuant to instructions of the
administrator of the Thrift Plan and ESOP or pursuant to instructions
from the trustees under the Pension Trust.
(4) Members of the DeZurik family acquired the Series C Preferred Stock in
connection with a 1972 Agreement of Merger involving the acquisition of
Colorado, a subsidiary of Coastal.
17
<PAGE>
The following table sets forth information, as of March 16, 1994, regarding
each of the then current directors, including Class II directors standing for
election, and all directors and executive officers as a group. Each director has
furnished the information with respect to age, principal occupation and
ownership of shares of stock of Coastal. As of such date, Messrs. Bissell,
Burrow, Chapin, Cordes, Gates and Katzin were the Class I directors whose terms
expire in 1996; Messrs. Arledge, Brundrett, Wooddy and Wyatt were the Class II
directors whose terms expire in 1994; and Messrs. Buck, Johnson, Marshall and
McDade were the Class III directors whose terms expire in 1995.
18
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME, (AGE), YEAR OFFICES WITH COASTAL BENEFICIALLY PERCENT (%)
FIRST BECAME DIRECTOR AND/OR PRINCIPAL OCCUPATION TITLE OF CLASS OWNED(1) OF CLASS*
- --------------------- --------------------------- --------------- ---------------- -----------
<S> <C> <C> <C> <C>
O. S. Wyatt, Jr. Chairman of the Board and Common Stock 3,183,935(2) 3.0
(69), 1955 Chief Executive Officer Class A Common Stock 154,577(2) 35.0
Harold Burrow Vice Chairman of the Board; Common Stock 156,693(2)
(79), 1973 Chairman of Colorado Class A Common Stock 13,602 3.1
David A. Arledge President and Common Stock 158,342
(49), 1988 Chief Operating Officer Class A Common Stock 13,484 3.1
John M. Bissell Chairman and Chief Executive Common Stock 4,575
(63), 1985 Officer of Bissell Inc. Class A Common Stock -0-
George L. Brundrett, Jr. Attorney; Former Senior Vice Common Stock 4,910
(72), 1973 President and General Counsel Class A Common Stock 2,290
of Coastal
Ervin O. Buck Former Vice Chairman of Texas Common Stock 25,243
(89), 1973 National Bank of Commerce Class A Common Stock -0-
Roy D. Chapin, Jr. Former Chairman and Common Stock 3,250(2)
(78), 1988 Chief Executive Officer Class A Common Stock -0-
of American Motors
Corporation
James F. Cordes Executive Vice President; Common Stock 105,117
(53), 1985 President of ANR; Class A Common Stock -0-
President, Natural
Gas Group
Roy L. Gates Retired; Ranching and Common Stock 4,095
(65), 1969 Investments Class A Common Stock 2,736
Kenneth O. Johnson Senior Vice President Common Stock 89,308
(73), 1988 Class A Common Stock 9,604 2.2
Jerome S. Katzin Retired; Former Managing Common Stock 41,803(2)
(75), 1983 Director of Shearson Class A Common Stock -0-
Lehman Brothers Inc.
J. Howard Marshall, II Retired; Former Executive of Common Stock 11,924(2)
(89), 1973 Allied Chemical Corporation, Class A Common Stock 600(2)
Ashland Oil and Refining
Company and Signal Oil and
Gas Company
Thomas R. McDade Senior Partner, Law Firm of Common Stock 500
(61), 1993 McDade and Fogler, Houston Class A Common Stock -0-
L. D. Wooddy, Jr. Retired; Former President Common Stock 1,000
(67), 1992 of Exxon Pipeline Company Class A Common Stock -0-
All directors and executive officers as a group Common Stock 4,393,491(3) 4.2
(33 persons, including the above) Class A Common Stock 202,129(3) 45.7
</TABLE>
- ----------
* Less than one percent unless otherwise indicated. Class includes outstanding
shares and presently exercisable stock options held by directors and
executive officers. Excluding presently exercisable stock options, directors
and executive officers as a group would own 187,501 shares of Class A Common
Stock, which would constitute 43.9% of the shares of such class.
19
<PAGE>
(1) Except for the shares referred to in Notes 2 and 3 below, and the shares
represented by presently exercisable stock options, the holders are
believed by Coastal to have sole voting and investment power as to the
shares indicated. Amounts include shares in Coastal ESOP and Thrift plans,
and presently exercisable stock options held by Messrs. Burrow (14,189
shares of Common Stock), Arledge (140,960 shares of Common Stock and
13,412 shares of Class A Common Stock), Cordes (89,786 shares of Common
Stock), and Johnson (60,415 shares of Common Stock).
(2) Includes shares owned by the spouse and a son of Mr. Wyatt (266,295
shares of Common Stock and 7,354 shares of Class A Common Stock), by the
spouse of Mr. Burrow (5,000 shares of Common Stock), by the spouse of Mr.
Chapin (1,000 shares of Common Stock) and by the spouse of Mr. Katzin (928
shares of Common Stock), as to which shares beneficial ownership is
disclaimed; also includes shares owned by the estate of the late Mrs.
Marshall (4,362 shares of Common Stock and 100 shares of Class A Common
Stock).
(3) Includes presently exercisable stock options to purchase 629,038 shares
of Common Stock and 14,628 shares of Class A Common Stock; also includes
280,239 shares of Common Stock and 7,354 shares of Class A Common Stock
owned by spouses and children, as to which shares beneficial ownership is
disclaimed; also includes 4,362 shares of Common Stock and 100 shares of
Class A Common Stock owned by the estate named in Note 2 above. In
addition, one executive officer owns 8 shares of Series B Preferred Stock,
each of which is convertible into 3.6125 shares of Common Stock and 0.1
share of Class A Common Stock.
No incumbent director is related by blood, marriage or adoption to another
director or to any executive officer of Coastal or its subsidiaries or
affiliates.
Except as hereafter indicated, the above table includes the principal
occupation of each of the directors during the past five years. The listed
executive officers have held various executive positions with Coastal, ANR, ANR
Pipeline and/or Colorado during the five-year period.
Mr. Bissell is a member of the Boards of Directors of Old Kent Financial
Corporation and Batts Inc.
Mr. Cordes is a member of the Boards of Directors of Comerica Inc. and Royal
Group, Inc.
Mr. Katzin is a member of the Board of Directors of Qualcomm Incorporated.
Mr. Marshall is a member of the Boards of Directors of Missouri-Kansas-Texas
Railroad Company and Presidio Oil Company.
Mr. McDade is a trial lawyer and the founding senior partner of the Houston
law firm of McDade & Fogler. Prior to forming McDade & Fogler he was a senior
partner in the Houston law firm of Fulbright & Jaworski.
Messrs. Arledge, Burrow, Cordes and Wyatt are directors of Colorado.
Mr. Cordes is a director of ANR Pipeline. Both of these subsidiaries of Coastal
are subject to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) Transactions with management and others.
ANR Pipeline participates in a program which matches short-term cash excesses
and requirements of participating affiliates, thus minimizing borrowings from
outside sources. At December 31, 1993, the Company had advanced $285.5 million
to an associated company at a market rate of interest. Such amount is repayable
on demand.
20
<PAGE>
Additional information called for by this item is set forth under Item 11,
"Executive Compensation" and Note 11 of Notes to Consolidated Financial
Statements included herein.
(b) Certain business relationships.
None.
(c) Indebtedness of management.
None.
(d) Transactions with promoters.
Not applicable.
21
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this Annual Report or
incorporated herein by reference:
1. Financial Statements.
The following Consolidated Financial Statements of ANR Pipeline and
Subsidiaries are included in response to Item 8 hereof on the attached
pages as indicated:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report............................... F-5
Consolidated Balance Sheet at December 31, 1993 and 1992... F-6
Statement of Consolidated Earnings for the Years Ended
December 31, 1993, 1992 and 1991.......................... F-8
Statement of Consolidated Retained Earnings
for the Years Ended December 31, 1993, 1992
and 1991.................................................. F-8
Statement of Consolidated Cash Flows for the
Years Ended December 31, 1993, 1992 and
1991...................................................... F-9
Notes to Consolidated Financial Statements................. F-10
</TABLE>
2. Financial Statement Schedules.
The following schedules of ANR Pipeline and Subsidiaries are included
on the attached pages as indicated:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Schedule II - Amounts Receivable from Related Parties
and Underwriters, Promoters and
Employees Other Than Related Parties.......... S-1
Schedule V - Property, Plant and Equipment................. S-2
Schedule VI - Accumulated Depreciation...................... S-3
Schedule X - Supplementary Income Statement Information.... S-4
</TABLE>
Schedules other than those referred to above are omitted as not
applicable or not required, or the required information is shown in the
Consolidated Financial Statements or Notes thereto.
3. Exhibits.
<TABLE>
<C> <S>
(3.1)+ Composite Certificate of Incorporation of ANR Pipeline effective
as of December 31, 1987 (Filed as Module ANRCertIncorp on
March 29, 1994).
(3.2)+ By-laws of ANR Pipeline effective as of August 29, 1991 (Filed
as Module ANRBY-LAWS on March 29, 1994).
(4) With respect to instruments defining the rights of holders of
long-term debt, the Company will furnish to the Securities
and Exchange Commission any such document on request.
(4.1)+ Board Resolution dated September 22, 1975 establishing the $2.675
Series of Cumulative Preferred Stock (Filed as Module
BoardRes_092275 on March 29, 1994).
</TABLE>
22
<PAGE>
<TABLE>
<C> <S>
(4.2)+ Board Resolution dated October 26, 1976 establishing the $2.12
Series of Cumulative Preferred Stock (Filed as Module
BoardRes_102676 on March 29, 1994).
(4.3)+ Board Resolution dated May 12, 1980 establishing the $12.00
Series of Cumulative Preferred Stock (Filed as Module
BoardRes_051280 on March 29, 1994).
(4.4)* Indenture dated as of February 15, 1994 and First Supplemental
Indenture dated as of February 15, 1994 for the $125 million
of 7-3/8% Debentures due February 15, 2024.
(10.1)+ Form of Employment Agreement between ANR Pipeline and certain of
its executive officers (Filed as Module ANREmployAgree
on March 29, 1994).
(10.2)+ Form of Employment Agreement between Coastal and certain Company
executive officers (Filed as Module TCCEmployAgree on
March 29, 1994).
(21)* Subsidiaries of the Company.
(23.1)* Consent of Deloitte & Touche.
(24)* Power of Attorney (included on signature pages herein).
</TABLE>
- -----------
Note:
+ Indicates documents incorporated by reference from the prior filings
indicated.
* Indicates documents filed herewith.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended December 31,
1993.
23
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Coby C. Hesse,
William L. Johnson and Austin M. O'Toole and each of them, any one of whom may
act without the joinder of the others, as his attorney-in-fact to sign on his
behalf and in the capacity stated below and to file all amendments to this
Annual Report on Form 10-K, which amendment or amendments may make such changes
and additions thereto as such attorney-in-fact may deem necessary or
appropriate.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ANR PIPELINE COMPANY
(Registrant)
By: /s/ JAMES F. CORDES
-------------------------
James F. Cordes
Chairman and Chief
Executive Officer
March 29, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: /s/ JAMES F. CORDES By: /s/ DANIEL F. COLLINS
------------------------- -------------------------
James F. Cordes Daniel F. Collins
Chairman and Chief Director
Executive Officer March 29, 1994
March 29, 1994
By: /s/ DAVID A. ARLEDGE By: /s/ JEFFREY A. CONNELLY
------------------------- -------------------------
David A. Arledge Jeffrey A. Connelly
Principal Financial Officer Director
March 29, 1994 March 29, 1994
By: /s/ WILLIAM L. JOHNSON By: /s/ AUSTIN M. O'TOOLE
------------------------- -------------------------
William L. Johnson Austin M. O'Toole
Principal Accounting Officer Director
March 29, 1994 March 29, 1994
* * *
24
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Notes to Consolidated Financial Statements contain information that is
pertinent to the following analysis.
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW. Internally generated funds have been the primary source to meet
mandatory debt and preferred stock retirements and other cash requirements of
the Company over the past three years. However, in 1991 the Company completed a
public offering of $300 million principal amount of 9-5/8% Debentures due
November 1, 2021. Approximately $238 million of the net proceeds were used to
repay long-term indebtedness and current maturities on long-term indebtedness of
the Company with the balance used for capital expenditures and other general
corporate purposes. The repayment of long-term indebtedness included the early
retirement of a $200 million note which was due to mature in 1993.
During 1993 the Company retired $78.1 million of its long-term debt
obligations, of which $47.4 million represented early redemptions. Interest
rates associated with the early redemptions ranged from 9-5/8% to 13-1/4%, which
are significantly higher than current market rates. Of the $47.4 million of
early redemptions, $37.7 million represents First Mortgage Pipe Line Bonds, with
the remaining amount representing Debentures.
On September 23, 1993, the Company filed a shelf registration statement with
the Securities and Exchange Commission for the public offering of up to $200
million in senior unsecured debt securities, which became effective on October
5, 1993. Subsequently, in February 1994, the Company completed an offering of
$125 million in principal amount of 7-3/8% 30-year Debentures due in February
2024. The net proceeds from the sale of the Debentures were added to the general
funds of the Company and were used for capital expenditures and for other
general corporate purposes, including the payment of dividends.
In March 1994, the Company paid a $255 million dividend on its common stock.
The Company uses the following consolidated ratios to measure liquidity and
ability to meet future funding needs and debt service requirements.
<TABLE>
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
Cash flow from operating activities to long-term debt 59.9% 62.4% 84.0%
Long-term debt and capital leases to total capitalization 27.3% 32.9% 38.2%
</TABLE>
The 1993 decrease in the cash flow from operating activities to long-term
debt resulted from lower rates associated with the settlement of the Company's
1989 rate case, partially offset by a decrease in long-term debt. The 1992
decrease can be attributed to higher operating expenses and costs related to the
settlement of the Company's 1989 rate case. The decreases in 1993 and 1992 in
long-term debt and capital leases to total capitalization resulted from the
retirement of long-term debt and an increase in retained earnings.
Management believes that the Company's stable financial position and earnings
ability will enable it to continue to generate and obtain capital for financing
needs in the foreseeable future.
Expenditures for each of the years 1991 through 1993 and the sources of
capital used to finance these expenditures are summarized in the "Statement of
Consolidated Cash Flows."
CONSTRUCTION. Construction additions were $118.9 million in 1992 and $58.2
million in 1993. Capital expenditures for 1994, including the Company's equity
investments in partnerships and joint ventures, are currently
F-1
<PAGE>
budgeted at approximately $138 million. Included in these expenditures is
approximately $90 million related to the acquisition of an ownership interest in
existing natural gas transmission facilities.
Funding for certain pending and proposed natural gas pipeline projects is
anticipated to be provided through non-recourse financings in which the
projects' assets and contracts will be pledged as collateral. This type of
financing typically requires the participants to make equity investments
totaling approximately 20% to 30% of the cost of the project, with the remainder
financed on a long term basis. Equity participation by other entities will also
be considered. To the extent required, cash for equity contributions to projects
will be from general corporate funds. Financing for the remaining budgeted
expenditures in 1994 will be accomplished by the use of internally generated
funds. Information concerning these projects is contained in Part I herein under
Item 1, "Business - Other Developments."
INVESTMENT IN STORAGE GAS. In 1993, storage gas inventories decreased by
$79.1 million as compared to 1992 year end levels and increased by $30.9 million
in 1992 as compared to 1991 year end levels. The decrease in 1993 is
attributable to the Company's implementation of Order 636 and the fact that,
effective November 1, 1993, the Company no longer provides a merchant service,
which previously required an ongoing investment in working storage gas. In
contrast, the increase in 1992 compared to 1991 is due to an increase in the
average cost of gas.
ASSETS RELATED TO EXCESS GAS SUPPLY. "Assets related to excess gas supply"
are being recovered through the currently allowed billing mechanism under FERC
Order No. 528, through gas takes against prepaid gas and through cash recoveries
of gas prepayments under certain take-or-pay contracts. In 1993, "Assets related
to excess gas supply" decreased by $82.6 million. The decline is attributable to
the recovery of producer contract reformation costs pursuant to FERC Order No.
528 and a significant first quarter cash recovery of a prepayment for gas under
a purchase contract with a producer.
FINANCING ALTERNATIVES. Alternatives to finance additional capital and other
expenditures are limited principally by the terms of certain debt instruments of
the Company and certain affiliates. Under the most restrictive of such
instruments, as of December 31, 1993, ANR Pipeline and certain affiliates could
incur in the aggregate approximately $917 million of additional indebtedness.
For the Company and these affiliates to incur indebtedness for borrowed money in
excess of this amount, approximately $400 million of indebtedness of Coastal
Natural Gas would need to be retired.
The Company participates in a program which matches short-term cash excesses
and requirements of participating affiliates, thus minimizing borrowings from
outside sources. At December 31, 1993, the Company had advanced $285.5 million
to an associated company at a market rate of interest. Such amount is repayable
upon demand.
ENVIRONMENTAL. The Company's operations are subject to extensive federal,
state and local environmental laws and regulations which may affect such
operations and costs as a result of their effect on the construction and
maintenance of its pipeline facilities. Additionally, appropriate governmental
authorities may enforce the laws and regulations with a variety of civil and
criminal enforcement measures, including monetary penalties and remediation
requirements.
The Comprehensive Environmental Response, Compensation and Liability Act,
also known as "Superfund," as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." The Company has been named as a potentially responsible party in two
"Superfund" waste disposal sites. At one site for which the EPA has developed
sufficient information to estimate total clean-up costs of approximately $1.8
million, the Company estimates its pro-rata exposure is less than $50,000. At
the other site, the EPA is currently unable to provide the Company with an
estimate of total clean-up costs and, accordingly, the Company is unable to
calculate its share of those costs.
There are additional areas of environmental remediation responsibilities
which may fall on the Company. Future information and developments will require
the Company to continually reassess the expected impact of these environmental
matters. However, the Company has evaluated its total environmental exposure
based on currently
F-2
<PAGE>
available data, including its potential joint and several liability, and
believes that compliance with all applicable laws and regulations will not have
a material adverse impact on the Company's liquidity or financial position.
RESULTS OF OPERATIONS
REVENUES. For the period November 1, 1992 through October 31, 1993, the
Company operated under restructured sales services as part of the Interim
Settlement. Prior to the restructuring, the cost of providing transportation
services for sales customers was recovered as part of the Company's total resale
rate and, therefore, was classified as part of gas sales revenue. Under the
Interim Settlement, these costs were recovered through a separate "bundled"
storage and transportation rate and were included in storage and transportation
revenue. Revenue recovered under this separate "bundled" service amounted to
$153.1 million and $29.3 million in 1993 and 1992, respectively.
In the fourth quarter of 1993, the Company implemented its Order 636
restructuring (see Note 7 of Notes to Consolidated Financial Statements), and
now offers an array of "unbundled" storage, transportation and balancing service
options. Under Order 636, the Company no longer offers a merchant service.
Former gas sales customers of the Company have largely retained their firm
storage and transportation service levels previously included in their "bundled"
gas sales services. Consequently, while operating revenues will be reduced as a
result of the implementation of Order 636, purchases and other related costs
will be reduced by a similar amount.
Gas sales revenues decreased by $31 million in 1993 as compared to 1992
primarily as a result of the sales service restructuring mentioned above and
rate decreases associated with gas pricing. These decreases were largely offset
by higher sales volumes resulting from sales customers purchasing gas for
storage injection during the spring and summer months. This purchase and storage
of gas by sales customers was in anticipation of the Company's implementation of
Order 636, and the fact that the Company would no longer provide a merchant
service effective November 1, 1993.
Gas sales revenues decreased by $6.7 million in 1992 in comparison to 1991
primarily as a result of the Company's restructuring of its sales service, as
mentioned above. Offsetting this decrease was a change in the provision for
rate-related contingencies associated with the settlement of the Company's 1989
rate case.
Storage and transportation revenues increased by 19% in 1993 as compared to
1992. The primary factors contributing to the increased revenue were the
recognition of $123.8 million of additional transportation revenue due to the
sales service restructuring mentioned above, and the addition of 24.4 Bcf and
46.2 Bcf of new firm storage and firm transportation services contracted for,
effective April 1 and November 1, 1993, respectively. These factors were offset
by lower transportation commodity rates associated with the settlement of the
Company's 1989 rate case, a decrease in open access transportation volumes of 7%
which, in part, is the result of higher sales volumes transported during the
period, and a change in the provision for rate-related contingencies associated
with the settlement of the Company's 1989 rate case.
Storage and transportation revenues increased by 21% in 1992 as compared to
1991. The factors contributing to the additional revenue for 1992 were the
addition of 25.8 Bcf of new firm storage and firm transportation services
contracted for the 1992/1993 heating season, the recognition of $29.3 million of
transportation revenue due to the sales service restructuring described
previously and a change in the provision for rate-related contingencies
associated with the settlement of the Company's 1989 rate case.
Other revenues increased in 1993 as compared to 1992 primarily because of
increased revenue from investments in pipeline partnerships and an increase in
interest income for 1993. Other revenues decreased in 1992 in comparison to 1991
because of a decrease in interest income for 1992 partially offset by an
increase in revenues from investments in pipeline partnerships.
COST OF GAS SOLD. As a result of the implementation of Order 636, as
discussed above, the Company no longer offers a merchant service. Because of
this, a significant portion of the Company's gas purchase contracts have been
bought out or reassigned. ANR Pipeline is continuing to negotiate the permanent
release from a number of gas
F-3
<PAGE>
purchase contract obligations which still exist. The Company believes it will
recover any costs associated with the resolution of these negotiations with no
significant adverse financial impact. For additional information concerning the
recovery of transition costs resulting from the implementation of Order 636, see
Note 7 of Notes to Consolidated Financial Statements included herein.
Cost of gas sold increased by $119.6 million in 1993 as compared to 1992 due
to higher sales volumes. This increase was partially offset by a decrease in the
average rate of the cost of gas purchased. Certain costs previously recorded as
cost of gas sold, which are now included in transmission and compression expense
within operation and maintenance expenses as a result of the Interim Settlement,
also contributed to this decrease. The average unit cost of gas charged to
operations was $2.31 per Mcf in 1993 as compared to $2.86 per Mcf in 1992 and
$2.89 in 1991.
OPERATION AND MAINTENANCE. Operation and maintenance expenses for 1993
approximated those of 1992, although the following fluctuations were noted.
Transmission and compression expenses increased in 1993 as described above, and
storage expense increased due to the addition of 42 Bcf of storage capacity
provided by Blue Lake Gas Storage Company commencing in April 1993. These
increases were offset by an adjustment in 1993 to the estimated costs recorded
in 1992 related to the settlement of the Company's 1989 rate case, the Interim
Settlement, and provisions for unrecoverable producer contract reformation
costs.
Operation and maintenance expense increased by $83.5 million in 1992 as
compared to 1991 primarily due to increased costs for transmission and
compression of gas by others, higher compressor station expenses associated with
compressor fuel and costs related to the settlement of the Company's 1989 rate
case and the Interim Settlement previously described in Item 1, "Business,
Regulations Affecting Gas System - Rate Matters."
DEPRECIATION. The decrease in depreciation expense of $44.1 million in 1993
as compared to 1992 and $5.2 million in 1992 as compared to 1991, is caused by a
decrease in depreciation rates, which became effective November 1, 1992, as a
result of the Interim Settlement.
INTEREST EXPENSE. Interest expense decreased by $7.3 million in 1993
compared to 1992 due to a lower effective interest rate and lower average
outstanding long-term debt, partially offset by a reduction in 1992 interest
expense associated with changes in provisions for regulatory matters. Interest
expense decreased by $2.9 million in 1992 when compared to 1991 primarily as a
result of changes in provisions for rate refunds partially offset by higher
average outstanding long-term debt at a higher effective rate of interest.
TAXES ON INCOME. Income taxes increased by $3.3 million in 1993 as compared
to 1992 primarily due to an increase in pre-tax income, and an increase in the
federal income tax rate from 34% to 35%, offset by certain adjustments to state
income tax accruals.
RECENT ADOPTION OF FASB PRONOUNCEMENTS
In 1993, the Company adopted a change in accounting for postretirement
benefits as required by FAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions."
In 1994, the Company adopted FAS No. 112, "Employers' Accounting for
Postemployment Benefits." This standard covers the accounting for estimated
costs of benefits provided to former or inactive employees before their
retirement. The $3 million estimated earnings impact of adopting FAS No. 112
will be deferred, as the Company has included such costs in its November 1, 1993
general rate case application with the FERC.
See Note 10 of Notes to Consolidated Financial Statements included herein for
a discussion of these items.
F-4
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
ANR Pipeline Company
Detroit, Michigan
We have audited the accompanying consolidated balance sheets of ANR Pipeline
Company (an indirect, wholly-owned subsidiary of The Coastal Corporation) and
subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of earnings, retained earnings and cash flows for each of the three
years in the period ended December 31, 1993. Our audits also included the
financial statement schedules listed in the Index at Item 14(a)2. These
financial statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of ANR Pipeline Company and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993 in conformity with generally accepted accounting principles.
Also, in our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
As discussed in Note 10 to the consolidated financial statements, in 1993 the
Company changed its method of accounting for postretirement benefits other than
pensions to conform with Statement of Financial Accounting Standards No. 106.
DELOITTE & TOUCHE
Detroit, Michigan
February 3, 1994
F-5
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1993 1992
-------- --------
<S> <C> <C>
ASSETS
Property, Plant and Equipment, at cost.................... $3,170.1 $3,139.2
Less - Accumulated depreciation.......................... 2,174.3 2,140.5
-------- --------
995.8 998.7
-------- --------
Current Assets:
Cash..................................................... .5 3.1
Special deposit.......................................... 33.4 -
Note receivable from affiliate........................... 285.5 227.5
Accounts receivable...................................... 94.2 98.6
Gas in underground storage, at FIFO cost................. 195.8 274.9
Materials and supplies at average cost................... 40.6 41.0
Other.................................................... .7 .9
-------- --------
650.7 646.0
-------- --------
Other Assets:
Deferred charges and other............................... 115.6 79.8
Investment in pipeline partnerships...................... 37.5 40.2
Assets related to excess gas supply...................... 120.7 203.3
-------- --------
273.8 323.3
-------- --------
$1,920.3 $1,968.0
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-6
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1993 1992
-------- --------
<S> <C> <C>
STOCKHOLDERS' EQUITY AND LIABILITIES
Common Stock and Other Stockholder's Equity:
Common stock, $100 par value, authorized and outstanding 1,000 shares........... $ .1 $ .1
Additional paid-in capital...................................................... 466.2 466.3
Retained earnings............................................................... 503.0 383.7
-------- --------
969.3 850.1
-------- --------
Mandatory Redemption Cumulative Preferred Stock, $1 par value, authorized
10,000,000 shares, outstanding 1,086,640 and 1,413,310 shares, respectively..... 26.0 36.1
-------- --------
Long-Term Debt................................................................... 356.6 404.0
-------- --------
Obligation Under Capital Leases.................................................. 17.4 31.1
-------- --------
Current Liabilities:
Maturities and sinking fund requirements of long-term debt and preferred stock.. 7.7 38.4
Obligation under capital leases................................................. 3.0 5.0
Accounts payable................................................................ 207.3 264.0
Taxes on income................................................................. (15.8) 13.9
Other........................................................................... 52.3 58.6
-------- --------
254.5 379.9
-------- --------
Deferred Credits and Other:
Accumulated deferred income taxes............................................... 217.1 186.2
Unamortized rate reductions for excess deferred federal income taxes............ 12.6 32.7
Other........................................................................... 66.8 47.9
-------- --------
296.5 266.8
-------- --------
$1,920.3 $1,968.0
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-7
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED EARNINGS
(Millions of Dollars)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Gas sales....................................... $ 603.5 $ 634.5 $ 641.2
Storage and transportation...................... 634.7 534.0 441.4
Other........................................... 33.6 23.3 31.8
-------- -------- --------
1,271.8 1,191.8 1,114.4
-------- -------- --------
Costs and Expenses:
Cost of gas sold................................ 539.6 420.0 421.2
Operation and maintenance....................... 397.6 395.1 311.6
Depreciation.................................... 46.6 90.7 95.9
Interest expense................................ 50.8 58.1 61.0
Taxes on income................................. 80.2 76.9 76.3
-------- -------- --------
1,114.8 1,040.8 966.0
-------- -------- --------
Net Earnings..................................... $ 157.0 $ 151.0 $ 148.4
======== ======== ========
</TABLE>
STATEMENT OF CONSOLIDATED RETAINED EARNINGS
(Millions of Dollars)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Balance - Beginning of Year...................... $ 383.7 $ 266.5 $ 444.6
Net Earnings..................................... 157.0 151.0 148.4
Dividends:
Common stock.................................... (33.7) (28.6) (320.0)
Preferred stock................................. (4.0) (5.2) ( 6.5)
-------- -------- --------
Balance - End of Year............................ $ 503.0 $ 383.7 $ 266.5
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-8
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Millions of Dollars)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings................................................................ $ 157.0 $ 151.0 $ 148.4
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation............................................................... 48.6 92.5 97.8
Increase in deferred income taxes.......................................... 13.6 7.7 9.0
Producer contract reformation cost recoveries.............................. 47.1 41.9 16.8
Provision for producer settlements......................................... (5.1) 13.6 13.5
Equity in earnings of pipeline partnerships................................ (6.5) (3.1) .1
Changes in other assets and liabilities affecting operating activities:
Decrease (increase) in accounts receivables................................ 4.4 (43.5) 91.6
Decrease (increase) in gas in underground storage.......................... 79.1 (30.9) 5.4
Increase (decrease) in accounts payable and other accruals................. (60.2) 13.7 (21.4)
Net increase (decrease) in other assets/liabilities........................ (64.5) 9.3 (25.8)
-------- -------- --------
Total adjustments......................................................... 56.5 101.2 227.0
-------- -------- --------
Net cash provided by operating activities................................. 213.5 252.2 375.4
-------- -------- --------
Cash Flows from Investing Activities:
Decrease (increase) in note receivable from affiliate....................... (58.0) (4.9) 77.5
Gas supply settlements and prepayments...................................... (4.3) (41.4) (50.7)
Recovery of gas supply prepayments.......................................... 24.9 4.4 23.0
Capital expenditures........................................................ (49.4) (112.0) (125.2)
-------- -------- --------
Net cash used in investing activities..................................... (86.8) (153.9) (75.4)
-------- -------- --------
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt.................................... - - 300.0
Retirement of long-term debt, capital lease obligation and preferred stock.. (91.5) (64.4) (276.5)
Common stock dividends paid................................................. (33.7) (28.6) (320.0)
Preferred stock dividends paid.............................................. (4.1) (5.5) (6.6)
-------- -------- --------
Net cash used in financing activities...................................... (129.3) (98.5) (303.1)
-------- -------- --------
Net Decrease in Cash......................................................... (2.6) (.2) (3.1)
Cash - Beginning of Period................................................... 3.1 3.3 6.4
-------- -------- --------
Cash - End of Period......................................................... $ .5 $ 3.1 $ 3.3
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-9
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
- - Basis of Presentation
ANR Pipeline is a subsidiary of ANR, which is a direct subsidiary of Coastal
Natural Gas and an indirect subsidiary of Coastal. The financial statements
presented herewith are presented on the basis of historical cost and do not
reflect the basis of cost to Coastal Natural Gas. Certain reclassifications of
prior period statements have been made to conform with current reporting
practices. The effect of the reclassifications was not material to the Company's
results of operations or financial position.
The Company is regulated by and subject to the regulations and accounting
procedures of the FERC. In addition, the Company meets the criteria and,
accordingly, follows the accounting and reporting requirements of FAS No. 71 for
regulated enterprises.
- - Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company and
its subsidiaries after eliminating all significant intercompany transactions.
The equity method of accounting is used for investments in which the Company has
a 20% to 50% continuing interest. The cost method of accounting is used for an
investment in which the Company has less than a 20% continuing interest.
- - Gas in Underground Storage
Gas in underground storage at December 31, 1993 includes $161.5 million,
pending approval by the FERC, which is to be transferred to Property, Plant and
Equipment for regulatory and accounting purposes.
- - Depreciation of Gas Plant
The Company's annual provisions for depreciation of gas plant are computed on
a straight-line basis using rates of depreciation which vary by type of
property. The annual composite depreciation rates for 1993, 1992 and 1991 were
approximately 1.6%, 3.1% and 3.4%, respectively.
- - Income Taxes
The Company is a member of a consolidated group which files a consolidated
federal income tax return. Members of the consolidated group with taxable
incomes are charged with the amount of income taxes as if they filed separate
federal income tax returns, and members providing deductions and credits which
result in income tax savings are allocated credits for such savings.
- - Statement of Cash Flows
The Company made cash payments for interest, net of interest capitalized, of
$53.0 million, $68.3 million and $54.8 million in 1993, 1992 and 1991,
respectively. Cash payments for income taxes amounted to $103.2 million, $104.1
million and $78.5 million in 1993, 1992 and 1991, respectively.
- - Allowance for Funds Used During Construction
In accordance with the accounting requirements of the FERC, an allowance for
equity and borrowed funds used during construction is included in the cost of
the Company's major additions to gas plant. These costs amounted to $1.5
million, $3.9 million and $4.5 million in 1993, 1992 and 1991, respectively.
F-10
<PAGE>
- - Concentrations of Credit Risk
The Company's primary market areas are located in the Midwest region of the
United States. The Company has a concentration of receivables due from
interstate pipelines, intrastate pipelines and local distribution companies in
these market areas. These concentrations of customers may affect the Company's
overall credit risk in that the customers may be similarly affected by changes
in economic, regulatory and other factors. Trade receivables are generally not
collateralized; however, the Company analyzes customers' credit positions prior
to extending credit.
2. Common Stock and Other Stockholder's Equity
All of ANR Pipeline's common stock is owned by ANR.
Under the terms of the most restrictive of the Company's financing
agreements, approximately $454 million was available at December 31, 1993 for
payment of dividends on the Company's common and preferred stock. In March 1994,
the Company paid a $255 million dividend on its common stock, which leaves
approximately $199 million of dividend capacity.
3. Mandatory Redemption Cumulative Preferred Stock
The following information relates to the preferred stock outstanding at
December 31, 1993:
<TABLE>
<CAPTION>
$2.675 $2.12 $ 12.00
SERIES SERIES SERIES
-------- -------- --------
<S> <C> <C> <C>
Year of issue..................................................... 1975 1976 1980
Shares outstanding (thousands).................................... 200.0 800.0 86.6
Issue price per share............................................. $ 25 $ 25 $ 100
Involuntary liquidation preference (millions of dollars).......... $ 5.0 $ 20.0 $ 8.7
Annual dividend per share......................................... $ 2.675 $ 2.12 $ 12.00
Redemption options:
Currently effective redemption price per share................... $ 25.268 $ 25.318 $103.790
Redemption price per share decreases annually to issue price by.. 1995 1996 1999
Redemptions during the years 1991-1993 (millions of dollars):
Balance outstanding at January 1, 1991........................... $ 20.0 $ 26.6 $ 21.3
Redemptions during 1991.......................................... (5.0) (1.6) (5.3)
1992.......................................... (5.0) (2.5) (4.6)
1993.......................................... (5.0) (2.5) (2.7)
-------- -------- --------
Balance outstanding at December 31, 1993......................... $ 5.0 $ 20.0 $ 8.7
======== ======== ========
</TABLE>
Mandatory sinking fund requirements yet to be met during the succeeding five
years aggregate $7.7 million for each of the years 1994 and 1995, $5.1 million
for 1996, $3.1 million for 1997 and $2.5 million for 1998.
