<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
FORM U5S
ANNUAL REPORT
For the Fiscal Year Ended September 30, 1994
Filed Pursuant to the
Public Utility Holding Company Act of 1935
by
NATIONAL FUEL GAS COMPANY
10 Lafayette Square, Buffalo, N. Y. 14203
<PAGE 2>
NATIONAL FUEL GAS COMPANY
FORM U5S - ANNUAL REPORT
For the Fiscal Year Ended September 30, 1994
TABLE OF CONTENTS
Page
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF
SEPTEMBER 30, 1994 3
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS 7
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF
SYSTEM SECURITIES 7
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM
SECURITIES 8
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES 9
ITEM 6. OFFICERS AND DIRECTORS
Part I. Names, principal business address and
positions held as of September 30, 1994 11
Part II. Financial connections as of September 30, 1994 13
Part III. Compensation and other related information 13
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS 17
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Intercompany sales and services
(1) Salaries of officers of the Registrant 18
(2) Services rendered by Statutory Subsidiaries 19
(3) Services rendered by Registrant 26
Part II. Contracts to purchase services or goods
between any System company and any affiliate 27
Part III. Employment of any person by any System
company for the performance on a continuing
basis of management services 27
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES 27
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements (Index) 28
Exhibits 43
SIGNATURE 48
<PAGE 3>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1994
Number of Common Percent of Issuer Owner's
Name of Company Shares Owned Voting Power Book Value Book Value
Registrant: (Thousands of Dollars)
National Fuel Gas Company
(Parent, Company or Registrant) - - - -
Statutory Subsidiaries:
National Fuel Gas Distribution
Corporation (Distribution
Corporation) (Note 1) 2,000 100% $386,064 $386,064
Unsecured Debt (Note 9) - - $401,600 $401,600
National Fuel Gas Supply Corporation
(Supply Corporation) (Note 2
and 12) 1,013,802 100% $195,902 $195,902
Unsecured Debt (Note 9) - - $230,865 $230,865
Seneca Resources Corporation
(Seneca Resources) (Note 3
and 12) 100,000 100% $109,539 $109,539
Unsecured Debt (Note 9) - - $133,000 $133,000
Empire Exploration Company
(Note 10) $ 449,200 N/A $ 449 $ 449
Empire 1983 Drilling
Program (Note 10) $ 449,200 N/A $ 449 $ 449
Empire 1983 Joint Venture
(Note 10) $ 970,150 N/A $ 970 $ 970
Highland Land & Minerals, Inc.
(Highland) (Note 4) 4,500 100% $ 4,440 $ 4,440
Utility Constructors, Inc.
(UCI) (Note 5) 1,000 100% $ 2,890 $ 2,890
Unsecured Debt (Note 9) - - $ 7,300 $ 7,300
Data-Track Account Services, Inc.
(Data-Track) (Note 6) 1,000 100% $ 583 $ 583
Leidy Hub, Inc. (Leidy Hub)
(Note 7) 4,000 100% $ 572 $ 572
Unsecured Debt (Note 9) - - $ 200 $ 200
Ellisburg-Leidy Northeast Hub
Company Partnership
(Note 11) $ 14 N/A $ 14 $ 14
National Fuel Resources, Inc.
(NFR) (Note 8) 10,000 100% $ 5,660 $ 5,660
<PAGE 4>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1994
(Continued)
Notes:
(1) Distribution Corporation is a public utility that sells natural gas and
provides gas transportation service in western New York and northwestern
Pennsylvania.
(2) Supply Corporation is engaged in the transportation and storage of
natural gas for System and nonaffiliated companies.
(3) Seneca Resources is engaged in the exploration for, and the development
and purchase of, natural gas and oil reserves in the Gulf Coast of Texas
and Louisiana, in California, and in the Appalachian region of the United
States. In addition, Seneca is engaged in the marketing of timber from
its Pennsylvania land holdings.
(4) Highland operates a sawmill and kiln in Kane, Pennsylvania.
(5) UCI is engaged in pipeline construction and other construction work for
the System and nonaffiliated companies, and is headquartered in
Linesville, Pennsylvania.
(6) Data-Track provides collection services for the subsidiaries of the
Company, particularly Distribution Corporation, primarily through the
issuance of collection notices.
(7) Leidy Hub (formerly Enerop Corporation) is a partner in the
Ellisburg-Leidy Northeast Hub Company, which operates a natural gas
market area hub in northcentral Pennsylvania serving the consuming
regions of the Northeast, Mid-Atlantic and Canada.
(8) NFR is engaged in the marketing and brokerage of natural gas and performs
energy management services for utilities and end-users.
(9) Unsecured debt is presented on page 6.
(10) In December 1983, Empire Exploration, Inc. (which was subsequently merged
into Seneca Resources effective July 1, 1994) established a drilling fund
through a series of limited partnerships in which it acts as general
partner (See File No. 70-6909). Empire Exploration, Inc. made a cash
investment of $449,200 in Empire Exploration Company, a limited
partnership. Empire Exploration Company paid such cash investment of
$449,200 plus other sums to, and various limited partners made cash
investments in, the Empire 1983 Drilling Program, another limited
partnership. Empire 1983 Drilling Program made a cash investment in
Empire 1983 Joint Venture, of $9,903,990 (of which $449,200 represents
the Empire Exploration, Inc. indirect investment), and Empire
Exploration, Inc. invested an additional $520,950 in Empire 1983 Joint
Venture. Thus, Empire Exploration, Inc.'s aggregate investment in all
three limited partnerships amounted to $970,150. This amount is included
in Seneca Resources' Paid In Capital of $104,035,000 at September 30,
1994.
<PAGE 5>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1994
(Continued)
None of the three limited partnerships has issued common stock; the
numbers listed with respect thereto under the first column represent
dollars.
(11) Leidy Hub and Hub Services, Inc. (a wholly-owned subsidiary of Natural
Gas Clearinghouse) entered into a Partnership Agreement on September 1,
1994 to form Ellisburg-Leidy Northeast Hub Company (the Partnership).
Leidy Hub and Hub Services, Inc. each has a 50% interest in the
Partnership.
The Partnership has not issued any common stock; the numbers listed with
respect thereto under the first column represent dollars.
(12) Effective January 1, 1994, Supply Corporation's exploration and
production assets were transferred to Empire Exploration Inc. at book
value. Effective July 1, 1994, Penn-York Energy Corporation was merged
into Supply Corporation and Empire Exploration, Inc. was merged into
Seneca Resources. Both mergers were accounted for at historical cost, in
a manner similar to a pooling of interests. Information provided
throughout this report is for the merged entities.
<PAGE 6>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1994
(Concluded)
Note (9) Unsecured Debt
Principal Issuer Owner's
Name of Company Amount Book Book
(Issuer) Security Owned by Registrant Owed Value Value
(Thousands of Dollars)
Distribution
Corporation Intercompany Notes:
6.24% Due May 1, 1995 $ 20,000 $ 20,000 $ 20,000
6.21% Due May 1, 1995 23,000 23,000 23,000
9.45% Due June 8, 1995 20,000 20,000 20,000
6.23% Due June 23, 1995 1,000 1,000 1,000
9.03% Due December 18, 1995 8,000 8,000 8,000
9.00% Due December 18, 1995 9,000 9,000 9,000
9.03% Due December 20, 1995 13,000 13,000 13,000
6.54% Due November 5, 1997 7,000 7,000 7,000
6.71% Due February 4, 2000 50,000 50,000 50,000
7.99% Due February 1, 2004 100,000 100,000 100,000
7.46% Due March 30, 2023 49,000 49,000 49,000
8.55% Due July 15, 2024 20,000 20,000 20,000
5.0573% System Money Pool* 81,600 81,600 81,600
401,600 401,600 401,600
Supply
Corporation Intercompany Notes:
9.03% Due December 18, 1995 17,500 17,500 17,500
9.00% Due December 18, 1995 11,000 11,000 11,000
6.54% Due November 5, 1997 25,000 25,000 25,000
7.37% Due July 14, 1999 50,000 50,000 50,000
7.99% Due February 1, 2004 25,000 25,000 25,000
8.44% Due November 10, 2012 50,965 50,965 50,965
8.55% Due July 15, 2024 30,000 30,000 30,000
5.0573% System Money Pool* 21,400 21,400 21,400
230,865 230,865 230,865
Seneca
Resources Intercompany Notes:
6.21% Due May 1, 1995 32,000 32,000 32,000
4.66% Due September 9, 1996 30,000 30,000 30,000
6.54% Due November 5, 1997 18,000 18,000 18,000
5.0573% System Money Pool* 53,000 53,000 53,000
133,000 133,000 133,000
UCI 5.0573% System Money Pool* 7,300 7,300 7,300
Leidy Hub 5.0573% System Money Pool* 200 200 200
$772,965 $772,965 $772,965
*Interest rate represents weighted average of all short-term securities
outstanding at September 30, 1994, pursuant to System money pool arrangement,
S.E.C. File No. 70-8297 (Release Nos. 25964, 26076 and 26196).