The holders of preferred stock are not entitled to vote unless four quarterly
dividend payments are in arrears.
F-11
<PAGE>
4. Long-Term Debt
Balances at December 31 were as follows (millions of dollars):
<TABLE>
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
First Mortgage Pipe Line Bonds:
8-5/8% series due 1993........................ $ - $ 5.3
9-5/8% series due 1994........................ - 7.7
10-5/8% series due 1995........................ - 5.8
9.95% series due 1999........................ - 37.2
Debentures:
11-3/4% series due 1997........................ - 15.0
13-1/4% series due 1997........................ - 7.5
9-5/8% series due 2021........................ 300.0 300.0
Unsecured Debt:
Swiss Franc Bonds due 1995*.................... 58.1 58.1
Unamortized discount related to outstanding debt,
net of premium.................................. (1.5) (1.9)
------ ------
356.6 434.7
Less maturities and sinking fund requirements.... - 30.7
------ ------
$356.6 $404.0
====== ======
</TABLE>
* In October 1985, the Company issued 6% bonds for 125 million Swiss francs
at a price of 100.25%. The foreign currency exposure resulting from the
issue has been contractually hedged through two currency swap agreements,
resulting in an effective borrowing cost of approximately 10.7%. Neither
the Company nor the counterparties are required to collateralize their
respective obligations under these swaps. In the event of nonperformance by
the counterparties to the currency swap, the Company would have no exposure
to credit loss.
Gas properties were pledged as security for the above listed First Mortgage
Pipe Line Bonds. Such bonds have been retired and the Company is in the process
of terminating the associated Mortgage and Deed of Trust.
Maturities and sinking fund requirements of the long-term debt during the
succeeding five years are as follows (millions of dollars):
<TABLE>
<CAPTION>
<S> <C>
1994...................... $ 0.0
1995...................... 58.1
1996...................... 0.0
1997...................... 0.0
1998...................... 0.0
</TABLE>
In February 1994, the Company completed a public offering of $125 million of
7-3/8% Debentures due in 2024. The net proceeds from the sale were used for
capital expenditures and for other general corporate purposes, including the
payment of dividends.
Alternatives to finance additional capital and other expenditures are limited
principally by the terms of certain debt instruments of the Company and certain
affiliates. Under the most restrictive of such instruments, as of December 31,
1993, ANR Pipeline and certain affiliates could incur in the aggregate
approximately $917 million of additional indebtedness. For the Company and these
affiliates to incur indebtedness for borrowed money in excess of this amount,
approximately $400 million of indebtedness of Coastal Natural Gas would need to
be retired.
F-12
<PAGE>
5. Value of Financial Instruments
The estimated fair value amounts of the Company's financial instruments have
been determined by the Company, using appropriate market information and
valuation methodologies. Considerable judgment is required to develop the
estimates of fair value, thus, the estimates provided herein are not necessarily
indicative of the amounts that could be realized in a current market exchange.
<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------- -------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE ANOUNT VALUE
-------- ------ -------- ------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Financial Assets:
Cash.................................. $ .5 $ .5 $ 3.1 $ 3.1
Special deposit....................... 33.4 33.4 - -
Marketable security of an affiliate... 2.0 2.2 - -
Note receivable from affiliate........ 285.5 285.5 227.5 227.5
Deferred gas cost receivable.......... 37.4 37.4 55.4 55.4
Financial Liabilities:
Long-term debt........................ 358.1 418.9 436.6 444.8
Mandatory redemption preferred stock.. 33.7 34.3 43.8 44.0
Foreign currency swaps................ - (32.1) - (22.6)
</TABLE>
The estimated fair value of the marketable security of an affiliate is based
on the market quote at December 31, 1993 and is included under Deferred Charges
and Other Assets. The note receivable from affiliate and the deferred gas cost
receivable are at floating market rates of interest and therefore, the carrying
amounts are reasonable estimates of their fair value. The estimated values of
the Company's long-term debt and mandatory redemption preferred stock are based
on interest rates at December 31, 1993 and 1992, respectively, for new issues
with similar remaining maturities. The fair market values of the Company's
foreign currency swaps are based on the estimated termination values at December
31, 1993 and 1992, respectively.
6. Take-or-Pay Obligations
"Assets related to excess gas supply" consists of $120.7 million and $203.3
million at December 31, 1993 and 1992, respectively, relating to prepayments for
gas under gas purchase contracts with producers and settlement payment amounts
relative to the restructuring of gas purchase contracts as negotiated with
producers. Currently, FERC regulations allow for the billing of a portion of the
costs of take-or-pay settlements and renegotiating gas purchase contracts.
Prepayments are normally recoupable through future deliveries of natural gas.
Contract reformation and take-or-pay costs incurred as a result of the
mandated Order 636 restructuring will be recovered under the transition cost
mechanisms of Order 636 as well as through negotiated agreements with the
Company's customers. The Company believes that these mechanisms provide adequate
coverage for such costs.
Several producers have instituted litigation arising out of take-or-pay
claims against the Company. In the Company's experience, producers' claims are
generally vastly overstated and do not consider all adjustments provided for in
the contract or allowed by law. The Company has resolved the majority of the
exposure with its suppliers for approximately 13% of the amounts claimed. At
December 31, 1993, the Company estimated that unresolved asserted and unasserted
producers' claims amounted to approximately $8 million. The remaining disputes
will be settled where possible and litigated if settlement is not possible.
At December 31, 1993, the Company was committed to make future purchases
under certain take-or-pay contracts with fixed, minimum or escalating price
provisions. Based on contracts in effect at that date, and before considering
reductions provided in the contracts or applicable law, such commitments are
estimated to be $37 million, $29 million, $22 million, $14 million and $3
million for the years 1994-1998, respectively, and $4 million thereafter.
F-13
<PAGE>
Such commitments have also not been adjusted for all amounts which may be
assigned or released, or for the results of future litigation or negotiation
with producers.
The Company has made provisions, which it believes are adequate, for payments
to producers that may be required for settlement of take-or-pay claims and
restructuring of future contractual commitments. In determining the net loss
relating to such provisions, the Company has also made accruals for the
estimated portion of such payments which would be recoverable pursuant to FERC-
approved settlements with customers.
7. Litigation, Environmental and Regulatory Matters
- - Litigation
Numerous lawsuits and other proceedings which have arisen in the ordinary
course of business are pending or threatened against the Company or its
subsidiaries. Although no assurances can be given and no determination can be
made at this time as to the outcome of any particular lawsuit or proceeding, the
Company believes there are meritorious defenses to substantially all such claims
and that any liability which may finally be determined should not have a
material adverse effect on the Company's consolidated financial position.
- - Environmental
The Company's operations are subject to extensive federal, state and local
environmental laws and regulations which may affect such operations and costs as
a result of their effect on the construction and maintenance of its pipeline
facilities. Additionally, appropriate governmental authorities may enforce the
laws and regulations with a variety of civil and criminal enforcement measures,
including monetary penalties and remediation requirements.
The Comprehensive Environmental Response, Compensation and Liability Act,
also known as "Superfund," as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." The Company has been named as a potentially responsible party in two
"Superfund" waste disposal sites. At one site for which the EPA has developed
sufficient information to estimate total clean-up costs of approximately $1.8
million, the Company estimates its pro-rata exposure is less than $50,000. At
the other site, the EPA is currently unable to provide the Company with an
estimate of total clean-up costs and, accordingly, the Company is unable to
calculate its share of those costs.
There are additional areas of environmental remediation responsibilities
which may fall on the Company. Future information and developments will require
the Company to continually reassess the expected impact of these environmental
matters. However, the Company has evaluated its total environmental exposure
based on currently available data, including its potential joint and several
liability, and believes that compliance with all applicable laws and regulations
will not have a material adverse impact on the Company's liquidity or financial
position.
- - Regulatory Matters
On March 10, 1992, the Company submitted to the FERC a comprehensive Interim
Settlement designed to resolve all outstanding issues resulting from its 1989
rate case and its 1990 proposed service restructuring proceeding. The Interim
Settlement involved, inter alia, an array of new sales, delivery, transportation
and storage service alternatives and the implementation of a GIC, designed to
compensate the Company for the costs of standing ready to serve its sales
customers. The Interim Settlement reflected a decrease in cost of service of
approximately $45 million, which was largely attributable to a reduction in
depreciation rates from 3.4% to 1.82%. Also included was a provision which
allowed the Company to direct bill its customers for its remaining unrecovered
purchased gas costs. The Interim Settlement became effective November 1, 1992
and expired with the Company's implementation of Order 636 on November 1, 1993.
Specific provisions of the Interim Settlement relating to the deferral and
future recovery of certain costs remain in effect.
On April 8, 1992, the FERC issued Order 636, which required significant
changes in the services provided by interstate natural gas pipelines. The
Company and numerous other parties have sought judicial review of aspects of
Order 636. ANR Pipeline placed its restructured services under Order 636 into
effect on November 1, 1993. The Company now offers a wide range of "unbundled"
storage, transportation and balancing services. Several persons,
F-14
<PAGE>
including ANR Pipeline, have sought judicial review of aspects of the FERC's
orders approving the Company's restructuring filings. Order 636 also provides
mechanisms for recovery of transition costs associated with compliance with that
Order. These transition costs include gas supply realignment costs, the cost of
stranded pipeline investment and the cost of new facilities required to
implement Order 636. The Company expects that it will incur transition costs of
approximately $150 million. As a result of the recovery mechanisms provided
under Order 636, the Company anticipates that these transition costs will not
have a material adverse effect on its financial position or its results of
operations.
On December 17, 1992, the FERC issued a policy statement that outlined
changes on how pipelines may recover the costs of employees' postretirement
benefits other than pensions. The FERC's policy will be to recognize, as a
component of jurisdictional cost-based rates, allowances for FAS No. 106 costs
of company employees when determined on an accrual basis, provided certain
conditions are met.
On November 1, 1993, the Company filed a general rate increase with the FERC.
The proposed rates reflect a $121 million increase in the Company's cost of
service from that approved in the Interim Settlement and a $218 million increase
over the Company's approved rates for its restructured services. The increase
represents higher plant investment, Order 636 restructuring costs, rate of
return and tax rate changes and increased costs related to the required adoption
of recent accounting rule changes, i.e., FAS Nos. 106 and 112. The FERC has
permitted the Company to place its new rates into effect on May 1, 1994, subject
to refund and subject to certain required compliance changes and the outcome of
an evidentiary hearing on all remaining issues.
Certain regulatory issues remain unresolved among the Company, its customers,
its suppliers and the FERC. The Company has made provisions which represent
management's assessment of the ultimate resolution of these issues. While the
Company estimates the provisions to be adequate to cover potential adverse
rulings on these and other issues, it cannot estimate when each of these issues
will be resolved.
Gas Costs
As part of the Company's Interim Settlement, the Company received the
authorization to refund or direct bill its former gas sales customers for the
outstanding amount of its deferred purchased gas costs as of October 31, 1992,
up to $72 million. The Company is also authorized to direct bill its former gas
sales customers for costs incurred to resolve billing disputes with its
producers up to an amount not to exceed $25 million. The Company began billing
for recovery of these costs in January 1993. The customers have up to five years
to pay on these billings. Interest will be accrued on any unpaid amounts.
Also, as part of the Company's Interim Settlement, a new demand-commodity
form of gas pricing replaced the purchased gas adjustment provision of the
Company's tariff. This new form of gas pricing included a cost-based GIC that
firm sales customers were obligated to pay for the right to purchase gas, and a
gas commodity charge which was capped by reference to a spot price index for gas
purchased. This method of gas cost recovery requires refund of over-collections,
and placed the Company at risk for under-collection, and expired under the terms
of the Interim Settlement on November 1, 1993. As required by the Interim
Settlement, the Company will file with the FERC in 1994 for approval of the
amount to be refunded.
Effective with the implementation of Order 636 on November 1, 1993, the
Company no longer provides a merchant service. However, the Company still
purchases gas under a number of gas purchase contracts. The Company's Order 636
restructured tariff provides mechanisms for the purpose of recovering from or
refunding to its customers any pricing differential between costs incurred to
purchase this gas and the amount the Company recovers through auctioning of gas
on the open market.
F-15
<PAGE>
8. Lease Commitments
The Company is the lessee of eight storage fields under capital leases. The
storage field leases were to expire on May 1, 1998. However, the Company has the
option to extend each of the leases for up to three successive five year
periods. On April 27, 1993, the Company exercised the first of these three
successive and separate options, extending the current storage field leases to
May 1, 2003. The net present value of the future minimum lease payments is
included as part of Property, Plant and Equipment in the Company's Consolidated
Balance Sheet as follows (millions of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1993 1992
------ ------
<S> <C> <C>
Storage property..................................... $121.9 $134.6
Less: Accumulated depreciation...................... 101.5 98.5
------ ------
$ 20.4 $ 36.1
====== ======
</TABLE>
The annual provision for depreciation included as a part of depreciation
expense was $3.0 million, $4.7 million and $4.9 million for 1993, 1992 and 1991,
respectively.
Future minimum lease payments under capital leases together with the present
value of the net minimum lease payments as of December 31, 1993 are as follows
(millions of dollars):
<TABLE>
<CAPTION>
<S> <C>
Year ending December 31:
1994........................................................ $10.6
1995........................................................ 10.1
1996........................................................ 9.6
1997........................................................ 9.1
1998 through 2003........................................... 34.8
-----
Total minimum lease payments................................ 74.2
Less: Amount representing executory costs.................. 22.6
-----
Net minimum lease payments.................................. 51.6
Less: Amount representing interest.......................... 31.2
-----
Present value of minimum lease payments..................... $20.4
=====
</TABLE>
Operating lease rentals included in operating expenses totaled $16.2 million
for 1993, $16.4 million for 1992 and $18.3 million for 1991. Aggregate minimum
lease payments under existing noncapitalized long-term leases are estimated to
be $12.8 million, $11.7 million, $11.7 million, $11.7 million and $11.6 million
for the years 1994-1998, respectively, and $121.2 million thereafter.
F-16
<PAGE>
9. Taxes On Income
Provisions for income taxes are composed of the following (millions of
dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Federal:
Currently payable........................ $ 62.0 $ 87.6 $ 75.5
Deferred................................. 14.5 (17.6) (6.5)
------ ------ ------
76.5 70.0 69.0
State and City:
Currently payable........................ 2.1 8.1 8.1
Deferred................................. 1.6 (1.2) (.8)
------ ------ ------
Total income taxes...................... $80.2 $ 76.9 $ 76.3
====== ====== ======
</TABLE>
Provisions for income taxes were different from the amount computed by
applying the statutory U.S. federal income tax rate to earnings before tax. The
reasons for these differences are (millions of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Tax expense computed by applying the U.S. federal income tax rate
of 35% for 1993 and 34% for 1992 and 1991......................... $ 83.0 $ 77.5 $ 76.4
State and city income taxes reduced by federal income tax benefit.. 2.4 4.6 4.8
Normalization adjustment for liberalized depreciation.............. (4.8) (4.8) (4.8)
Other.............................................................. (.4) (.4) (.1)
------ ------ ------
Taxes on income................................................... $ 80.2 $ 76.9 $ 76.3
====== ====== ======
</TABLE>
Deferred tax liabilities (assets) which are recognized for the estimated
future tax effects attributable to temporary differences and carryforwards are
(millions of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1993 1992
------ ------
<S> <C> <C>
Depreciation............................... $156.3 $130.6
Purchased gas and other recoverable costs.. 53.2 44.8
Other...................................... 15.2 11.0
------ ------
Deferred tax liabilities.................. 224.7 186.4
------ ------
Inventory capitalization................... (8.0) (10.6)
Benefit plans and accrued expenses......... (8.3) (7.8)
Other...................................... (6.5) (6.3)
------ ------
Deferred tax assets....................... (22.8) (24.7)
------ ------
Deferred income taxes..................... $201.9 $161.7
====== ======
</TABLE>
The Omnibus Budget Reconciliation Act of 1993 enacted in August 1993
included, among other things, an increase in the corporate federal income tax
rate from 34% to 35% retroactive to January 1, 1993. The cumulative impact of
the tax rate increase, which amounted to $1.1 million, has been reflected in the
1993 federal income tax provisions above. In addition, the Company has included
in its November 1, 1993 general rate case application with the FERC a provision
to reduce, by $4 million, its obligation to ratepayers for the "Unamortized rate
reductions for excess deferred federal income taxes" as a result of this tax
rate increase.
F-17
<PAGE>
10. Benefit Plans
The Company participates with its affiliates in the non-contributory pension
plan of Coastal (the "Plan") which covers substantially all employees. The Plan
provides benefits based on final average monthly compensation and years of
service. As of December 31, 1993, the Plan did not have an unfunded accumulated
benefit obligation. ANR Pipeline made no contributions to the Plan for 1993,
1992 or 1991. Assets of the Plan are not segregated or restricted by its
participating subsidiaries and pension obligations for Company employees would
remain the obligation of the Plan if the Company were to withdraw.
ANR Pipeline also makes contributions to a thrift plan, which is a trusteed,
voluntary and contributory plan for eligible employees of the Company. The
Company's contributions, which match the contributions made by employees,
amounted to $5.9, $5.7 and $5.4 million for 1993, 1992 and 1991, respectively.
The Company provides certain health care and life insurance benefits for
substantially all of its retired employees. Effective January 1, 1993, the
Company adopted FAS No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" ("FAS 106"). FAS 106 requires the Company to accrue the
estimated cost of retiree benefit payments during the years the employee
provides services. The Company previously expensed the cost of these benefits,
which are principally health care, as claims were incurred. FAS 106 allows
recognition of the cumulative effect of the liability in the year of the
adoption or the amortization of the obligation over a period of up to 20 years.
The Company has elected to recognize the initial postretirement benefit
obligation of approximately $62.7 million over a period of 20 years. The
Company's cash flows were not affected by the implementation of FAS 106 and the
incremental impact of $6.5 million on the Company's 1993 year-to-date results of
operations has been deferred, as the Company has included such costs in its
November 1, 1993 general rate case application with the FERC.
<TABLE>
<CAPTION>
(millions of
dollars)
------------
<S> <C>
Accumulated postretirement benefit obligation as of December 31, 1993:
Retirees........................................................................... $ 55.6
Fully eligible plan participants................................................... 6.3
Other active plan participants..................................................... 7.1
------
$ 69.0
======
Accumulated postretirement benefit obligation in excess of plan assets............... $(69.0)
Unrecognized transition obligation................................................... 59.6
Unrecognized net loss from past experience different from that assumed............... 2.9
------
Postretirement benefit obligation included in balance sheet as of December 31, 1993.. $ (6.5)
======
Net periodic postretirement benefit cost for the year ended December 31, 1993,
consisted of the following components:
Service cost - benefits earned during the period................................... $ .4
Interest cost on accumulated postretirement benefit obligation..................... 5.0
Amortization of transition obligation.............................................. 3.1
Deferred regulatory asset.......................................................... (6.5)
------
Net periodic postretirement benefit expense........................................ $ 2.0
======
</TABLE>
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 16.0% in 1993, declining gradually to 7.0%
by the year 2004. A one percentage point increase in the assumed health care
cost trend rate for each year would increase the accumulated postretirement
benefit obligation as of December 31, 1993 and the net postretirement health
care cost by approximately 7.2%. The assumed discount rate used in determining
the accumulated postretirement benefit obligation was 7.25%.
F-18
<PAGE>
The FASB has issued FAS No. 112, "Employers' Accounting for Postemployment
Benefits" ("FAS 112"), to be effective in 1994. This standard covers the
accounting for estimated costs of benefits provided to former or inactive
employees before their retirement. The $3 million estimated earnings impact of
adopting FAS 112 will be deferred, as the Company has included such costs in its
November 1, 1993 general rate case application with the FERC. The Company
implemented FAS 112 effective January 1, 1994.
11. Transactions with Affiliates and Major Customers
The Statement of Consolidated Earnings includes Gas Sales and Storage and
Transportation revenues from major customers; the cost of Gas Purchases and
Transmission, Compression and Storage of gas by others from affiliates and
related parties as follows (millions of dollars):
<TABLE>
<CAPTION>
1993 1992 1991
---------------- ----------------- -----------------
PERCENT PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL
------ --------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Gas Sales and Storage and Transportation Services
- -------------------------------------------------
Michigan Consolidated Gas Company................. $241.7 19.5% $243.8 20.9% $204.1 18.9%
Wisconsin Gas Company............................. 223.0 18.0 197.7 16.9 174.2 16.1
Gas Purchases
- -------------
Coastal Gas Marketing Company..................... $ 67.0 16.0% $ - -% $ - -%
Great Lakes....................................... - - .8 0.2 1.5 0.4
Production Company................................ 3.6 0.9 16.5 3.7 7.7 2.1
Transmission, Compression and Storage
- -------------------------------------
ANR Storage....................................... $ 11.8 7.6% $ 11.6 12.3% $ 11.6 17.1%
Blue Lake Gas Storage Company..................... 19.9 12.8 - - - -
Coastal Gas Marketing Company..................... 8.3 5.4 8.0 8.5 8.6 12.6
Colorado.......................................... 5.5 3.5 5.9 6.2 3.8 5.6
Great Lakes....................................... 11.5 7.4 4.8 5.1 0.8 1.2
HIOS.............................................. 12.0 7.7 13.3 14.1 11.4 16.8
</TABLE>
The Consolidated Balance Sheet includes $6.2 million at December 31, 1993 and
$17.5 million at December 31, 1992 due from affiliates reflected in accounts
receivable and $17.7 million at December 31, 1993 and $39.6 million at December
31, 1992 due to affiliates reflected in accounts payable.
Services provided by the Company at cost for affiliated companies were $10.1
million for 1993, $10.4 million for 1992 and $9.8 million for 1991. Services
provided by affiliated companies for the Company at cost were $31.6 million for
1993, $31.5 million for 1992 and $27.4 million for 1991. The services provided
by the Company to affiliates, and by affiliates to the Company primarily reflect
the allocation of costs relating to the sharing of facilities and general and
administrative functions. Such costs are allocated to the Company using a three
factor formula consisting of revenues, property and payroll, which has been
applied on a reasonable and consistent basis.
The Company has a lease agreement with ANR Ren Cen, Inc., a subsidiary of
ANR, for the rental of office space in Detroit. Rental payments for the years
1993, 1992 and 1991 amounted to $4.9 million, $4.8 million and $4.6 million,
respectively.
The Company has lease agreements with Coastal and one of its affiliates for
the rental of certain facilities. Rental expenses of $4.1 million, $5.8 million
and $4.2 million were recorded in 1993, 1992 and 1991, respectively, in
conjunction with the terms of the lease agreements.
ANR Pipeline participates in a program which matches short-term cash excesses
and requirements of participating affiliates, thus minimizing borrowings from
outside sources. At December 31, 1993, the Company had advanced $285.5 million
to an associated company at a market rate of interest. Such amount is repayable
on demand.
F-19
<PAGE>
12. Quarterly Financial Data (Unaudited)
The results of operations by quarter for the years ended December 31, 1993
and 1992 were (millions of dollars):
<TABLE>
<CAPTION>
1993 QUARTER ENDED
----------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31,
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues......................... $362.1 $337.6 $303.9 $268.2
Cost of gas sold................. 176.0 157.7 121.0 84.9
------ ------ ------ ------
Revenues less cost of gas sold.. 186.1 179.9 182.9 183.3
Other costs and expenses......... 136.4 142.9 151.8 144.1
------ ------ ------ ------
Net earnings.................... $ 49.7 $ 37.0 $ 31.1 $ 39.2
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
1992 QUARTER ENDED
----------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31,
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues......................... $358.3 $261.6 $231.2 $340.7
Cost of gas sold................. 152.9 81.6 48.9 136.6
------ ------ ------ ------
Revenues less cost of gas sold.. 205.4 180.0 182.3 204.1
Other costs and expenses......... 152.3 148.5 146.2 173.8
------ ------ ------ ------
Net earnings.................... $ 53.1 $ 31.5 $ 36.1 $ 30.3
====== ====== ====== ======
</TABLE>
F-20
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER
THAN RELATED PARTIES
(Millions of Dollars)
<TABLE>
<CAPTION>
DEDUCTIONS BALANCE AT END
BALANCE AT ------------------------ OF YEAR
BEGINNING AMOUNTS AMOUNTS -----------------------
NAME OF DEBTOR(1) OF YEAR ADDITIONS COLLECTED WRITTEN OFF CURRENT NON-CURRENT
- ------------------------------ ------- --------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ------------------------------
ANR Credit Corporation $ 227.5 $ 58.0 $ - $ - $ 285.5 $ -
======= ========= ========= =========== ======= ===========
Year Ended December 31, 1992
- ----------------------------
ANR Credit Corporation $ 222.6 $ 4.9 $ - $ - $ 227.5 $ -
======= ========= ========= =========== ======= ===========
Year Ended December 31, 1991
- ----------------------------
ANR Credit Corporation $ 300.1 $ - $ 77.5 $ - $ 222.6 $ -
======= ========= ========= =========== ======= ===========
</TABLE>
- -------------------------------------
1 The note receivable is a promissory note due from an affiliate on demand and
bears a market rate of interest.
S-1
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(Millions of Dollars)
<TABLE>
<CAPTION>
OTHER
BALANCE AT RETIRE- CHANGES BALANCE
BEGINNING ADDITIONS MENTS OR ADD AT END
OF YEAR AT COST SALES (DEDUCT) OF YEAR
---------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ----------------------------
Gas Plant, at original cost:
General............................... $3,004.6 $ 58.1 $14.5 $ - $3,048.2
Storage property under capital lease.. 134.6 .1 12.8 - 121.9
-------- ------ ----- ------- --------
Total................................ $3,139.2 $ 58.2 $27.3 $ - $3,170.1
======== ====== ===== ======= ========
Year Ended December 31, 1992
- ----------------------------
Gas Plant, at original cost:
General............................... $2,892.4 $118.7 $ 6.0 $ (0.5) $3,004.6
Storage property under capital lease.. 134.4 .2 - - 134.6
-------- ------ ----- ------- --------
Total................................ $3,026.8 $118.9 $ 6.0 $ (0.5) $3,139.2
======== ====== ===== ======= ========
Year Ended December 31, 1991
- ----------------------------
Gas Plant, at original cost:
General............................... $2,785.3 $116.0 $ 8.0 $ (0.9) $2,892.4
Storage property under capital lease.. 134.3 0.1 - - 134.4
-------- ------ ----- ------- --------
Total................................ $2,919.6 $116.1 $ 8.0 $ (0.9) $3,026.8
======== ====== ===== ======= ========
</TABLE>
S-2
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION
(Millions of Dollars)
<TABLE>
<CAPTION>
OTHER
BALANCE AT ADDITIONS CHANGES BALANCE
BEGINNING CHARGED TO ADD AT END
OF YEAR EXPENSES RETIREMENTS (DEDUCT) OF YEAR
---------- ---------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
- ---------------------------------------
Gas Plant:
General............................... $ 2042.0 $45.6 $14.8 $ - $2,072.8
Storage property under capital lease.. 98.5 3.0 - - 101.5
-------- ----- ----- ------- --------
Total................................ $2,140.5 $48.6 $14.8 $ - $2,174.3
======== ===== ===== ======= ========
Year Ended December 31, 1992
- ---------------------------------------
Gas Plant:
General............................... $1,960.5 $87.8 $ 6.3 $ - $2,042.0
Storage property under capital lease.. 93.8 4.7 - - 98.5
-------- ----- ----- ------- --------
Total................................ $2,054.3 $92.5 $ 6.3 $ - $2,140.5
======== ===== ===== ======= ========
Year Ended December 31, 1991
- ---------------------------------------
Gas Plant:
General............................... $1,876.1 $92.9 $ 8.5 $ - $1,960.5
Storage property under capital lease.. 88.9 4.9 - - 93.8
-------- ----- ----- ------- --------
Total................................ $1,965.0 $97.8 $ 8.5 $ - $2,054.3
======== ===== ===== ======= ========
</TABLE>
S-3
<PAGE>
ANR PIPELINE COMPANY AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Millions of Dollars)
<TABLE>
<CAPTION>
CHARGED TO
OPERATIONS AND MAINTENANCE
YEAR ENDED DECEMBER 31,
--------------------------
1993 1992 1991
---- ---- -----
<S> <C> <C> <C>
Maintenance and repairs..................... $41.0 $41.9 $36.2
Taxes, other than payroll and income taxes.. 34.5 32.9 30.6
</TABLE>
S-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------ ----------------------------------------------------------------------
<C> <S>
(3.1)+ Composite Certificate of Incorporation of ANR Pipeline effective
as of December 31, 1987. (Filed as Module ANRCertIncorp on
March 29, 1994).
(3.2)+ By-laws of ANR Pipeline effective as of August 29, 1991. (Filed
as Module ANRBY-LAWS on March 29, 1994).
(4.1)+ Board Resolution dated September 22, 1975 establishing the
$2.675 Series of Cumulative Preferred Stock. (Filed as
Module BoardRes_092275 on March 29, 1994).
(4.2)+ Board Resolution dated October 26, 1976 establishing the $2.12
Series of Cumulative Preferred Stock. (Filed as Module
BoardRes_102676 on March 29, 1994).
(4.3)+ Board Resolution dated May 12, 1980 establishing the $12.00
Series of Cumulative Preferred Stock. (Filed as Module
BoardRes_051280 on March 29, 1994).
(4.4)* Indenture dated as of February 15, 1994 and First Supplemental
Indenture dated as of February 15, 1994 for the $125 million of
7-3/8% Debentures due February 15, 2024.
(10.1)+ Form of Employment Agreement between the Company and certain of
its executive officers. (Filed as Module ANREmployAgree
on March 29, 1994).
(10.2)+ Form of Employment Agreement between Coastal and certain
Company executive officers. (Filed as Module TCCEmployAgree
on March 29, 1994).
(21)* Subsidiaries of the Company.
(23.1)* Consent of Deloitte & Touche.
(24)* Power of Attorney (included on signature pages herein).
</TABLE>
- --------------
Note:
+ Indicates documents incorporated by reference from the prior filings
indicated.
* Indicates documents filed herewith.
<PAGE>
<PAGE> 1
EXHIBIT 3-1
COMPOSITE
CERTIFICATE OF INCORPORATION
OF
ANR PIPELINE COMPANY
Amended as of December 31, 1987
<PAGE>
<PAGE> 2
COMPOSITE
CERTIFICATE OF INCORPORATION
OF
ANR PIPELINE COMPANY
Article I.
The name of this corporation is ANR PIPELINE COMPANY
Article II.
The principal office of this corporation in the State of Delaware
is located at 100 West Tenth Street in the City of Wilmington, County of New
Castle. The name and address of its resident agent is The Corporation Trust
Company, 100 West Tenth Street, Wilmington, Delaware.
Article III.
The nature of the business of this corporation, or the objects or
purposes to be transacted, promoted or carried on by it, are as follows,
namely:
1. To buy, lease, construct or otherwise acquire, to sell,
mortgage, lease or otherwise dispose of, and to extend, improve, maintain,
develop and operate the following properties, or any of them, namely:
Works, plants, wells, tanks, pipe lines and conduits for the production,
purification, storage, transportation, distribution, exchange and sale of
natural or manufactured gas or a mixture of natural and manufactured gas for
light, heat, power and any other use to which gas is or may be applied.
2. To prospect and explore for, work, develop and mine, oil,
natural gas and, without limitation by the preceding enumeration, other
minerals; to sink, dig, drill and drive wells and mines for the production
of minerals; to locate, acquire, purchase, develop, own, sell, mortgage or
otherwise dispose of any lands or any interest in lands containing or
believed to contain oil, natural gas or other minerals; to purchase or
otherwise acquire oil, oil royalties, natural gas, casinghead gas and gas
royalties, and to sell or otherwise dispose of the same.
3. To establish, construct, operate and maintain refineries and
plants for the refining and treatment of oil, natural gas, casinghead gas
and all the products and by-products thereof; to establish, construct,
operate and maintain refineries and plants for the manufacture of gasoline
and other products from coal, shale and other minerals; to construct,
operate and maintain plants for the manufacture of gas of any description
for heat, light, power or other purposes.
4. To enter into, maintain, operate or carry on in all its
branches the business of mining and of drilling, boring and exploring for,
producing, refining, treating distilling, manufacturing, handling, dealing
in, buying and selling petroleum, oil, natural gas, asphaltum, bitumen,
bituminous rock and any and all other mineral and hydrocarbon substances,
any and all products or by-products which may be derived from said
substances or any of them; and for such or any of such purposes to buy,
exchange, contract for, lease and in any and all other ways acquire, take,
hold and own and to sell, mortgage, lease and otherwise dispose of, and to
construct, manage, maintain, deal in and operate wells, refineries, tanks
and machinery and otherwise to deal in, operate, establish, promote,
<PAGE>
<PAGE> 3
carryon, conduct and manage any and all other property and appliances that
may in any wise be deemed advisable in connection with the business of this
corporation or any branch thereof, or that may be deemed convenient at any
time by the board of directors of this corporation.
5. To do engineering and contracting for hire or profit in the
designing, construction, improvement, extension, maintenance and repair of
gas plants, gas pipe lines and other public utility plants and systems,
including the pipe lines and other appurtenances thereto appertaining; also,
in the drilling, developing and operating of oil and gas wells.
6. To manufacture, purchase or otherwise acquire, own,
mortgage, pledge, sell, assign and transfer, or otherwise dispose of, to
invest, trade and deal in and deal with goods, wares and merchandise and
real and personal property of every class and description.
7. To acquire, and pay for in cash, stock, bonds or obligations
of this corporation or otherwise, the good will, rights, assets and
property, and to undertake or assume the whole or any part of the
obligations or liabilities, of any person, firm, association or corporation.
8. To buy, exchange, construct, contract for, lease and in any
and all other ways to acquire, take, hold and own pipe lines and telegraph
and telephone lines useful or necessary, in the judgment of the board of
directors of this corporation, for its own business, and to improve,
maintain and operate the same, and to sell, mortgage, lease or otherwise
dispose of the same.
9. To buy, acquire, sell, mortgage and otherwise deal in
patents and licenses, and to take, acquire, hold, sell, lease, mortgage and
otherwise dispose of franchises, franchise rights, and Federal, State and
Municipal grants of every character, which this corporation may deem
advantageous in the prosecution of its business or in the maintenance,
operation or extension of its properties.
10. To borrow money and to issue bonds, debentures, notes and
other evidences of indebtedness of this corporation, from time to time, and
without limit as to amount, for any lawful corporate purpose, and to
mortgage, pledge and otherwise charge any or all of its properties, rights,
privileges and franchises to secure the payment thereof, or to issue such
bonds, debentures, notes and other evidences of indebtedness without any
such security.
11. To lend money; to purchase, acquire, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of and deal in shares of the
capital stock, bonds, debentures, notes or other securities of any other
corporation or association, whether domestic or foreign, and whether now or
hereafter organized, and while the holder of any such shares or other secur-
ities, to exercise all the rights and privileges of ownership, including the
right to vote thereon to the same extent as a natural person might or could
do.
12. To purchase, hold, sell, exchange, transfer or otherwise
deal in shares of its own capital stock, bonds or other obligations from
time to time to such extent and in such manner and upon such terms as its
board of directors shall determine; provided that this corporation shall not
use any of its funds or property for the purchase of its own shares of
capital stock when such use would cause any impairment of the capital of
this corporation, except as otherwise permitted by law; and provided,
further, that shares of its own capital stock belonging to this corporation
shall not be voted upon directly or indirectly.
- 2 -
<PAGE>
<PAGE> 4
13. To promote or to aid in any manner, financially or
otherwise, any corporation or association, any stocks, bonds or other
evidences of indebtedness or securities of which are held directly or
indirectly by this corporation; and for this purpose to guarantee the
contracts, dividends, stocks, bonds, notes and other obligations of such
other corporations or associations; and to do any other acts or things
designed to protect, preserve, improve or enhance the value of such stocks,
bonds or other evidences of indebtedness or securities.
14. To carry on any other lawful business whatsoever which may
seem to this corporation capable of being carried on in connection with the
above, or calculated directly or indirectly to promote the interest of this
corporation or to enhance the value of its properties, and to have, enjoy
and exercise all the rights, powers and privileges which are now or which
may hereafter be conferred upon corporations organized under an Act of the
Legislature of Delaware entitled, "An Act Providing a General Corporation
Law", approved March 10, 1899, and the Acts now or hereafter amendatory
thereof and supplemental thereto; and to do any or all of the things
hereinbefore set forth to the same extent as natural persons might or could
do.
15. To conduct its business (including holding, exchanging,
mortgaging and conveying of real and personal property) in the State of
Delaware, other states, the District of Columbia, the territories and
colonies of the United States and in foreign countries, and to maintain such
offices either within or without the State of Delaware, as may be
convenient.
The foregoing clauses shall be construed both as objects and
powers; and the foregoing enumeration of specific powers shall not be held
to limit or restrict in any manner the powers of this corporation.
Article IV.
The total number of shares of all classes of capital stock which
this corporation shall have the authority to issue is 10,001,000 shares
which are divided into two classes as follows:
10,000,000 shares of Cumulative Preferred Stock, par value one
dollar ($1.00) per share, and,
1,000 shares of Common Stock, par value one hundred dollars ($100)
per share.
The designations, voting powers, preferences and relative, parti-
cipating, optional or other special rights and qualifications, limitations
or restrictions of the above classes of stock are follows:
A. CUMULATIVE PREFERRED STOCK
1. ISSUANCE IN SERIES. Shares of Cumulative Preferred
Stock may be issued in one or more series, at such time or times, and for
such consideration, not less than the par value thereof, as the Board of
Directors may, from time to time, determine. All shares of any one series of
Cumulative Preferred Stock shall be identical with each other in all
respects, except that shares of one series issued at different times may
differ as to dates from which dividends thereon may be cumulative. All
series will rank equally and be identical in all respects, except as
permitted by the following provisions of paragraph 2 of this Division A.
- 3 -
<PAGE>
<PAGE> 5
2. AUTHORITY OF THE BOARD WITH RESPECT TO SERIES. The
Board of Directors is authorized, at any time and from time to time, to
provide for the issuance of shares of Cumulative Preferred Stock in one or
more series with such powers, designations, preferences, and relative,
participating, optional or other rights and qualifications, limitations or
restrictions thereof as are stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of
Directors, and as are not set forth in this Certificate of Incorporation, as
amended from time to time, including, the following:
a. the distinctive serial designation and the number
of shares constituting a series:
b. the dividend rate or rates;
c. certain voting powers, full or limited, if any, of
the shares of the series;
d. whether the shares are redeemable and, if so, the
time or times, price or prices, or rate or rates, and with such adjustments,
at which, and the terms and conditions (except as fixed in paragraph 5 of
this Division A) on which, the shores may be redeemed;
e. the amount or amounts payable on the shares in the
event of the voluntary or involuntary liquidation, dissolution or winding up
of the Corporation prior to any payment or distribution of the assets of the
Corporation to any class or classes of stock of the Corporation ranking
junior to the Cumulative Preferred Stock;
f. whether the shares are entitled to the benefit of
a sinking, purchase or analogous fund to be applied to the purchase or
redemption of shares of the series and, if so entitled, the amount of the
fund and the manner of its application, including the price or prices at
which the shares may be redeemed or purchased through application of the
fund;
g. whether the shares are convertible into, or
exchangeable for, shares of any other class or classes or of any other
series of the same or any other class of stock of the Corporation and, if so
convertible or exchangeable, the conversion price or prices, or the rates of
exchange, and any adjustments thereof, at which conversion or exchange may
be made; and any other terms and conditions of conversion or exchange; and
h. any other preferences, privileges and powers, and
relative, participating, optional or other special rights, and any
qualifications, limitations or restrictions as may be deemed advisable by
the Board of Directors and as are not inconsistent with the provisions of
this Certificate of Incorporation.
3. DIVIDENDS. The holders of shares of Cumulative
Preferred Stock of each series shall be entitled to receive, as and when
declared payable by the Board of Directors from funds legally available for
the payment thereof, preferential dividends in lawful money of the United
States of America at the rate per annum fixed and determined as herein
authorized for the shares of such series, but no more, payable quarterly on
the first day of each of the months of March, June, September and December
(the quarterly dividend payment dates) in each year with respect to the
quarterly period ending on the day prior to each such respective dividend
payment date, to stockholders of record on a date to be fixed by the Board
of Directors not exceeding 60 days preceding each quarterly dividend payment
date. Such dividends shall be cumulative with respect to each share from and
including the quarterly dividend payment date next preceding the date of
- 4 -
<PAGE>
<PAGE> 6
issue thereof unless (a) the date of issue be a quarterly dividend payment
date, in which case dividends shall be cumulative from and including the
date of issue, (b) issued during an interval between a record date for the
payment of a quarterly dividend on shares of such series and the payment
date for such dividend, in which case dividends shall be cumulative from and
including such payment date, or (c) the Board of Directors shall determine
that the first dividend with respect to shares of a particular series issued
during an interval between quarterly dividend payment dates shall be
cumulative from and including a date during such interval, in which event
dividends shall be cumulative from and including such date. No dividends
shall be declared on shares of Cumulative Preferred Stock of any series in
respect of accumulations for any quarterly dividend period or portion
thereof unless dividends shall likewise be or have been declared with
respect to accumulations on all then outstanding shares of Cumulative
Preferred Stock of each other series for the same period or portion thereof;
and the ratios of the dividends declared to dividends accumulated with
respect to any quarterly dividend period on the shares of each series
outstanding shall be identical. Accumulations of dividends shall not bear
interest.
So long as any shares of Cumulative Preferred Stock remain
outstanding:
a. no dividend shall be declared on shares of junior
stock unless preferential dividends on all outstanding shares of Cumulative
Preferred Stock for all past quarterly periods and the period which includes
the date of such declaration shall have been previously declared; and
b. no dividend shall be paid or other distribution
made on shares of junior stock, nor shall any shares of junior stock be
purchased, redeemed, retired or otherwise acquired for a consideration,
unless preferential dividends on all outstanding shares of Cumulative
Preferred Stock for all past quarterly dividend periods and the period which
includes the day of such payment or distribution shall have been paid, or
declared and set apart for payment, provided, however, that the restrictions
of this sub-paragraph (b) shall not apply to (i) the payment of dividends on
shares of junior stock if payable solely in shares of junior stock, (ii) the
payment of dividends on shares of junior stock to the extent that equivalent
moneys are reinvested by the recipients of such dividends in shares of such
junior stock upon receipt of such dividends, (iii) the acquisition of any
shares of junior stock through application of proceeds of any shares of
junior stock sold at or about the time of such acquisition, or (iv) the
transfer of any amount from surplus to stated capital attributable to junior
stock; and
c. no funds shall be paid into or set aside for any
sinking, purchase or analogous fund established with respect to outstanding
shares of any junior stock, nor shall any dividend be paid or declared or
other distribution made on shares of junior stock, nor shall any shares of
junior stock be purchased, redeemed or retired or otherwise acquired for a
consideration if the Corporation shall be in default or deficient under any
requirement of a sinking, purchase or analogous fund established with
respect to outstanding shares of any series of Cumulative Preferred Stock
for any period of time then elapsed.
4. LIQUIDATION PREFERENCES. In the event of voluntary or
involuntary dissolution, liquidation or winding up to the Corporation, the
holders of shares of Cumulative Preferred Stock of each series outstanding
shall be entitled to receive out of the assets of the Corporation such
amount per share as shall have been fixed by the Board of Directors as the
voluntary or involuntary liquidation price, as the case may be, for the
shares of such series plus preferential dividends at the rate fixed and
- 5 -
<PAGE>
<PAGE> 7
determined for such series as herein authorized, accrued and unpaid to the
date fixed for payment, but no more. Until payment to the holders of
outstanding shares of Cumulative Preferred Stock as aforesaid, or until
moneys or other assets sufficient for such payment shall have been set apart
for payment by the Corporation, separate and apart from its other funds and
assets for the account of such holders so as to be and continue to be
available for payment to such holders, no payment or distribution shall be
made to holders of shares of junior stock in connection with or upon such
dissolution or liquidation or for declared but unpaid dividends on such
junior stock. If upon any such dissolution or liquidation the assets of the
Corporation available for payment and distribution to shareholders are
insufficient to make payment in full, as hereinabove provided, to the
holders of shares of Cumulative Preferred Stock, payment of such assets
shall be made to such holders ratably in accordance with the respective
distributive amounts to which such holders would be entitled if paid in
full.
Neither a consolidation nor merger of the Corporation with or into
any other corporation, nor a merger of any other corporation into the
Corporation, nor the purchase of redemption of all or any part of the
outstanding shares of any class or classes of stock of the Corporation, nor
the sale, transfer or lease of the property and business of the Corporation
as, or substantially as, an entirety shall be construed to be a dissolution
or liquidation of the Corporation within the meaning of the foregoing
provisions.
5. REDEMPTION AND PURCHASE. The Corporation may, at its option
expressed by vote of the Board of Directors, at any time or from time to
time redeem the whole or any part of the Cumulative Preferred Stock or of
any series thereof, at the redemption price or prices at the time in effect,
any such redemption of Cumulative Preferred Stock to be on such redemption
date and at such place in the City of Detroit, State of Michigan, or in the
City, County and State of New York, as shall likewise be determined by vote
of the Board of Directors. Notice of any proposed redemption of shares of
Cumulative Preferred Stock shall be given by the Corporation by mailing a
copy of such notice, not more than 60 or less than 30 days prior to the
redemption date, to the holders of record of shares of Cumulative Preferred
Stock to be redeemed, at their respective addresses then appearing on the
books of the Corporation and by publishing such notice at least once in each
week for four successive weeks in a newspaper customarily published at least
on each business day, other than Saturdays, Sundays and holidays, which is
printed in the English language and published and of general circulation in
the Borough of Manhattan, City and State of New York. Publication of such
notice shall be commenced not more than 60 days, and shall be concluded not
less than 30 days, prior to the redemption date, but such notice need not
necessarily be published on the same day of each week or in the same
newspaper. In case less than all of the shares of any series are to be
redeemed, the shares so to be redeemed shall be determined by lot or pro
rata in such manner as may be prescribed by the Board of Directors. On the
redemption date the Corporation shall, and at any time prior to such
redemption date may, deposit in trust, for the account of the holders of
shares of Cumulative Preferred Stock to be redeemed, funds necessary for
such redemption with a bank or trust company in good standing, organized
under the laws of the United States of America or of the State of Michigan
or of the State of New York, doing business in the City of Detroit,
Michigan, or in the City, County and State of New York and having combined
capital surplus and undivided profits of at least $5,000,000, which shall be
designated in such notice of redemption. Notice of redemption having been
duly given, or said bank or trust company having been irrevocably authorized
by the Corporation to give such notice, and, funds necessary for such
redemption having been deposited, all as aforesaid, all shares of Cumulative
Preferred Stock with respect to which such deposit shall have been made
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shall forthwith whether or not the date fixed for such redemption shall have
occurred or the certificates for such shares shall have been surrendered for
cancellation, be deemed no longer to be outstanding for any purpose, and all
rights with respect to such shares shall thereupon cease and terminate,
excepting only the right of the holders of the certificates for such shares
to receive, out of the funds so deposited in trust, on the redemption date
(unless an earlier date is fixed by the Board of Directors), the redemption
funds, without interest, to which they are entitled, and the right to
exercise any privilege of conversion not theretofore expiring, the
Corporation to be entitled to the return of any funds deposited for
redemption of shares converted pursuant to such privilege. At the expiration
of six years after the redemption date such trust shall terminate. Any such
moneys then remaining on deposit shall be paid to the Corporation by the
bank or trust company with which the deposit shall have been made, free of
trust, and thereafter the holders of the certificates for such shares shall
have no claim against such bank or trust company but only claims as
unsecured creditors against the Corporation for the amounts payable upon
redemption thereof, without interest. Interest, if any, allowed by the bank
or trust company as aforesaid shall belong to the Corporation, and shall be
paid to it from time to time during the term of such trust.
Subject to applicable law, the Corporation may from time to time
purchase or otherwise acquire outstanding shares of Cumulative Preferred
Stock at a price per share not exceeding the amount then payable in the
event of redemption thereof otherwise than through operation of a sinking
fund, if any.
No shares of Cumulative Preferred Stock shall be purchased,
redeemed or otherwise acquired (whether pursuant to or for any sinking,
purchase or analogous fund established with respect to outstanding shares of
any series of Cumulative Preferred Stock, or otherwise) for a consideration
(a) unless all dividends on all outstanding shares of Cumulative Preferred
Stock for all past quarterly dividend periods shall have been paid or
declared and set apart for payment, or (b) if the Corporation shall be in
default or deficient under any requirement of a sinking, purchase or
analogous fund established with respect to outstanding shares of any series
of Cumulative Preferred Stock for any period of time then elapsed, except
for the purpose of wholly or partially eliminating such default or
deficiency.
Any and all shares of Cumulative Preferred Stock which shall at
any time have been redeemed, or purchased through operation of any sinking
fund with respect thereto, or which shall have been converted into or
exchanged for shares of any other class or classes or other securities of
the Corporation pursuant to a right of conversion or exchange reserved in
such Cumulative Preferred Stock, shall be cancelled and shall assume the
status of authorized but unissued shares of Cumulative Preferred Stock and
may thereafter be reissued as provided in paragraph 2 of this Division A.
6. VOTING RIGHTS. So long as any shares of Cumulative
Preferred Stock are outstanding, the Corporation shall not, without the
consent (given by vote in person or by proxy at a meeting called for that
purpose) of the holders of at least two-thirds of the votes of the shares of
Cumulative Preferred Stock then outstanding --
a. Create, authorize, or increase the authorized amount of
any shares of senior stock, or any obligation or security convertible into
any such shares; or
b. Alter or change the powers, preferences, priorities or
special rights of then outstanding Cumulative Preferred Stock so as to
affect the holders thereof adversely, provided, however, if any such
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alteration or change would adversely affect the holders of the shares of one
or more of the series of Cumulative Preferred Stock at the time outstanding,
but would not so affect all series thereof, only the consent of holders of
two-thirds of the shares of each series so affected shall be required.
So long as any shares of Cumulative Preferred Stock are
outstanding, the Corporation shall not, without the consent (given by vote
in person or by proxy at a meeting called for that purpose) of the holders
of a majority of the votes of the shares of Cumulative Preferred Stock then
outstanding --
c. Merge or consolidate with or into any other
corporation, provided that this provision shall not apply to a purchase or
other acquisition by the Corporation of franchises or assets of another
corporation in any manner which does not involve a statutory merger or
consolidation, or to a merger or consolidation with or into any corporation
which directly or indirectly controls, or is controlled by, or is under
common control with the Corporation (for purposes of this sub-paragraph c,
control shall be deemed to exist through ownership of 50% or more of the
voting securities of a corporation), but no such merger or consolidation
shall in any way result in the occurrence of an event described in
sub-paragraph a of this paragraph 6 without the consent of the holders of at
least two-thirds of the votes of the shares of Cumulative Preferred Stock
then outstanding or result in the occurrence of an event described in
sub-paragraph b of this paragraph 6 without the consent required by said
sub-paragraph b; or
d. Sell, lease, or exchange all or substantially all of
its property and assets unless the fair value of the net assets of the
Corporation after completion of such transaction shall at least equal the
then voluntary liquidation preference of the Cumulative Preferred Stock of
all series, and of all senior or parity stock, then outstanding.
No consent provided for in this paragraph 6 shall be
required in the case of the holders of any shares of Cumulative Preferred
Stock which are to be redeemed at or prior to the time when the transaction
being consented to is to take effect.
Except as provided by law or as may be specifically provided
in a resolution or resolutions of the Board of Directors establishing a
series of Cumulative Preferred Stock, no consent of any holder of
outstanding shares of Cumulative Preferred Stock shall be required in
connection with or as a condition to any increase in the authorized amount,
or issuance of authorized but unissued shares, of Cumulative Preferred Stock
or parity stock, or the creation or authorization of obligations or
securities payable in or convertible into shares of Cumulative Preferred
Stock, or, in each case, parity stock.
If at any time dividends on any of the outstanding shares of
Cumulative Preferred Stock shall be in default in an amount equivalent to
four or more full quarterly dividends, the holders of outstanding shares of
Cumulative Preferred Stock, voting separately as a class, shall be entitled
to elect either one-fourth of the total number or two (whichever shall be
greater) of the Directors of the Corporation, which right shall continue in
force and effect until all arrears of dividends on outstanding shares of
Cumulative Preferred Stock shall have been declared and paid or deposited in
trust with a bank or trust company having the qualifications set forth in
paragraph 5 of this Division A for payment on or before the next succeeding
dividend payment date. When all such arrears have been declared and paid or
deposited in trust for payment as aforesaid, such right to elect Directors
shall cease and terminate unless and until the equivalent of four or more
full quarterly dividends shall again be in default on outstanding shares of
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Cumulative Preferred Stock. At any time when such right of holders of
Cumulative Preferred Stock voting separately as a class to elect Directors
shall be in force and effect, the remaining Directors shall be elected by
the other class or classes of stock entitled to vote, also voting separately
as a class, at each meeting of stockholders held for the purpose of electing
Directors.
When and as voting power for the election of Directors shall
be vested in the Cumulative Preferred Stock as aforesaid, there shall be
called a special meeting of the Cumulative Preferred Stock and of any other
class or classes of stock having voting power with respect thereto, for the
purpose of electing Directors. Such meeting shall be called upon the notice
required for annual meetings of stockholders and shall be held at the
earliest practicable date at the place at which the last preceding annual
meeting of the stockholders of the Corporation was held, but may be held at
the time and place of the annual meeting if such annual meeting is to be
held within 60 days after such voting power shall be vested in the
Cumulative Preferred Stock. If such meeting shall not be called as required
within 20 days after such voting power shall be so vested, then the holders
of record of shares having at least ten per cent (10%) of the votes of the
Cumulative Preferred Stock then outstanding may designate in writing one of
their number to call such meeting, and such meeting may be called by such
person so designated at the expense of the Corporation upon the notice
required for annual meetings of stockholders and shall be held at the place
at which the last preceding annual meeting of the stockholders of the
Corporation was held. Any holder of Cumulative Preferred Stock so designated
shall have access to the stock books of the Corporation for the purpose of
causing a meeting of stockholders to be called pursuant to these provisions.
At any meeting so called, and at any other meeting of
stockholders held for the purpose of electing Directors at which the
Cumulative Preferred Stock shall have the right, voting separately and as a
class, to elect Directors as aforesaid, the presence in person or by proxy
of holders of record of shares having one-third of the votes of the
outstanding shares of Cumulative Preferred Stock shall be required to
constitute a quorum of such class for the election of any Director by the
Cumulative Preferred Stock as a class. If such quorum of the shares of
Cumulative Preferred Stock be present, then such shares of Common Stock as
may be present at the meeting in person or by proxy, shall, for the purpose
of electing Directors, constitute a quorum of the Common Stock.
If at any such meeting or adjournment thereof a quorum of
the Cumulative Preferred Stock shall not be present, no election of the
Directors shall take place and the meeting shall be adjourned from time to
time for periods not exceeding thirty days until a quorum of the Cumulative
Preferred Stock is present at such adjourned meeting.
The term of office of all Directors in office at any time
when voting power shall, as aforesaid, become vested in the Cumulative
Preferred Stock shall terminate upon the election of any new Directors at
any meeting of stockholders called for the purpose of electing Directors.
Upon any termination of the right of the Cumulative Preferred Stock to vote
for Directors as herein provided, the term of office of all Directors then
in office shall terminate upon the election of any new Directors at a
meeting of the other class or classes of stock of the Corporation then
entitled to vote for Directors, which meeting shall be called to be held as
promptly as practicable after such termination of voting right in the
Cumulative Preferred Stock, upon notice as above provided, and shall be
called by the Secretary of the Corporation upon written request of any
holder of record of outstanding shares of such other class or classes of
stock then entitled to vote for Directors.
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In case of any vacancy in the office of a Director occurring
among the Directors elected by the holders of Cumulative Preferred Stock, as
a class, pursuant to the foregoing provisions of this paragraph 6, the
remaining Director or Directors elected by the holders of Cumulative
Preferred Stock may elect, by affirmative vote of a majority thereof, a
successor or successors to hold office for the unexpired term of the
Director or Directors whose place or places shall be vacant. Likewise, in
case of any vacancy in the office of a Director occurring among the
Directors elected by the holders of the other class or classes of stock
entitled to vote pursuant to the foregoing provisions of this paragraph 6,
the remaining Director or Directors elected by the holders of such other
class or classes of stock may elect, by affirmative vote of a majority
thereof, a successor or successors to hold office for the unexpired term of
the Director or Directors whose place or places shall be vacant.
Each share of Cumulative Preferred Stock shall have the
number of votes determined by multiplying the number one (1) by a fraction,
the numerator of which is the amount of the involuntary liquidation
preference of such share and the denominator of which is $25.
Except as provided in this paragraph 6 of this Division A,
or in a resolution or resolutions of the Board of Directors establishing a
series of Cumulative Preferred Stock, or as by statute at the time
mandatorily provided, holders of outstanding shares of Cumulative Preferred
Stock shall not be entitled to vote; and except as by statute at the time
mandatorily provided, holders of such shares shall not be entitled to
receive notice of any meeting of shareholders at which they are not entitled
to vote or consent.
7. JUNIOR, PARITY AND SENIOR STOCK. Junior, parity or
senior stock, with regard to Cumulative Preferred Stock, shall refer to
stock of the Corporation ranking junior, on a parity with or senior to the
Cumulative Preferred Stock upon dissolution or liquidation, or as to
dividends.
B. COMMON STOCK
1. DIVIDENDS. Subject to the rights of the Cumulative
Preferred Stock, the holders of the Common Stock are entitled to receive, to
the extent permitted by law, such dividends as may be declared by the Board
of Directors.
2. LIQUIDATION. In the event of the voluntary or
involuntary liquidation, dissolution, or winding up of the Corporation,
after distribution in full of the preferential amounts, if any, to be
distributed to the holders of shares of Cumulative Preferred Stock, holders
of Common Stock shall be entitled to receive all of the remaining assets of
the Corporation, of whatever kind, available for distribution to
stockholders ratably in proportion to the number of shares of Common Stock
held. The merger or consolidation of the Corporation into or with any other
corporation, or the merger of any other corporation into it, or the purchase
or redemption of any shares of stock of the Corporation, of any class, shall
not be deemed to be a dissolution, liquidation or winding up of the
Corporation for the purposes of this paragraph.
3. VOTING RIGHTS. Except as may be otherwise required by
law or this Certificate of Incorporation, each holder of Common Stock has
one vote in respect of each share of stock held by him of record on the
books of the Corporation on all matters voted upon by the stockholders.
C. OTHER PROVISIONS
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1. MINIMUM CAPITAL. The minimum amount of capital with
which this Corporation shall commence business is one thousand dollars
($1,000).
2. RECORD OWNERSHIP. The Corporation shall be entitled to
treat the person in whose name any share, preferred or common, is registered
as the owner thereof for all purposes, and shall not be bound to recognize
any equitable or other claim to, or interest in, such share on the part of
any other person, whether or not the Corporation shall have notice thereof,
save as expressly provided by the laws of the State of Delaware.
Article V.
The names and places of residence of the incorporators are as
follows:
Name Residence
Wm. G. Woolfolk Detroit, Michigan
Henry Fink Detroit, Michigan
Glenn R. Chamberlain Grand Rapids, Michigan
Article VI.
This corporation shall have perpetual existence.
Article VII.
The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatever, but shall be exempt
from corporate liability.
Article VIII.
In furtherance and not in limitation of the powers conferred by
the statute, the board of directors is expressly authorized:
(a) To make, alter, amend and rescind the by-laws of this
corporation.
(b) To set apart out of any of the funds of this corporation
available for dividends a reserve or reserves for any proper purpose, and to
abolish any such reserve in the manner in which it was created.
(c) To determine the use and distribution of any surplus and
net profits.
(d) To authorize and cause to be executed and delivered,
without limit as to amount, mortgages and instruments of pledge of, and
other instruments creating liens upon, the real and personal property of
this corporation.
(e) From time to time, to determine whether and to what
extent and at what times and places and under what conditions and
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regulations the accounts and books of this corporation (other than the stock
ledgers) or any of them shall be open to the inspection of the stockholders,
and no stockholder shall have any right to inspect any account or book or
document of this corporation, except as conferred by statute, or authorized
by the board of directors or by a resolution of the stockholders.
(f) By resolution or resolutions, passed by a majority of the
whole board, to designate one or more committees, each committee to consist
of two or more of the directors of this corporation, which, to the extent
provided in said resolution or resolutions or in the by-laws of this
corporation, shall have and may exercise the powers of the board of
directors in the management of the business and affairs of this corporation,
and may have power to authorize the seal of this corporation to be affixed
to all papers which may require it. Such committee or committees shall have
such name or names as may be stated in the by-laws of this corporation or as
may be determined from time to time by resolution adopted by the board of
directors.
(g) When and as authorized by the affirmative vote of the
holders of a majority of the stock issued and outstanding having voting
powers given at a stockholders' meeting duly called for that purpose, or
when authorized by the written consent of the holders of a majority of the
voting stock issued and outstanding, the board of directors shall have power
and authority to sell, lease or exchange all of the property and assets of
the corporation, including its good will, upon such terms and conditions and
for such consideration, which may be in whole or in part shares of stock in,
or other securities of, any other corporation or corporations, as the board
of directors shall deem expedient and for the best interests of the
corporation.
This corporation may in its by-laws confer powers and
authority upon its board of directors in addition to the foregoing and in
addition to the powers and authorities expressly conferred upon it by
statute.
Article IX.
No contract or other transaction between this corporation and any
other corporation and no act of this corporation shall in any way be
affected or invalidated by the fact that any of the directors of this
corporation are pecuniarily or otherwise interested in, or are directors or
officers of, such other corporation.
Article X.
The stockholders and board of directors shall have power, if the
by-laws so provide, to hold their meetings and to keep the books of the
corporation (except such as are required by the laws of Delaware to be kept
in Delaware) and documents and papers of this corporation outside the State
of Delaware.
Article XI.
This corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
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manner now or hereafter prescribed by statute, and all rights and powers
conferred herein on stockholders are granted subject to this reserved power.
Article XII.
The number of directors of this corporation shall be specified in
the by-laws and such number may be increased or decreased from time to time
in such manner as may be prescribed in the by-laws. The directors need not
be stockholders.
In case of an increase in the number of directors, the additional
directors may be elected by the board of directors to hold office until the
next annual meeting of the stockholders and until their successors are
elected and qualified. In case of vacancies in the board of directors, a
majority of the remaining directors may elect directors to fill such
vacancies.
Article XIII.
At all elections of directors of this corporation, each
stockholder shall be entitled to as many votes as shall equal the number of
shares of voting stock of such stockholder multiplied by the number of
directors to be elected, and such stockholder may cast all of such votes for
a single director or may distribute them among the number to be voted for,
or any two or more of them, as such stockholder may see fit.
WE, THE UNDERSIGNED, being all the incorporators, for the purpose
of forming a corporation in pursuance of an Act of the Legislature of the
State of Delaware entitled "An Act Providing a General Corporation Law"
(approved March 10, 1899) and the acts amendatory thereof and supplemental
thereto, do make and file this Certificate of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and
accordingly hereunto have set our respective hands and seals this 19th day
of July, A.D., 1945.
Henry Fink(SEAL)
Glenn R. Chamberlain
(SEAL)
Wm. G. Woolfolk
(SEAL)
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STATE OF MICHIGAN, )
) SS.:
COUNTY OF WAYNE. )
BE IT REMEMBERED, That on this 19th day of July, A.D., 1945,
personally appeared before me, the subscriber, a Notary Public for the State
and County aforesaid, Wm. G. Woolfolk, Glenn R. Chamberlain and Henry Fink,
all the parties to the foregoing Certificate of Incorporation, known to me
personally to be such, and severally acknowledged the said Certificate to be
their act and deed respectively, and that the facts therein stated are truly
set forth.
GIVEN under my hand and seal of office the day and year aforesaid.
R. J. Karcher
------------------------
Notary Public
My commission expires Feb. 6, 1948
R. J. KARCHER
NOTARY PUBLIC
WAYNE COUNTY, MICH.
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EXHIBIT 3-2
BY-LAWS
OF
ANR PIPELINE COMPANY
AS AMENDED
August 29, 1991
<PAGE>
<PAGE> 2
BY-LAWS
OF
ANR PIPELINE COMPANY
A Delaware Corporation
____________________
ARTICLE I
OFFICES
SECTION 1.1 Registered Office and Agent. The registered office of the
corporation in the State of Delaware shall be in Wilmington, Delaware. The
name of the registered agent is the Corporation Trust Company.
SECTION 1.2 Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 2.1 Annual Meetings. The annual meetings of the stockholders
for the election of directors and for the transaction of such other business
as may properly come before the meeting shall be held at such place, date
and hour as shall be designated in the notice thereof.
SECTION 2.2 Special Meetings. Except as otherwise prescribed by law,
special meetings of the stockholders, for any purpose or purposes, may be
called by the Chairman, or in his absence by the President, or by the
Secretary at the request of the Board of Directors. The notice of the
special meeting shall state the time, place and purposes of the proposed
special meeting. Business transacted at a special meeting shall be confined
to the purposes stated in the notice.
SECTION 2.3 Place of Meetings. Each meeting of the stockholders for
the election of Directors shall be held at the principal office of the
corporation in Detroit, Michigan, unless the Board of Directors shall by
resolution designate any other place, within or without the State of
Delaware, as the place of such meeting. Meetings of stockholders for any
other purpose may be held at any such place, within or without the State of
Delaware, and at such time as shall be stated in the notice of the meeting,
or in a duly executed waiver thereof.
SECTION 2.4 Notice of Meetings. Except as otherwise provided by law,
written notice of time, place and, in case of a special meeting, the purpose
or purposes for which the meeting is called, shall be given not less than
ten nor more than sixty days before the date of the meeting to each
stockholder of record entitled to vote at the meeting.
SECTION 2.5 Stockholder List. At least ten days before every meeting
of stockholders, the officer of agent having charge of the stock transfer
books shall prepare a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order, with the address of, and
number of shares registered in the name of each. Such list shall be open to
examination of any stockholder during ordinary business hours, for any
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purpose germane to the meeting, for a period of at least ten days prior to
the meeting, either at a place in the city where such meeting shall be held,
which place shall be specified in the notice of meeting or, if not so
specified, at the place where the meeting is to be held; and the list shall
be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any such stockholder who may be
present.
SECTION 2.6 Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote there at, present in person or represented
by proxy, shall be requisite for, and shall constitute, a quorum at all
meetings of the stockholders of the corporation for the transaction of
business, except as otherwise provided by law or these By-Laws.
SECTION 2.7 Proxies. At every meeting of stockholders, each
stockholder has the right to vote in person or by proxy. Such proxy shall be
appointed by an instrument in writing subscribed by stockholder or his
authorized agent or representative, and bearing a date not more than three
(3) years prior to such meeting, unless the proxy provides for a longer
period. Each proxy shall be filed with the Secretary of the corporation
prior to or at the time of the meeting.
SECTION 2.8 Voting. Each outstanding share is entitled to one vote on
each matter submitted to a vote unless otherwise provided in the Certificate
of Incorporation. When a quorum is present at any meeting of the
stockholders, the vote of the holders of a majority of the stock having
voting power present in person or represented by proxy shall decide any
question brought before such meeting, unless the question is one upon which,
by provision of law or these By-laws, a different vote is required, in which
case such provision shall govern and control the decision of such question.
Directors of the corporation shall be elected by a plurality of the votes
cast at an election.
SECTION 2.9 Voting of Certain Shares. Shares standing in the name of
another corporation, domestic or foreign, and entitled to vote may be voted
by such officer, agent, or proxy as the by-laws of such corporation may
prescribe, or, in the absence of such provision, as the Board of Directors
of such corporation may determine.
SECTION 2.10 Action Without Meeting. Any action required or permitted
to be taken at any annual or special meeting of stockholders of the
corporation may be taken without a meeting, without prior notice and without
a vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or to take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Such consent shall be filed with the minutes of the proceedings of
the stockholders. Prompt notice of the taking of corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
SECTION 2.11 Presiding Officers. The Chairman, or in his absence, the
President, shall call the meeting of the stockholders to order and shall act
as chairman thereof. In the absence of both the Chairman and the President,
the stockholders present at the meeting shall elect a chairman. The
Secretary shall act as a secretary of all meetings of stockholders. In the
absence of the Secretary at any meeting of stockholders, the presiding
officer may appoint any person to act as secretary of the meeting.
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ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 Management Responsibility. The business and affairs of
the corporation shall be managed by the Board of Directors except as
otherwise provided by law or by the Certificate of Incorporation.