<PAGE 7>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
None during fiscal year ended September 30, 1994.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
One Outer Continental Shelf Mineral Lessee's and Operator's bond executed
by Seneca Resources, as principal, and Aetna Casualty and Surety Company, as
surety, was outstanding during the year. This bond was in favor of the United
States of America and is required as security regarding Seneca Resources'
possible liabilities resulting from its operations under the Outer Continental
Shelf Lands Act. It is a blanket bond in the sum of $3,000,000. The blanket
bond extends to January 25, 1995. Seneca Resources paid a fee of $30,000 to
Aetna for acting as surety of this bond. This transaction is exempt pursuant
to Rule 45(b)(6) under the Public Utility Holding Company Act of 1935.
<PAGE 8>
<TABLE>
<CAPTION>
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
FISCAL YEAR ENDED SEPTEMBER 30, 1994
Name of Company Number of Shares or
Acquiring, Redeeming Principal Amount Commission
Name of Issuer and Title of Issue or Retiring Securities Acquired Redeemed Retired Consideration Authorization
(Thousands of Dollars)
Registered Holding Company:
<S> <C> <C> <C> <C> <C> <C>
Registrant:
9.5% Debentures
Due July 1, 2019 Registrant $19,917 $ 21,337 Rule 42
Distribution Corporation:
8.55% Note maturing
July 15, 2024 Registrant $ 20,000 20,000 File No. 70-8143
Supply Corporation:
8.55% Note maturing
July 15, 2024 Registrant 30,000 30,000 File No. 70-8143
7.37% Note maturing
July 14, 1999 Registrant 50,000 50,000 File No. 70-8143
$121,337
Subsidiaries of Registered
Holding Company
Distribution Corporation:
9.5% Note Due July 1, 2019 Distribution Corp. 19,917 $21,337 Rule 42
Leidy Hub:
Ellisburg-Leidy
Northeast Hub Company
Partnership Leidy Hub 14 $14 File No. 70-8417
</TABLE>
<PAGE 9>
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
Number of Aggregate
1. Name of Owner Persons Business of Persons Investment
Distribution Corporation Two Municipalities and $ 1,088
Civic Organizations
Supply Corporation One Purchase of natural $ 81
gas and other
petroleum products
Name and
Business Description Owner's
2. Name of Owner of Issuer of Securities Book Value
Leidy Hub Metscan, Inc. 400,000 shares $447,439
A developer of of common stock*
an electronic
gas meter read-
ing device.
56,500 shares of $120,154
preferred A stock*
29,167 shares of $ 35,000
preferred B stock*
* In the aggregate, Leidy Hub has 4.79% voting power.
<PAGE 10>
THIS PAGE LEFT BLANK INTENTIONALLY
<PAGE 11>
<TABLE>
<CAPTION>
ITEM 6. OFFICERS AND DIRECTORS
Part I. Names, principal business address and positions held as of September 30, 1994
Names of System Companies with Which Connected
National Fuel National Fuel Seneca
Gas Distribution Gas Supply Resources
Registrant Corp. Corp. Corp.
<C> <C> <C> <C> <C>
B. J. Kennedy Buffalo, NY (1) D,COB,CEO,P,s D, COB, s D, COB, s s
B. S. Lee Des Plaines, IL (2) D, df - - -
J. M. Brown Buffalo, NY (1) D, df - - -
D. N. Campbell Buffalo, NY (1) D, df - - -
L. F. Kahl Niagara Falls, NY (3) D, df - - -
L. Rochwarger Buffalo, NY (5) D, df - - -
G. H. Schofield Erie, PA (7) D, df - - -
E. T. Mann Buffalo, NY (1) D, df - - -
P. C. Ackerman Buffalo, NY (1) D, SVP, s D ,EVP ,s EVP ,s D, P, s
J. A. Beck Houston, TX (8) - - - VP ,s
A. M. Cellino Buffalo, NY (1) AS, s VP, s - -
R. P. Borneman Buffalo, NY (1) - VP ,s s s
R. R. Davis Linesville, PA (6) - - - s
W. E. DeForest Buffalo, NY (1) - D, SVP, s s -
R. M. DiValerio Buffalo, NY (1) S, s - D, S, GC, s -
B. H. Hale Buffalo, NY (1) - D, SVP, s s -
R. Hare Buffalo, NY (1) - - D, P, s -
W. J. Hill Buffalo, NY (1) - D, P, s - -
S. D. Holbrook Buffalo, NY (1) - VP, s - -
R. J. Kreppel Buffalo, NY (1) - - - -
J. P. Pawlowski Buffalo, NY (1) T, s D, SVP, T, s T, s s
J. R. Pustulka Buffalo, NY (1) - - VP, s -
J. D. Ramsdell Buffalo, NY (1) VP, s - -
W. A. Ross Buffalo, NY (1) - - D, VP, s s
D. J. Seeley Buffalo, NY (1) - s D, SVP, s -
D. F. Smith Buffalo, NY (1) - D, SVP, S, s - D
R. J. Tanski Buffalo, NY (1) - GC, VP, s - s
P. A. Turek Erie, PA (4) - - D, VP, s -
G. T. Wehrlin Buffalo, NY (1) C, s D, SVP, C, s s D,S, T, C, s
R. W. Wilcox Buffalo, NY (1) - VP, s s s
R. J. Wright Buffalo, NY (1) - VP, s s -
<FN>
Position Symbol Key
COB - Chairman of the Board of Directors df - Director's Fees
CEO - Chief Executive Officer S - Secretary
P - President AS - Assistant Secretary
EVP - Executive Vice President C - Controller
SVP - Senior Vice President D - Director
VP - Vice President s - Salary
GC - General Counsel T - Treasurer
Notes
(1) National Fuel Gas Company, 10 Lafayette Square, Buffalo, New York 14203
(2) Institute of Gas Technology, 1700 So. Mt. Prospect Road, DesPlaines, IL 60018-1804
(3) The Carborundum Company, 345 Third St., Niagara Falls, NY 14303
(4) National Fuel Gas, 1100 State Street, Erie, Pennsylvania 16512
(5) Rockmont Corporation, 135 Delaware Avenue, Buffalo, New York 14202
</FN>
<PAGE 12>
<CAPTION>
Highland Utility Data-Track
Land & Constructors Account National Fuel Leidy-Hub,
Minerals, Inc. Inc. Services, Inc. Resources, Inc. Inc.
<C> <C> <C> <C> <C>
s COB, s s s D
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
D, P, s D, P, s D, P - -
- - - - -
- - - - -
- - - - -
- VP, s - - -
- - - - P, D
- - - - -
- - s s -
- - - - -
- - - - -
- - - - -
- - - VP, s -
S, T, s T, s T, s s -
- - - - -
- - - - -
- - - - -
- - - - -
D D, S D, S D, P, s -
- - - S, T -
- - - - -
D, s D, s D, s D, s S, T, D
s s s s -
s s s s -
<FN>
(6) Utility Constructors, Inc., P. O. Box 7, Linesville, Pennsylvania 16424
(7) Zurn Industries, Inc., One Zurn Plaza, Erie, PA 16505
(8) Seneca Resources Corp., 333 Clay St., Houston, Texas 77002
</FN>
</TABLE>
<PAGE 13>
Item 6. OFFICERS AND DIRECTORS (Continued)
Part II. Financial connections as of September 30, 1994:
Position Held Applicable
Name of Officer Name and Location of in Financial Exemption
or Director Financial Institution Institution Rule
D. N. Campbell Manufacturers & Traders
Trust Company,
Buffalo, New York Director 70 (a) (1)
First Empire State Corp-
oration,
Buffalo, New York Director 70 (a) (1)
B. J. Kennedy Marine Midland Bank
Buffalo, New York Director 70 (a) (1)
Part III. Compensation and other related information:
(A) Compensation of Directors and Executive Officers:
The information required by this item appears under "Directors'
Compensation," and "Executive Compensation," on page 5 and pages 7 to 21,
respectively, of National Fuel Gas Company Proxy Statement, dated January 5,
1995, included as exhibit A (4) to this Form U5S and is incorporated herein by
reference.
(B) Interest of executive officers and directors in securities of System
Companies including options or other rights to acquire securities:
The information required by this item appears under "Security
Ownership of Certain Beneficial Owners and Management," on pages 6 to 7 of
the National Fuel Gas Company Proxy Statement, dated January 5, 1995,
included as exhibit A (4) of this Form U5S and is incorporated herein by
reference.