SECTION 3.2 Number: Elections: Term. The Board of Directors shall
consist of no more than eight members. The number of Directors may be
increased or decreased from time to time by resolution of the Board of
Directors. The Directors shall be elected at the annual meeting of the
stockholders, or at any adjournment thereof, or at special meetings of
stockholders held in accordance with Section 2.2 of Article II of these By-
Laws. Each Director elected shall hold office until the succeeding annual
meeting and until his successor shall be elected and shall qualify, or until
his earlier resignation or removal.
SECTION 3.3 Resignation and Vacancies. Any Director may resign at any
time by giving written notice to the corporation. Any such resignation shall
take effect a the date of the receipt of such notice or at any later time
specified therein, and, unless otherwise specified therein the acceptance of
such resignation shall not be necessary to make it effective. Any vacancy
occurring in the Board of Directors may be filled by an affirmative vote of
a majority of the remaining Directors even though less than a quorum of the
Board of Directors, or by the sole remaining Director. A directorship to be
filled because of an increase in the number of Directors to fill a vacancy
may be filled by the Board of a term of office continuing only until the
next election of Directors by the stockholders.
SECTION 3.4 Regular Meetings. A regular meeting of the Board of
Directors shall be held as soon as practicable after the annual meeting of
stockholders without further notice. The Board of Directors may provide, by
resolution, the time and place for the holding of additional regular
meetings without other notice than such resolution.
SECTION 3.5 Special Meetings. Special meetings of the Board of
Directors may be called and the time and place thereof designated by the
Chairman or the President. Except as otherwise provided by law, written
notice of the time and place of such special meeting of the Board of
Directors shall be given at least two days prior to the time of holding the
meeting. The attendance of a Director at any meeting shall constitute a
waiver of notice of such meeting, except where a Director attends a meeting
for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any special meeting of the Board of
Directors need be specified in any notice or waiver of notice of such
meeting except that notice shall be given of any proposed amendment to the
By-Laws or with respect to any other matter where notice is required by law.
SECTION 3.6 Quorum. At each meeting of the Board of Directors, the
presence of not less than a majority of the whole Board shall be necessary
and sufficient to constitute a quorum for the transaction of business, and
the act of a majority of the Directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by law. If a quorum shall not be present at
any meeting of Directors, the Directors present there at may adjourn the
meeting from time to time, without notice other than announcement at the
meeting until a quorum shall be present. A member of the Board may
participate in any meeting of the Board, or of any committee thereof, by
means of conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other.
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Participation in a meeting pursuant to this Subsection constitutes presence
in person at the meeting.
SECTION 3.7 Action Without Meeting. An action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee of
the Board, may be taken without a meeting if a written consent thereto is
signed by all members of the Board or of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings of the
Board or committee. Such consent shall have the same effect as a vote of the
Board or committee for all purposes.
SECTION 3.8 Salary and Expenses. Directors shall not receive any
stated salary for their services as such. Members of the Board of Directors
shall be allowed their reasonable traveling expenses when actually engaged
in the business of the corporation. Members of any committee may be allowed
like expenses for attending committee meetings. Nothing herein contained
shall be construed as precluding any Director from serving the corporation
in any other capacity and receiving compensation therefor.
ARTICLE IV
NOTICES
SECTION 4.1 Manner of Notice to Directors. Whenever under the
provisions of law, the Certificate of Incorporation, or these By-laws,
notice is required to be given to any Director, such notice may be given in
writing by personal delivery to the business address of such Director; and
such notice shall be deemed to be given when it is thus delivered. Notice
may also be given in writing by mail addressed to such Director at his
business address, and such notice shall be deemed to be given at the time
when it is deposited in the United States mail in a sealed envelope, with
first-class postage affixed thereto. Notice to Directors may also be given
by telephone or telegram. It shall be the duty of every Director to furnish
the Secretary with his business address and to notify the Secretary of any
change therein.
SECTION 4.2 Notice of Stockholders. Whenever under the provisions of
law, the Articles of Incorporation, or these By-Laws, notice is required to
be given to any stockholder, that requirement of notice shall not be
construed to require personal delivery, and such notice may be given, in
writing, by mail addressed to such stockholder at the address of such
stockholder as it appears in the stock transfer books of the corporation.
Such notice shall be deemed to be given at the time when it is deposited in
the United States mail in a sealed envelope, with first-class postage
affixed thereto.
SECTION 4.3 Waiver of Notice. Whenever any notice is required to be
given under the provisions of law, the Certificate of Incorporation, or
these By-Laws, a waiver thereof in writing signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
SECTION 5.1 Designations. The officers of the corporation shall be a
Chairman of the Board, a President, such number of Vice Presidents
(including any Executive Vice Presidents and any Senior Vice Presidents) as
the Board of Directors may determine from time to time, a Controller, a
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<PAGE>
<PAGE> 6
Treasurer, and a Secretary. Two or more offices may be held by the same
person, except as otherwise provided by law.
The Board of Directors may elect or appoint such other officers
(including a Vice Chairman of the Board, one or more Assistant Vice
presidents, one or more Assistant Controllers, one or more Assistant
Treasurers and one or more Assistant Secretaries) as it deems necessary, who
shall have such authority and shall perform such duties as the Board of
Directors may prescribe.
If additional officers are elected or appointed during the year, each
of them shall hold office until the next annual meeting of the Board of
Directors at which officers are regularly elected or appointed and until his
successor is elected or appointed or until his earlier death or resignation
or removal in the manner hereinafter provided.
SECTION 5.2 Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the stockholders. If the
election of officers shall not be held at such meeting, such election shall
held as soon thereafter as convenient. Each officer shall hold office until
his successor shall have been duly elected and shall have qualified or until
his death or until he shall resign or shall be have been removed in the
manner hereinafter provided.
SECTION 5.3 Resignation and Removal. Any officer may resign at any
time by giving written notice to the Chairman of the Board, the President or
the Secretary of the corporation, and such resignation shall take effect at
the time specified therein or, if the time when it shall become effective
shall not be specified therein, then it shall take effect when accepted by
action of the Board. Except as aforesaid, the acceptance of such resignation
shall not be necessary to make it effective.
Any officer may be removed by the Board of Directors whenever, in its
judgment, the best interest of the corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an officer shall not of
itself create contract rights.
SECTION 5.4 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 5.5 Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the Board of Directors and of the stockholders at
which he is present.
SECTION 5.6 Vice Chairman of Board (if any). The Vice Chairman of the
Board shall preside at all meetings of the Board of Directors and of the
stockholders in the absence of the Chairman of the Board and have such
powers and duties as shall be prescribed by the Board of Directors and the
Chairman of the Board.
SECTION 5.7 President. The President shall have general charge of the
business and affairs of the corporation and shall preside at meetings of the
Board of Directors and of the stockholders in the absence of the Chairman of
the Board or the Vice Chairman of the Board (if any).
SECTION 5.8 Vice Presidents: Any Vice President shall have such
powers and duties as shall be prescribed by the President, the Chairman of
the Board or the Board of Directors.
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<PAGE> 7
SECTION 5.9 Treasurer. The Treasurer shall have charge and custody of
and be responsible for all funds and securities of the corporation.
SECTION 5.10 Controller. The Controller shall be in charge of the
accounts of the corporation and shall perform such duties as from time to
time may be assigned to him by the President, the Chairman of the Board or
the Board of Directors.
SECTION 5.11 Secretary. The Secretary shall keep the records of all
meetings of the stockholders and of the Board of Directors and the Executive
Committee (if any). He, or any Assistant Secretary, shall affix the seal of
the corporation to all deeds, contracts, bonds or other instruments
requiring the corporate seal, and when the same shall have been signed on
behalf of the corporation by a duly authorized officer, shall be attested by
his or an Assistant Secretary's signature.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
AGENTS AND OTHER PERSONS; RELIANCE UPON RECORDS
SECTION 6.1 Indemnification. The corporation shall indemnify its
officers, directors, employees, agents, and other persons to the fullest
extent to which corporations are empowered to indemnify such persons under
the laws of Delaware, as the same may from time to time be amended, except
as such indemnification may be limited by the Certificate of Incorporation.
ARTICLE VII
CERTIFICATES FOR STOCK AND
THEIR TRANSFER
SECTION 7.1 Certificates of Stock. Every stockholder shall be
entitled to a certificate, in such form as the Board of Directors shall from
time to time approve, signed by the Chairman or President or a Vice
President and by the Secretary or an Assistant Secretary. Any or all of the
signatures on the certificate may be facsimile. In case any officer,
transfer agent of registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is used, it may be
issued by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of such issue.
SECTION 7.2 Replacement of Lost or Destroyed Certificates. The Board
of Directors may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost or destroyed, upon the making of an
affidavit by the person claiming the certificate to be lost, stolen, or
destroyed as to his ownership of the certificate and of the facts as to its
loss, theft, or destruction.
SECTION 7.3 Transfer of Stock. Upon surrender to the corporation or
the Transfer Agent of the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment, or
authority to transfer, it shall be the duty of the corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
SECTION 7.4 Fixing Record Date. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting
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<PAGE>
<PAGE> 8
of stockholders or any adjournment thereof or to express consent to
corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall not be more
than sixty nor less than ten days before the date of such meeting nor more
than sixty days prior to any other action. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided, however, that the
Board of Directors may fix a new record date for the adjourned meeting.
SECTION 7.5 Record Ownership of Stock: The corporation shall be
entitled to treat the person in whose name any share of stock is registered
as the owner thereof, for all purposes, and shall not be bound to recognize
any equitable or other claim to, or interest in, such share on the part of
any other person, whether or not it shall have notice thereof, except as
otherwise expressly provided by the laws of Delaware.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Dividends. Subject to the statutes of the State of
Delaware, the Board of Directors may declare and pay dividends or make other
distributions in cash, its securities, or its property.
SECTION 8.2 Books and Records. The corporation shall keep current and
complete books and records of account and shall keep minutes of the
proceedings of the stockholders and Board of Directors, and shall keep at
its registered office or principal place of business, or at the office of
its transfer agent or registrar, a record of its stockholders, the names and
addresses of all stockholders and the number and class of the shares held by
each.
SECTION 8.3 Checks and Notes. All checks or demands for money and
notes of the corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.
SECTION 8.4 Fiscal Year. The fiscal year of the corporation shall be
the calendar year.
SECTION 8.5 Seal. The corporation shall have a corporate seal in a
form which shall be approved by the Board of Directors.
SECTION 8.6 Voting of Stock. Unless otherwise ordered by the Board of
Directors, the Chairman, the President, the Executive Vice Presidents, or
any Vice President of the corporation shall have full power and authority to
act and vote, in the name and on behalf of this corporation, at any meeting
of stockholders of any corporation in which the corporation may hold stock
and at any such meeting shall possess and may exercise any and all of the
rights and powers incident to the ownership of such stock, and shall have
full power and authority to execute, in the name of and on behalf of this
corporation, proxies authorizing any suitable person or persons to act and
to vote at any meeting of stockholders of any corporation in which this
corporation may hold stock, and at any meeting the person or persons so
designated shall possess and may exercise any and all of the rights and
powers incident to the ownership of such stock.
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<PAGE>
<PAGE> 9
SECTION 8.7 Amendment of By-Laws. These By-Laws may be altered,
amended or repealed at any meeting of the Board of Directors at which a
quorum is present by a majority vote of the Directors. Nothing in this
Article shall be construed to limit the power of the stockholders to amend,
alter or rescind any of the By-Laws of the corporation.
<PAGE>
<PAGE> 1
MICHIGAN WISCONSIN PIPE LINE COMPANY
CERTIFICATE AS TO RESOLUTION
ADOPTED BY BOARD OF DIRECTORS
Michigan Wisconsin Pipe Line Company, a corporation organized
and
existing under the laws of the State of Delaware, by one of its
Vice
Presidents and one of its Assistant Secretaries, hereby certifies
that at a
meeting of the Board of Directors of said Corporation duly
convened and
held, pursuant to notice, in accordance with the By-Laws of said
Corporation, on September 22, 1975 at the hour of 2:00 o'clock
P.M. (Eastern
Daylight Time), at which meeting a quorum was present and acting
throughout,
there were duly adopted, by vote of all of the Directors present
at said
meeting, preambles and a resolution reading as follows:
WHEREAS, by Amendment of the Certificate of Incorporation of
this
Corporation adopted September 18, 1975, 10,000,000 shares of
Cumulative
Preferred Stock of the Corporation, par value $1.00 per share,
were
authorized, divisible into and issuable in series; and
WHEREAS, in and by paragraph 2 of Division A of said
Amendment,
authority was expressly vested in the Board of Directors pursuant
to Section
151 of the General Corporation Law of the State of Delaware
(Title 8,
Chapter 1, Revised Code of Delaware of 1953, as amended), to fix
and
determine:
a. the distinctive serial designation and the number of
shares
constituting a series;
b. the dividend rate or rates;
c. certain voting powers, full or limited, if any, of
the shares of
the series;
d. whether the shares are redeemable and, if so, the
time or times,
price or prices, or rate or rates, and with such adjustments,
at which,
and the terms and conditions (except as fixed in paragraph 5
of Division
A of said Amendment) on which, the shares may be redeemed;
e. the amount or amounts payable on the shares in the
event of the
voluntary or involuntary liquidation, dissolution or winding
up of the
Corporation prior to any payment or distribution of the
assets of the
Corporation to any class or classes of stock of the
Corporation ranking
junior to the Cumulative Preferred Stock;
f. whether the shares are entitled to the benefit of a
sinking,
purchase or analogous fund to be applied to the purchase or
redemption
of shares of the series and, if so entitled, the amount of
the fund and
the manner of its application, including the price or prices
at which
the shares may be redeemed or purchased through application
of the fund;
g. whether the shares are convertible into, or
exchangeable for,
shares of any other class or classes or of any other series
of the same
or any other class of stock of the Corporation and, if so
convertible or
exchangeable, the conversion price or prices, or the rates of
exchange,
and any adjustments thereof, at which conversion or exchange
may be
made, and any other terms and conditions of conversion or
exchange; and
h. any other preferences, privileges and powers, and
relative,
participating, optional or other special rights, and any
qualifications,
limitations or restrictions as may be deemed advisable by the
Board of
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<PAGE> 2
Directors and as are not inconsistent with the provisions of
the
Certificate of Incorporation;
WHEREAS, this Board now desires to fix and determine such
matters with
respect to the initial series of Cumulative Preferred Stock known
as
Cumulative Preferred Stock, $2.675 Series, consisting of
2,000,000 shares;
and
NOW, THEREFORE, BE IT RESOLVED as follows:
a. Establishment of Series and Designation thereof.
There shall be
and hereby is established a series of Cumulative Preferred
Stock, the
serial designation of the shares of which shall be, and the
shares of
which shall be known as, Cumulative Preferred Stock, $2.675
Series. Such
series shall be a closed series consisting of 2,000,000
shares of
Cumulative Preferred Stock.
b. Rate of Dividend. The rate of preferential dividends
on the
shares of Cumulative Preferred Stock, $2.675 Series, shall be
$2.675 per
share per annum, which shall be cumulative from and including
the date
of issue of the $2.675 Cumulative Preferred Stock.
c. Price at Which Redeemable. The shares of Cumulative
Preferred
Stock, $2.675 Series, shall be redeemable at the option of
the
Corporation at any time, or from time to time, after the
issue thereof
at the following applicable prices per share during the
respective 12-
month periods ending September 30 of the years indicated,
<TABLE>
<CAPTION>
<S> <C> <S> <C> <S> <C>
<S> <C> <S> <C>
1976 . $27.675 1980 . . $27.140 1984 . .
$26.605 1988 . $26.070 1992 . . $25.535
1977 . 27.542 1981 . . 27.007 1985 . .
26.472 1989 . 25.937 1993 . . 25.402
1978 . 27.408 1982 . . 27.873 1986 . .
26.338 1990 . 25.803 1994 . . 25.268
1979 . 27.274 1983 . . 26.739 1987 . .
26.204 1991 . 25.669 1995 . . 25.134
</TABLE>
and at $25.00 per share on and after October 1, 1995; plus,
in each
case, an amount equivalent to preferential dividends at the
rate
aforesaid accrued and unpaid to the date of redemption,
provided that,
no shares of Cumulative Preferred Stock, $2.675 Series, shall
be
redeemed prior to October 1, 1980, at the option of the
Corporation by
or in anticipation of any refunding operation involving
application,
directly or indirectly, of borrowed funds or the proceeds of
an issue of
any stock of the Corporation ranking senior to or on a parity
with the
Cumulative Preferred Stock upon dissolution or liquidation or
as to
dividends if such borrowed funds have an interest rate or
cost to the
Corporation or such stock has a dividend rate or cost to the
Corporation
(in each case calculated in accordance with generally
accepted financial
practice) less than 10.7%. The shares of Cumulative Preferred
Stock,
$2.675 Series, shall be redeemable at any time on or after
October 1,
1980, for purposes of the sinking fund hereinafter provided
at the price
of $25.00 per share plus an amount equivalent to preferential
dividends
at the rate aforesaid accrued and unpaid to the date of
redemption.
d. Sinking Fund. Within each 12-month period commencing
with the
12-month period ending September 30, 1981, the Corporation
shall,
subject to the restrictions contained in Article IV of its
Certificate
of Incorporation, as amended, or contained in any mortgage or
loan
agreement entered into by the Corporation, acquire either (i)
by
optional redemption thereof, or (ii) by redemption thereof at
the
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<PAGE>
<PAGE> 3
sinking fund redemption price, or (iii) by purchase thereof
in such
manner as the Board of Directors may determine from time to
time at not
exceeding the sinking fund redemption price thereof, and
shall retire
100,000 shares of Cumulative Preferred Stock, $2.675 Series,
or the
number of shares of such series outstanding, whichever shall
be less;
provided, however, that the obligation hereunder shall be
cumulative so
that if the Corporation shall be prevented by the
restrictions contained
in Article IV of its Certificate of Incorporation, as
amended, or
contained in any mortgage or loan agreement entered into by
the
Corporation, or for any other reason, from acquiring during
any 12-month
period the number of shares of Cumulative Preferred Stock,
$2.675
Series, which in the absence of such restrictions it would be
required
to acquire during such period, then, although the Corporation
shall not
be deemed to have defaulted in the performance of the
requirements of
this paragraph d, it shall be and remain deficient in such
performance,
and such deficiency shall be made good as soon as
practicable. The
Corporation may, at its option, call for redemption at the
sinking fund
redemption price or purchase in such manner as the Board of
Directors
may determine from time to time at not exceeding the sinking
fund
redemption price, during any such 12-month period, up to an
additional
100,000 shares of Cumulative Preferred Stock, $2.675 Series;
provided,
however, such option shall not be cumulative and the exercise
of such
option shall not operate to reduce the amount of any
subsequent
mandatory annual sinking fund obligation.
Any shares of Cumulative Preferred Stock, $2.675 Series,
which, in
any such 12-month period, shall be redeemed by the
Corporation at the
optional redemption price set forth above or purchased by the
Corporation at not exceeding the sinking fund redemption
price, and
which shall not be applied to meet the Corporation's sinking
fund
obligation for such 12-month period, may be credited on the
amounts
required to be acquired in any one or more of the succeeding
12-month
periods which the Corporation may designate. If, at the end
of any 12-
month period, the Corporation has acquired by purchase or
optional
redemption 95% or more of the number of shares of Cumulative
Preferred
Stock then required to be redeemed for the sinking fund, the
Corporation
will not be obligated to redeem the remaining shares of such
sinking
fund requirement in that 12-month period, but such shares
will be added
to the sinking fund requirement for the next succeeding
12-month period.
The shares of Cumulative Preferred Stock, $2.675 Series, of
the
Corporation redeemed or purchased and applied to meet its
sinking fund
obligations shall be cancelled and shall not be reissued as
stock of the
$2.675 Series.
e. Liquidation Amounts. The amount payable on each share
of the
Cumulative Preferred Stock, $2.675 Series, (i) in the event
of voluntary
liquidation, dissolution or winding up of the Corporation
shall be an
amount equal to the optional redemption price thereof,
applicable at the
date fixed for payment, and no more, and (ii) in the event of
the
involuntary liquidation, dissolution or winding up of the
Corporation
shall be $25.00; plus in each case the amount of accrued and
unpaid
dividends, if any, thereon to the date fixed for payment, and
no more.
f. Restriction on Issue of Additional Cumulative
Preferred Stock or
Senior or Parity Stock. So long as any shares of the
Cumulative
Preferred Stock, $2.675 Series, are outstanding, the
Corporation shall
not, without the consent of holders of at least a majority of
the
outstanding shares of Cumulative Preferred Stock, $2.675
Series, issue
any shares of Cumulative Preferred Stock (except for the
purpose of
refunding shares of Cumulative Preferred Stock at the time
outstanding
with shares of such stock of a like aggregate involuntary
liquidation
preference), or issue any stock ranking senior to or on a
parity with
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<PAGE>
<PAGE> 4
the Cumulative Preferred Stock upon dissolution or
liquidation or as to
dividends, or issue any obligation or security payable in or
convertible
into shares of Cumulative Preferred Stock or such senior or
parity
stock, unless
(i) the gross income of the Corporation available for
interest
and dividends for a period of 12 consecutive calendar
months out of
the 15 calendar months immediately preceding such issue
shall amount
to at least 1-1/2 times the sum of (x) the interest
charges paid or
accrued during such 12-month period (excluding interest
charges on
indebtedness to be retired by the application of the
proceeds from
the issuance of such shares) and (y) the total annual
dividend
requirements of all shares of Cumulative Preferred Stock
and of any
stock ranking senior to or on a parity with the
Cumulative Preferred
Stock upon dissolution or liquidation or as to dividends,
to be
outstanding after giving effect to such issue; and
(ii) after giving effect to such issue, the
consolidated net
assets of the Corporation shall amount to at least 225%
of the
aggregate involuntary liquidation preference of all
Cumulative
Preferred Stock, and of any stock ranking senior to or on
a parity
with the Cumulative Preferred Stock upon dissolution or
liquidation
or as to dividends, then to be outstanding.
For the purposes hereof the meanings below assigned
shall
control: The "gross income of the Corporation available
for interest
and dividends" for any period means the consolidated net
income of
the Corporation and its consolidated subsidiary companies
for such
period, determined in accordance with such system of
accounts as may
be prescribed by governmental authorities having
jurisdiction in the
premises or, in the absence thereof, in accordance with
sound
accounting practice, but in any case crediting to
consolidated net
income all amounts of interest actually charged to
construction for
the period in question and all interest actually paid or
accrued
during such period by the Corporation.
The "consolidated net assets of the Corporation"
shall be
determined in accordance with sound accounting practice,
but in
making such determination there shall be deducted any
capital stock
expense and all liabilities (other than capital, stock
premiums and
surplus accounts) and reserves.
For purposes of this paragraph f, obligations or
securities
payable in or convertible into shares of Cumulative
Preferred Stock,
or in or into shares ranking senior to or on a parity
with the
Cumulative Preferred Stock upon dissolution or
liquidation or as to
dividends, shall be treated as though such shares had
been issued in
payment or upon conversion of such obligations or
securities.
g. Restriction on Dividends on and acquisition of Junior
Stock. So
long as any shares of Cumulative Preferred Stock, $2.675
Series, are
outstanding, no dividend shall be paid or declared, or other
distribution made, on shares of any class ranking junior to
the
Cumulative Preferred Stock as to dividends, nor shall any
shares of any
class ranking junior to the Cumulative Preferred Stock upon
dissolution
or liquidation or as to dividends be purchased, redeemed or
otherwise
acquired for a consideration, if after giving effect to such
dividend,
distribution, purchase, redemption or acquisition, the
consolidated net
assets of the Corporation shall be less than 225% of the
aggregate
involuntary liquidation preference of all the outstanding
Cumulative
Preferred Stock and of any stock ranking senior to or on a
parity with
the Cumulative Preferred Stock upon dissolution or
liquidation or as to
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<PAGE>
<PAGE> 5
dividends, provided, however, that the restrictions of this
paragraph g
shall not apply to (i) the declaration and payment of
dividends on
shares of any class ranking junior to the Cumulative
Preferred Stock as
to dividends, if payable solely in shares of any class
ranking junior to
the Cumulative Preferred Stock upon dissolution or
liquidation and as to
dividends, (ii) the payment of dividends on shares of any
class ranking
junior to the Cumulative Preferred Stock as to dividends, to
the extent
that equivalent moneys are reinvested by the recipients of
such
dividends in shares of such junior class upon receipt of such
dividends,
(iii) the Stock upon dissolution or liquidation or as to
dividends
through application of proceeds of any shares of any class
ranking
junior to the Cumulative Preferred Stock upon dissolution or
liquidation
and as to dividends sold at or about the time of such
acquisition, or
(iv) the transfer of any amount from surplus to stated
capital
attributable to junior stock.
h. No Conversion Privilege. The shares of Cumulative
Preferred
Stock, $2.675 Series, shall not be convertible into other
shares or
securities of the Corporation.
Said Corporation, by one of its Vice Presidents and one of
its Assistant
Secretaries, hereby further certifies that the issuance of
2,000,000 shares
of the Cumulative Preferred Stock, $2.675 Series, has been
authorized by the
Board of Directors of said Corporation.
IN WITNESS WHEREOF, said Michigan Wisconsin Pipe Line Company
has caused
its corporate seal to be hereunto affixed this certificate to be
signed by
R. A. Waters, a Vice President, and Charles A. Praxmarer, an
Assistant
Secretary, this 23rd day of September, 1975.
MICHIGAN WISCONSIN PIPE
LINE COMPANY
By__________________________________
ATTEST Vice
President
________________________________
Assistant Secretary
CORPORATE SEAL
<PAGE>
<PAGE> 1
MICHIGAN WISCONSIN PIPE LINE COMPANY
Certificate as to Resolution
Adopted by Board of Directors
Michigan Wisconsin Pipe Line Company, a corporation organized
and
existing under the laws of the State of Delaware, by one of its
Vice
Presidents and one of its Assistant Secretaries, hereby certifies
that as of
October 26, 1976 there were duly adopted, by unanimous written
consent of
the Directors pursuant to Section 141(f) of the General
Corporation Law of
the State of Delaware, preambles and a resolution reading as
follows:
WHEREAS, by Amendment of the Certificate of Incorporation of
this
Corporation adopted September 18, 1975, 10,000,000 shares of
Cumulative
Preferred Stock of the Corporation, par value $1.00 per share,
were
authorized, divisible into and issuable in series; and
WHEREAS, in and by paragraph 2 of Division A of said
Amendment,
authority was expressly vested in the Board of Directors pursuant
to Section
151 of the General Corporation Law of the State of Delaware
(Title 8,
Chapter 1, Revised Code of Delaware of 1953, as amended), to fix
and
determine:
a. the distinctive serial designation and the number of
shares
constituting a series;
b. the dividend rate or rates;
c. certain voting powers, full or limited, if any, of
the shares of
the series;
d. whether the shares are redeemable and, if so, the
time or times,
price or prices, or rate or rates, and with such adjustments,
at which,
and the terms and conditions (except as fixed in paragraph 5
of Division
A of said Amendment) on which, the shares may be redeemed;
e. the amount or amounts payable on the shares in the
event of the
voluntary or involuntary liquidation, dissolution or winding
up of the
Corporation prior to any payment or distribution of the
assets of the
Corporation to any class or classes of stock of the
Corporation ranking
junior to the Cumulative Preferred Stock;
f. whether the shares are entitled to the benefit of a
sinking,
purchase or analogous fund to be applied to the purchase or
redemption
of shares of the series and, if so entitled, the amount of
the fund and
the manner of its application, including the price or prices
at which
the shares may be redeemed or purchased through application
of the fund;
g. whether the shares are convertible into, or
exchangeable for,
shares of any other class or classes or of any other series
of the same
or any other class of stock of the Corporation and, if so
convertible or
exchangeable, the conversion price or prices, or the rates of
exchange,
and any adjustments thereof, at which conversion or exchange
may be
made, and any other terms and conditions of conversion or
exchange; and
h. any other preferences privileges and powers, and
relative,
participating, optional or other special rights, and any
qualifications,
limitations or restrictions as may be deemed advisable by the
Board of
Directors and as are not inconsistent with the provisions of
the
Certificate of Incorporation;
ANREX4-2 -2-
<PAGE>
<PAGE> 2
WHEREAS, this Board now desires to fix and determine such
matters with
respect to the second series of Cumulative Preferred Stock known
as
Cumulative Preferred Stock, $2.12 Series, consisting of 2,000,000
shares;
and
NOW, THEREFORE, BE IT RESOLVED as follows:
a. Establishment of Series and Designation thereof.
There shall be
and hereby is established a series of Cumulative Preferred
Stock, the
serial designation of the shares of which shall be, and the
shares of
which shall be known as, Cumulative Preferred Stock, $2.12
Series. Such
series shall be a closed series consisting of 2,000,000
shares of
Cumulative Preferred Stock.
b. Rate of Dividend. The rate of preferential dividends
on the
shares of Cumulative Preferred Stock, $2.12 Series, shall be
$2.12 per
share per annum, which shall be cumulative from and including
the date
of issue of the Cumulative Preferred Stock, $2.12 Series.
c. Price at Which Redeemable. The shares of Cumulative
Preferred
Stock, $2.12 Series, shall be redeemable at the option of the
Corporation at any time, or from time to time, after the
issue thereof
at the following applicable prices per share during the
respective 12-
month periods ending October 31 of the years indicated,
<TABLE>
<CAPTION>
<S> <C> <S> <C> <S> <C>
<S> <C> <S> <C>
1977 . $27.120 1981 . . $26.696 1985 . .
$26.272 1989 . $25.848 1993 . . $25.424
1978 . 27.014 1982 . . 26.590 1986 . .
26.166 1990 . 25.742 1994 . . 25.318
1979 . 26.908 1983 . . 26.484 1987 . .
26.060 1991 . 25.636 1995 . . 25.212
1980 . 26.802 1984 . . 26.378 1988 . .
25.954 1992 . 25.530 1996 . . 25.106
</TABLE>
and at $25.00 per share on and after November 1, 1996; plus,
in each
case, an amount equivalent to preferential dividends at the
rate
aforesaid accrued and unpaid to the date of redemption,
provided that,
no shares of Cumulative Preferred Stock, $2.12 Series, shall
be
redeemed prior to November 1, 1981, at the option of the
Corporation by
or in anticipation of any refunding operation involving
application,
directly or indirectly, of borrowed funds or the proceeds of
an issue
of any stock of the Corporation ranking senior to or on a
parity with
the Cumulative Preferred Stock upon dissolution or
liquidation or as to
dividends if such borrowed funds have an interest rate or
cost to the
Corporation or such stock has a dividend rate or cost to the
Corporation (in each case calculated in accordance with
generally
accepted financial practice) less than 8.48%. The shares of
Cumulative
Preferred Stock, $2.12 Series, shall be redeemable at any
time on or
after November 1, 1981, for purposes of the sinking fund
hereinafter
provided at the price of $25.00 per share plus an amount
equivalent to
preferential dividends at the rate aforesaid accrued and
unpaid to the
date of redemption.
d. Sinking Fund. Within each 12-month period
commencing with
the 12-month period ending October 31, 1982, the Corporation
shall,
subject to the restrictions contained in Article IV of its
Certificate
of Incorporation, as amended, or contained in any mortgage
or loan
agreement entered into by the Corporation, acquire either
(i) by
optional redemption thereof, or (ii) by redemption thereof
at the
sinking fund redemption price, or (iii) by purchase thereof
in such
manner as the Board of Directors may determine from time to
time at not
exceeding the sinking fund redemption price thereof, and
shall retire
ANREX4-2 -3-
<PAGE>
<PAGE> 3
100,000 shares of Cumulative Preferred Stock, $2.12 Series,
or the
number of shares of such series outstanding, whichever shall
be less;
provided, however, that the obligation hereunder shall be
cumulative so
that if the Corporation shall be prevented by the
restrictions
contained in Article IV of its Certificate of Incorporation,
as
amended, or contained in any mortgage or loan agreement
entered into by
the Corporation, or for any other reason, from acquiring
during any 12-
month period the number of shares of Cumulative Preferred
Stock, $2.12
Series, which in the absence of such restrictions it would
be required
to acquire during such period, then, although the
Corporation shall not
be deemed to have defaulted in the performance of the
requirements of
this paragraph d, it shall be and remain deficient in such
performance,
and such deficiency shall be made good as soon as
practicable. The
Corporation may, at its option, call for redemption at the
sinking fund
redemption price or purchase in such manner as the Board of
Directors
may determine from time to time at not exceeding the sinking
fund
redemption price, during any such 12-month period, up to an
additional
100,000 shares of Cumulative Preferred Stock, $2.12 Series;
provided,
however, such option shall not be cumulative and the
exercise of such
option shall not operate to reduce the amount of any
subsequent
mandatory annual sinking fund obligation.
Any shares of Cumulative Preferred Stock, $2.12
Series, which, in
any such 12-month period, shall be redeemed by the
Corporation at the
optional redemption price set forth above or purchased by
the
Corporation at not exceeding the sinking fund redemption
price, and
which shall not be applied to meet the Corporation's sinking
fund
obligation for such 12-month period, may be credited on the
amounts
required to be acquired in any one or more of the succeeding
12-month
periods which the Corporation may designate. If, at the end
of any 12-
month period, the Corporation has acquired by purchase or
optional
redemption 95% or more of the number of shares of Cumulative
Preferred
Stock then required to be redeemed for the sinking fund, the
Corporation will not be obligated to redeem the remaining
shares of
such sinking fund requirement in that 12-month period, but
such shares
will be added to the sinking fund requirement for the next
succeeding
12-month period. The shares of Cumulative Preferred Stock,
$2.12
Series, of the Corporation redeemed or purchased and applied
to meet
its sinking fund obligations shall be cancelled and shall
not be
reissued as stock of the $2.12 Series.
e. Liquidation Amounts. The amount payable on each
share of the
Cumulative Preferred Stock, $2.12 Series, (i) in the event
of voluntary
liquidation, dissolution or winding up of the Corporation
shall be an
amount equal to the optional redemption price thereof,
applicable at
the date fixed for payment, and no more, and (ii) in the
event of the
involuntary liquidation, dissolution or winding up of the
Corporation
shall be $25.00; plus in each case the amount of accrued and
unpaid
dividends, if any, thereon to the date fixed for payment,
and no more.
f. Restriction on Issue of Additional Cumulative
Preferred
Stock or Senior or Parity Stock. So long as any shares of
the
Cumulative Preferred Stock, $2.12 Series, are outstanding,
the
Corporation shall not, without the consent of holders of at
least a
majority of the outstanding shares of Cumulative Preferred
Stock, $2.12
Series, issue any shares of Cumulative Preferred Stock
(except for the
purpose of refunding shares of Cumulative Preferred Stock at
the time
outstanding with shares of such stock of a like aggregate
involuntary
liquidation preference), or issue any stock ranking senior
to or on a
parity with the Cumulative Preferred Stock upon dissolution
or
liquidation or as to dividends, or issue any obligation or
security
payable in or convertible into shares of Cumulative
Preferred Stock or
ANREX4-2 -4-
<PAGE>
<PAGE> 4
such senior or parity stock, unless
(i) the gross income of the Corporation
available for
interest and dividends for a period of 12 consecutive
calendar
months out of the 15 calendar months immediately
preceding such
issue shall amount to at least 1-1/2 times the sum of
(x) the interest charges paid or accrued during such 12-month
period
(excluding interest charges on indebtedness to be
retired by the
application of the proceeds from the issuance of such
shares) and
(y) the total annual dividend requirements of all
shares of
Cumulative Preferred Stock and of any stock ranking
senior to or
on a parity with the Cumulative Preferred Stock upon
dissolution
or liquidation or as to dividends, to be outstanding
after giving
effect to such issue; and
(ii) after giving effect to such issue, the
consolidated net
assets of the Corporation shall amount to at least
225% of the
aggregate involuntary liquidation preference of all
Cumulative
Preferred Stock, and of any stock ranking senior to or
on a parity
with the Cumulative Preferred Stock upon dissolution
or
liquidation or as to dividends, then to be
outstanding.