(C) Contracts and Transactions with System Companies:
Exhibit No.
(Incorporated by Reference
as Indicated)
Executive Death Benefits Agreements dated
August 28, 1991 with Bernard J. Kennedy. 10-TT (2)
Split Dollar Death Benefits Agreement dated
April 1, 1991 with Richard Hare (errata). 10.9 (6)
Executive Death Benefits Agreement dated
April 1, 1991 with William J. Hill. EX-10.8 (3)
Split Dollar Death Benefits Agreement dated
April 1, 1991 with Philip C. Ackerman (errata). 10.10 (6)
<PAGE 14>
Item 6. OFFICERS AND DIRECTORS (Continued)
Part III. Compensation of Directors and Executive Officers (Continued):
(C) Contracts and Transactions with System Companies (Continued)
Exhibit No.
(Incorporated by Reference
as Indicated)
Amendment to Death Benefits Agreement dated
March 15, 1994 with Richard Hare 10.5 (6)
Amendment to Death Benefits Agreement dated
March 15, 1994 with Philip C. Ackerman 10.6 (6)
Employment Agreements, dated September 17, 1981,
with Bernard J. Kennedy. 10.4 (6)
Eighth Extension to Employment Agreement with
Bernard J. Kennedy, dated September 20, 1991. 10-SS (2)
National Fuel Gas Company 1993 Award and Option
Plan, dated February 18, 1993. 10.1 (5)
National Fuel Gas Company 1983 Incentive Stock
Option Plan, as amended and restated through
February 18, 1993. 10.2 (5)
National Fuel Gas Company 1984 Stock Plan, as
amended and restated through February 18, 1993. 10.3 (5)
Change in Control Agreement, dated
May 1, 1992, with Philip C. Ackerman. EX-10.4 (3)
Change in Control Agreement, dated
May 1, 1992, with Richard Hare. EX-10.5 (3)
Change in Control Agreement, dated
May 1, 1992, with William J. Hill. EX-10.6 (3)
Agreement, dated August 1, 1989, with Richard Hare. 10-Q (1)
National Fuel Gas Company Deferred Compensation
Plan, as amended and restated through May 1, 1994. 10.7 (6)
National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan as
amended and restated through February 17, 1994. 10.8 (6)
Excerpt of Minutes from the National Fuel Gas Company
Board of Directors Meeting dated December 5, 1991. 10-UU (2)
Summary of Annual at Risk Compensation Incentive
Program 10.10 (4)
<PAGE 15>
Item 6. OFFICERS AND DIRECTORS (Continued)
Part III. Compensation of Directors and Executive Officers (Continued):
(C) Contracts and Transactions with System Companies (Concluded):
(Notes)
(1) Incorporated by reference from the Exhibit filed
with the Annual Report on Form 10-K, for the
fiscal year ended September 30, 1989.
(2) Incorporated by reference from Exhibit filed
with the Annual Report on Form 10-K, for
fiscal year ended September 30, 1991.
(3) Incorporated by reference from Exhibit filed with
the Annual Report on Form 10-K for fiscal year ended
September 30, 1992.
(4) Incorporated by reference from Exhibit filed with the
Annual Report on Form 10-K for fiscal year ended
September 30, 1993.
(5) Incorporated by reference from Exhibit filed with the
Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1993.
(6) Incorporated by reference from Exhibit filed with the
Annual Report on Form 10-K for fiscal year ended
September 30, 1994.
(D) Indebtedness to System Companies: None
(E) Participation in Bonus and Profit-Sharing Arrangements and Other
Benefits:
The information required by this item appears under "Director's
Compensation," and "Executive Compensation," on page 5 and pages 7 to 21,
respectively, of the National Fuel Gas Company Proxy Statement, dated January
5, 1995, included as exhibit A (4) to this Form U5S and is incorporated herein
by reference.
(F) Rights to Indemnity:
The information required by this item appears in Article II, Paragraph 8
of the National Fuel Gas Company By-Laws as amended through June 9, 1994. Such
By-Laws are listed as Exhibit B(1)(i) to this Form U5S and are incorporated
therein by reference as indicated.
<PAGE 16>
Item 6. OFFICERS AND DIRECTORS (Concluded)
Part III. Compensation of Directors and Executive Officers (Concluded):
The Company also purchases directors and officers liability insurance with
a primary limit of $35 million and $25 million in excess coverage, and, in
recognition of the scope of the foregoing by-law indemnification, certain other
errors and omissions and general liability insurance coverages which are
applicable to all employees as insureds, including directors and officers.
<TABLE>
<PAGE 17>
<CAPTION>
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
Amount
Name of Recipient Accounts Charged Per Books Fiscal Year Ended
Name of Company or Beneficiary Purpose of Disbursing Company September 30, 1994
Tabulation showing expenditures, disbursements, or payments during the year, in money, goods or services,
directly or indirectly to or for the account of:
(1) Any political party, candidate for public office or holder of such office, or any committee or agent
therefor:
<S> <C> <C> <C> <C>
Distribution Corporation N/A *FEDPAC Misc. Income Deductions $10,900
Distribution Corporation N/A *NYPAC Misc. Income Deductions $ 9,829
Distribution Corporation N/A *PAPAC Misc. Income Deductions $ 9,567
Supply Corporation N/A *FEDPAC Misc. Income Deductions $ 577
Supply Corporation N/A *NYPAC Misc. Income Deductions $ 1,776
Supply Corporation N/A *PAPAC Misc. Income Deductions $ 1,658
*Company labor and expenses relating to administration of political action funds.
(2) Any citizens group or public relations counsel:
Distribution Corporation Alliance for a New
New York Civic Operation Expense $109,000
Miscellaneous Deferred Debits $ 66,000
$175,000
Distribution Corporation Greater Buffalo
Partnership Civic Operation Expense $ 30,643
Distribution Corporation 51 Beneficiaries Civic Operation Expense $ 35,993
Supply Corporation 21 Beneficiaries Civic Operation Expense $ 15,994
National Fuel Resources 2 Beneficiaries Civic Operation Expense $ 530
The information called for by instruction 2 to Item 7 was compiled, and memoranda from the applicable
System Companies were received and are preserved by the Registrant.
</TABLE>
<TABLE>
<PAGE 18>
<CAPTION>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Intercompany sales and services
(1) Salaries of officers of the Registrant
NATIONAL FUEL GAS COMPANY
REPORT OF OFFICERS' SALARIES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
Distri-
bution Supply Seneca Data-
Parent Corp. Corp. Resources UCI Highland Track NFR Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B. J. Kennedy $65,000 $240,853 $364,720 $ 7,452 $ 3,440 $ 1,337 $2,674 $2,674 $688,150
P. C. Ackerman 17,403 90,493 184,466 48,728 3,480 3,480 - - 348,050
T. E. Burns* 6,045 66,288 36,825 10,760 501 336 23 122 120,900
R. M. DiValerio 7,736 - 146,989 - - - - - 154,725
J. P. Pawlowski 9,506 104,245 57,905 16,925 787 528 36 193 190,125
G. T. Wehrlin 9,506 104,245 57,905 16,925 787 528 36 193 190,125
A. M. Cellino 500 105,425 - - - - - - 105,925
* Retired effective November 1, 1994.
<PAGE 19>
<CAPTION>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries
DISTRIBUTION CORPORATION
REPORT OF INTERCOMPANY SALES AND SERVICES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Common Expenses
Public
Relations Materials Industrial
Receiving Company Executive Purchasing Common Management Accounting Engineering
<S> <C> <C> <C> <C> <C> <C>
Supply Corporation $ 921 $231 $193 $636 $1,164 $242
Seneca Resources 267 13 11 - 90 -
UCI 22 1 1 - 8 -
Highland 17 1 1 - 6 -
Data-Track 2 - - - - -
NFR 6 - - - 2 -
$1,235 $246 $206 $636 $1,270 $242
<CAPTION>
Clearing Accounts and Direct Charges
Data Material,
Processing Human Risk Operations & Issues & Gas
Receiving Company - Other Resources Land Management Construction Transfers Planning
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $1,410 $ 12 $222 $251 $286 $551 $ 4
Seneca Resources 137 - 4 - 4 4 -
UCI - - - - - - -
Highland - - - - - - -
Data-Track - - - - 10 7 -
NFR - - - - - - -
$1,547 $ 12 $226 $251 $300 $562 $ 4
<CAPTION>
Clearing Accounts and Direct Charges Continued
Convenience or
Facilities Industrial Accomodation
Receiving Company Valuation Management Security Engieering Payments *
<S> <C> <C> <C> <C> <C>
Supply Corporation $1 $120 $ - $ 1 $6,594
Seneca Resources - - - - 682
UCI - - - - 437
Highland - - - - 11
Data-Track - - 3 - 131
NFR - - - - 315
$1 $120 $ 3 $ 1 $8,170
* Analysis of Convenience or Accommodation Payments is presented on page 21.
<PAGE 20>
<CAPTION>
Public Affairs Data Human Government
Administration Processing Resources Legal Finance Affairs
<C> <C> <C> <C> <C> <C>
$ 99 $415 $468 $ 9 $1,304 $ 94
- 5 138 2 104 -
- - 12 - 9 -
- - 9 - 6 -
- - 1 - 1 -
- - 3 - 2 -
$ 99 $420 $631 $11 $1,426 $ 94
<CAPTION>
Messenger Revenue Government Gas Materials Market
Expense Legal Executive Recovery Engineering Finance Affairs Control Management Research
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$58 $ 3 $ 58 $ - $30 $128 $42 $12 $37 $ -
3 6 51 - - 58 - - - -
- - 9 - - 56 - - - -
- - 7 - - - - - - -
- - - 16 - - - - - -
- 4 1 - - - - - - 13
$61 $13 $126 $16 $30 $242 $42 $12 $37 $13
<CAPTION>
Total
Services Rendered
by Statutory Subsidiaries
<C>
$15,596
1,579
555
58
171
346
$18,305
</TABLE>
<PAGE 21>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
DISTRIBUTION CORPORATION
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Receiving Company
Supply Seneca Data-
Corporation Resources UCI Highland Track NFR Total
Material $ 448 $ 11 $ - $ - $ - $ 99 $ 558
Rents 202 - - - - - 202
Transportation 9 1 - - 1 - 11
Utilities 271 15 9 - 79 - 374
Contractors &
Outside Services 460 25 102 3 - 1 591
Equipment Purchases
& Rentals 1,800 25 21 - 33 2 1,881
Employee Benefits 1,174 111 95 5 1 1 1,387
Office Expense 731 76 40 - 2 1 850
Dues & Subscriptions 361 - - - - - 361
Postage 14 5 - - 14 - 33
Other Insurance 763 399 100 - - - 1,262
Injuries and Damages 2 - 30 - - - 32
Advertising - 1 - - - - 1
Environmental 1 - - - - - 1
Other 358 13 40 3 1 211 626
$6,594 $682 $437 $11 $131 $315 $8,170
<PAGE 22>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
SUPPLY CORPORATION
REPORT OF INTERCOMPANY SALES AND SERVICES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Clearing Accounts and Direct Charges
Gas
Human Operations Production
Receiving Company Engineering Resources Land Geology & Construction Purchases
Distribution Corp. $483 $184 $234 $ 1 $2,700 $127
Seneca Resources - - 133 626 104 -
UCI - - - - - -
Highland - - - - - -
Data Track - - - - - -
NFR - - - - - -
$483 $184 $367 $627 $2,804 $127
Clearing Accounts and Direct Charges Continued
Material Convenience or Total Services
Issues & Gas Accommodation Rendered By Statu-
Receiving Company Transfers Control Executive Payments * tory Subsidiaries
Distribution Corp. $568 $811 $ 2 $5,898 $11,008
Seneca Resources 31 - 37 1,249 2,180
UCI - 70 77 594 741
Highland - - 2 60 62
Data Track - - 3 - 3
NFR - - - - -
$599 $881 $121 $7,801 $13,994
* Analysis of Convenience or Accommodation Payments is presented on page 23.
<PAGE 23>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
SUPPLY CORPORATION
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Receiving Company
Distribution Seneca
Corporation Resources UCI Highland NFR Total
Material $ 204 $ 17 $ 4 $ 1 $ - $ 226
Rents 3,472 13 - - 50 3,535
Transportation 5 3 3 - - 11
Utilities 87 10 - - 3 100
Contractors &
Outside Services 257 64 23 - - 344
Equipment Purchases
& Rentals 788 - - - - 788
Employee Benefits 85 - - - - 85
Office Expense 152 32 - - - 184
Dues & Subscriptions 22 - - - - 22
Aircraft Expense 1 - 472 - - 473
Environmental - 6 - - - 6
Property Acquisition - - - - -
Postage 1 - - - 1
Production Clearing - 852 - - - 852
Other 824 252 92 59 (53) 1,174
$5,898 $1,249 $594 $ 60 $ - $7,801
<PAGE 24>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
SENECA RESOURCES
REPORT OF INTERCOMPANY SALES AND SERVICES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Convenience or Total
Accommodation Services Rendered By
Receiving Company Operations Payments Statutory Subsidiaries
Distribution Corporation $ - $ 5 $ 5
Supply Corporation - 24 24
Highland 41 95 136
UCI 54 - 54
NFR 5 301 306
Data-Track 4 - 4
$104 $425 $529
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
Receiving Company
Distribution Supply
Corporation Corporation Highland NFR Total
Employee Benefits $ - $ - $ - $100 $100
Rent - 4 - - 4
Office Expense - - 1 6 7
Contractors and
Outside Services 5 3 - 5 13
Other Insurance - - 94 - 94
Utilities - - - 1 1
Other - 17 - 189 206
$ 5 $24 $95 $301 $425
<PAGE 25>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
UCI
REPORT OF INTERCOMPANY SALES AND SERVICES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Construction
Receiving Company Services
Distribution Corporation $ 701
Supply Corporation 683
Seneca Resources 350
Highland 31
$1,765
HIGHLAND
REPORT OF INTERCOMPANY SALES AND SERVICES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Right-of-Way Clearing
Receiving Company and Logging
Supply Corporation $ 4
Seneca Resources 49
$ 53
<PAGE 26>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Concluded)
Part I. Intercompany sales and services (Concluded)
(2) Services rendered by Statutory Subsidiaries (Concluded)
DATA-TRACK
REPORT OF INTERCOMPANY SALES AND SERVICES
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
Convenience
or Total
Accommodation Collection Services Rendered by
Receiving Company Payments Services Statutory Subsidiaries
Distribution
Corporation $ 3 $411 $414
Supply Corporation 1 - 1
$ 4 $411 $415
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
Receiving Company
Distribution Supply
Corporation Corporation Total
Equipment Purchase $ 3 $ - $ 3
Other - 1 1
$ 3 $ 1 $ 4
(3) Services rendered by Registrant
No services were rendered for a charge by the Registrant to any of its
subsidiaries during the fiscal year ended September 30, 1994.
<PAGE 27>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Concluded)
Part II. Contracts to purchase services or goods between any System company
and any affiliate at September 30, 1994:
None
Part III. Employment of any person by any System company for the performance on
a continuing basis of management services
Description of Contract and Annual
Name Scope of Services Consideration
Joseph Maljovec Performs management and consulting $53,500
services for the Registrant's
wholly-owned sawmill subsidiary,
Highland Land & Minerals, Inc.
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
Not applicable.
<PAGE 28>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
Page
Report of Independent Accountants 29
National Fuel Gas Company and Subsidiaries:
Consolidated and Consolidating Balance Sheet at
September 30, 1994, and Consolidated Balance
Sheet at September 30, 1993 31 - 34
Consolidated and Consolidating Statement of Income
for the Fiscal Year Ended September 30, 1994, and
Consolidated Statement of Income for the Fiscal
Years Ended September 30, 1993, and 1992 35 - 36
Consolidated and Consolidating Statement of
Earnings Reinvested in the Business for the
Fiscal Year Ended September 30, 1994, and the
Consolidated Statement of Earnings Reinvested
in the Business for the Fiscal Years Ended
September 30, 1993, and 1992 37 - 38
Consolidated and Consolidating Statement of
Cash Flows for the Fiscal Year Ended
September 30, 1994, and the Consolidated
Statement of Cash Flows for the Fiscal Years
Ended September 30, 1993, and 1992 39 - 42
Notes to Consolidated Financial Statements for
Fiscal Years 1994, 1993 and 1992 *
*The Notes to Consolidated Financial Statements appearing on pages 58 to 88 of
National Fuel Gas Company's 1994 Annual Report on Form 10-K for the year
ended September 30, 1994, are incorporated herein by reference.
<PAGE 29>
REPORT OF INDEPENDENT ACCOUNTANTS
October 28, 1994
To the Board of Directors and
Shareholders of
National Fuel Gas Company
In our opinion, the consolidated financial statements listed in the index
appearing under Item 10 on Page 28 present fairly, in all material respects,
the financial position of National Fuel Gas Company and its subsidiaries at
September 30, 1994 and 1993, and the results of their operations and their cash
flows for each of the three years in the <PAGE>
period ended September 30, 1994, in
conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Notes A and F to the consolidated financial statements which
are incorporated by reference on Page 28, the Company adopted the new
accounting standards for postretirement benefits other than pensions, income
taxes and other postemployment benefits in fiscal 1994.