For the purposes hereof the meanings below
assigned shall
control: The "gross income of the Corporation
available for
interest and dividends" for any period means the
consolidated net
income of the Corporation and its consolidated
subsidiary
companies for such period, determined in accordance
with such
system of accounts as may be prescribed by
governmental
authorities having jurisdiction in the premises or, in
the absence
thereof, in accordance with sound accounting practice,
but in any
case crediting to consolidated net income all amounts
of interest
actually charged to construction for the period in
question and
all interest actually paid or accrued during such
period by the
Corporation.
The "consolidated net assets of the Corporation"
shall be
determined in accordance with sound accounting
practice, but in
making such determination there shall be deducted any
capital
stock expense and all liabilities (other than capital,
stock
premiums and surplus accounts) and reserves.
For purposes of this paragraph f, obligations or
securities
payable in or convertible into shares of Cumulative
Preferred
Stock, or in or into shares ranking senior to or on a
parity with
the Cumulative Preferred Stock upon dissolution or
liquidation or
as to dividends, shall be treated as though such
shares had been
issued in payment or upon conversion of such
obligations or
securities.
g. Restriction on Dividends on and Acquisition of
Junior Stock.
So long as any shares of Cumulative Preferred Stock, $2.12
Series, are
outstanding, no dividend shall be paid or declared, or other
distribution made, on shares of any class ranking junior to
the
Cumulative Preferred Stock as to dividends, nor shall any
shares of any
class ranking junior to the Cumulative Preferred Stock upon
dissolution
or liquidation or as to dividends be purchased, redeemed or
otherwise
acquired for a consideration, if after giving effect to such
dividend,
distribution, purchase, redemption or acquisition, the
consolidated net
assets of the Corporation shall be less than 225% of the
aggregate
involuntary liquidation preference of all the outstanding
Cumulative
Preferred Stock and of any stock ranking senior to or on a
parity with
the Cumulative Preferred Stock upon dissolution or
liquidation or as to
ANREX4-2 -5-
<PAGE>
<PAGE> 5
dividends, provided, however, that the restrictions of this
paragraph g
shall not apply to (i) the declaration and payment of
dividends on
shares of any class ranking junior to the Cumulative
Preferred Stock as
to dividends, if payable solely in shares of any class
ranking junior
to the Cumulative Preferred Stock upon dissolution or
liquidation and
as to dividends, (ii) the payment of dividends on shares of
any class
ranking junior to the Cumulative Preferred Stock as to
dividends, to
the extent that equivalent moneys are reinvested by the
recipients of
such dividends in shares of such junior class upon receipt
of such
dividends, (iii) the acquisition of any shares of any class
ranking
junior to the Cumulative Preferred Stock upon dissolution or
liquidation or as to dividends through application of
proceeds of any
shares of any class ranking junior to the Cumulative
Preferred Stock
upon dissolution or liquidation and as to dividends sold at
or about
the time of such acquisition, or (iv) the transfer of any
amount from
surplus to stated capital attributable to junior stock.
h. No Conversion Privilege. The shares of Cumulative
Preferred
Stock, $2.12 Series, shall not be convertible into other
shares or
securities of the Corporation.
Said Corporation, by one of its Vice Presidents and one of
its
Assistant Secretaries, hereby further certifies that the issuance
of
2,000,000 shares of the Cumulative Preferred Stock, $2.12 Series,
has been
authorized by the Board of Directors of said Corporation.
IN WITNESS WHEREOF, said Michigan Wisconsin Pipe Line
Company has
caused this certificate to be signed by R. A. Waters, a Vice
President, and
C. A. Praxmarer, an Assistant Secretary, and its corporate seal
to be
hereunto affixed this 27th day of October, 1976.
MICHIGAN WISCONSIN PIPE
LINE COMPANY
By__________________________________
ATTEST Vice
President
__________________________________
Assistant Secretary
<PAGE>
<PAGE> 1
MICHIGAN WISCONSIN PIPE LINE COMPANY
Certificate as to Resolution
Adopted By Board of Directors
Michigan Wisconsin Pipe Line Company, a corporation organized and
existing under the laws of the State of Delaware, by one of its Vice
Presidents and its Secretary, hereby certifies that at a regular quarterly
meeting of the Board of Directors of said Corporation held May 12, 1980, the
following preambles and resolutions were duly adopted:
WHEREAS, by Amendment of the Certificate of Incorporation of this
Corporation adopted September 18, 1975, 10,000,000 shares of Cumulative
Preferred Stock of the Corporation, par value $1.00 per share, were
authorized, divisible into and issuable in series; and
WHEREAS, in and by paragraph 2 of Division A of said Amendment,
authority was expressly vested in the Board of Directors pursuant to Section
151 of the General Corporation Law of the State of Delaware (Title 8,
Chapter 1, Revised Code of Delaware of 1953, as amended), to fix and
determine:
a. the distinctive serial designation and the number of shares
constituting a series;
b. the dividend rate or rates;
c. certain voting powers, full or limited, if any, of the shares of
the series;
d. whether the shares are redeemable and, if so, the time or times,
price or prices, or rate or rates, and with such adjustments, at which,
and the terms and conditions (except as fixed in paragraph 5 of Division
A of said Amendment) on which, the shares may be redeemed;
e. the amount or amounts payable on the shares in the event of the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation prior to any payment or distribution of the assets of the
Corporation to any class or classes of stock of the Corporation ranking
junior to the Cumulative Preferred Stock;
f. whether the shares are entitled to the benefit of a sinking,
purchase or analogous fund to be applied to the purchase or redemption
of shares of the series and, if so entitled, the amount of the fund and
the manner of its application, including the price or prices at which
the shares may be redeemed or purchased through application of the fund;
g. whether the shares are convertible into, or exchangeable for,
shares of any other class or classes or of any other series of the same
or any other class of stock of the Corporation and, if so convertible or
exchangeable, the conversion price or prices, or the rates of exchange,
and any adjustments thereof at which conversion or exchange may be made,
and any other terms and conditions of conversion or exchange; and
h. any other preferences, privileges and power, and relative,
participating, optional or other special rights, and any qualifications,
limitations or restrictions as may be deemed advisable by the Board of
Directors and as are not inconsistent with the provisions of the
Certificate of Incorporation; and
ANREX4-3 2
<PAGE>
<PAGE> 2
WHEREAS, this Board now desires to fix and determine such matters with
respect to the fourth series of Cumulative Preferred Stock known as
Cumulative Preferred Stock, $12.00 Series, consisting of 400,000 shares;
NOW, THEREFORE, BE IT RESOLVED as follows:
a. Establishment of Series and Designation thereof. There shall be
and hereby is established a series of Cumulative Preferred Stock, the
serial designation of the shares of which shall be, and the shares of
which shall be known as, Cumulative Preferred Stock, $12.00 Series. Such
series shall be a closed series consisting of 400,000 shares of
Cumulative Preferred Stock.
b. Rate of Dividend. The rate of preferential dividends on the
shares of Cumulative Preferred Stock, $12.00 Series, shall be $12.00 per
share per annum, which, as to each share of the Cumulative Preferred
Stock, $12.00 Series, shall be cumulative from and including the date of
issue of such share.
c. Price at Which Redeemable. The shares of Cumulative Preferred
Stock, $12.00 Series, shall be redeemable at the option of the
Corporation at any time, or from time to time, after the issue thereof
at the following applicable prices per share during the respective 12-
month periods ending July 31, of the years indicated,
<TABLE>
<CAPTION>
<S> <C> <S> <C>
1981 . . . . . . . . . . . . $112.00 1990 . . . . . . . . . . $106.32
1982 . . . . . . . . . . . . 111.37 1991 . . . . . . . . . . 105.68
1983 . . . . . . . . . . . . 110.74 1992 . . . . . . . . . . 105.05
1984 . . . . . . . . . . . . 110.11 1993 . . . . . . . . . . 104.42
1985 . . . . . . . . . . . . 109.47 1994 . . . . . . . . . . 103.79
1986 . . . . . . . . . . . . 108.84 1995 . . . . . . . . . . 103.16
1987 . . . . . . . . . . . . 108.21 1996 . . . . . . . . . . 102.53
1988 . . . . . . . . . . . . 107.58 1997 . . . . . . . . . . 101.89
1989 . . . . . . . . . . . . 106.95 1998 . . . . . . . . . . 101.26
1999 . . . . . . . . . . 100.63
</TABLE>
and at $100.00 per share on or after August 1, 1999; plus, in each case,
an amount equivalent to preferential dividends at the rate aforesaid
accrued and unpaid to the date of redemption, provided, however, that,
no shares of Cumulative Preferred Stock, $12.00 Series, shall be
redeemed prior to August 1, 1990 if such redemption is the result of, a
part of or in anticipation of any refunding operation involving
application, directly or indirectly, of funds derived or to be derived,
in whole or in part, from any indebtedness of the Corporation, or from
any issuance and sale of shares of any series or class of stock of the
Corporation ranking senior to the Common Stock, par value $100 per
share, of the Corporation upon dissolution or liquidation or as to
dividends, whether such stock is now existing or hereafter authorized or
issued, if such indebtedness or stock has an annual cost of money to the
Corporation, computed in accordance with generally accepted financial
practice, of less than 12% per annum (in the case of indebtedness,
stated as the interest rate and giving effect to all commissions and
expenses and to the amortization of any premium or discount of the
borrowing, in the case of stock, stated as the dividend rate and giving
effect to all commissions and expenses and to the amortization of any
premium or discount of the issuance and sale thereof and in the case of
both indebtedness and stock not giving effect to the deductibility for
federal income tax purposes (if any) by the Corporation of interest or
dividends paid thereon by the Corporation). The shares of Cumulative
ANREX4-3 3
<PAGE>
<PAGE> 3
Preferred Stock, $12.00 Series, shall be redeemable at any time on or
after August 1, 1986 for purposes of the sinking fund hereinafter
provided at the price of $100.00 per share plus an amount equivalent to
preferential dividends at the rate aforesaid accrued and unpaid to the
date of redemption.
d. Sinking Fund. Beginning on August 1, 1986 and ending on August
1, 1999, on each August 1, the Corporation shall, subject to the
restrictions contained in Article IV of its Certificate of
Incorporation, as amended, or contained in any mortgage or loan
agreement entered into by the Corporation, acquire by redemption thereof
at the sinking fund redemption price, and shall retire 21,336 shares of
Cumulative Preferred Stock, $12.00 Series and on August 1, 2000, the
Corporation shall, subject to the restrictions contained in Article IV
of its Certificate of Incorporation, as amended, or contained in any
mortgage or loan agreement entered into by the Corporation, acquire by
redemption thereof at the sinking fund redemption price, and shall
retire 21,296 shares of Cumulative Preferred Stock, $12.00 Series or, in
each case, the number of shares of such series outstanding, whichever
shall be less; provided, however, that the obligation hereunder shall be
cumulative so that if the Corporation shall be prevented by the
restrictions contained in Article IV of its Certificate of
Incorporation, as amended, or contained in any mortgage or loan
agreement entered into by the Corporation, or for any other reason, from
acquiring during any 12-month period the number of shares of Cumulative
Preferred Stock, $12.00 Series, which in the absence of such
restrictions it would be required to acquire during such period, then,
although the Corporation shall not be deemed to have defaulted in the
performance of the requirements of this paragraph d, it shall be and
remain deficient in such performance, and such deficiency shall be made
good as soon as practicable. The Corporation may, at its option, call
for redemption at the sinking fund redemption price on any such August
1, up to an additional 21,336 shares of Cumulative Preferred Stock,
$12.00 Series; provided, however, that (i) such option shall not be
cumulative, (ii) the exercise of such options shall not operate to
reduce the amount of any subsequent mandatory annual sinking fund
obligation, and (iii) no more than 25% of the shares of Cumulative
Preferred Stock, $12.00 Series, issued pursuant to this resolution may,
in the aggregate, be redeemed pursuant to such option.
e. Pro Rata Redemption. Each redemption of shares of Cumulative
Preferred Stock, $12.00 Series, shall be made on a pro rata basis, as
nearly as possible, among all holders thereof at the time of such
redemption in the same proportion that each such holder's then
respective holdings of shares of such series shall bear to the aggregate
number of shares of such series then outstanding; provided, however,
that the Corporation shall not be required to redeem any fractional
shares, and shares of such series to be redeemed from any holder thereof
may be rounded to the nearest full share. No redeemed share of
Cumulative Preferred Stock $12.00 Series, shall be reissued as a share
of Cumulative Preferred Stock, $12.00 Series.
f. Liquidation Amounts. The amount payable on each share of the
Cumulative Preferred Stock, $12.00 Series, (i) in the event of voluntary
liquidation, dissolution or winding up of the Corporation shall be
$112.00 per share if the date fixed for payment shall occur any time
prior to August 1, 1981 and an amount equal to the optional redemption
price thereof applicable at the date fixed for payment if the date fixed
for the payment shall be August 1, 1981 or thereafter, and (ii) in the
event of the involuntary liquidation, dissolution or winding up of the
Corporation shall be $100.00, plus in each case the amount of accrued
and unpaid dividends, if any, thereon to the date fixed for payment, and
ANREX4-3 4
<PAGE>
<PAGE> 4
no more.
g. Restriction on Issue of Additional Cumulative Preferred Stock or
Senior or Parity Stock. So long as any shares of the Cumulative
Preferred Stock, $12.00 Series, are outstanding, the Corporation shall
not, without the consent of holders of at least a majority of the
outstanding shares of Cumulative Preferred Stock, $12.00 Series, issue
any shares of Cumulative Preferred Stock (except for the purpose of
refunding shares of Cumulative Preferred Stock at the time outstanding
with shares of such stock of a like aggregate involuntary liquidation
preference), or issue any stock ranking senior to or on a parity with
the Cumulative Preferred Stock upon dissolution or liquidation or as to
dividends, or issue any obligation or security payable in or convertible
into shares of Cumulative Preferred Stock or such senior or parity
stock, unless
(i) the gross income of the Corporation available for interest
and dividends for a period of 12 consecutive calendar months out of
the 15 calendar months immediately preceding such issue shall amount
to at least 1-1/2 times the sum of (x) the interest charges paid or
accrued during such 12-month period (excluding interest charges on
indebtedness to be retired by the application of the proceeds from
issuance of such shares) and (y) the total annual dividend
requirements of all shares of Cumulative Preferred Stock and of any
stock ranking senior to or on a parity with the Cumulative Preferred
Stock upon dissolution or liquidation or as to dividends, to be
outstanding after giving effect to such issue; and
(ii) after giving effect to such issue, the consolidated net
assets of the Corporation shall amount to at least 225% of the
aggregate involuntary liquidation preference of all Cumulative
Preferred Stock, and of any stock ranking senior to or on a parity
with the Cumulative Preferred Stock upon dissolution or liquidation
or as to dividends, then to be outstanding.
For the purposes hereof the meanings below assigned shall
control: The "gross income of the Corporation available for interest
and dividends" for any period means the consolidated net income of
the Corporation and its consolidated subsidiary companies for such
period, determined in accordance with such system of accounts as may
be prescribed by governmental authorities having jurisdiction in the
premises or, in the absence thereof, in accordance with sound
accounting practice, but in any case crediting to consolidated net
income all amounts of interest actually charged to construction for
the period in question and all interest actually paid or accrued
during such period by the Corporation.
The "consolidated net assets of the Corporation" shall be
determined in accordance with sound accounting practice, but in
making such determination there shall be deducted any capital stock
expense and all liabilities (other than capital, stock premiums,
unamortized investment tax credit and surplus accounts) and
reserves.
For purposes of this paragraph g, obligations or securities
payable in or convertible into shares of Cumulative Preferred Stock
or in or into shares ranking senior to or on a parity with the
Cumulative Preferred Stock upon dissolution or liquidation or as to
dividends, shall be treated as though such shares had been issued in
payment or upon conversion of such obligations or securities.
h. Restriction on Dividends on and Acquisition of Junior Stock. So
ANREX4-3 5
<PAGE>
<PAGE> 5
long as any shares of Cumulative Preferred Stock, $12.00 Series, are
outstanding, no dividend shall be paid or declared, or other
distribution made, on shares of any class ranking junior to the
Cumulative Preferred Stock as to dividends, nor shall any shares of any
class ranking junior to the Cumulative Preferred Stock upon dissolution
or liquidation or as to dividends be purchased, redeemed or otherwise
acquired for a consideration, if after giving effect to such dividend,
distribution, purchase, redemption or acquisition, the consolidated net
assets of the Corporation shall be less than 225% of the aggregate
involuntary liquidation preference of all the outstanding Cumulative
Preferred Stock and of any stock ranking senior to or on a parity with
the Cumulative Preferred Stock upon dissolution or liquidation or as to
dividends, provided, however, that the restrictions of this paragraph h
shall not apply to (i) the declaration and payment of dividends on
shares of any class ranking junior to the Cumulative Preferred Stock as
to dividends, if payable solely in shares of any class ranking junior to
the Cumulative Preferred Stock upon dissolution or liquidation and as to
dividends, (ii) the payment of dividends on shares of any class ranking
junior to the Cumulative Preferred Stock as to dividends, to the extent
that equivalent moneys are reinvested by the recipients of such
dividends in shares of such junior class upon receipt of such dividends,
(iii) the acquisition of any shares of any class ranking junior to the
Cumulative Preferred Stock upon dissolution or liquidation or as to
dividends through application of proceeds of any shares of any class
ranking junior to the Cumulative Preferred Stock upon dissolution or
liquidation and as to dividends sold at or about the time of such
acquisition, or (iv) the transfer of any amount from surplus to stated
capital attributable to junior stock.
i. No Conversion Privilege. The shares of Cumulative Preferred
Stock, $12.00 Series, shall not be convertible into other shares or
securities of the Corporation.
Said Corporation, by one of its Vice Presidents and its Secretary,
hereby further certifies that the issuance of 400,000 shares of the
Cumulative Preferred Stock, $12.00 Series, has been authorized by the Board
of Directors of said Corporation.
ANREX4-3 6
<PAGE>
<PAGE> 6
IN WITNESS WHEREOF, Said Michigan Wisconsin Pipe Line Company has caused
this certificate to be executed by R.A. Waters, a Vice President, and by
C.J. McInerney, Secretary, and its corporate seal to be hereunto affixed
this 13th day of May, 1980.
MICHIGAN WISCONSIN PIPE LINE COMPANY
By________________________________
Vice President and Treasurer
(Corporate Seal)
Attest:
______________________
Secretary
MICHIGAN WISCONSIN PIPE LINE COMPANY
By________________________________
Vice President and Treasurer
(Corporate Seal)
Attest:
______________________
Secretary
ANREX4-3 7
<PAGE>
<PAGE> 7
MICHIGAN WISCONSIN PIPE LINE COMPANY
CERTIFICATE OF CORRECTION
MICHIGAN WISCONSIN PIPE LINE COMPANY, a corporation organized and
existing under the laws of the State of Delaware, by one of its Vice
Presidents and its Secretary,
DOES HEREBY CERTIFY:
1. The name of the corporation is MICHIGAN WISCONSIN PIPE LINE
COMPANY.
2. A Certificate Designating Cumulative Preferred Stock, $12.00
Series, was filed with the Secretary of State of Delaware on May 19, 1980
and was recorded on May 19, 1980 and appears in Incorporation Record C, Vol.
133, page 688 in the office of the Recorder of Deeds of New Castle County
and said Certificate requires correction of an inaccuracy as permitted by
Subsection (f) of Section 103 of the General Corporation Law of the State of
Delaware.
3. The inaccuracy in said Certificate to be corrected is as follows:
The number 21,336 appearing in two places in paragraph
d (Sinking Fund) of the Resolution contained in said
Certificate should be 26,670; the number 21,296
appearing in one place in said paragraph should be
26,620.
4. Paragraph d of the Resolution contained in said Certificate is set
forth in corrected form as follows:
d. Sinking Fund. Beginning on August 1, 1986 and
ending on August 1, 1999, on each August 1, the
Corporation shall, subject to the restrictions
contained in Article IV of its Certificate of
Incorporation, as amended, or contained in any mortgage
or loan agreement entered into by the Corporation,
acquire by redemption thereof at the sinking fund
redemption price, and shall retire 26,670 shares of
Cumulative Preferred Stock, $12.00 Series, and on
August 1, 2000, the Corporation shall, subject to the
restrictions contained in Article IV of its Certificate
of Incorporation, as amended, or contained in any
mortgage or loan agreement entered into by the
Corporation, acquire by redemption thereof at the
sinking fund redemption price, and shall retire 26,620
shares of Cumulative Preferred Stock, $12.00 Series,
or, in each case, the number of shares of such series
outstanding, whichever shall be less; provided,
however, that the obligation hereunder shall be
cumulative so that if the Corporation shall be
ANREX4-3 8
<PAGE>
<PAGE> 8
prevented by the restrictions contained in Article IV
of its Certificate of Incorporation, as amended, or
contained in any mortgage or loan agreement entered
into by the Corporation, or for any other reason, from
acquiring during any 12-month period the number of
shares of Cumulative Preferred Stock, $12.00 Series,
which in the absence of such restrictions it would be
required to acquire during such period, then, although
the Corporation shall not be deemed to have defaulted
in the performance of the requirements of this
paragraph d, it shall be and remain deficient in such
performance, and such deficiency shall be made good as
soon as practicable. The Corporation may, at its
option, call for redemption at the sinking fund
redemption price on any such August 1, up to an
additional 26,670 shares of Cumulative Preferred Stock,
$12.00 Series; provided, however, that (i) such option
shall not be cumulative, (ii) the exercise of such
option shall not operate to reduce the amount of any
subsequent mandatory annual sinking fund obligation,
and (iii) no more than 25% of the shares of Cumulative
Preferred Stock, $12.00 Series, issued pursuant to this
resolution may, in the aggregate, be redeemed pursuant
to such option.
IN WITNESS WHEREOF, said MICHIGAN WISCONSIN PIPE LINE COMPANY has
caused this Certificate to be signed by R. A. Waters, a Vice President, and
C. J. McInerney, its Secretary, and its corporate seal to be hereunto
affixed this 11th day of June, 1980.
MICHIGAN WISCONSIN PIPE LINE COMPANY
By__________________________________
Vice President
ATTEST:
By_______________________________
Secretary
<PAGE>
[CONFORMED COPY]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANR PIPELINE COMPANY
AND
COMERICA BANK, TRUSTEE
------------------
INDENTURE
DATED AS OF FEBRUARY 15, 1994
AND
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 15, 1994
------------------
$125,000,000
7 3/8% DEBENTURES DUE FEBRUARY 15, 2024
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANR PIPELINE COMPANY
AND
COMERICA BANK, TRUSTEE
---------------------
INDENTURE
DATED AS OF FEBRUARY 15, 1994
---------------------
DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
INDENTURE
TIA SECTION SECTION
----------- ---------
<C> <S> <C>
Section 310 (a)(1).......................................... 7.10
(a)(2).......................................... 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.08
(b)............................................. 7.08; 7.10; 10.02
(c)............................................. N.A.
Section 311 (a)............................................. 7.11
(b)............................................. 7.11
(c)............................................. N.A.
Section 312 (a)............................................. 2.06
(b)............................................. 10.03
(c)............................................. 10.03
Section 313 (a)............................................. 7.06
(b)(1).......................................... N.A.
(b)(2).......................................... 7.06
(c)............................................. 7.06; 10.02
(d)............................................. 7.06
Section 314 (a)............................................. 4.09; 10.02
(b)............................................. N.A.
(c)(1).......................................... 10.04
(c)(2).......................................... 10.04
(c)(3).......................................... N.A.
(d)............................................. N.A.
(e)............................................. 10.05
(f)............................................. N.A.
Section 315 (a)............................................. 7.01(b)
(b)............................................. 7.05; 10.02
(c)............................................. 7.01(a)
(d)............................................. 7.01(c)
(e)............................................. 6.11
Section 316 (a)(last sentence).............................. 2.10
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
(c)............................................. 9.04
Section 317 (a)(1).......................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.05
Section 318 (a)............................................. 10.01
</TABLE>
- ---------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
i
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Recitals of the Company................................................... 1
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions.............................................. 1
Section 1.02. Incorporation by Reference of Trust Indenture Act........ 9
Section 1.03. Rules of Construction.................................... 9
ARTICLE 2
The Securities
Section 2.01. Form of Securities....................................... 10
Section 2.02. Title and Terms.......................................... 11
Section 2.03. Execution and Authentication............................. 12
Section 2.04. Registrar and Paying Agent............................... 14
Section 2.05. Paying Agent to Hold Money in Trust...................... 15
Section 2.06. Securityholder Lists..................................... 15
Section 2.07. Transfer and Exchange.................................... 16
Section 2.08. Replacement Securities................................... 16
Section 2.09. Outstanding Securities................................... 17
Section 2.10. Treasury Securities...................................... 18
Section 2.11. Temporary Securities..................................... 18
Section 2.12. Cancellation............................................. 19
Section 2.13. Defaulted Interest....................................... 19
Section 2.14. Persons Deemed Owners.................................... 19
Section 2.15. Securities Issuable in the Form of a Global Security..... 19
ARTICLE 3A
Redemption
Section 3A.01. Right of Redemption...................................... 22
Section 3A.02. Applicability of Article................................. 22
Section 3A.03. Election to Redeem; Notice to Trustee.................... 22
Section 3A.04. Selection by Trustee of Securities to be Redeemed........ 23
Section 3A.05. Notice of Redemption..................................... 23
Section 3A.06. Deposit of Redemption Price.............................. 24
Section 3A.07. Securities Payable on Redemption Date.................... 24
Section 3A.08. Securities Redeemed in Part.............................. 25
</TABLE>
<PAGE>
ii
ARTICLE 3B
Sinking Fund
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 3B.01. Sinking Fund Payments................................. 25
Section 3B.02. Satisfaction of Sinking Fund Payments with Securities. 26
Section 3B.03. Redemption of Securities for Sinking Fund............. 26
ARTICLE 4
Covenants
Section 4.01. Payment of Securities................................. 27
Section 4.02. Maintenance of Office or Agency....................... 27
Section 4.03. Corporate Existence................................... 28
Section 4.04. Payment of Taxes and Other Claims..................... 28
Section 4.05. Notice of Defaults.................................... 29
Section 4.06. Maintenance of Properties............................. 29
Section 4.07. Liquidation........................................... 29
Section 4.08. Compliance Certificate................................ 31
Section 4.09. SEC Reports........................................... 31
Section 4.10. Waiver of Stay, Extension or Usury Laws............... 31
Section 4.11. Restrictions on Liens................................. 32
Section 4.12. Restrictions on Sales and Leasebacks.................. 33
ARTICLE 5
Successor Corporation
Section 5.01. When Company May Merge, etc. ......................... 34
Section 5.02. Successor Corporation Substituted..................... 35
ARTICLE 6
Default and Remedies
Section 6.01. Events of Default..................................... 35
Section 6.02. Acceleration.......................................... 37
Section 6.03. Other Remedies........................................ 38
Section 6.04. Waiver of Past Defaults............................... 38
Section 6.05. Control by Majority................................... 39
Section 6.06. Limitation on Suits................................... 39
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 6.07. Rights of Holders to Receive Payment..................... 39
Section 6.08. Collection Suit by Trustee............................... 39
Section 6.09. Trustee May File Proofs of Claim......................... 40
Section 6.10. Priorities............................................... 41
Section 6.11. Undertaking for Costs.................................... 41
ARTICLE 7
Trustee
Section 7.01. Duties of Trustee........................................ 41
Section 7.02. Rights of Trustee........................................ 43
Section 7.03. Individual Rights of Trustee............................. 43
Section 7.04. Trustee's Disclaimer..................................... 44
Section 7.05. Notice of Defaults....................................... 44
Section 7.06. Reports by Trustee to Holders............................ 44
Section 7.07. Compensation and Indemnity............................... 44
Section 7.08. Replacement of Trustee................................... 45
Section 7.09. Successor Trustee by Merger, etc......................... 46
Section 7.10. Eligibility; Disqualification............................ 47
Section 7.11. Preferential Collection of Claims Against Company........ 47
ARTICLE 8
Discharge of Indenture
Section 8.01. Termination of Company's Obligations..................... 47
Section 8.02. Application of Trust Money............................... 49
Section 8.03. Repayment to Company..................................... 49
Section 8.04. Reinstatement............................................ 49
Section 8.05. Indemnity for U.S. Government Obligations................ 50
ARTICLE 9
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders............................... 50
Section 9.02. With Consent of Holders.................................. 51
Section 9.03. Compliance With Trust Indenture Act...................... 52
Section 9.04. Revocation and Effect of Consents........................ 52
Section 9.05. Notation On or Exchange of Securities.................... 53
Section 9.06. Trustee to Sign Amendments, etc.......................... 53
</TABLE>
<PAGE>
iv
ARTICLE 10
Miscellaneous
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 10.01. Trust Indenture Act Controls............................ 53
Section 10.02. Notices................................................. 54
Section 10.03. Communications by Holders With Other Holders............ 54
Section 10.04. Certificate and Opinion as to Conditions Precedent...... 55
Section 10.05. Statements Required in Certificate or Opinion........... 55
Section 10.06. Rules by Trustee, Paying Agent, Registrar............... 55
Section 10.07. Legal Holidays.......................................... 55
Section 10.08. Governing Law........................................... 56
Section 10.09. No Adverse Interpretation of Other Agreements........... 56
Section 10.10. No Recourse Against Others.............................. 56
Section 10.11. Successors.............................................. 56
Section 10.12. Duplicate Originals..................................... 56
Section 10.13. Separability............................................ 56
Section 10.14. Action of Holders When Securities are Denominated in
Different Currencies................................... 57
Section 10.15. Monies of Different Currencies to be Segregated......... 57
Section 10.16. Payment to be in Proper Currency........................ 57
Signatures............................................................ 59
Exhibit A--Form of Security........................................... A-1
</TABLE>
- ---------
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
INDENTURE, dated as of February 15, 1994, between ANR Pipeline Company, a
Delaware corporation (the "Company"), and Comerica Bank, a Michigan banking
corporation incorporated and existing under the laws of the State of Michigan,
as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured notes, deben-
tures or other evidences of indebtedness (collectively, the "Securities"), to
be issued from time to time in one or more series (a "Series") as provided in
this Indenture and as shall be provided, in respect of any Series, in or pur-
suant to the Authorizing Resolution hereinafter referred to and/or in the in-
denture supplemental hereto (if any) relating to such Series.
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate" of any specified person means any other person directly or indi-
rectly controlling or controlled by or under direct or indirect common control
with such specified person. For the purposes of this definition, "control"
when used with respect to any person means the power to direct the management
and policies of such person, directly or indirectly, whether through the own-
ership of voting securities, by contract or otherwise; and the terms "control-
ling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Attributable Debt" means, with respect to any Sale and Leaseback Transaction
as of any particular time, the present value (discounted at the rate of inter-
est implicit in the terms of the lease) of the obligations of the lessee under
such lease for net rental payments during the remaining term of the lease (in-
cluding any period for which such lease has been extended or may, at the op-
tion of the Company, be extended).
"Authorizing Resolution" means a Board Resolution providing for the issuance
of a Series of Securities.
"Bankruptcy Law" shall have the meaning provided in Section 6.01.
<PAGE>
2
"Board of Directors" means the Board of Directors of the Company or any duly
authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such certifica-
tion, and delivered to the Trustee (except as provided in Section 2.03).
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means, with respect to any person, any and all shares, inter-
ests, participations or other equivalents (however designated) of corporate
stock of such person other than Mandatory Redemption Preferred Stock.
"Capitalized Lease Obligation" means Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting pur-
poses in accordance with generally accepted accounting principles and the
amount of such Indebtedness shall be the capitalized amount of such obliga-
tions determined in accordance with such principles.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by two Officers of the Company or
by an Officer and the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, and delivered to the Trustee in respect of the Series to
which the Company Request or Company Order shall relate.
"Custodian" shall have the meaning provided in Section 6.01.
"Default" means any event which is, or after notice or passage of time would
be, an Event of Default.
"Depository" means, unless otherwise specified by the Company pursuant to ei-
ther Section 2.02 or 2.15, with respect to Securities of any Series issuable
or issued as a Global Security, The Depository Trust Company, New York, New
York, or any successor thereto registered under the Securities and Exchange
Act of 1934, as amended, or other applicable statute or regulation.
<PAGE>
3
"Event of Default" shall have the meaning provided in Section 6.01.
"Extendible Securities" means Securities of any Series issued hereunder the
final maturity of which is extendible for a stated period of time, as shall be
provided in, or pursuant to, the Authorizing Resolution and/or supplemental
indenture (if any) relating to such Series.
"Funded Debt" means Indebtedness which does not mature within one year after
the date as of which any determination thereof is made (but excludes any such
Indebtedness which will be retired through or by means of any deposit or pay-
ment required to be made within one year from such date under any prepayment
provision, sinking fund, purchase fund or other similar fund) and Indebtedness
which may not mature within one year after the date as of which any determina-
tion thereof is made due solely to such Indebtedness being renewable or out-
standing pursuant to a revolving credit or similar agreement.
"General Mortgage" means the Company's Mortgage and Deed Trust dated as of
September 1, 1948, as supplemented and amended from time to time, and any
other mortgage and deed of trust upon the property of the Company which may
hereafter from time to time be created by the Company in substitution, di-
rectly or indirectly, for said General Mortgage, as from time to time supple-
mented and amended; provided that any such mortgage and deed of trust hereaf-
ter created shall contain provisions with respect to property excepted from
the lien thereof and liens permitted thereunder substantially similar to (but
not necessarily identical to) the provisions of said General Mortgage, as sup-
plemented and amended at the date hereof.
"Global Security" means a Security issued to evidence all or a part of any
Series of Securities which is executed by the Issuer and authenticated and de-
livered by the Trustee to the Depository or pursuant to the Depository's in-
struction, all in accordance with this Indenture and pursuant to a Company Or-
der, which shall be registered in the name of the Depository or its nominee.