Our audit was made for the purpose of forming an opinion on the consolidated
financial statements taken as a whole. The consolidating information on Pages
31 through 42 is presented for purposes of additional analysis rather than to
present financial position, results of operations and cash flows of the
individual companies. Accordingly, we do not express an opinion on the
financial position, results of operations and cash flows of the individual
companies. However, the consolidating information on Pages 31 through 42 has
been subjected to the auditing procedures applied in the audit of the
consolidated financial statements and, in our opinion, is fairly stated in all
material respects in relation to the consolidated financial statements taken as
a whole.
PRICE WATERHOUSE LLP
<PAGE 30>
THIS PAGE LEFT BLANK INTENTIONALLY
<TABLE>
<PAGE 31>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS) National National
National Fuel Gas Fuel Gas Seneca Highland
Fuel Gas Distribution Supply Resources Leidy Hub, Land &
Company Corporation Corporation Corporation Inc. Minerals Inc.
ASSETS
<S> <C> <C> <C> <C> <C> <C>
PROPERTY,PLANT & EQUIPMENT:
Gas Utilities $ - $1,036,145 $640,110 $ - $ - $ -
Non-Utilities 244 80 13 476,877 3 2,811
244 1,036,225 640,123 476,877 3 2,811
Less: Accumulated Depreciation,
Depletion and Amortization 107 248,431 199,313 168,211 3 964
137 787,794 440,810 308,666 - 1,847
CURRENT ASSETS:
Cash and Temporary Cash Investments 7,138 15,133 3,554 1,744 100 183
Notes Receivable-Intercompany 259,500 - 37,700 - - 2,100
Allowance for Uncollectible Accounts - (4,798) - (122) - -
Accounts Receivable-Intercompany 13,618 14,217 14,143 1,269 - 181
Accounts Receivable 7,784 67,189 5,487 10,181 5 450
Unbilled Utility Revenue - 17,311 - - - -
Dividends Receivable-Intercompany 11,848 - - - - -
Materials and Supplies - at
average cost - 8,322 13,800 1,327 - 384
Gas Stored Underground - 31,900 2,811 - - -
Unrecovered Purchased Gas Costs - - - - - -
Prepayments 226 14,412 3,820 1,382 6 79
300,114 163,686 81,315 15,781 111 3,377
OTHER ASSETS:
Recoverable Future Taxes - 94,039 5,703 - - -
Unamortized Debt Expense 4,645 18,907 4,844 - - -
Other Regulatory Assets - 44,112 3,625 - - -
Deferred Charges 895 4,605 10,035 1,068 50 -
Investment in Associated Companies 709,453 - 61 - - -
Notes of Subsidiaries 513,465 - - - - -
Other 214 7,403 4,869 717 617 2
1,228,672 169,066 29,137 1,785 667 2
$1,528,923 $1,120,546 $551,262 $326,232 $ 778 $5,226
<FN>
See Notes to Consolidated Financial Statements appearing on pages 58 to 88 of
National Fuel Gas Company's Annual Report on Form 10-K for the year ended
September 30, 1994, incorporated herein by reference.
</FN>
<PAGE 32>
<CAPTION>
Consolidated Balance Sheet
National Fuel Gas Company
Utility Data-Track National Total Before Eliminations and Subsidiaries
Constructors, Account Fuel Eliminations & Adjustments September 30,
Inc. Services, Inc. Resources & Adjustments Dr (Cr) 1994 1993
<C> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $1,676,255 $ - $1,676,255 $1,600,097
9,869 85 19 490,001 - 490,001 439,339
9,869 85 19 2,166,256 - 2,166,256 2,039,436
5,360 1 6 622,396 (1,121) 623,517 561,433
4,509 84 13 1,543,860 (1,121) 1,542,739 1,478,003
97 74 993 29,016 - 29,016 13,595
- 400 2,400 302,100 (302,100) - -
- - (135) (5,055) - (5,055) (5,739)
640 52 540 44,660 (44,660) - -
4,264 - 3,788 99,148 1,900 101,048 92,696
- - - 17,311 - 17,311 27,210
- - - 11,848 (11,848) - -
- - - 23,833 (37) 23,796 20,848
- - - 34,711 - 34,711 22,120
- - - - - - 20,772
77 1 133 20,136 (25) 20,111 17,094
5,078 527 7,719 577,708 (356,770) 220,938 208,596
- - - 99,742 - 99,742 -
- - - 28,396 - 28,396 28,735
- - - 47,737 - 47,737 43,644
- - 8 16,661 (865) 15,796 21,255
- - - 709,514 (709,514) - -
- - - 513,465 (513,465) - -
2,464 1 542 16,829 9,480 26,309 21,307
2,464 1 550 1,432,344 (1,214,364) 217,980 114,941
$12,051 $612 $ 8,282 $3,553,912 $(1,572,255) $1,981,657 $1,801,540
<PAGE 33>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
National National
National Fuel Gas Fuel Gas Seneca Highland
Fuel Gas Distribution Supply Resources Leidy-Hub Land &
Company Corporation Corporation Corporation Inc. Minerals, Inc.
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common Stock, $1 Par Value
Authorized-100,000,000 Shares;
Issued and Outstanding-37,278,409
Shares and 36,661,008 Shares,
Respectively $ 37,278 $ - $ - $ - $ - $ -
Capital Stock of Subsidiaries - 59,170 25,345 500 4 5
Paid in Capital 379,156 121,668 35,894 104,035 1,039 445
Earnings Reinvested in the Business 363,854 205,226 134,663 5,004 (471) 3,990
Total Common Stock Equity 780,288 386,064 195,902 109,539 572 4,440
Long-Term Debt, Net of Current
Portion 462,500 - - - - -
Notes Payable-Intercompany - 256,000 209,465 48,000 - -
Total Capitalization 1,242,788 642,064 405,367 157,539 572 4,440
CURRENT AND ACCRUED LIABILITIES:
Notes Payable to Banks and
Commercial Paper 112,500 - - - - -
Notes Payable-Intercompany 42,600 145,600 21,400 85,000 200 -
Current Portion of Long-Term Debt 96,000 - - - - -
Accounts Payable 210 41,552 8,448 17,351 - 15
Amounts Payable to Customers - 18,342 20,372 - - -
Dividends Payable 14,671 - - - - -
Accounts Payable-Intercompany 7,855 19,575 12,429 388 1 305
Dividends Payable-Intercompany - 7,468 4,380 - - -
Customer Deposits - 5,747 - - - -
Federal Income Taxes 200 2,704 4,658 (4,559) 5 383
Other Taxes (99) 4,496 1,118 340 - 118
Other Accruals 11,391 14,990 6,350 2,678 - 3
285,328 260,474 79,155 101,198 206 824
DEFERRED CREDITS:
Taxes Refundable to Customers - 23,390 8,298 - - -
Unamortized Investment Tax Credit - 13,611 446 - - -
Accumulated Deferred Income Taxes (180) 155,323 48,079 64,783 - (44)
Other Deferred Credits 987 25,684 9,917 2,712 - 6
807 218,008 66,740 67,495 - (38)
$1,528,923 $1,120,546 $551,262 $326,232 $ 778 $5,226
<FN>
See Notes to Consolidated Financial Statements appearing on pages 58 to 88 of
National Fuel Gas Company's Annual Report on Form 10-K for the year ended
September 30, 1994, incorporated herein by reference.
</FN>
<PAGE 34>
<CAPTION>
Consolidated Balance Sheet
National Fuel Gas Company
Utility Data-Track National Total Before Eliminations and Subsidiaries
Constructors, Account Fuel Eliminations & Adjustments September 30,
Inc. Services, Inc. Resources & Adjustments (Dr) Cr 1994 1993
<C> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ 37,278 $ - $ 37,278 $ 36,661
1 1 10 85,036 (85,036) - -
5,959 499 3,490 652,185 (273,029) 379,156 363,677
(3,070) 83 2,160 711,439 (347,585) 363,854 335,907
2,890 583 5,660 1,485,938 (705,650) 780,288 736,245
- - - 462,500 - 462,500 478,417
- - - 513,465 (513,465) - -
2,890 583 5,660 2,461,903 (1,219,115) 1,242,788 1,214,662
- - - 112,500 - 112,500 196,800
7,300 - - 302,100 (302,100) - -
- - - 96,000 - 96,000 -
1,376 10 534 69,496 (2,829) 66,667 42,893
- - - 38,714 - 38,714 40,776
- - - 14,671 - 14,671 14,103
32 21 630 41,236 (41,236) - -
- - - 11,848 (11,848) - -
- - - 5,747 - 5,747 5,494
(1,076) 4 601 2,920 (4,448) (1,528) 10,888
(137) (4) (45) 5,787 - 5,787 5,288
821 - 458 36,691 - 36,691 33,750
8,316 31 2,178 737,710 (362,461) 375,249 349,992
- - - 31,688 - 31,688 -
- - - 14,057 - 14,057 14,743
207 - 371 268,539 5,021 273,560 188,793
638 (2) 73 40,015 4,300 44,315 33,350
845 (2) 444 354,299 9,321 363,620 236,886
$12,051 $612 $8,282 $3,553,912 $(1,572,255) $1,981,657 $1,801,540
<PAGE 35>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
National National
National Fuel Gas Fuel Gas Seneca Highland
Fuel Gas Distribution Supply Resources Leidy-Hub Land &
Company Corporation Corporation Corporation Inc. Minerals, Inc.