"Holder" or "Securityholder" means, with respect to any Security, the person
in whose name such Security is registered on the Security Register.
"Indebtedness" means (i) any liability of any person (a) for borrowed money,
(b) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any property or
assets (other than inventory or similar property acquired in the
<PAGE>
4
ordinary course of business), including securities, or (c) for the payment of
money relating to a Capitalized Lease Obligation; (ii) any guarantee by any
person of any liability of others described in the preceding clause (i); and
(iii) any amendment, renewal, extension or refunding of any liability of the
types referred to in clauses (i) and (ii) above.
"Indenture" means this Indenture as amended or supplemented from time to time
and shall include the forms and terms of particular Series of Securities es-
tablished as contemplated hereunder.
"Interest Payment Date" means, for any Series of Securities issued and out-
standing hereunder, the date or dates in each year on which any interest on
such Series is paid or made available for payment.
"Legal Holiday" shall have the meaning provided in Section 10.07.
"Lien" means any mortgage, lien, pledge, charge, or other security interest
or encumbrance of any kind.
"Mandatory Redemption Preferred Stock" means, with respect to any person, any
and all shares of preferred stock of such person now outstanding or hereafter
issued, subject to mandatory redemption provisions.
"Maturity" when used with respect to any Security means the date on which the
principal of such Security becomes due and payable as therein or herein pro-
vided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Maturity Date" means the date specified in each Security on which the prin-
cipal thereof is due and payable in full.
"Net Tangible Assets" means the total amount of assets (less depreciation and
valuation reserves and other reserves and items deductible from the gross book
value of specific asset accounts) of the Company which would be included on a
consolidated balance sheet of the Company, after deducting therefrom (without
duplication of deductions) (1) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles which would be
so included on such balance sheet, and (2) all liabilities which would be so
included on such balance sheet except: Funded Debt, reserves, deferred credits
and Stock Accounts.
<PAGE>
5
"Officer" means the Principal Executive Officer, Principal Financial Officer
or Principal Accounting Officer of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and the Treasurer or an Assistant Treasurer or the Secretary or an As-
sistant Secretary of the Company and delivered to the Trustee. See Sections
10.04 and 10.05.
"Opinion of Counsel" means a written opinion from legal counsel who is ac-
ceptable to the Trustee. The counsel may be an employee of or counsel to the
Company. See Sections 10.04 and 10.05.
"Original Issue Date" means the date on which a Security is issued to the
original purchaser thereof, as specified in such Security.
"Original Issue Discount Securities" means Securities which provide for an
amount less than 100% of the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
6.02.
"Paying Agent" shall have the meaning provided in Section 2.04, except that
for the purposes of Article 8 and Section 4.07 the Paying Agent shall not be
the Company or any Subsidiary.
"Permitted Liens" means the following:
(a) Liens upon rights-of-way for pipeline purposes;
(b) undetermined Liens and charges incidental to construction or mainte-
nance;
(c) the right reserved to, or vested in, any municipality or public author-
ity by the terms of any right, power, franchise, grant, license, permit or
by any provision of law, to terminate such right, power, franchise, grant,
license or permit, or to purchase or recapture or to designate a purchaser
of, any of the mortgaged property;
(d) Liens upon any property in which the Company has a leasehold estate and
to which such leasehold estate is or may become subject, and the rights re-
served to lessors of such property, and to their successors and assigns, un-
der applicable law or the instrument creating such leasehold estate;
(e) the Lien of taxes and assessments (other than those constituting Liens
upon rights-of-way for pipe line purposes) which are not at the time delin-
quent;
<PAGE>
6
(f) the Lien of specified taxes and assessments (other than those consti-
tuting liens upon rights-of-way for pipe line purposes) which are delinquent
but the validity of which is being contested at the time by the Company in
good faith, unless thereby in the opinion of counsel or of the trustee under
the General Mortgage any of the mortgaged property thereunder may be lost or
forfeited;
(g) the Lien reserved in leases for rent and for compliance with the terms
of the lease in the case of leasehold estates;
(h) minor defects and irregularities in the titles to any property which do
not materially impair the use of such property for the purposes for which it
is held by the Company;
(i) any Liens securing indebtedness, neither assumed nor guaranteed by the
Company nor on which it customarily pays interest, existing upon real estate
or rights in or relating to real estate (including rights-of-way and ease-
ments) acquired by the Company for pipeline, metering station or right-of-
way purposes;
(j) easements, exceptions or reservations in any property of the Company
granted or reserved for the purpose of pipe lines, roads, the removal of
oil, gas, coal or other minerals, and other like purposes, or for the joint
or common use of real property, facilities and equipment, which do not mate-
rially impair the use of such property for the purposes for which it is held
by the Company;
(k) rights reserved to or vested in any municipality or public authority to
control or regulate any property of the Company, or to use such property in
any manner which does not materially impair the use of such property for the
purposes for which it is held by the Company;
(l) any obligations or duties, affecting the property of the Company, to
any municipality or public authority with respect to any franchise, grant,
license or permit;
(m) the Liens of any judgments in an aggregate amount not in excess of one
million United States dollars ($1,000,000) or the Lien of any judgment the
execution of which has been stayed or which has been appealed and secured,
if necessary, by the filing of an appeal bond, or the Lien of any judgment
in respect of which monies in the amount of the judgment have been deposited
with the trustee under the General Mortgage to be held as a part of the
trust estate and to be withdrawn only as provided in (S)8.05 of the General
Mortgage; and
(n) zoning laws and ordinances.
<PAGE>
7
"person" means any individual, corporation, partnership, joint venture, asso-
ciation, joint-stock company, trust, unincorporated organization or government
or other agency or political subdivision thereof.
"principal" of a debt security means the principal of the security plus, when
appropriate, the premium, if any, on the security.
"Principal Domestic Property of the Company" shall mean any property, plant,
equipment or facility of the Company which is located in the United States or
any territory or political subdivision thereof, except any property which the
Board of Directors or management of the Company or any such Subsidiary shall
determine to be not material to the business or operations of the Company and
its Subsidiaries, taken as a whole.
"Redeemable Securities" means Securities of any Series which may be redeemed,
at the option of the Company, prior to the Stated Maturity thereof, on the
terms specified in or pursuant to the Authorizing Resolution and/or supplemen-
tal indenture relating to such Series and in accordance with Article 3A here-
in.
"Redemption Date" when used with respect to any Security of any Series to be
redeemed means the date fixed for such redemption by or pursuant to the provi-
sions of such Security, this Indenture and the Authorizing Resolution and/or
supplemental indenture relating to such Security.
"Redemption Price" when used with respect to any Security of any Series to be
redeemed means the price at which it is to be redeemed pursuant to the provi-
sions of such Security, this Indenture and the Authorizing Resolution and/or
supplemental indenture relating to such Security.
"Registrar" shall have the meaning provided in Section 2.04.
"Regular Record Date" means, for the interest payable on any Interest Payment
Date in respect of any Series of Securities, except as provided in, or pursu-
ant to, the Authorizing Resolution and/or supplemental indenture relating
thereto, the day (whether or not a Business Day) that is fifteen days preced-
ing the applicable Interest Payment Date.
"Required Currency" shall have the meaning provided in Section 10.16.
"Sale and Leaseback Transaction" shall have the meaning provided in Section
4.12.
<PAGE>
8
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities, as amended or supplemented from time to
time pursuant to the terms of this Indenture, of the Company of any Series
that are issued under this Indenture.
"Security Register" shall have the meaning provided in Section 2.04.
"Series" means, with respect to Securities issued hereunder, the Securities
issued pursuant to any particular Authorizing Resolution and/or supplemental
indenture (if any), subject to the right of the Board of Directors to specify
in such Authorizing Resolution and/or supplemental indenture (if any) that
such Securities shall constitute more than one Series.
"Short-Term Borrowing" means all Indebtedness in respect of borrowed money
maturing on demand or within one year from the date of the creation thereof
and not directly or indirectly renewable or extendible, at the option of the
debtor, by its terms or by the terms of any instrument or agreement relating
thereto, to a date one year or more from the date of the creation thereof;
provided, that Indebtedness in respect of borrowed money arising under a re-
volving credit or similar agreement which obligates the lender or lenders to
extend credit over a period of one year or more shall constitute Funded Debt
and not Short-Term Borrowing even though the same matures on demand or within
one year from the date as of which such Short-Term Borrowing is to be deter-
mined.
"Sinking Fund" means, with respect to any Sinking Fund Securities, a sinking
fund provided for in Article 3B.
"Sinking Fund Securities" means Securities of any Series which are required
to be redeemed from time to time prior to the Stated Maturity thereof in whole
or in part under a Sinking Fund, on the terms specified in the Authorizing
Resolution and/or supplemental indenture (if any) relating to such Series and
in accordance with Article 3B herein.
"Special Record Date" shall have the meaning provided in Section 2.13.
"Stated Maturity" when used with respect to any Security or any installment
of interest thereon means the date specified in such Security as the fixed
date on which the principal of such Security or such installment of interest
is due and payable.
<PAGE>
9
"Stock" means any and all shares, interests, participations or other equiva-
lents (however designated) of corporate stock.
"Stock Accounts", as applied to a corporation, means the amount of such cor-
poration's outstanding Stock, other paid-in capital and retained earnings, all
as shown in a statement of financial position of such corporation.
"Subsidiary" means (i) a corporation a majority of whose capital stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by the Company and a Subsidiary
(or Subsidiaries) of the Company or by a Subsidiary (or Subsidiaries) of the
Company or (ii) any other person (other than a corporation) in which the Com-
pany, a Subsidiary (or Subsidiaries) of the Company or the Company and a Sub-
sidiary (or Subsidiaries) of the Company, directly or indirectly, at the date
of determination thereof has at least majority ownership interest; provided,
that no corporation shall be deemed a Subsidiary until the Company, a Subsidi-
ary (or Subsidiaries) of the Company or the Company and a Subsidiary (or Sub-
sidiaries) of the Company acquires more than 50% of the outstanding voting
stock thereof and has elected a majority of its board of directors.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture except as provided in Sec-
tion 9.03.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means and includes the person or each person who is then a Trustee hereunder,
and if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"Trust Officer" means any officer or assistant officer of the Trustee as-
signed by the Trustee to administer its corporate trust matters.
"U.S. Government Obligations" shall have the meaning provided in Section
8.01.
"Yield to Maturity" means, with respect to any Series of Securities, the
yield to maturity thereof, calculated at the time of issuance thereof, or, if
applicable, at the most recent redetermination of interest thereon, and calcu-
lated in accordance with accepted financial practice.
<PAGE>
10
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other obli-
gor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA, de-
fined by TIA reference to another statute or defined by SEC rule and not oth-
erwise defined herein have the meanings assigned to them therein.
Section 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with generally accepted accounting principles in effect on the
date hereof, and any other reference in this Indenture to "generally ac-
cepted accounting principles" refers to generally accepted accounting prin-
ciples on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural in-
clude the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to this In-
denture as a whole and not to any particular Article, Section or other Sub-
division.
ARTICLE 2
The Securities
Section 2.01. Form of Securities.
The Securities of each Series and the certificate of authentication thereon
shall be in substantially the forms set forth in Exhibit A or in such other
forms
<PAGE>
11
as shall be specified in, or pursuant to, the Authorizing Resolution and/or in
the indenture supplemental hereto (if any) relating to such Series, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or the said Authorizing Resolution
and/or supplemental indenture (if any).
The definitive Securities of each Series shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, or, if they shall
not be listed on any securities exchange, in any other manner consistent here-
with, all as shall be determined by the officers executing such Securities, as
evidenced by their execution of such Securities. The Securities may have nota-
tions, legends or endorsements required by law, stock exchange rule or usage.
The Company shall approve the form of the Securities and any notation, legend
or endorsement on them.
The terms and provisions contained in the Securities, annexed hereto as Ex-
hibit A or such other forms as specified in the Authorizing Resolution and/or
supplemental indenture (if any) relating thereto, shall constitute, and are
hereby expressly made, a part of this Indenture.
Section 2.02. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more Series. The terms of each Series
shall be as provided in an Authorizing Resolution and/or supplemental inden-
ture (if any) or shall be determined in the manner specified therein. The
terms to be specified in respect of each Series in the Authorizing Resolution
and/or supplemental indenture (if any), or by such person and/or procedures as
shall be provided therein, shall include the following:
(1) the title of the Securities of such Series, which shall distinguish
such Series from all other Series;
(2) the aggregate principal amount of the Securities of such Series which
may be authenticated and delivered under this Indenture (except for Securi-
ties of such Series authenticated and delivered upon transfer of, or in ex-
change for, or in lieu of, other Securities pursuant to Section 2.07, 2.08,
2.11, 3A.08 or 9.05);
<PAGE>
12
(3) the date or dates on which the principal of the Securities of such Se-
ries is payable, and, if the Series shall be Extendible Securities, the
terms on which the Company or any other person shall have the option to ex-
tend the Maturity of such Securities and the rights, if any, of the Holders
to require payment of the Securities;
(4) the rate or rates at which the Securities of such Series shall bear in-
terest, if any (whether floating or fixed), the provisions, if any, for de-
termining such interest rate or rates and adjustments thereto, the date or
dates from which such interest shall accrue, the Interest Payment Dates
therefor and the Regular Record Dates (if different from those provided in
the form of Security herein set forth) for the determination of Holders of
the Securities of such Series to whom interest is payable;
(5) the place or places where the principal of and interest on Securities
of such Series shall be payable (if other than as provided in Section 4.02);
(6) the price or prices at which, the period or periods within which and
the terms and conditions upon which the Securities of such Series may be re-
deemed, in whole or in part, at the option of the Company, pursuant to a
Sinking Fund or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase or repay Se-
curities of such Series, in whole or in part, pursuant to a Sinking Fund or
otherwise or at the option of a Holder thereof, and the price or prices at
which, the period or periods within which and the terms and conditions upon
which such redemption, purchase or repayment shall be made;
(8) any Events of Default with respect to the Securities of such Series
which may be different from or in addition to those provided for herein, and
any covenants or obligations of the Company to the Holders of the Securities
of such Series different from or in addition to those set forth herein;
(9) if less than 100% of the principal amount of the Securities of such Se-
ries is payable on acceleration under Section 6.02 or provable in bankruptcy
under Section 6.09 at any time, a schedule of or the manner of computing the
amounts which are so payable and provable from time to time;
(10) whether the Securities of the Series shall be issued in whole or in
part in the form of a Global Security or Securities; the terms and condi-
tions, if any, upon which such Global Security or Securities may be ex-
changed in whole or in part for other individual Securities; and the Deposi-
tory for such Global Security or Securities; and the form of the Securities
of such Series (which may be, but which need not be, consistent with the
form set forth in Exhibit A attached hereto);
(11) if other than United States dollars, the currency(ies) in which pay-
ment of the principal of or interest, if any, on the Securities of that Se-
ries shall be payable;
<PAGE>
13
(12) if the principal of or interest, if any, on the Securities of that Se-
ries is to be payable, at the election of the Company or a Holder thereof,
in a currency or currencies other than that in which the Securities are
stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(13) if the amount of payments of principal of (and premium, if any) or in-
terest, if any, on the Securities of the Series may be determined with ref-
erence to an index based on a currency or currencies other than that in
which the Securities are stated to be payable, the manner in which such
amounts shall be determined; and
(14) any other terms of the Securities of such Series; provided, that such
other terms shall not be inconsistent with any express terms of this Inden-
ture or in conflict with any express terms of any other Series of Securities
which shall be issued and outstanding.
All Securities of any one Series shall be substantially identical in form ex-
cept as to denomination and except as may be otherwise provided in and pursu-
ant to the Authorizing Resolutions and/or supplemental indenture (if any) re-
lating thereto.
Section 2.03. Execution and Authentication.
Two Officers or an Officer and the Secretary of the Company shall sign the
Securities for the Company by manual or facsimile signature. The Company's
seal shall be reproduced on the Securities and may be in facsimile form.
If an Officer or a Secretary whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs the certifi-
cate of authentication on the Security. The signature shall be conclusive evi-
dence that the Security has been authenticated under this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee, together with a Company Order for the authentication
and delivery of such Securities. The Company Order may provide that the Secu-
rities which are the subject thereof shall be authenticated and delivered by
the Trustee upon the telephonic, written or other order of persons designated
in the Company Order, and that such persons are authorized to
<PAGE>
14
specify the terms and conditions of such Securities, to the extent permitted
by the Authorizing Resolution and/or supplemental indenture (if any) relating
thereto. The Trustee shall execute and deliver the supplemental indenture (if
any) relating to said Securities and the Trustee shall authenticate and de-
liver said Securities as specified in such Company Order; provided that, prior
to authentication and delivery of the first Securities of any Series, the
Trustee shall have received:
(1) a copy of the Authorizing Resolution, with a copy of the form of Secu-
rity approved thereby attached thereto, or a supplemental indenture in re-
spect of the issuance of the Series, executed on behalf of the Company;
(2) an Officers' Certificate to the effect that the Securities of such Se-
ries comply or will comply with the requirements of this Indenture and the
said Authorizing Resolution and/or supplemental indenture (if any);
(3) an Opinion of Counsel (a) to the effect that (i) the Securities of such
Series, the Authorizing Resolution and/or the supplemental indenture (if
any) relating thereto comply or will comply with the requirements of this
Indenture, and (ii) the Securities of such Series, when authenticated and
delivered by the Trustee in accordance with the said Company Order, will
constitute valid and binding obligations of the Company enforceable in ac-
cordance with their terms, subject to (A) bankruptcy and other laws affect-
ing creditors' rights generally as in effect from time to time, (B) limita-
tions of generally applicable equitable principles and (C) other exceptions
acceptable to the Trustee and its counsel; and (b) relating to such other
matters as may reasonably be requested by the Trustee or its counsel; and
(4) if the Securities to be issued are Original Issue Discount Securities,
an Officers' Certificate setting forth the Yield to Maturity for the Securi-
ties or other information sufficient to compute amounts due on acceleration,
or specifying the manner in which such amounts are to be determined, pro-
vided that such Yield to Maturity and other facts are not specified in the
form of the Securities.
Subject to Section 7.01 hereof, the Trustee shall be fully protected in rely-
ing upon the documents delivered to it as provided above in connection with
the issuance of any Series of Securities.
The Trustee shall have the right to decline to authenticate and deliver any
Securities under this Section 2.03 if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in
good faith shall determine that such action would expose the Trustee to lia-
bility to Holders of previously issued and outstanding Securities.
<PAGE>
15
Each Security shall be dated the date of its authentication unless otherwise
specified in the Authorizing Resolution and/or supplemental indenture relating
thereto.
The Trustee may appoint an authenticating agent reasonably acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An au-
thenticating Agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company
The Securities of each Series shall be issuable only in registered form with-
out coupons and only in denominations of $1,000 and any integral multiple
thereof, or in such other currencies or denominations as may be specified in,
or pursuant to, the Authorizing Resolution and/or supplemental indenture (if
any) relating to the Series.
Section 2.04. Registrar and Paying Agent.
The Company shall cause to be kept a register (the "Security Register") at an
office or agency where Securities may be presented for registration of trans-
fer or for exchange ("Registrar") and an office or agency where Securities may
be presented for payment ("Paying Agent"). The Company may have one or more
co-Registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall give prompt writ-
ten notice to the Trustee of the name and address of any such Agent and the
Trustee shall have the right to inspect the Security Register at all reason-
able times and to obtain copies thereof. If the Registrar shall not be the
Trustee in respect of any Series, the Company shall promptly notify the Regis-
trar as to the amounts and terms of each Security of such Series which shall
be authenticated and delivered hereunder, and as to the names in which such
Securities shall be registered. If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to appro-
priate compensation therefor pursuant to Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying Agent.
<PAGE>
16
Section 2.05. Paying Agent to Hold Money In Trust.
Each Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities (whether such money has been paid to it by the
Company or any other obligor on the Securities), and shall notify the Trustee
of any default by the Company (or any other obligor on the Securities) in mak-
ing any such payment. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate the money and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and account for any funds disbursed and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so the Paying Agent shall have no
further liability for the money.
Section 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list furnished to it of the names and addresses of Security-
holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee ten days before each Interest Payment Date and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders of
Securities of any Series and the Company shall otherwise comply with Section
312(a) of the TIA.
The Trustee shall be entitled to rely upon a certificate of the Registrar,
the Company or such other Paying Agent, as the case may be, as to the names
and addresses of the Holders of Securities of any Series and the principal
amounts and serial numbers of such Securities.
Section 2.07. Transfer and Exchange.
Subject to Section 2.15, when Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for
an equal principal amount of Securities of the same Series and Stated Maturity
of other authorized denominations, the Registrar shall register the transfer
or make the exchange as requested if its requirements for such transactions
are met. To permit registrations of transfers and exchanges, the Company shall
<PAGE>
17
execute and the Trustee shall authenticate Securities at the Registrar's re-
quest. No service charge shall be made to any Holder for any registration of
transfer or exchange, but the Company or the Trustee may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge pay-
able in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges pursuant to Section 2.11, 3A.08 or
9.05 in which case such transfer taxes or similar governmental charges shall
be paid by the Company).
The Company shall not be required (i) to issue, register the transfer of or
exchange any Security of any Series during a period beginning at the opening
of the day which is 15 Business Days before the day of the mailing of a notice
of redemption of Securities of such Series selected for redemption under Sec-
tion 3A.04 or 3B.01 and ending at the close of business on the day of such
mailing, or (ii) to register the transfer of or exchange any Security so se-
lected for redemption in whole or in part, except, in the case of any Security
to be redeemed in part, the portion thereof not to be redeemed.
Section 2.08. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully tak-
en, the Company shall issue and the Trustee shall authenticate a replacement
Security of like tenor, Series and principal amount, bearing a number not as-
signed to any Security of the same Series then outstanding, if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be sufficient in the judgment of the Trustee to protect the Company,
the Trustee or any Agent from any loss which any of them may suffer if a Secu-
rity is replaced. The Company may charge such Holder for its expenses in re-
placing a Security.
Every replacement Security is an additional obligation of the Company.
Section 2.09. Outstanding Securities.
Securities, or Securities of any particular Series, outstanding at any time
are all such Securities that have been authenticated and delivered by the
Trustee except for those cancelled by it, those delivered to it for cancella-
tion and those described in this Section as not outstanding. A Security does
not cease to be outstanding because the Company or one of its Affiliates holds
the Security.
<PAGE>
18
If a Security is replaced pursuant to Section 2.08, it ceases to be outstand-
ing unless the Trustee receives proof satisfactory to it that the replaced Se-
curity is held by a bona fide purchaser.
If the Trustee or Paying Agent (other than the Company or a Subsidiary) holds
on the Maturity Date or Redemption Date money sufficient to pay Securities
payable on such date, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue; provided that, if such Se-
curities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee
has been made.
Section 2.10. Treasury Securities.
In determining whether the Holders of the required principal amount of Secu-
rities of any Series have concurred in any direction, waiver or consent (a)
the principal amount of an Original Issue Discount Security of such Series
that shall be deemed to be outstanding for such purposes shall be the amount
that would be due and payable as of the date of determination upon a declara-
tion of acceleration thereof pursuant to Section 6.02 and (b) Securities of
such Series owned by the Company or an Affiliate of the Company shall be dis-
regarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of such Series which the Trustee actually knows are so owned shall
be so disregarded. Upon the request of the Trustee, the Company shall furnish
to the Trustee an Officers' Certificate identifying all Securities of such Se-
ries, if any, known by the Company to be owned by it or any of its Affiliates.
Section 2.11. Temporary Securities.
Until definitive Securities of any Series are ready for delivery, the Company
may prepare and execute and, upon compliance with the requirements of Section
2.03, the Trustee shall authenticate temporary Securities of such Series. Tem-
porary Securities of any Series shall be substantially in the form of defini-
tive Securities of such Series but may have variations that the Company con-
siders appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
for such Series in exchange for temporary Securities of such Series in an ex-
change pursuant to Section 2.07.
<PAGE>
19
Section 2.12. Cancellation.
The Company at any time may deliver Securities to the Trustee for cancella-
tion. The Registrar and the Paying Agent shall forward to the Trustee any Se-
curities surrendered to them for transfer, exchange or payment. The Trustee
and no one else shall cancel all Securities surrendered for transfer, ex-
change, payment or cancellation or for credit against any Sinking Fund Payment
in respect of such Series pursuant to Section 3B.02. The Company may not issue
new Securities to replace Securities it has paid or delivered to the Trustee
for cancellation.
Section 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities of any Se-
ries, it shall pay the defaulted interest, plus any interest payable on the
defaulted interest, to the persons who are Holders of such Securities on a
subsequent special record date ("Special Record Date") and such term, as used
in this Section 2.13 with respect to the payment of any defaulted interest,
shall mean the fifteenth day next preceding the date fixed by the Company for
the payment of defaulted interest, whether or not such day is a Business Day.
At least 15 days before the Special Record Date, the Company shall mail to
each holder of such Securities a notice that states the Special Record Date,
the payment date and the amount of defaulted interest to be paid.
Section 2.14. Persons Deemed Owners.
The Company, the Trustee and any Agent may treat the person in whose name any
Security is registered as the owner of such Security for the purpose of re-
ceiving payment of principal of and (subject to Section 2.13) interest on such
Security and for all other purposes whatsoever, whether or not such Security
shall have matured, and neither the Company, the Trustee nor any Agent shall
be affected by any notice to the contrary.
Section 2.15. Securities Issuable in the Form of a Global Security.
(a) If the Company shall establish pursuant to Section 2.02 that the Securi-
ties of a particular Series are to be issued in whole or in part in the form
of one or more Global Securities, then the Company shall execute and the
Trustee shall, in accordance with Section 2.03 and the Company Order delivered
to the Trustee thereunder, authenticate and deliver such Global Security or
Securities, which (i) shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, the outstanding Securities of such
Series to be represented by such Global Security or Securities, (ii) shall be
<PAGE>
20
registered in the name of the Depository for such Global Security or Securi-
ties or its nominee, (iii) shall be delivered by the Trustee to the Depository
or pursuant to the Depository's instruction and (iv) shall bear a legend sub-
stantially to the following effect: "UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR THE INDIVIDUAL [Name of Security] REPRESENTED HEREBY, THIS
GLOBAL [Name of Security] MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE (I) BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR (II) BY A NOMINEE OF THE DEPOSI-
TORY OR THE DEPOSITORY TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCES-
SOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE-
SENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSI-
TORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER EN-
TITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.
HAS AN INTEREST HEREIN."
(b) Notwithstanding any other provision of this Section 2.15 or of Sec-
tion 2.07, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for individual Securities, a
Global Security may be transferred, in whole but not in part and in the manner
provided in Section 2.07, only to another nominee of the Depository for such
Global Security, or to a successor Depository for such Global Security se-
lected or approved by the Company or to a nominee of such successor Deposito-
ry.
(c) (i) If at any time the Depository for a Global Security notifies the Com-
pany that it is unwilling or unable to continue as Depository for such Global
Security or if at any time the Depository for the Securities for such Series
shall no longer be eligible or in good standing under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Com-
pany shall appoint a successor Depository with respect to such Global Securi-
ty. If a successor Depository for such Global Security is not appointed by the
Com-
<PAGE>
21
pany within 90 days after the Company receives such notice or becomes aware of
such ineligibility, the Company's election pursuant to Section 2.02(10) shall
no longer be effective with respect to such Global Security and the Company
will execute, and the Trustee, upon receipt of a Company Order for the authen-
tication and delivery of individual Securities of such Series in exchange for
such Global Security, will authenticate and deliver individual Securities of
such Series of like tenor and terms in definitive form in an aggregate princi-
pal amount equal to the principal amount of the Global Security in exchange
for such Global Security.
(ii) If an event of Default shall have occurred and be continuing or an event
shall have occurred which with the giving of notice or lapse of time or other,
would constitute an Event of Default with respect to the Securities repre-
sented by such Global Security, the Company's election pursuant to Section
2.02(10) shall no longer be effective with respect to such Global Security and
the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securities of such Series in
exchange for such Global Security, will authenticate and deliver individual
Securities of such Series of like tenor and terms in definitive form in an ag-
gregate principal amount equal to the principal amount of the Global Security
in exchange for such Global Security.
(iii) The Company may at any time and in its sole discretion determine that
the Securities of any Series issued or issuable in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee, upon re-
ceipt of a Company Order for the authentication and delivery of individual Se-
curities of such Series in exchange in whole or in part for such Global Secu-
rity, will authenticate and deliver individual Securities of such Series of
like tenor and terms in definitive form in an aggregate principal amount equal
to the principal amount of such Global Security or Securities representing
such Series in exchange for such Global Security or Securities.
(iv) If specified by the Company pursuant to Section 2.02 with respect to Se-
curities issued or issuable in the form of a Global Security, the Depository
for such Global Security may surrender such Global Security in exchange in
whole or in part for individual Securities of such Series of like tenor and
terms in definitive form on such terms as are acceptable to the Company and
such Depository. Thereupon the Company shall execute, and the Trustee shall
authenticate and delivery, without service charge, (1) to each person speci-
fied by such Depository a new Security or Securities of the same Series of
like tenor
<PAGE>
22
and terms and of any authorized denomination as requested by such person in
aggregate principal amount equal to and in exchange for such person a benefi-
cial interest in the Global Security; and (2) to such Depository a new Global
Security of like tenor and terms and in a denomination equal to the differ-
ence, if any, between the principal amount of the surrendered Global Security
and the aggregate principal amount of Securities delivered to Holders thereof.
(v) In any exchange provided for in any of the preceding four paragraphs, the
Company will execute and the Trustee will authenticate and deliver individual
Securities in definitive registered form in authorized denominations. Upon the
exchange of a Global Security for individual Securities, such Global Security
shall be cancelled by the Trustee. Securities issued in exchange for a Global
Security pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depository for such Global Security, pur-
suant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the
persons in whose names such Securities are so registered.
ARTICLE 3A
Redemption
Section 3A.01. Right of Redemption.
Redeemable Securities may be redeemed otherwise than through the operation of
the Sinking Fund provided for in Article 3B at the election of the Company at
the times, on the conditions and at the Redemption Prices specified therein,
in (or pursuant to) the Authorizing Resolution relating thereto or in the sup-
plemental indenture (if any) executed in connection with the issuance of such
Securities to the extent provided therein, any Redemption Price to be accompa-
nied by accrued interest to the Redemption Date.
Section 3A.02. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as per-
mitted or required by any provision referred to in Section 3A.01, shall be
made in accordance with such provision and this Article.
Section 3A.03. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities of any Series shall be
evidenced by a Board Resolution or set forth in an Officers' Certificate which
<PAGE>
23
states that such election has been duly authorized by all requisite corporate
action on the part of the Company. In case of any redemption at the election
of the Company of less than all of the Securities of such Series the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company (un-
less a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
the Series or the several Series, as the case may be, to be redeemed. In the
case of any redemption of Securities prior to the expiration of any restric-
tion on such redemption provided in the Securities or elsewhere in this Inden-
ture, the Company shall furnish the Trustee with an Officers' Certificate evi-
dencing compliance with such restriction.
Section 3A.04. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any Series are to be redeemed, the partic-
ular Securities of such Series to be redeemed shall be selected not more than
90 days prior to the Redemption Date by the Trustee, from the outstanding Se-
curities of such Series not previously called for redemption, in compliance
with the requirements of the principal national securities exchange, if any,
on which such Securities are listed or, if the Securities are not listed on a
national securities exchange, on a pro rata basis or by lot. The Trustee may
select for redemption portions (equal to the minimum authorized denomination
of the Series or any integral multiple thereof) of the principal amount of
such Securities of a denomination larger than such minimum denomination. If
the Company shall so specify, Securities held by the Company or any of its
Subsidiaries or Affiliates shall not be included in the Securities selected
for redemption.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for par-
tial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 3A.05. Notice of Redemption.
Notice of redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date,
<PAGE>
24
to each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all outstanding Securities of the Series are to be re-
deemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security, and that interest thereon shall cease to
accrue on and after said date;
(5) that the redemption is for a Sinking Fund, if such is the case; and
(6) the place or places where such Securities are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of the Com-
pany shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company.
Section 3A.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.05) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any accrued interest on, all the Secu-
rities or portions thereof which are to be redeemed on that date.
Section 3A.07. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemp-
tion Price thereof and from and after such date (unless the Company shall de-
fault in the payment of the Redemption Price and accrued interest) such Secu-
rities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the Redemp-
tion Date; provided, however, that installments of interest whose Stated Matu-
rity is on or prior to the Redemption Date shall be payable to the
<PAGE>
25
Holders of such Securities registered as such on the relevant Regular or Spe-
cial Record Date according to their terms and the provisions of such Security
and Section 2.13.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the Redemption Date at the rate borne by the Security or,
in the case of Original Issue Discount Securities, at a rate equal to the
Yield to Maturity thereof.
Section 3A.08. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at the
office or agency of the Company maintained for that purpose pursuant to Sec-
tion 4.02 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or his attorney duly au-
thorized in writing), and the Company shall execute and the Trustee shall au-
thenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities of the same Series, of any authorized denomina-
tion as requested by such Holder in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so sur-
rendered.
ARTICLE 3B
Sinking Fund
Section 3B.01. Sinking Fund Payments.
As and for a Sinking Fund for the retirement of Sinking Fund Securities, the
Company will, until all such Securities are paid or payment thereof is duly
provided for, deposit in accordance with Section 3A.06, at such times and sub-
ject to such terms and conditions as shall be specified in the provisions of
such Securities and the Authorizing Resolution and/or supplemental indenture
(if any) relating thereto, such amounts in cash or such other Required Cur-
rency as shall be required or permitted under such provisions in order to re-
deem Securities on the specified Redemption Dates at a Redemption Price equal
to their principal amounts, less in each such case the amount of any
<PAGE>
26
credit against such payment received by the Company under Section 3B.02. Each
such Sinking Fund payment shall be applied to the redemption of Securities on
the specified Redemption Date as herein provided.
Section 3B.02. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Securities of the same Series (other than any Se-
curities of such Series previously called for redemption pursuant to the Sink-
ing Fund or theretofore applied as a credit against a Sinking Fund payment)
and (2) may apply as a credit Securities of the same Series redeemed at the
election of the Company pursuant to Section 3A.01 or through the operation of
the Sinking Fund in any period in excess of the minimum amount required for
such period under Section 3B.01 and not theretofore applied as a credit
against a Sinking Fund payment, in each case in satisfaction of all or any
part of any Sinking Fund payment required to be made pursuant to Section
3B.01. Each such Security so delivered or applied shall be credited for such
purpose by the Trustee at a Redemption Price equal to its principal amount or,
in the case of an Original Issue Discount Security, its then accreted value,
and the required amount of such Sinking Fund payment in respect of such Series
shall be reduced accordingly.
Section 3B.03. Redemption of Securities for Sinking Fund.
If in any year the Company shall elect to redeem in excess of the minimum
principal amount of Securities of any Series required to be redeemed pursuant
to Section 3B.01 or to satisfy all or any part of any Sinking Fund payment by
delivering or crediting Securities of the same Series pursuant to Section
3B.02, then at least 45 days prior to the date on which the Sinking Fund pay-
ment in question shall be due (or such shorter period as shall be approved by
the Trustee), the Company shall deliver to the Trustee an Officers' Certifi-
cate specifying the amount of the Sinking Fund payment and the portions
thereof which are to be satisfied by payment of cash or such other Required
Currency, by delivery of Securities of such Series or by crediting Securities
of such Series, and, at least 45 days prior to the Sinking Fund payment date
(or such shorter period as shall be approved by the Trustee), will also de-
liver to the Trustee the Securities of such Series to be so delivered. Such
Officers' Certificate shall also state that the Securities forming the basis
of any such credit do not include any Securities which have been redeemed
through the operation of the Sinking Fund in the minimum amount required under
Section 3B.01 or previously
<PAGE>
27
credited against any Sinking Fund payment. The Trustee shall, upon the receipt
of such Officers' Certificate (or, if it shall not have received such an Offi-
cers' Certificate at least 45 days prior to the Sinking Fund payment date,
then following such 45th day), select the Securities of such Series to be re-
deemed upon the next Sinking Fund payment date, in the manner specified in
Section 3A.04, and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
3A.05. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 3A.06, 3A.07
and 3A.08.
ARTICLE 4
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities of each
Series on the dates and in the manner provided in the Securities and in this
Indenture. An installment of principal or interest shall be considered paid on
the date due if the Trustee or Paying Agent (other than the Company or a Sub-
sidiary) holds on that date money designated for and sufficient to pay the in-
stallment.
The Company shall pay interest on overdue principal at the respective rates
borne by such Securities or, in the case of Original Issue Discount Securi-
ties, at rates equal to the respective Yields to Maturity thereof; it shall
pay interest on overdue installments of interest at the respective rates borne
by such Securities to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
Except as otherwise provided in the Authorizing Resolutions and/or supplemen-
tal indenture (if any) relating to any Series, the Company will maintain in
the City of Detroit, Michigan, an office or agency where Securities may be
surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect to the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the
<PAGE>
28
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Sec-
tion 10.02.
The Company may from time to time change such office or agency or designate
one or more other offices or agencies where the Securities of any Series or a
particular Series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, that no such
change, designation or rescission shall in any manner relieve the Company of
its obligation to maintain an office or agency for such purposes. The Company
will give prompt written notice to the Trustee of any such change, designation
or rescission and of any change in the location of any such office or agency.
The Company hereby initially designates the Trustee in the City of Detroit,
Michigan, as an agency of the Company in accordance with Section 2.04.
Section 4.03. Corporate Existence.
Subject to Article 5 and Section 4.07, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
material Subsidiary in accordance with the respective organizational documents
of each such Subsidiary and the rights (charter and statutory) and material
franchises of the Company and its material Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right or fran-
chise, or the corporate existence of any material Subsidiary, if the Board of
Directors or management of the Company or such Subsidiary shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries, taken as a whole, and if the loss thereof
is not, and will not be, adverse in any material respect to the Holders.
Section 4.04. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all material taxes, assessments and gov-
ernmental charges levied or imposed upon the Company or any Subsidiary or upon
the income, profits or property of the Company or any Subsidiary and
<PAGE>
29
(2) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a material Lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate provision has
been made.
Section 4.05. Notice of Defaults.
In the event that any Indebtedness of the Company or any of its Subsidiaries
is declared due and payable before its maturity because of the occurrence of
any default (or any event which, with notice or the lapse of time, or both,
shall constitute such default) under such Indebtedness, the Company will
promptly give written notice to the Trustee of such declaration.
Section 4.06. Maintenance of Properties.
Subject to Section 4.07, the Company will cause all material properties owned
by or leased to it or any Subsidiary and used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in normal
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company
may be necessary, so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or any Subsidiary from dis-
continuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judg-
ment of the Board of Directors or of the board of directors, board of trustees
or managing partners of the Subsidiary concerned, or of an officer (or other
agent employed by the Company or of any of its Subsidiaries) of the Company or
such Subsidiary having managerial responsibility for any such property, desir-
able in the conduct of the business of the Company or any Subsidiary, and if
such discontinuance or disposal is not disadvantageous in any material respect
to the Holders.
Section 4.07. Liquidation.
The Board of Directors or the stockholders of the Company may not adopt a
plan of liquidation which provides for, contemplates or the effectuation of
<PAGE>
30
which is preceded by (i) the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company otherwise than substan-
tially as an entirety (Article 5 of this Indenture being the Article which
governs any such sale, lease, conveyance or other disposition substantially as
an entirety) and (ii) the distribution of all or substantially all of the pro-
ceeds of such sale, lease, conveyance or other disposition and of the remain-
ing assets of the Company to the holders of Capital Stock of the Company, un-
less the Company shall in connection with the adoption of such plan make pro-
visions for, or agree that prior to making any liquidating distributions it
will make provisions for, the satisfaction of the Company's obligations here-
under and under the Securities of each Series as to the payment of principal
and interest. The Company shall be deemed to make provision for such payments
only if (a) the Company delivers in trust to the Trustee or Paying Agent
(other than the Company or a Subsidiary) (i) in the case of any Securities of
any Series denominated in United States dollars, an amount of cash sufficient
to pay principal of and interest on such outstanding Securities at their re-
spective Stated Maturities or U.S. Government Obligations in an aggregate
principal amount equal to the unpaid principal amount of such Securities and
having maturities and interest payment dates that shall coincide, as nearly as
may be practicable, with the dates that the principal of and interest on such
Securities are due and (ii) in the case of any Securities of any Series denom-
inated in any currency other than United States dollars, an amount of the Re-
quired Currency sufficient to pay principal of and interest on such outstand-
ing Securities at their respective Stated Maturities or (b) there is an ex-
press assumption of the due and punctual payment of the Company's obligations
hereunder and under the Securities of each Series and the performance and ob-
servance of all covenants and conditions to be performed by the Company here-
under, by the execution and delivery of a supplemental indenture in form sat-
isfactory to the Trustee by a person which acquires or will acquire (otherwise
than pursuant to a lease) a portion of the assets of the Company, and which
person will have assets (immediately after the acquisition) and aggregate net
earnings (for such person's four full fiscal quarters immediately preceding
the acquisition) equal to not less than the assets of the Company (immediately
preceding the acquisition) and the aggregate net earnings of the Company (for
its four full fiscal quarters immediately preceding such acquisition), respec-
tively, and which is organized and existing under the laws of the United
States, any State thereof or the District of Columbia; provided, however, that
the Company shall not make any liquidating distribution until after the Com-
pany shall have certified
<PAGE>
31
to the Trustee with an Officers' Certificate and an Opinion of Counsel at
least five days prior to the making of any liquidating distribution that it
has complied with the provisions of this Section 4.07.
Section 4.08. Compliance Certificate.
The Company shall deliver to the Trustee within 90 days after the end of each
fiscal quarter of the Company an Officers' Certificate stating whether or not
the signers know of any Default or Event of Default by the Company that oc-
curred during such fiscal quarter and whether all of the conditions and cove-
nants of the Company have been complied with regardless of any period of grace
or requirement of notice provided under the Indenture. If they do know of such
a Default or Event of Default, the certificate shall describe the Default or
Event of Default, as the case may be, and its status. The first Officers' Cer-
tificate to be delivered pursuant to this Section 4.08 shall be for the fiscal
quarter ending immediately after the Original Issue Date.
Section 4.09. SEC Reports.
(a) The Company shall file with the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information, docu-
ments and other reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Securities Ex-
change Act of 1934, as amended. The Company also shall comply with the other
provisions of TIA (S) 314(a).
(b) So long as the Securities of any Series remain outstanding, the Company
shall cause its annual report to stockholders and any quarterly or other fi-
nancial reports furnished by it to stockholders to be mailed to the Holders of
Securities outstanding at their addresses appearing in the Security Register.
Section 4.10. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law or
other law, which would prohibit or forgive the Company from paying all or any
portion of the principal of and/or interest on the Securities of any Series as
contemplated herein, wherever enacted, now or at any time hereafter in
<PAGE>
32
force, or which may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants that it will
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 4.11. Restrictions on Liens.
The Company will not incur, create, assume or otherwise become liable in re-
spect of any Indebtedness secured by a Lien, or guarantee any Indebtedness
with a guarantee which is secured by a Lien, on any Principal Domestic Prop-
erty of the Company without effectively providing that the Securities of each
Series (together with, if the Company shall so determine, any other Indebted-
ness of the Company then existing or thereafter created ranking equally with
the Securities of each Series) shall be secured equally and ratably with (or,
at the option of the Company, prior to) such secured Indebtedness, so long as
such secured Indebtedness shall be so secured; provided, however, that this
Section 4.11 shall not apply to Indebtedness secured by:
(1) Liens existing on the date of this Indenture;
(2) Liens securing Indebtedness issued pursuant to the General Mortgage;
(3) Permitted Liens;
(4) Liens which require the consent of the holders of indebtedness issued
pursuant to the General Mortgage and such consent has been received in ac-
cordance with the General Mortage;
(5) Liens which consist of pledges of indebtedness issued pursuant to the
General Mortgage to secure other indebtedness provided that the principal
amount of indebtedness so pledged shall not exceed the amount of the other
indebtedness secured thereby;
(6) Liens in favor of governmental bodies to secure progress, advance or
other payments;
(7) Liens existing on property, shares of stock or Indebtedness at the time
of acquisition thereof (including acquisition through lease, merger or con-
solidation) or Liens to secure the payment of all or any part of the pur-
chase price thereof or the purchase price of construction, installation,
renovation, improvement or development thereon or thereof or to secure any
Indebtedness incurred prior to, at the time of, or within 360 days after the
later of the acquisition, completion of such construction, installation,
renovation,
<PAGE>
33
improvement or development or the commencement of full operation of such
property or within 360 days after the acquisition of such shares or Indebt-
edness for the purpose of financing all or any part of the purchase price
thereof;
(8) Liens securing Indebtedness in an aggregate amount which, at the time
of incurrence and together with all outstanding Attributable Debt in respect
of Sale and Leaseback Transactions permitted by clause (y) of the second
paragraph of Section 4.12, does not exceed five percent of the Net Tangible
Assets of the Company; and
(9) any extension, renewal or replacement (or successive extensions, renew-
als or replacements), as a whole or in part, of any Lien referred to in the
foregoing clauses (1) to (8) inclusive; provided, that such extension, re-
newal or replacement of such Lien is limited to all or any part of the same
property that secured the Lien extended, renewed or replaced (plus improve-
ments on such property), and that such secured Indebtedness at such time is
not increased.
If at any time the Company shall incur, create, assume or otherwise become
liable in respect of any Indebtedness secured by a Lien, or guarantee any In-
debtedness with a guarantee which is secured by a Lien, on any Principal Do-
mestic Property of the Company other than as permitted under clauses (1)
through (9) of this Section 4.11, the Company shall promptly deliver to the
Trustee (i) an Officers' Certificate stating that the covenant of the Company
to secure the Securities equally and ratably with such secured Indebtedness
pursuant to this Section 4.11 has been complied with and (ii) an Opinion of
Counsel that such covenant has been complied with and that any instruments ex-
ecuted by the Company in performance of such covenant comply with the require-
ments of such covenant.
Section 4.12. Restrictions on Sales and Leasebacks.
The Company will not sell or transfer any Principal Domestic Property of the
Company, with the Company taking back a lease of such Principal Domestic Prop-
erty of the Company (a "Sale and Leaseback Transaction"), unless (i) such
Principal Domestic Property of the Company is sold within 360 days from the
date of acquisition of such Principal Domestic Property of the Company or the
date of the completion of construction or commencement of full operations on
such Principal Domestic Property of the Company, whichever is later, or (ii)
the Company, within 120 days after such sale, applies or causes to be applied
to the retirement of Funded Debt of the Company (other than
<PAGE>
34
Funded Debt of the Company which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the Se-
curities of each Series) an amount not less than the greater of (A) the net
proceeds of the sale of such Principal Domestic Property of the Company or (B)
the fair value (as determined in any manner approved by the Board of Direc-
tors) of such Principal Domestic Property of the Company.
The provisions of this Section 4.12 shall not prevent a Sale and Leaseback
Transaction (x) if the lease entered into by the Company in connection there-
with is for a period, including renewals, of not more than 36 months or (y) if
the Company would, at the time of entering into such Sale and Leaseback Trans-
action, be entitled, without equally and ratably securing the Securities, to
create or assume a Lien on such Principal Domestic Property securing Indebted-
ness in an amount at least equal to the Attributable Debt in respect of such
Sale and Leaseback Transaction pursuant to clause (8) of Section 4.11.
ARTICLE 5
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into any other corpo-
ration or transfer all or substantially all of its properties and assets as an
entirety to any person, unless:
(1) either the Company shall be the continuing person, or the person (if
other than the Company) formed by such consolidation or into which the Com-
pany is merged or to which all or substantially all of the properties and
assets of the Company as an entirety are transferred shall be a corporation
organized and existing under the laws of the United States or any State
thereof or the District of Columbia and shall expressly assume, by an inden-
ture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities of each Series and this Indenture;
(2) immediately before and immediately after giving effect to such transac-
tion, no Event of Default and no Default shall have occurred and be continu-
ing; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture comply with this Article and that
<PAGE>
35
all conditions precedent herein provided for relating to such transactions
have been complied with.
Notwithstanding the foregoing, any Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or
any other Subsidiary or Subsidiaries.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any transfer of all or substantially all
of the properties and assets of the Company in accordance with Section 5.01,
the successor corporation formed by such consolidation or into which the Com-
pany is merged or to which such transfer is made shall succeed to, and be sub-
stituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
ARTICLE 6
Default and Remedies
Section 6.01. Events of Default.
An "Event of Default" occurs if, with respect to any Series of Securities,
unless it is either inapplicable to a particular Series or it is specifically
deleted or modified in the Authorizing Resolution and/or supplemental inden-
ture (if any) in respect of the Series, and upon any other events which may be
specified as Events of Default in the Authorizing Resolution and/or supplemen-
tal indenture (if any) in respect of such Series:
(1) the Company defaults in the payment of interest on any Securities of
such Series when the same becomes due and payable and the default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of any Securities
of such Series when the same becomes due and payable at its Maturity or oth-
erwise or defaults in the deposit of any Sinking Fund installment in respect
of such Series, when and as payable by the terms of Section 3B.01 hereof;
(3) the Company fails to comply with any of its other agreements contained
in the Securities of such Series or this Indenture (other than an agreement
relating exclusively to another Series of Securities) and the default con-
tinues for the period and after the notice specified below;
<PAGE>
36
(4) there shall be a default under any bond, debenture, note or other evi-
dence of indebtedness for money borrowed or under any mortgage, indenture or
other instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company or
under any guarantee of payment by the Company of indebtedness for money bor-
rowed, whether such indebtedness or guarantee now exists or shall hereafter
be created, and the effect of such default is to cause such indebtedness to
become due prior to its stated maturity; provided, however, that no default
under this clause (4) shall exist if all such defaults do not relate to such
indebtedness or such guarantees with an aggregate principal amount in excess
of $5,000,000 at the time outstanding;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in an invol-
untary case or proceeding,
(C) consents to the appointment of a Custodian of it or for all or sub-
stantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or proceed-
ing,
(B) appoints a Custodian of the Company for all or substantially all of
its properties, or
(C) orders the liquidation of the Company,
and in each case the order or decree remains unstayed and in effect for 60
days; or
(7) final judgments for the payment of money which in the aggregate exceed
$5,000,000 at the time outstanding shall be rendered against the Company by
a court of competent jurisdiction and shall remain undischarged for a period
(during which execution shall not be effectively stayed) of 60 days after
such judgment becomes final and nonappealable.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator, sequestrator or similar official under any
Bankruptcy Law.
<PAGE>
37
A Default under clause (3) is not an Event of Default until the Trustee noti-
fies the Company, or the Holders of at least 25% in principal amount of the
outstanding Securities of such Series notify the Company and the Trustee, of
the Default and the Company does not cure the Default within 30 days after re-
ceipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default." When a Default is
cured, it ceases. Such notice shall be given by the Trustee if so requested by
the Holders of at least 25% in principal amount of the Securities of such Se-
ries then outstanding.
Subject to the provisions of Sections 7.01 and 7.02, the Trustee shall not be
charged with knowledge of any Event of Default unless written notice thereof
shall have been given to a Trust Officer at the corporate trust office of the
Trustee by the Company, the Paying Agent, any Holder or an agent of any Hold-
er.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(5) or (6)) with respect to Securities of any Series occurs and is contin-
uing, the Trustee may, by notice to the Company, or the Holders of at least
25% in principal amount of such Securities of such Series then outstanding
may, by notice to the Company and the Trustee, and the Trustee shall, upon the
request of such Holders, declare all unpaid principal (or, if such Securities
are Original Issue Discount Securities, such portion of the principal amount
as may then be payable on acceleration as provided in the terms thereof) and
accrued interest to the date of acceleration on all such Securities of such
Series then outstanding (if not then due and payable) to be due and payable
and, upon any such declaration, the same shall become and be immediately due
and payable. If an Event of Default specified in Section 6.01(5) or (6) oc-
curs, all unpaid principal (or, if any Securities are Original Issue Discount
Securities, such portion of the principal amount as may then be payable on ac-
celeration as provided in the terms thereof) and accrued interest on all Secu-
rities of every Series then outstanding shall ipso facto become and be immedi-
ately due and payable without any declaration or other act on the part of the
Trustee or any Securityholder. Upon payment of such principal amount and in-
terest, all of the Company's obligations under such Securities of such Series
and this Indenture with respect to such Securities of such Series, other than
obligations under Section 7.07, shall terminate. The Holders of a majority in
principal
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38
amount of the Securities of such Series then outstanding by notice to the
Trustee may rescind an acceleration and its consequences if (i) all existing
Events of Default, other than the non-payment of the principal of the Securi-
ties of such Series which has become due solely by such declaration of accel-
eration, have been cured or waived, (ii) to the extent the payment of such in-
terest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of acceler-
ation, has been paid, (iii) the rescission would not conflict with any judg-
ment or decree of a court of competent jurisdiction and (iv) all payments due
to the Trustee and any predecessor Trustee under Section 7.07 have been made.
Anything herein contained to the contrary notwithstanding, in the event of any
acceleration pursuant to this Section 6.02, the Company shall not be obligated
to pay any premium in connection with any repayment arising from an Event of
Default.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Securities of the Series as to which the Event
of Default shall have occurred or to enforce the performance of any provision
of such Securities or the Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the
Securities of the Series as to which the Event of Default shall have occurred
or does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Securityholder in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative to the extent permit-
ted by law.
Section 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in principal
amount of the outstanding Securities of a Series by written notice to the
Trustee may waive an existing Default or Event of Default and its conse-
quences, except a Default in the payment of principal of or interest on any
such Security as specified in clauses (1) and (2) of Section 6.01. When a De-
fault or Event of Default is waived, it is cured and ceases.
<PAGE>
39
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding Securities
of a Series (or, if more than one Series is affected, of all such Series vot-
ing as a single class) 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 it. However, the Trustee may refuse to follow any direction
that conflicts with any law or this Indenture that the Trustee determines may
be unduly prejudicial to the rights of another Securityholder, or that may in-
volve the Trustee in personal liability; provided that the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.
Section 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this Indenture or
the Securities of the applicable Series unless:
(1) the Holder gives to the Trustee written notice of a continuing Event of
Default;
(2) the Holders of at least 25% in principal amount of the outstanding Se-
curities of the Series in respect of which the Event of Default has occurred
make a written request to the Trustee to pursue a remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after re-
ceipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal amount
of the outstanding Securities of such Series do not give the Trustee a di-
rection which, in the opinion of the Trustee, is inconsistent with the re-
quest.
A Holder of Securities of any Series may not use this Indenture to prejudice
the rights of any other Holders of Securities of that Series or to obtain a
preference or priority over any other Holders of Securities of that Series.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due dates expressed in such Security, or to bring suit
for
<PAGE>
40
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in Sec-
tion 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of an express trust against the Company or any
other obligor on the Securities of the Series in respect of which the Event of
Default has occurred for the whole amount of principal and accrued interest
remaining unpaid, together with interest overdue on principal or, in the case
of Original Issue Discount Securities, the then accreted value, and to the ex-
tent that payment of such interest is lawful, interest on overdue installments
of interest, in each case at the rate per annum borne by such Securities or,
in the case of Original Issue Discount Securities, at a rate equal to the
Yield to Maturity thereof, and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable compensa-
tion, expenses, disbursements and advances of the Trustee, its agents and
counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee (in-
cluding any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Securityholders al-
lowed in any judicial proceedings relative to the Company (or any other obli-
gor upon the Securities), its creditors or its property and shall be entitled
and empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian
in any such judicial proceedings is hereby authorized by each Securityholder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Securityholder any plan of reorganization, arrange-
ment, adjustment or composition affecting the Securities of any Series or the
rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Securityholder in any such proceeding.
<PAGE>
41
Section 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article 6 with
respect to Securities of a Series, it shall pay out the money or property in
the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities of such Se-
ries in respect of which monies have been collected for principal and inter-
est, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and interest, re-
spectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party liti-
gant in the suit of an undertaking to pay the costs of the suit, and the court
in its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This Sec-
tion 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant
to Section 6.07, or a suit by any Holder or a group of Holders of more than
10% in principal amount of the outstanding Securities of all Series (or, if
the matter in issue does not relate to all Series of Securities, then the
Holders of 10% in principal amount of the outstanding Securities of all Series
to which such issue relates) (treated as a single class).
ARTICLE 7
Trustee
Section 7.01. Duties of Trustee.
(a) The Trustee, except during the continuance of an Event of Default known
to it pursuant to Section 6.01, undertakes to perform such duties and
<PAGE>
42
only such duties as are specifically set forth in this Indenture. If an Event
of Default known to the Trustee pursuant to Section 6.01 has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exer-
cise as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default known to the Trustee
pursuant to Section 6.01:
(1) the Trustee need perform only those duties as are specifically set
forth in this Indenture and no others and no implied covenants or obliga-
tions shall be read into this Indenture against the Trustee;
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; however, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent ac-
tion, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraphs (a) and (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error of judgement made in good
faith by a Trust Officer, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the perfor-
mance of any of its duties hereunder or in the exercise of any of its rights
or powers if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not reason-
ably assured to it.
(e) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
<PAGE>
43
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree with the Company in writing. Money held in
trust by the Trustee need not be segregated from other funds except to the ex-
tent required by law.
Section 7.02. Right of Trustee.
Subject to Section 7.01:
(a) the Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person; the Trustee need not
investigate any fact or matter stated in the document;
(b) before the Trustee acts or refrains from acting, it may require an Of-
ficers' Certificate or an Opinion of Counsel, which shall conform to Section
10.05; the Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such certificate or opinion;
(c) the Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care;
(d) the Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within
its rights or powers;
(e) the Trustee may consult with counsel and the advice or opinion of such
counsel as to matters of law shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by it hereun-
der in good faith and in accordance with the advice or opinion of such coun-
sel; and
(f) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of the
Holders, including, without limitation, the duties, rights and powers speci-
fied in Section 6.02 hereof, unless such Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by the Trustee in compliance with such request or
action.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its Affili-
ates with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights. However, the Trustee is subject to Sections 7.10
and 7.11.
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44
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities of any Series, it shall not be accountable for the
recitals contained in this Indenture or for the Company's use of the proceeds
from the Securities of any Series, and it shall not be responsible for any
statement in the Securities of any Series, or in any prospectus used to sell
the Securities of any Series, other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing with respect of
any Series of Securities, and if it is actually known to the Trustee pursuant
to Section 6.01 hereof, the Trustee shall mail to each Holder of the Securi-
ties of such Series notice of the Default or Event of Default within 60 days
after it occurs. Except in the case of a Default or an Event of Default in
payment of principal of or interest on any Security or in the payment of any
Sinking Fund installment, the Trustee may withhold such notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
the notice is in the interest of Securityholders.
Section 7.06. Reports by Trustee to Holders.
The Trustee shall transmit to the Holder such reports concerning, among other
things, the Trustee and its action under this Indenture as may be required
pursuant to the TIA at the time and in compliance with TIA(S)313(a). The
Trustee also shall comply with TIA(S)313(b)(2) and 313(c).
A copy of each such report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange, if any, on which the Se-
curities of any Series are listed.
The Company shall notify the Trustee if the Securities of any Series become
listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation as
shall be agreed upon in writing by the Company and the Trustee. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Company shall reimburse the Trustee upon
<PAGE>
45
request for all reasonable disbursements, expenses and advances incurred or
made by it. Such expenses shall include the reasonable compensation, disburse-
ments and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless against,
any loss or liability incurred by it in connection with the administration of
this trust and its duties hereunder, including the reasonable expenses of de-
fending itself against any claim of liability arising hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee
for which it may seek indemnity. The Company need not pay for any settlement
made without its written consent, which consent shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the Trustee
shall have a lien prior to the Securities of each Series on all money or prop-
erty held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust, pursuant to Section 8.01 or by the Paying
Agent, to pay principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of De-
fault specified in Section 6.01(5) or (6) occurs, the expenses and the compen-
sation for the services are intended to constitute expenses of administration
under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The Holders of
a majority in principal amount of the outstanding Securities of all Series
(voting as a single class) may remove the Trustee by so notifying the Trustee
in writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
<PAGE>
46
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trust-
ee. Within one year after the successor Trustee takes office, the Holders of a
majority in principal amount of the Securities of all Series (voting as a sin-
gle class) may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer, after payment of all sums then owing to the Trustee
pursuant to Section 7.07, all property held by it as Trustee to the successor
Trustee, subject to the lien provided in Section 7.07, the resignation or re-
moval of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Hold-
ers of at least 10% in principal amount of the outstanding Securities of all
Series (voting as a single class) may petition any court of competent juris-
diction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may pe-
tition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee. Any successor Trustee shall comply
with TIA (S) 310(a)(5).
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 shall continue for the benefit of the
retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall be the successor Trustee.
<PAGE>
47
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements of
TIA (S) 310(a)(1). The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA (S) 310(b), including the provi-
sion permitted by the second sentence of TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a), excluding from the operation of
(S) 311(a) any creditor relationship listed in TIA (S) 311(b). A Trustee who
has resigned or been removed shall be subject to TIA (S) 311(a) to the extent
indicated.
ARTICLE 8
Discharge of Indenture
Section 8.01. Termination of Company's Obligations.
The Company may terminate its obligations under the Securities of any Series
and this Indenture with respect to such Series, except those obligations re-
ferred to in the immediately succeeding paragraph, (a) if all Securities of
such Series previously authenticated and delivered (other than destroyed, lost
or stolen Securities of such Series which have been replaced or paid or Secu-
rities of such Series for whose payment money or securities have theretofore
been held in trust and thereafter repaid to the Company, as provided in Sec-
tion 8.03) have been delivered to the Trustee for cancellation and the Company
has paid all sums payable by it hereunder, or (b) if, following the date on
which the Company shall have given notice to the Trustee of its intention to
defease all of the Securities of such Series, the Company has irrevocably de-
posited or caused to be deposited with the Trustee or a Paying Agent (other
than the Company or a Subsidiary), under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee and any such Pay-
ing Agent, as trust funds in trust solely for the benefit of the Holders for
that purpose, (i) in the case of any Securities of any Series denominated in
United States dollars, an amount of cash sufficient to pay principal of and
interest on such outstanding Securities at their respective Stated Maturities,
or direct non-callable obligations of, or non-callable obligations guaranteed
by, the United States of America for the payment of which guarantee or obliga-
tion the full faith and
<PAGE>
48
credit of the United States is pledged, including but not limited to deposi-
tory receipts issued by a bank as custodian with respect to any such security
held by the custodian for the benefit of the holder of such depository receipt
("U.S. Government Obligations"), maturing as to principal and interest in such
amounts and at such times as are sufficient without consideration of any rein-
vestment of such interest, to pay principal of and interest on such outstand-
ing Securities at their respective Stated Maturities and (ii) in the case of
any Securities of any Series denominated in any currency other than United
States dollars, an amount of the Required Currency sufficient to pay principal
of and interest on such outstanding Securities at their respective Stated Ma-
turities; provided that the Trustee or such Paying Agent shall have been ir-
revocably instructed to apply such cash, the proceeds of such U.S. Government
Obligations or the Required Currency, as the case may be, to the payment of
said principal and interest with respect to the Securities of such Series; and
provided further, that if such irrevocable deposit in trust with the Trustee
of cash, U.S. Government Obligations or the Required Currency, as the case may
be, is made on or prior to one year from the Stated Maturity for payment of
principal of the Securities of the applicable Series, the Company shall have
delivered to the Trustee either an Opinion of Counsel with no material quali-
fications in form and substance satisfactory to the Trustee to the effect that
Holders of such Securities (i) will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit (and the defeasance
contemplated in connection therewith) and (ii) will be subject to Federal in-
come tax on the same amounts and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not occurred, or
an applicable favorable ruling to that effect received from or published by
the Internal Revenue Service.
Notwithstanding the foregoing paragraph, the Company's obligations in Sec-
tions 2.04, 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 7.08, 8.03 and 8.04, and
except as otherwise provided in the Authorizing Resolution and/or the supple-
mental indenture (if any) in respect of any Series, shall survive until the
Securities are no longer outstanding. Thereafter, the Company's obligations in
Sections 7.07, 8.03 and 8.04 shall survive.
After any such irrevocable deposit the Trustee upon request shall acknowledge
in writing the discharge of the Company's obligations under the Securities of
the applicable Series and this Indenture with respect to such Series except
for those surviving obligations specified above.
<PAGE>
49
Section 8.02. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust cash, U.S. Government Obliga-
tions or the Required Currency, as the case may be, deposited with it pursuant
to Section 8.01, and shall apply the deposited cash, the money from U.S. Gov-
ernment Obligations or the Required Currency, as the case may be, in accor-
dance with this Indenture to the payment of principal of and interest on the
Securities.
Section 8.03. Repayment to Company.
Subject to Section 8.01, the Trustee and the Paying Agent shall promptly pay
to the Company upon request any excess money held by them at any time. Subject
to the provisions of applicable law, the Trustee and the Paying Agent shall
pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided, however,
the Trustee or such Paying Agent before being required to make any payment may
at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such publi-
cation or mailing, any unclaimed balance of such money then remaining will be
repaid to the Company. After payment to the Company, the Trustee shall be re-
leased from all further liability with respect to such money and
Securityholders entitled to money must look to the Company for payment as gen-
eral creditors unless an applicable abandoned property law designates another
person.
Section 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash, U.S. Government
Obligations or the Required Currency, as the case may be, in accordance with
Section 8.01 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or oth-
erwise prohibiting such application, the Company's obligations under this In-
denture (with respect to the applicable Series) and the Securities of the ap-
plicable Series shall be revived and reinstated as though no deposit had oc-
curred pursuant to Section 8.01 until such time as the Trustee or Paying Agent
is permitted to apply all such cash, U.S. Government Obligations and Required
Currency, as the case may be, in accordance with Section 8.01;
<PAGE>
50
provided, however, that if the Company has made any payment of interest on or
principal of any Securities of any Series because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the cash, U.S. Government Obliga-
tions or the Required Currency, as the case may be, held by the Trustee or
Paying Agent.
Section 8.05. Indemnity for U.S. Government Obligations.
The Company shall pay, and shall indemnify the Trustee against, any tax, fee
or other charge imposed on or assessed against U.S. Government Obligations de-
posited pursuant to Section 8.01 or the principal and interest received on
such U.S. Government Obligations.
ARTICLE 9
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee may amend
or supplement this Indenture or the Securities of any Series without notice to
or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to certificated
Securities;
(4) to secure the Securities in connection with Section 4.11;
(5) to make any change that does not adversely affect the rights of any
Securityholder of such Series;
(6) to provide for the issuance and the terms of any particular Series of
Securities, the rights and obligations of the Company and the Holders of the
Securities of such Series, the form or forms of the Securities of such Se-
ries and such other matters in connection therewith as the Board of Direc-
tors of the Company shall consider appropriate, including, without limita-
tion, provisions for (a) additional or different covenants, restrictions or
conditions applicable to such Series, (b) additional or different Events of
Default in respect of such Series, (c) a longer or shorter period of grace
and/or notice in respect of any provision applicable to such Series than is
provided in Section 6.01, (d) immediate enforcement of any Event of Default
in respect
<PAGE>
51
of such Series or (e) limitations upon the remedies available in respect of
any Events of Default in respect of such Series or upon the rights of the
holders of Securities of such Series to waive any such Event of Default;
provided, that this paragraph (6) shall not be deemed to require the execu-
tion of a supplemental indenture to provide for the issuance of any Series
of Securities unless the same shall be provided for in the Authorizing Reso-
lution relating thereto; or
(7) to provide for a separate Trustee for one or more Series.
Section 9.02. With Consent of Holders.
Subject to Section 6.07, with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities of all Series af-
fected thereby (voting as a single class), the Company, when authorized by a
Board Resolution, and the Trustee may amend or supplement this Indenture or
such Securities without notice to any Securityholder. Subject to Section 6.07,
the Holders of a majority in principal amount of the outstanding Securities of
all Series affected thereby (voting as a single class) may waive compliance by
the Company with any provision of this Indenture or such Securities without
notice to any Securityholder; provided, that, only the holders of a majority
in principal amount of Securities of a particular Series may waive compliance
with a provision of this Indenture or the Securities of such Series having ap-
plicability solely to such Series. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series or all Series (voting as
a single class), as the case may be, whose Holders must consent to an amend-
ment, supplement or waiver;
(2) reduce the rate or change the Stated Maturity for payment of interest
on any Security;
(3) reduce the principal or any premium payable upon the redemption of or
change the Stated Maturity of any Security;
(4) waive a Default in the payment of the principal of or interest on any
Security;
(5) make any changes in Section 6.04, 6.07 or the third sentence of this
Section 9.02; or
(6) make any Security payable in money other than that stated in the Secu-
rity.
<PAGE>
52
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular Series of Securities, or which modifies the
rights of the Holders of Securities of such Series with respect to such cove-
nant or other provision, shall be deemed not to affect the rights under the
Indenture of the Holders of Securities of any other Series.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiv-
er, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes effec-
tive, the Company shall mail to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of such Se-
curity or portion of such Security that evidences the same debt as the con-
senting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke in writing
the consent as to his Security or portion of a Security. Such revocation shall
be effective only if the Trustee receives the written notice of revocation be-
fore the date the amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment, sup-
plement or waiver which shall be at least 30 days prior to the first solicita-
tion of such consent. If a record date is fixed, then notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies), and only those
persons, shall be entitled to consent to such amendment, supplement or
<PAGE>
53
waiver or to revoke any consent previously given, whether or not such persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind ev-
ery Holder of a Security of such Series, unless it makes a change described in
any of clauses (1) through (6) of Section 9.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security of the
same Series that evidences the same debt as the consenting Holder's Security.