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Gas Sales $ - $892,343 $ - $ 1,461 $ - $ -
Other Operating Revenues - 39,330 155,879 70,042 - 7,137
- 931,673 155,879 71,503 - 7,137
OPERATING EXPENSE:
Purchased Gas - 530,978 - 1,181 - -
Operation Expense 5,525 170,753 54,060 19,325 9 5,683
Maintenance - 22,272 8,697 10 - -
Property, Franchise & Other
Taxes 1,274 88,870 11,373 1,856 6 64
Depreciation, Depletion and
Amortization 6 28,216 17,904 26,964 - 194
Income Taxes - Net 212 25,125 18,680 3,282 6 439
7,017 866,214 110,714 52,618 21 6,380
Operating Income (Loss) (7,017) 65,459 45,165 18,885 (21) 757
OTHER INCOME:
Unremitted Earnings of
Subsidiaries 36,958 - - - - -
Dividends from Subsidiaries 47,395 - - - - -
Interest-Intercompany 47,731 209 376 - - 75
Miscellaneous - 321 140 59 41 -
Investment Tax Credit - 658 24 - - -
Allowance for Other Funds Used
in Construction - 211 338 - - -
Other Interest 559 181 379 48 - 47
132,643 1,580 1,257 107 41 122
Income Before Interest Charges 125,626 67,039 46,422 18,992 20 879
INTEREST CHARGES:
Interest on Long-Term Debt 36,699 - - - - -
Interest-Intercompany 792 25,975 14,764 6,731 11 -
Other Interest 5,700 3,546 1,171 207 - -
Allowance for Borrowed Funds
Used in Construction - (46) (164) - - -
43,191 29,475 15,771 6,938 11 -
Income Before Cumulative Effect 82,435 37,564 30,651 12,054 9 879
Cumulative Effect of Changes in
Accounting 3,237 - - 3,865 - 51
Net Income Available
for Common Stock $ 85,672 $ 37,564 $ 30,651 $15,919 $ 9 $ 930
<FN>
* Includes revenues from affiliates and non-affiliates of $1,765 and $11,823, respectively.
See Notes to Consolidated Financial Statements appearing on pages 58 to 88 of National Fuel Gas Company's
Annual Report on Form 10-K for the year ended September 30, 1994, incorporated herein by reference.
</FN>
<PAGE 36>
<CAPTION>
Consolidated Statement of Income
National Fuel Gas Company
and Subsidiaries
Utility Data-Track National Total Before Eliminations & For the Fiscal Year Ended
Constructors, Account Fuel Eliminations Adjustments September 30,
Inc. Services, Inc. Resources & Adjustments (Dr) Cr 1994 1993 1992
<C> <C> <C> <C> <C> <C> <C> <C>
$ - $ - $50,764 $ 944,568 $ (868) $ 943,700 $ 846,391 $761,480
13,588* 411 - 286,387 (88,763) 197,624 173,991 158,970
13,588 411 50,764 1,230,955 (89,631) 1,141,324 1,020,382 920,450
- - 47,964 580,123 82,436 497,687 409,005 363,690
14,254 420 919 270,948 10,537 260,411 258,918 240,645
- - - 30,979 - 30,979 24,312 22,439
77 - 268 103,788 - 103,788 95,393 89,158
1,330 - 2 74,616 (148) 74,764 69,425 55,726
(410) 5 506 47,845 53 47,792 41,046 35,231
15,251 425 49,659 1,108,299 92,878 1,015,421 898,099 806,889
(1,663) (14) 1,105 122,656 3,247 125,903 122,283 113,561
- - - 36,958 (36,958) - - -
- - - 47,395 (47,395) - - -
- 19 112 48,522 (48,522) - - -
194 - - 755 - 755 192 289
- - - 682 - 682 693 706
- - - 549 - 549 528 1,517
434 - 15 1,663 7 1,670 3,420 3,278
628 19 127 136,524 (132,868) 3,656 4,833 5,790
(1,035) 5 1,232 259,180 (129,621) 129,559 127,116 119,351
- - - 36,699 - 36,699 38,507 39,949
249 - - 48,522 48,522 - - -
5 - 6 10,635 - 10,635 13,567 20,180
- - - (210) - (210) (175) (1,088)
254 - 6 95,646 48,522 47,124 51,899 59,041
(1,289) 5 1,226 163,534 (81,099) 82,435 75,217 60,310
(714) - - 6,439 (3,202) 3,237 - -
$(2,003) $ 5 $ 1,226 $ 169,973 $(84,301) $ 85,672 $ 75,217 $ 60,310
<S> <C> <C> <C>
Earnings Per Common Share
Income Before Cumulative Effect $2.23 $2.15 $1.94
Cumulative Effect of Changes in Accounting .09 - -
Net Income Available for Common Stock $2.32 $2.15 $1.94
Weighted Average Common Shares Outstanding 37,046,249 34,938,722 31,152,635
<PAGE 37>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
National National
National Fuel Gas Fuel Gas Seneca Highland
Fuel Gas Distribution Supply Resources Leidy-Hub, Land &
Company Corporation Corporation Corporation Inc. Minerals, Inc.
<S> <C> <C> <C> <C> <C> <C>
EARNINGS REINVESTED IN THE BUSINESS
Balance at Beginning of Year $335,907 $178,842 $121,535 $(26,611) $(480) $3,060
Net Income (Loss) Available
for Common Stock 85,672 37,564 30,651 15,919 9 930
Dividends on Common Stock
(1994-$1.56; 1993-$1.52;
1992-$1.48 per share) (57,725) (29,872) (17,523) - - -
Adjustments:
Unbilled Revenue (1) - 18,692 - - - -
Full Cost Pool (2) - - - 15,696 - -
Balance at End of Year $363,854 $205,226 $134,663 $ 5,004 $(471) $3,990
At September 30, 1994
<S> <C>
Intercompany Eliminations:
Earnings Reinvested in the Business:
Unremitted Earnings of Subsidiaries
Since Acquisition $344,354
Earnings Reinvested in the Business
of Subsidiaries at Acquisition 7,095
Consolidating Adjustment (3,864)
$347,585
Net Income Available for Common Stock:
Subsidiaries-Dividends on
Common Stock $47,395
Unremitted Earnings of Subsidiaries 36,958
Cumulative Effect of Changes in
Accounting of Subsidiaries 3,202
Consolidating Adjustment (3,254)
$84,301
<FN>
See Notes to Consolidated Financial Statements appearing on pages 58 to 88 of
National Fuel Gas Company's Annual Report on Form 10-K for the year ended
September 30, 1994, incorporated herein by reference.
</FN>
<PAGE 38>
<CAPTION>
Consolidated Statement of Earnings
Reinvested in the Business
National Fuel Gas Company
Utility Data-Track National Total Before Eliminations and Subsidiaries For the
Constructors, Account Fuel Eliminations & Adjustments Fiscal Year Ended September 30,
Inc. Services, Inc. Resources & Adjustments (Dr) Cr 1994 1993 1992
<C> <C> <C> <C> <C> <C> <C> <C>
$(1,067) $ 78 $ 934 $612,198 $(276,291) $335,907 $314,334 $301,066
(2,003) 5 1,226 169,973 (84,301) 85,672 75,217 60,310
- - - (105,120) 47,395 (57,725) (53,644) (47,042)
- - - 18,692 (18,692) - - -
- - - 15,696 (15,696) - - -
$(3,070) $ 83 $2,160 $711,439 $(347,585) $363,854 $335,907 $314,334
<CAPTION>
ANALYSIS OF INVESTMENTS IN ASSOCIATED COMPANIES AT SEPTEMBER 30, 1994
Par or Earnings Total Investment
Stated Value Reinvested in Unremitted in Associated
of Paid the Business Earnings Companies
Subsidiary in at Since at
Stock Capital Acquisition Acquisition Equity
<S> <C> <C> <C> <C> <C>
Registrant:
Distribution Corporation $59,170 $121,668 $4,636 $200,590 $386,064
Supply Corporation 25,345 35,833 2,453 132,210 195,841
Seneca Resources 500 104,035 6 4,998 109,539
Leidy-Hub, Inc. 4 1,039 - (471) 572
Highland 5 445 - 3,990 4,440
UCI 1 5,959 - (3,070) 2,890
Data-Track 1 499 - 83 583
NFR 10 3,490 - 2,160 5,660
Consolidating Adjustment - - - 3,864 3,864
85,036 272,968 7,095 344,354 709,453
Supply Corporation:
Seneca Resources - 61 - - 61
$85,036 $273,029 $7,095 $344,354 $709,514
<FN>
(1) Reflects the recording of unbilled utility revenue on the books of Distribution Corporation in
March 1994, in accordance with a State of New York Public Service Commission Order. Unbilled
utility revenue was previously only recorded in the consolidated financial statements of National
Fuel Gas Company.
(2) Reflects reversal of the effect of a prior period write-down on a separate company basis, of
Seneca Resources' full cost pool. After giving effect to the transfer of Supply Corporation's oil
and gas production assets to Empire Exploration, Inc. ("Empire") and the subsequent merger of
Empire into Seneca Resources, effective July 1, 1994, (S.E.C. File No. 70-8385, Release No.
35-26036) this write-down on the separate company books of Seneca Resources is no longer
necessary. Prior to the merger noted above, the write-down on Seneca Resources' books was
reversed in the consolidated financial statements of National Fuel Gas Company.
</FN>
<PAGE 39>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
National National
National Fuel Gas Fuel Gas Seneca Highland
Fuel Gas Distribution Supply Resources Leidy-Hub, Land &
Company Corporation Corporation Corporation Inc. Minerals, Inc.
<S> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) Available for Common Stock $ 85,672 $ 37,564 $30,651 $15,919 $ 9 $ 930
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Effect of Noncash Adjustments:
Cumulative Effect of Changes in
Accounting (3,237) - - (3,865) - (51)
Depreciation, Depletion and Amortization 6 28,216 17,904 26,964 - 194
Deferred Income Taxes (19) (7,240) 5,969 6,158 1 (103)
Allowance for Other Funds Used in
Construction - (211) (338) - - -
Other 750 844 1,108 (41) - -
83,172 59,173 55,294 45,135 10 970
Change in:
Receivables and Unbilled Utility Revenue (19) 211 2,135 2,070 (5) (137)
Accounts Receivable- Intercompany (656) (364) 5,248 (590) - (33)
Gas Stored Underground
and Material and Supplies - (14,326) (78) (947) - (188)
Unrecovered Purchased Gas Costs - 20,594 178 - - -
Prepayments 124 (2,226) 1,081 (125) - 6
Accounts Payable (80) 10,168 (248) 12,182 - (8)
Amounts Payable to Customers - (8,562) 6,500 - - -
Accounts Payable-Intercompany (119) (2,024) (735) 88 - 24
Other Accruals and Current Liabilities 881 4,964 (2,839) (1,683) 29 53
Other Assets and Liabilities-Net (516) 4,473 2,032 (1,391) 147 1
Net Cash Provided by (Used in) Operating
Activities $ 82,787 $ 72,081 $68,568 $54,739 $ 181 $688
<FN>
See Notes to Consolidated Financial Statements appearing on pages 58 to 88 of
National Fuel Gas Company's Annual Report on Form 10-K for the year ended
September 30, 1994, incorporated herein by reference.
(Consolidating Statement of Cash Flows continues on pages 41 and 42)
</FN>
<PAGE 40>
<CAPTION>
Consolidated Statement of
Cash Flows
National Fuel Gas Company
and Subsidiaries
Utility Data-Track National Total Before For the Fiscal Year Ended
Constructors, Account Fuel Eliminations Eliminations September 30,
Inc. Services, Inc. Resources & Adjustments & Adjustments 1994 1993 1992
<C> <C> <C> <C> <C> <C> <C> <C>
$(2,003) $ 5 $1,226 $169,973 $(84,301) $ 85,672 $ 75,217 $ 60,310
714 - - (6,439) 3,202 (3,237) - -
1,330 - 2 74,616 148 74,764 69,425 55,726
227 - (88) 4,905 (52) 4,853 16,919 14,125
- - - (549) - (549) (528) (1,517)
- - - 2,661 3,668 6,329 6,102 4,514
268 5 1,140 245,167 (77,335) 167,832 167,135 133,158
(1,967) - (1,425) 863 - 863 (21,531) (12,074)
740 (21) (534) 3,790 (3,790) - - -
- - - (15,539) - (15,539) 7,156 (5,221)
- - - 20,772 - 20,772 (7,739) (7,703)
253 (1) (118) (1,006) (2,011) (3,017) (1,489) 2,862
607 2 (188) 22,435 1,339 23,774 (2,579) 4,349
- - - (2,062) - (2,062) (18,808) (6,728)
4 10 170 (2,582) 2,582 - - -
543 (14) 971 2,905 167 3,072 15,249 15,704
269 (2) (11) 5,002 (1,468) 3,534 (13,691) (31,359)
$ 717 $(21) $ 5 $279,745 $( 80,516) $199,229 $123,703 $ 92,988
<PAGE 41>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS (CONCLUDED)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1994
(THOUSANDS OF DOLLARS)
National National
National Fuel Gas Fuel Gas Seneca Highland
Fuel Gas Distribution Supply Resources Leidy-Hub, Land &
Company Corporation Corporation Corporation Inc. Minerals, Inc.
<S> <C> <C> <C> <C> <C> <C>
INVESTING ACTIVITIES:
Capital Expenditures $ (20) $(61,715) $(20,490) $(63,592) $ - $(361)
Investment in Associated Companies (36,957) - - - - -
Other - 327 9,262 2,896 - -
Net Cash Used In Investing
Activities (36,977) (61,388) (11,228) (60,696) - (361)
FINANCING ACTIVITIES:
Change in Notes Payable to Banks
and Commercial Paper (84,300) - - - - -
Change in Notes Payable-Intercompany 38,100 31,583 200 6,500 (100) -
Change in Notes and Dividends
Receivable-Intercompany (38,627) - (37,700) - - (300)
Proceeds from Issuance of Long-Term Debt 100,000 - - - - -
Reduction of Long-Term Debt (19,917) - - - - -
Proceeds from Issuance of Common Stock 16,084 - - - - -
Dividends Paid on Common Stock (57,157) (29,654) (17,397) - - -
Net Cash Provided by (Used in)
Financing Activities (45,817) 1,929 (54,897) 6,500 (100) (300)
Net Increase (Decrease) in Cash and
Temporary Cash Investments (7) 12,622 2,443 543 81 27
Cash and Temporary Cash Investments
at Beginning of Year 7,145 2,511 1,111 1,201 19 156
Cash and Temporary Cash Investments at
End of Year $ 7,138 $ 15,133 $ 3,554 $ 1,744 $ 100 $ 183
<FN>
See Notes to Consolidated Financial Statements appearing on pages 58 to 88 of
National Fuel Gas Company's Annual Report on Form 10-K for the year ended
September 30, 1994, incorporated herein by reference.
</FN>
<PAGE 42>
<CAPTION>
Consolidated Statement of
Cash Flows (Concluded)
Utility Data-Track National Total Before National Fuel Gas Company
Constructors, Account Fuel Eliminations Eliminations September 30,
Inc. Services, Inc. Resources & Adjustments & Adjustments 1994 1993 1992
<C> <C> <C> <C> <C> <C> <C> <C>
$(1,293) $ (53) $ (6) $(147,530) $ 12,446 $(135,084) $(131,926) $(157,856)
- - - (36,957) 36,957 - - -
363 - - 12,848 (9,262) 3,586 225 (2,052)
(930) (53) (6) (171,639) 40,141 (131,498) (131,701) (159,908)
- - - (84,300) - (84,300) (30,200) 20,500
100 - - 76,383 (76,383) - - -
- 100 (200) (76,727) 76,727 - - -
- - - 100,000 - 100,000 129,000 251,000
- - - (19,917) - (19,917) (180,083) (176,729)
- - - 16,084 (7,020) 9,064 78,822 73,728
- - - (104,208) 47,051 (57,157) (52,224) (45,634)
100 100 (200) (92,685) 40,375 (52,310) (54,685) 122,865
(113) 26 (201) 15,421 - 15,421 (62,683) 55,945
210 48 1,194 13,595 - 13,595 76,278 20,333
$ 97 $ 74 $ 993 $ 29,016 $ - $ 29,016 $ 13,595 $ 76,278
</TABLE>
<PAGE 43>
EXHIBITS
A. *(1) Annual Report on Form 10-K for fiscal year ended September 30, 1994,
filed December 22, 1994 (File No. 1-3880)
*(2) Amendment No. 1 on Form 10-K/A for fiscal year ended September 30,
1994, filed January 17, 1995 (File No. 1-3880)
(3) National Fuel Gas Company 1994 Annual Report to Shareholders
*(4) National Fuel Gas Company Proxy Statement, dated January 5, 1995,
filed January 4, 1995 (File No. 1-03880)
B. Articles of Incorporation, By-Laws and Partnership Agreements
(1) National Fuel Gas Company
*i National Fuel Gas Company By-Laws as amended through June 9,
1994. (Exhibit 3.1, on Form 10-K for fiscal year ended September
30, 1994)
*ii Restated Certificate of Incorporation of National Fuel Gas
Company, dated March 15, 1985 (Exhibit 10-OO, Form 10-K for
fiscal year ended September 30, 1991)
*iii Certificate of Amendment of Restated Certificate of Incorporation
of National Fuel Gas Company, dated March 9, 1987 (Exhibit A-3 in
File No. 70-7334)
*iv Certificate of Amendment of Restated Certificate of Incorporation
of National Fuel Gas Company, dated February 22, 1988 (Exhibit
B-5 in File No. 70-7478)
*v Certificate of Amendment of Restated Certificate of
Incorporation, dated March 17, 1992 (Exhibit EX-3(a), Form 10-K
for fiscal year ended September 30, 1992.)