Section 9.05. Notation On or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall is-
sue and the Trustee shall authenticate a new Security of the same Series that
reflects the changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected in re-
lying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of any amendment, supplement or waiver authorized pursuant to
this Article 9 is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
ARTICLE 10
Miscellaneous
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with an-
other provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
<PAGE>
54
Section 10.02. Notices.
Any notice or communication shall be sufficiently given if in writing and de-
livered in person or mailed by first-class mail addressed as follows:
if to the Company:
ANR Pipeline Company
c/o The Coastal Corporation
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
Attention: Director, Financial Administration
if to the Trustee:
Comerica Bank
411 West Lafayette, MC 3461
Detroit, Michigan 48226
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to him
at his address as it appears on the Security Register and shall be suffi-
ciently given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
Except for a notice to the Trustee, which is deemed given only when received,
if a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
Section 10.03. Communications by Holders With Other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the Secu-
rities of an applicable Series. The Company, the Trustee, the Registrar and
any other person shall have the protection of TIA (S) 312(c). The Depository
may grant proxies and otherwise authorize the beneficial owners of the Global
Securities to give or take any act which a Holder is entitled to take under
the Indenture.
<PAGE>
55
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any ac-
tion under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.08, shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or in-
vestigation upon which the statements or opinions contained in such certifi-
cate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such exam-
ination or investigation as is necessary to enable him to express an in-
formed opinion as to whether or not such covenant or condition has been com-
plied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
Section 10.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institu-
tions in New York, New York or Detroit, Michigan are not required to be open.
If a payment date is a Legal Holiday at a place of payment, payment
<PAGE>
56
may be made at that place on the next succeeding day that is not a Legal Holi-
day, and no interest shall accrue for the intervening period.
Section 10.08. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURI-
TIES WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability.
Section 10.11. Successors.
All agreements of the Company in this Indenture and the Securities shall bind
its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
Section 10.12. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement.
Section 10.13. Separability.
In case any provision in this Indenture or in the Securities shall be inval-
id, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and
a Holder shall have no claim therefor against any party hereto.
<PAGE>
57
Section 10.14. Action of Holders when Securities are Denominated in Different
Currencies.
Whenever any action is to be taken hereunder by the Holders of two or more
Series of Securities denominated in different currencies, then, for the pur-
poses of determining the principal amount of Securities held by such Holders,
the aggregate principal amount of the Securities denominated in a currency
other than United States dollars shall be deemed to be that amount of United
States dollars that could be obtained for such principal amount on the basis
of the spot rate of exchange for such currency as determined by the Company or
by an authorized exchange rate agent and evidenced to the Trustee by an Offi-
cers' Certificate as of the date the taking of such action by the Holders of
the requisite percentage in principal amount of the Securities is evidenced to
the Trustee. An exchange rate agent may be authorized in advance or from time
to time by the Company, and may be the Trustee or its Affiliate. Any such de-
termination by the Company or by any such exchange rate agent shall be conclu-
sive and binding on all Holders and the Trustee, and neither the Company nor
such exchange rate agent shall be liable therefor in the absence of bad faith.
Section 10.15. Monies of Different Currencies to be Segregated.
The Trustee shall segregate monies, funds, and accounts held by the Trustee
hereunder in one currency from any monies, funds or accounts in any other cur-
rencies, notwithstanding any provision herein which would otherwise permit the
Trustee to commingle such amounts.
Section 10.16. Payment to be in Proper Currency.
Each reference in any Security, or in the Authorizing Resolution and/or sup-
plemental indenture, if any, relating thereto, to any currency shall be of the
essence. In the case of any Security denominated in any currency (the "Re-
quired Currency") other than United States dollars, except as otherwise pro-
vided therein or in the related Authorizing Resolution and/or supplemental in-
denture, if any, the obligation of the Company to make any payment of princi-
pal of or interest thereon shall not be discharged or satisfied by any tender
by the Company, or recovery by the Trustee, in any currency other than the Re-
quired Currency, except to the extent that such tender or recovery shall re-
sult in the Trustee timely holding the full amount of the Required Currency.
The costs and risks of any such exchange, including without limitations, the
<PAGE>
58
risks of delay and exchange rate fluctuation, shall be borne by the Company;
the Company shall remain fully liable for any shortfall or delinquency in the
full amount of Required Currency then due and payable, and in no circumstances
shall the Trustee be liable therefor. The Company hereby waives any defense of
payment based upon any such tender or recovery which is not in the Required
Currency, or which, when exchanged for the Required Currency by the Trustee,
is less than the full amount of Required Currency then due and payable.
<PAGE>
59
SIGNATURES
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and at-
tested, all as of the date first written above.
ANR Pipeline Company
[SEAL]
/s/ David A. Arledge
By: ----------------------------------------
Name: David A. Arledge
Title: Senior Executive Vice President
/s/ Austin M. O'Toole
Attest:---------------------------
Name: Austin M. O'Toole
Title: Senior Vice President
and Assistant Secretary
Comerica Bank
/s/ James Kowalski
By: ----------------------------------------
Name: James Kowalski
Title: Trust Administrator
<PAGE>
EXHIBIT A
[Form of Face of Security]
[The following is to be included if the Security is an Original Issue Dis-
count Security:]
[FOR PURPOSES OF SECTION 1273 OF THE UNITED STATES INTERNAL REVENUE CODE OF
1986, AS AMENDED: (I) THE ISSUE DATE OF THIS SECURITY IS ; (II) THE YIELD
TO MATURITY IS %; (III) THE ORIGINAL ISSUE DISCOUNT PER $ FACE AMOUNT
AT WHICH THE SECURITY IS ISSUED IS $ ; AND (IV) THE [EXACT] [APPROXIMATE]
METHOD HAS BEEN USED TO DETERMINE YIELD FOR THE ACCRUAL PERIOD BEGINNING
AND ENDING AND THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT PER $ FACE
AMOUNT ALLOCABLE TO THE ACCRUAL PERIOD BEGINNING AND ENDING IS
$ ].
ANR Pipeline Company
[Title of Security]
<TABLE>
<CAPTION>
RATE OF INTEREST MATURITY DATE ORIGINAL ISSUE DATE
- ---------------- ------------- -------------------
<S> <C> <C>
</TABLE>
No.
ANR Pipeline Company, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), for value re-
ceived, hereby promises to pay to or registered assigns, the principal
sum of on the Maturity Date shown above, and to pay interest thereon, at
the annual rate of interest shown above, from the Original Issue Date shown
above or from the most recent Interest Payment Date (as hereinafter defined)
to which interest has been paid or duly provided for, payable semi-annually on
and of each year and at maturity (an "Interest Payment Date"),
commencing on the first such date after the Original Issue Date, except that
if the Original Issue Date is on or after a
<PAGE>
A-2
Regular Record Date but before the next Interest Payment Date, interest pay-
ments will commence on the second Interest Payment Date following the Original
Issue Date.
[reference to currency[ies] of payment and currency exchange arrangements, if
applicable.]
The interest so payable, and punctually paid or duly provided for, on any In-
terest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this [name of Security] is registered at the close of business
on the Regular Record Date for any such Interest Payment Date, which shall be
the fifteenth calendar day (whether or not a Business Day) preceding the ap-
plicable Interest Payment Date. Any such interest not so punctually paid or
duly provided for, and any interest payable on such defaulted interest (to the
extent lawful), will forthwith cease to be payable to the Holder on such Regu-
lar Record Date and shall be paid to the person in whose name this [name of
Security] is registered at the close of business on a special record date for
the payment of such defaulted interest to be fixed by the Company, notice of
which shall be given to Holders of [name of Series] not less than 15 days
prior to such special record date. Payment of the principal of and interest on
this [name of Security] will be made at the agency of the Company maintained
for that purpose in [New York, New York or other place of payment] and at any
other office or agency maintained by the Company for such purpose, in [refer-
ence to United States dollars or other currency of payment]; provided, howev-
er, that at the option of the Company payment of interest, other than interest
due on the Maturity Date, may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Security Register.
[Include the following, if applicable:] Payments on the Maturity Date will be
made in immediately available funds against presentment of this [name of Secu-
rity].
Reference is hereby made to the further provisions of this [name of Security]
set forth on the reverse hereof, which further provisions shall for all pur-
poses have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this [name of
Security] shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
<PAGE>
A-3
In Witness Whereof, ANR Pipeline Company has caused this instrument to be ex-
ecuted in its corporate name by the facsimile signature of its duly authorized
officers and has caused a facsimile of its corporate seal to be affixed here-
unto or imprinted hereon.
ANR Pipeline Company
By: ________________________________________
[Title of Officer]
Attest:
___________________________________
[Assistant] Secretary
DATED:
Trustee's Certificate of Authentication
This is one of the [name of Series] referred to in the within-mentioned In-
denture.
Comerica Bank
By: ________________________________________
Authorized Signatory
<PAGE>
A-4
[Reverse Side]
ANR Pipeline Company
[Name of Security]
This [name of Security] is one of a duly authorized issue of [name of Securi-
ties] of the Company (which term includes any successor corporation under the
Indenture hereinafter referred to) designated as its [title of Series] (the
"[name of Series]"), issued or to be issued pursuant to an Indenture,
dated as of , 1993 (the "Indenture"), between the Company and
Comerica Bank, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture); and under [reference to Authorizing Resolution
and/or supplemental indenture (if any) relating to the Series]. The terms of
this [name of Security] include those stated in the Indenture and [reference
to Authorizing Resolution and/or supplemental indenture (if any) relating to
the Series] and those made part of the Indenture by reference to the Trust In-
denture Act of 1939, as in effect on the date of the Indenture. Reference is
hereby made to the Indenture and all [further] supplemental indentures thereto
for a statement of the respective rights, limitation of rights, duties and im-
munities thereunder of the Company, the Trustee and the Holders and of the
terms upon which the [name of Security] are, and are to be, authenticated and
delivered.
This [name of Series] is a Series of Securities issued or to be issued by the
Company under the Indenture, and this Series is limited in aggregate principal
amount to $ . The Indenture provides that the Securities of the Company re-
ferred to therein ("Securities"), including the [name of Series], may be is-
sued in one or more Series, which different Series may be issued in such ag-
gregate principal amounts and on such terms (including, but not limited to,
terms relating to interest rate or rates, provisions for determining such in-
terest rate or rates and adjustments thereto, maturity, redemption (optional
and mandatory), sinking fund, covenants and Events of Default) as may be pro-
vided in or pursuant to the Authorizing Resolutions and/or supplemental inden-
ture (if any) relating to the several Series.
[The following to be included if the Securities are not redeemable prior to
maturity.]
This [name of Security] may not be redeemed prior to its Maturity Date.
<PAGE>
A-5
[The following paragraph, or other appropriate redemption provisions, to be
included if the Securities are Redeemable Securities:]
The [name of Series] are subject to redemption upon not less than 30 nor more
than 60 days' notice by mail, [the following clause to be included if there is
a Sinking Fund:] [ (1) on [annual Sinking Fund Redemption Date] in each year
commencing with the year [year of first Sinking Fund payment] through opera-
tion of the Sinking Fund at a Redemption Price equal to their principal amount
and (2)] [at any time or from time to time] in whole or in part, at the elec-
tion of the Company at a Redemption Price equal to the percentage set forth
below of the principal amount to be redeemed for the respective twelve-month
periods beginning [ ] of the years indicated:
[Schedule of Redemption Prices]
and thereafter at 100% of the principal amount thereof, together in each case
with accrued interest to the Redemption Date.
[The following paragraph, or other appropriate Sinking Fund provision, to be
included if there is a Sinking Fund for the Series:]
The Sinking Fund provides for the redemption on [first Sinking Fund Redemp-
tion Date] and on [annual Sinking Fund Redemption Date] in each year thereaf-
ter through [year of final Sinking Fund date] of not less than [minimum re-
quired Sinking Fund redemption amount] principal amount nor more than [maximum
permitted Sinking Fund redemption amount] principal amount of [name of Se-
ries]. [name of Series] purchased, acquired or redeemed by the Company other-
wise than by redemption through the Sinking Fund may be credited against Sink-
ing Fund requirements to the extent not previously so credited.
<PAGE>
A-6
[The following paragraph to be included if the Securities are Redeemable Se-
curities or Sinking Fund Securities:]
If an event of redemption of this [name of Security] in part only, a new
[name of Security] or [name of Series] for the unredeemed portion hereof shall
be issued in the name of the Holder hereof upon the surrender hereof.
[The following paragraph to be included if the Securities are not Original
Issue Discount Securities:]
If an Event of Default, as defined in the Indenture and in the Authorizing
Resolution and/or supplemental indenture (if any) relating to the [name of Se-
ries] (if there shall be any additional Events of Default specified in respect
of the [name of Series]), shall occur and be continuing, the principal of all
the [name of Series] may be declared due and payable in the manner and with
the effect provided in the Indenture.
[If the Securities are Original Issue Discount Securities, insert schedule as
to amounts which are payable on acceleration under Section 6.02 and provable
in bankruptcy under Section 6.09 from time to time.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the [name of Series] under the Inden-
ture at any time by the Company and the Trustee with the consent of the Hold-
ers of a majority in aggregate principal amount of the Securities affected
thereby, voting as a single class (which may include the [name of Series]), at
the time outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Securi-
ties at the time outstanding to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this [name of
Security] shall be conclusive and binding upon such Holder and upon all future
Holders of this [name of Security] and of any [name of Security] issued upon
the registration of transfer hereof or in exchange herefor in lieu hereof,
whether or not notation of such consent or waiver is made upon this [name of
Security].
The Indenture provides that no Holder may pursue any remedy under the Inden-
ture unless the Trustee shall have failed to act after notice of an Event of
<PAGE>
A-7
Default and written request by Holders of at least 25% in principal amount of
the [name of Securities] of the applicable Series and the offer to the Trustee
of indemnity satisfactory to it; however, such provision does not affect the
right to sue for enforcement of any overdue payment on any Security.
No reference herein to the Indenture and no provision of this [name of Secu-
rity] or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this [name of Security] at the times, places and rates, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this [name of Security] is registrable in the Security
Register upon surrender of this [name of Security] for registration of trans-
fer at the agency of the Company provided for that purpose duly endorsed by,
or accompanied by a written instrument of transfer in substantially the form
accompanying this [name of Security] duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new [name
of Series], of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The [name of Series] are issuable only in registered form without coupons in
denominations of [currency and minimum denomination] and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the [name of Series] are exchangeable for a like aggregate
principal amount of [name of Series] of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or ex-
change, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable
upon exchanges pursuant to Section 2.11, 3A.08 or 9.05 in which case such
transfer taxes or similar governmental charges shall be paid by the Company).
Prior to due presentment of this [name of Security] for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this [name of Security] is registered as
the
<PAGE>
A-8
owner hereof for all purposes, whether or not this [name of Security] be over-
due, and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
[Reference to Foreign Currencies]
All terms used in this [name of Security] which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Customary abbreviations may be used in the name of a [name of Security]
holder or any assignee, such as: TEN COM ( = tenants in common), TEN ENT
( = tenants by the entireties), JT TEN ( = joint tenants with right of survi-
vorship and not as tenants in common), CUST ( = Custodian) and U/G/M/A
( = Uniform Gifts to Minors Act).
The Company will furnish to any [name of Security] holder of record, upon
written request, without charge, a copy of the Indenture. Requests may be made
to: ANR Pipeline Company, c/o The Coastal Corporation, Coastal Tower, Nine
Greenway Plaza, Houston, Texas 77046-0995, Attention: Corporate Secretary.
<PAGE>
A-9
ASSIGNMENT FORM
If you the holder want to assign this [name of Security], fill in the form
below and have your signature guaranteed:
I or we assign and transfer this [name of Security] to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(PRINT OR TYPE NAME, ADDRESS AND ZIP CODE AND
SOCIAL SECURITY OR TAX ID NUMBER OF ASSIGNEES)
and irrevocably appoint, _______________________________agent to transfer this
[name of Security] on the books of the Company. The agent may substitute another
to act for him.
Dated: _________________________ Signed: __________________________________
__________________________________________
(SIGN EXACTLY AS NAME APPEARS ON THE
OTHER SIDE OF THIS [NAME OF SECURITY] )
SIGNATURE GUARANTEE: __________________________________________________________
Notice: Signature(s) must be guaranteed by a member firm of the New York
Stock Exchange or a commercial bank or trust company.
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EXHIBIT 19-1
EMPLOYMENT AGREEMENT
THIS AGREEMENT between ANR Pipeline Company, a Delaware corporation
(the "Corporation"), and ___________________ (the "Executive"), dated this
____________ day of _______________________.
WITNESSETH THAT:
WHEREAS, the Corporation wishes to attract and retain well qualified
executive and key personnel and to assure both itself and the Executive of
continuity of management;
NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Effective Date. The "effective date of this Agreement" shall
be ___________________________ _____.
2. Employment. The Corporation hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Corporation, for the period commencing on the effective date
of this Agreement and ending on the third anniversary of such date or the
Executive's normal retirement date under the Corporation's retirement plan
now in effect (the "employment period"), whichever is earlier, to exercise
such authority and perform such executive duties as are commensurate with
the authority being exercised and duties being performed by the Executive
immediately prior to the effective date of this Agreement, which services
shall be performed in the general metropolitan location where the Executive
was employed immediately prior to the effective date of this Agreement. The
Executive agrees that during the employment period he shall devote his full
time exclusively to his executive duties as in effect on the effective date
of this Agreement and attributed to his executive position and title on such
date and to perform such duties faithfully and efficiently.
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3. Compensation, Compensation Plans, Perquisites. During the
employment period, the Executive shall be compensated as follows:
(a) He shall receive an annual salary at a rate which is not
less than his rate of annual salary immediately prior to
the effective date of this Agreement, with increases from
time to time thereafter, which are in accordance with the
Corporation's salary increase standards for management
level employees.
(b) He shall be eligible to participate on a reasonable basis
in The Coastal Corporation Stock Option Plan and ANR
Annual Management Incentive Plan and other incentive
compensation plans provided by the Corporation for
executives with comparable duties in accordance with the
Corporation's regular practices.
(c) He shall be entitled to receive employee benefits and
perquisites which are comparable in the aggregate with
those to which he was entitled immediately prior to the
effective date of this Agreement after giving effect to
his service since that date. Such benefits and perquisites
shall include those listed on Exhibit A hereto. It is
understood that particular changes may be made in the
benefits program in an effort to merge the benefits of The
Coastal Corporation and American Natural Resources
Company. The parties agree that, if such changes are made,
the Executive shall receive benefits which are, in the
aggregate, the substantial economic equivalent of the
benefits received immediately prior to the effective date
of this Agreement as determined by an independent actuary.
4. Termination. The term "termination" shall mean (a) termination
by the Corporation of the employment of the Executive with the Corporation
for any reason, other than death, disability or cause, or (b) termination as
the result of any resignation of the Executive upon the occurrence of any of
the following events:
(a) A significant change in the Executive's title, duties,
authorities or reporting responsibilities in effect
immediately prior to the effective date of this Agreement.
(b) A reduction in salary from that referred to in Section
3(a) or a termination of, or significant reduction in,
employee benefits and perquisites referred to in
Section 3(b) or Section 3(c) as in effect on the effective
date of this Agreement.
(c) A move of the location of the Executive's office to a
location outside of the general metropolitan area in which
such office is located prior to the effective date of this
Agreement.
The term "cause" means fraud, misappropriation or intentional material
damage to the property or business of the Corporation or commission of a
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felony. The term "disability" shall mean an Executive's inability to perform
the duties and responsibilities of his position by reason of any medically
determinable physical or mental impairment which can be expected to be of
long, continued or indefinite duration.
5. Termination Payments. In the event of a termination and
subject to the provisions of Sections 6 and 7 of this Agreement, the
Corporation shall pay to the Executive and provide him with the following:
(a) During the remainder of the employment period, the
Corporation shall continue to pay the Executive his salary
on a monthly basis at the rate required by paragraph 3(a)
and in effect immediately prior to the date of termination
plus (1) salary increases from time to time thereafter,
which are in accordance with the Corporation's salary
increase standards for management level employees and (2)
bonuses and other incentive compensation from time to time
thereafter, which are in accordance with the Corporation's
regular practices and which he would have received had he
remained in the employ of the Corporation for the
remainder of the employment period; such bonuses and other
incentive compensation shall be substantially equivalent
to bonuses and other incentive compensation paid to
executives remaining in the employ of the Corporation.
(b) During the remainder of the employment period, the
Executive shall continue to be treated as an employee
under the provisions of the Corporation's Plans referred
to in paragraph 3(b). In addition, the Executive shall
continue to be entitled to all benefits and service
credits for benefits, programs and arrangements of the
Corporation referred to in paragraph 3(c) as if he were
still employed during such period under this Agreement.
(c) If, despite the provisions of paragraph (b) above,
benefits or service credits under any employee benefit
plan shall not be payable or provided under any such plan
to the Executive, or his dependents, beneficiaries and
estate, because he is no longer an employee of the
Corporation, the Corporation itself shall, to the extent
necessary, pay or provide for payment of such benefits to
the Executive, his dependents, beneficiaries and estate.
(d) If, despite the provisions of paragraph (b) above,
benefits or the right to accrue further benefits under any
Plan referred to in paragraph 3(b) shall not be provided
under any such Plans to the Executive, or his dependents,
beneficiaries and estate, because he is no longer an
employee of the Corporation, the Corporation shall, to the
extent necessary, provide, pay or provide for payment of
such benefits to the Executive, his dependents,
beneficiaries and estate.
6. Non-Competitive and Confidentiality. The Executive agrees
that:
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(a) There shall be no obligation on the part of the
Corporation to provide any further payments or benefits
(other than benefits or payments already earned or
accrued) described in Section 5 if, during the employment
period, the Executive shall be employed by or otherwise
engaged or be interested (other than as a passive investor
in a publicly owned entity) in any business which is in
direct substantial competition with any business of the
Corporation or any subsidiary or affiliate in which the
Executive was actively engaged during his employment prior
to termination; and
(b) During and after the employment period, he shall retain in
confidence any confidential information known to him
concerning the Corporation and its subsidiaries and their
respective businesses so long as such information is not
publicly disclosed.
7. No Obligation to Mitigate Damages. The Executive shall not be
obligated to seek other employment in mitigation of amounts payable or
arrangements made under the provisions of this Agreement and the obtaining
of any such other employment shall in no event affect any reduction of the
Corporation's obligations to make the payments and arrangements required to
be made under this Agreement.
8. Indemnification. If litigation shall be brought to enforce or
interpret any provision hereof by either party or any other person, the
Corporation to the extent permitted by applicable law hereby agrees to
indemnify the Executive for his reasonable attorney's fees and disbursements
incurred in such litigation, and the Corporation hereby agrees to pay
prejudgment interest on any money judgment obtained by the Executive in such
litigation calculated at the prime interest rate at the National Bank of
Detroit in effect from time to time from the date the payment should have
been made to the Executive under this Agreement.
9. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in
writing and if sent by registered or certified mail to the Executive at the
last address he has filed in writing with the Corporation or, in the case of
the Corporation, at its principal executive offices.
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10. Non-Alienation. The Executive shall not have any right to
pledge, hypothecate, anticipate or in any way create a lien or security
interest upon any amounts provided under this Agreement; and no benefits
payable hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts, or by operation of law, except by will or the
laws of descent and distribution.
11. Governing Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Michigan.
12. Amendment. This Agreement may be amended or cancelled by
mutual agreement of the parties in writing without the consent of any other
person and, so long as the Executive lives, no person, other than the
parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof.
13. Successor to the Corporation. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
Corporation and any successor of the Corporation.
14. Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason in any jurisdiction, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect in such
jurisdiction and any such invalid or unenforceable provision shall not be
considered invalid or unenforceable in any other jurisdiction.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Corporation
has caused these presents to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary, all as
of the day and year first above written.
_______________________________
Executive
ANR PIPELINE COMPANY
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By ____________________________
Its Chairman
ATTEST:
____________________________
Secretary
(SEAL)
6
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EXHIBIT A
ANR System Companies Employees' Retirement Plan
ANR System Companies Employees' Savings Plan
ANR System Companies Employee Stock Ownership Plan
ANR System Supplemental Death Benefit and Retirement Income Plan
ANR Long Term Disability Plan
ANR Life Insurance Plan
ANR Voluntary Accident Insurance
ANR Business Travel Accident Plan
ANR Surviving Spouse's Annuity Plan
ANR Health Insurance Plan (including major medical)
ANR Dental Plan
ANR Deferred Salary Plan
ANR Non-Qualified Retirement Plans
ANR Non-Qualified Savings Plan
ANR Split Dollar Insurance Plan
Company Car Plan
Physical Examination (including diagnostic referral) Plan
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EXHIBIT 19-2
EMPLOYMENT AGREEMENT
THIS AGREEMENT between The Coastal Corporation, a Delaware corporation
(the "Corporation"), and ____________________ (the "Executive"), dated this
____________ day of ____________________.
WITNESSETH THAT:
WHEREAS, the Corporation wishes to attract and retain well qualified
executive and key personnel for ANR Pipeline Company (the "Employer") and to
assure both itself and the Executive of continuity of management;
NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Effective Date. The "effective date of this Agreement" shall be
__________________________________.
2. Employment. The Corporation hereby agrees to cause the Employer
to continue the Executive in its employ, and the Executive hereby agrees to
remain in the employ of the employer, for the period commencing on the
effective date of this Agreement and ending on the fifth anniversary of such
date or the Executive's normal retirement date under the Employer's
retirement plan now in effect (the "employment period"), whichever is
earlier, to exercise such authority and perform such executive duties as are
commensurate with the authority being exercised and duties being performed
by the Executive immediately prior to the effective date of this Agreement,
which services shall be performed in the general metropolitan location where
the Executive was employed immediately prior to the effective date of this
Agreement. The Executive agrees that during the employment period he shall
devote his full time exclusively to his executive duties as in effect on the
effective date of this Agreement and attributed to his executive position
and title on such date and to perform such duties faithfully and
efficiently.
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3. Compensation, Compensation Plans, Perquisites.
During the employment period, the Executive shall be compensated
as follows:
(a) He shall receive an annual salary at a rate which is not
less than his rate of annual salary immediately prior to
the effective date of this Agreement, with increases from
time to time thereafter, which are in accordance with the
Employer's salary increase standards for management level
employees.
(b) He shall be eligible to participate on a reasonable basis
in The Coastal Corporation Stock Option Plan and ANR Annual
Management Incentive Plan and other incentive compensation
plans provided by the Employer for executives with
comparable duties in accordance with the Employer's regular
practices.
(c) He shall be entitled to receive employee benefits and
perquisites which are comparable in the aggregate with
those to which he was entitled immediately prior to the
effective date of this Agreement after giving effect to his
service since that date. Such benefits and perquisites
include those listed on Exhibit A hereto. It is understood
that particular changes may be made in the benefits program
in an effort to merge the benefits of The Coastal
Corporation and American Natural Resources Company. The
parties agree that, if such changes are made, the Executive
shall receive benefits which are, in the aggregate, the
substantial economic equivalent of the benefits received
immediately prior to the effective date of this Agreement
as determined by an independent actuary.
4. Termination. The term "termination" shall mean (a) termination by
the Employer of the employment of the Executive with the Employer for any
reason, other than death, disability or cause, or (b) termination as the
result of any resignation of the Executive upon the occurrence of any of the
following events:
(a) A significant change in the Executive's title, duties,
authorities or reporting responsibilities in effect
immediately prior to the effective date of this Agreement.
(b) A reduction in salary from that referred to in Section 3(a)
or a termination of, or significant reduction in, employee
benefits and perquisites referred to in Section 3(b) or
Section 3(c) as in effect on the effective date of this
Agreement.
(c) A move of the location of the Executive's office to a
location outside of the general metropolitan area in which
such office is located prior to the effective date of this
Agreement.
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The term "cause" means fraud, misappropriation or intentional material
damage to the property or business of the Corporation or commission of a
felony. The term "disability" shall mean an Executive's inability to perform
the duties and responsibilities of his position by reason of any medically
determinable physical or mental impairment which can be expected to be of
long, continued or indefinite duration.
5. Termination Payments. In the event of a termination and subject to
the provisions of Sections 6 and 7 of this Agreement, the Employer shall pay
to the Executive and provide him with the following:
(a) During the remainder of the employment period, the Employer
shall continue to pay the Executive his salary on a monthly
basis at the rate required by paragraph 3(a) and in effect
immediately prior to the date of termination plus (1)
salary increases from time to time thereafter, which are in
accordance with the Employer's salary increase standards
for management level employees and (2) bonuses and other
incentive compensation from time to time thereafter, which
are in accordance with the Employer's regular practices and
which he would have received had he remained in the employ
of the Employer for the remainder of the employment period;
such bonuses and other incentive compensation shall be
substantially equivalent to bonuses and other incentive
compensation paid to executives remaining in the employ of
the Corporation.
(b) During the remainder of the employment period, the
Executive shall continue to be treated as an employee under
the provisions of the Employer's Plans referred to in
paragraph 3(b). In addition, the Executive shall continue
to be entitled to all benefits and service credits for
benefits, programs and arrangements of the Employer
referred to in paragraph 3(c) as if he were still employed
during such period under this Agreement.
(c) If, despite the provisions of paragraph (b) above, benefits
or service credits under any employee benefit plan shall
not be payable or provided under any such plan to the
Executive, or his dependents, beneficiaries and estate,
because he is no longer an employee of the Employer, the
Employer itself shall, to the extent necessary, pay or
provide for payment of such benefits to the Executive, his
dependents, beneficiaries and estate.
(d) If, despite the provisions of paragraph (b) above, benefits
or the right to accrue further benefits under any Plan
referred to in paragraph 3(b) shall not be provided under
any such Plans to the Executive, or his dependents,
beneficiaries and estate, because he is no longer an
employee of the Employer, the Employer shall, to the extent
necessary, provide, pay or provide for payment of such
benefits to the Executive, his dependents, beneficiaries
and estate.
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6. Non-Competitive and Confidentiality. The Executive agrees that:
(a) There shall be no obligation on the part of the Employer to
provide any further payments or benefits (other than
benefits or payments already earned or accrued) described
in Section 5 if, during the employment period, the
Executive shall be employed by or otherwise engaged or be
interested (other than as a passive investor in a publicly
owned entity) in any business which is in direct
substantial competition with any business of the
Corporation or any subsidiary or affiliate in which the
Executive was actively engaged during his employment; and
(b) During and after the employment period, he shall retain in
confidence any confidential information known to him
concerning the Corporation and its subsidiaries and their
respective businesses so long as such information is not
publicly disclosed.
7. No Obligation to Mitigate Damages. The Executive shall not be
obligated to seek other employment in mitigation of amounts payable or
arrangements made under the provisions of this Agreement and the obtaining
of any such other employment shall in no event affect any reduction of the
Employer's obligations to make the payments and arrangements required to be
made under this Agreement.
8. Indemnification. If litigation shall be brought to enforce or
interpret any provision hereof by either party or any other person, the
Employer to the extent permitted by applicable law hereby agrees to
indemnify the Executive for his reasonable attorney's fees and disbursements
incurred in such litigation, and the Employer hereby agrees to pay
prejudgment interest on any money judgment obtained by the Executive in such
litigation calculated at the prime interest rate at the National Bank of
Detroit in effect from time to time from the date the payment should have
been made to the Executive under this Agreement.
9. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent
by registered or certified mail to the Executive at the last address he has
filed in writing with the Employer or, in the case of the Employer, at its
principal executive offices.
10. Non-Alienation. The Executive shall not have any right to pledge,
hypothecate, anticipate or in any way create a lien or security interest
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upon any amounts provided under this Agreement and no benefits payable
hereunder shall be assignable in anticipation of payment either by voluntary
or involuntary acts, or by operation of law, except by will or the laws of
descent and distribution.
11. Governing Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Michigan.
12. Amendment. This Agreement may be amended or cancelled by mutual
agreement of the parties in writing without the consent of any other person
and, so long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement or the
subject matter hereof.
13. Successor to the Corporation or Employer. Except as otherwise
provided herein, this Agreement shall be binding upon and inure to the
benefit of the Corporation, the Employer and any successor of the
Corporation or the Employer.
14. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason
in any jurisdiction, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect in such
jurisdiction and any such invalid or unenforceable provision shall not be
considered invalid or unenforceable in any other jurisdiction.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Corporation
has caused these presents to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary, all as
of the day and year first above written.
________________________________
Executive
THE COASTAL CORPORATION
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By_______________________________
Its President
ATTEST:
____________________________
Secretary
(SEAL)
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The Employer hereby accepts and agrees to this Agreement and has caused
these presents to be executed in its name and behalf, and its corporate seal
to be hereunto affixed and attested by its Secretary, all as of the day and
year first above written.
ATTEST: __________________________COMPANY
_____________________________ BY ______________________________
Secretary Its Chairman
(SEAL)
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EXHIBIT A
ANR System Companies Employees' Retirement Plan
ANR System Companies Employees' Savings Plan
ANR System Companies Employee Stock Ownership Plan
ANR System Supplemental Death Benefit and Retirement Income Plan
ANR Long Term Disability Plan
ANR Life Insurance Plan
ANR Voluntary Accident Insurance
ANR Business Travel Accident Plan
ANR Surviving Spouse's Annuity Plan
ANR Health Insurance Plan (including major medical)
ANR Dental Plan
ANR Deferred Salary Plan
ANR Non-Qualified Retirement Plans
ANR Non-Qualified Savings Plan
ANR Split Dollar Insurance Plan
Country & Luncheon Club Memberships Plan
Financial Counselling Plan
Company Car Plan
Physical Examination (including diagnostic referral) Plan
ANR Deferred Salary Retirement Plan
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EXHIBIT 21
SUBSIDIARIES OF ANR PIPELINE COMPANY
State of
Incorporation
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ANR Atlantic Pipeline CompanyDelaware
ANR Eastern Pipeline CompanyDelaware
ANR Energy Conversion CompanyMichigan
ANR Iroquois, Inc.Delaware
ANR Mayflower CompanyDelaware
ANR Southern Pipeline CompanyDelaware
American Natural Offshore CompanyDelaware
Subsidiaries:
Texas Offshore Pipeline System, Inc.Delaware
Unitex Offshore Transmission CompanyDelaware
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Exhibit 23.1
CONSENT OF DELOITTE & TOUCHE
We consent to the incorporation by reference in Registration Statement No.
33-50375 of ANR Pipeline Company on Form S-3 of our report dated February 3,
1994, appearing in this Annual Report on Form 10-K of ANR Pipeline Company for
the year ended December 31, 1993.
DELOITTE & TOUCHE
Houston, Texas
March 25, 1994