(2) National Fuel Gas Distribution Corporation
i By-Laws, as amended (Designated as Exhibit EX-3(b) for EDGAR
purposes.)
*ii Restated Certificate of Incorporation of National Fuel Gas
Distribution Corporation, dated May 9, 1988 (Exhibit B-1 in File
No. 70-7478)
(3) National Fuel Gas Supply Corporation
*i By-Laws, as amended (Exhibit (3) i, Form U5S for fiscal year
ended September 30, 1989)
*ii Articles of Incorporation of United Natural Gas Company, dated
February 1, 1886 (Exhibit (3)ii, Form U5S for fiscal year ended
September 30, 1984)
* Incorporated herein by reference as indicated.
<PAGE 44>
EXHIBITS (Continued)
*iii Certificate of Merger and Consolidation dated January 2, 1951
(Exhibit (3)iii, Form U5S for fiscal year ended September 30,
1984)
*iv Joint Agreement and Plan of Merger, dated June 18, 1974.
(Exhibit (3) iv, Form U5S for fiscal year ended September 30,
1987)
v Certificate of Merger and Plan of Merger of Penn-York Energy
Corporation and National Fuel Gas Supply Corporation dated April
1, 1994. (Designated as Exhibit EX-99-3 for EDGAR purposes.)
(4) Leidy Hub, Inc. (formerly Enerop Corporation)
*i By-Laws (Exhibit A-15, File No. 70-7478)
*ii Restated Articles of Incorporation of Enerop Corporation dated
April 13, 1988 (Exhibit B-4 in File No. 70-7478)
*iii Action by Board of Directors to amend the By-Laws dated
October 10, 1993 including a Restated Certificate of
Incorporation of Enerop Corporation dated October 15, 1993
(Exhibit (4)iii, designated as Exhibit EX-3 for EDGAR purposes,
Form U5S for fiscal year ended September 30, 1993)
iv Partnership Agreement between Leidy Hub, Inc. and Hub Services,
Inc. dated September 1, 1994. (Designated as Exhibit EX-99-1 for
EDGAR purposes.)
(5) Seneca Resources Corporation
*i By-Laws, as amended (Exhibit (5) i, Form U5S for fiscal year
ended September 30, 1989)
*ii Articles of Incorporation of Mars Natural Gas Company dated March
29, 1913 (Exhibit (5)ii, Form U5S for fiscal year ended September
30, 1984)
*iii Secretary's Certificate dated January 4, 1918 (Exhibit (5)iii,
Form U5S for fiscal year ended September 30, 1984)
*iv Articles of Amendment, dated March 30, 1955 (Exhibit (5)iv, Form
U5S for fiscal year ended September 30, 1984)
*v Certificate of Amendment changing name of the Mars Company to
Seneca Resources Corporation, January 29, 1976 (Exhibit (5)v,
Form U5S for fiscal year ended September 30, 1984)
vi Certificate of Merger and Plan of Merger of Seneca Resources
Corporation and Empire Exploration, Inc. dated April 29, 1994.
(Designated as Exhibit EX-99-2 for EDGAR purposes.)
* Incorporated herein by reference as indicated.
<PAGE 45>
EXHIBITS (Continued)
*(6) Limited Partnership Agreement dated November 28, 1983, between
Empire Exploration, Inc. (now Seneca Resources Corporation) as
general partner and Herman P. Loonsk as limited partner (Exhibit
(8), Form U5S for fiscal year ended September 30, 1984)
*(7) Empire 1983 Drilling Program, Limited Partnership Agreement, dated
November 28, 1983, between Empire Exploration, Inc., (now Seneca
Resources Corporation) as general partner and those parties
collectively called limited partners. (Exhibit (9), Form U5S for
fiscal year ended September 30, 1984)
*(8) Empire 1983 Joint Venture Agreement dated December 6, 1983 between
Empire Exploration, Inc. (now Seneca Resources, Corporation) and
Empire 1983 Drilling Program (Exhibit (10), Form U5S for fiscal year
ended September 30, 1984)
(9) Highland Land & Minerals, Inc.
*i. Certificate of Incorporation, dated August 19, 1982 (Exhibit (11)
i, Form U5S for fiscal year ended September 30, 1985)
*ii. By-Laws (Exhibit (11) ii, Form U5S for fiscal year ended
September 30, 1987)
(10) Utility Constructors, Inc.
*i. Articles of Incorporation, dated December 23, 1986, and
certificate of amendment dated December 31, 1986. (Exhibit
(12)i, Form U5S for fiscal year ended September 30, 1987)
*ii. By-Laws (Exhibit (12) ii, Form U5S for fiscal year ended
September 30, 1987)
(11) Data-Track Account Services, Inc.
*i. Restated Articles of Incorporation, dated March 2, 1984 (Exhibit
A-1, File No. 70-7512)
*ii. By-Laws (Exhibit A-2, File No. 70-7512)
(12) National Fuel Resources, Inc.
*i. Articles of Incorporation, dated January 9, 1991. (Exhibit (14)i;
designated as Exhibit EX-3(a) for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1992)
*ii. By Laws (Exhibit (14)ii; designated as Exhibit EX-3(b) for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1992)
* Incorporated herein by reference as indicated.
<PAGE 46>
EXHIBITS (Continued)
C. Indentures
* Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 2(b), File
No. 2-5l796)
* Eighth Supplemental Indenture dated as of July 1, 1989, to Indenture
dated as of October 15, 1974, between the Company and The Bank of
New York (formerly Irving Trust Company) (Exhibit EX-4.3, Form 10-K
for fiscal year ended September 30, 1992) (Portions of Debentures
issued thereunder redeemed March 16, 1993 and July 7, 1993 and July
1, 1994)
* Ninth Supplemental Indenture dated as of January 1, 1990 to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit EX-4.4,
Form 10-K for fiscal year ended September 30, 1992)
* Tenth Supplemental Indenture dated as of February 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a), Form
8-K dated February 14, 1992, in File No. 1-3880)
* Eleventh Supplemental Indenture dated as of May 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company ) (Exhibit 4(b),
Form 8-K dated February 14, 1992, in File No. 1-3880)
* Twelfth Supplemental Indenture dated as of June 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company ) (Exhibit 4(c),
Form 8-K dated June 18, 1992, in File No. 1-3880)
* Thirteenth Supplemental Indenture dated as of March 1, 1993, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a)(14)
in File No. 33-49401)
* Fourteenth Supplemental Indenture dated as of July 1, 1993, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4.1, Form
10-K for fiscal year ended September 30, 1993)
* Incorporated herein by reference as indicated.
<PAGE 47>
EXHIBITS (Concluded)
D. *Tax Allocation Agreement pursuant to Rule 45(c) (Exhibit (D); designated
as Exhibit EX-99 for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1993)
E. *Filing pursuant to Rule 48(b) (Exhibit (E) Form U5S for fiscal year ended
September 30, 1991)
F. Schedules of Utility Plant Accounts
These schedules are not available as of the date of filing of
this Form U5S. They will be filed pursuant to a Form U5S/A as
soon as they are available.
G. Financial Data Schedules. (Designated as Exhibit EX-27 for EDGAR
purposes.)
H. Not applicable.
I. Not applicable.
* Incorporated herein by reference as indicated.
<PAGE 48>
S I G N A T U R E
The undersigned System company has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized pursuant to
the requirements of the Public Utility Holding Company Act of 1935.
NATIONAL FUEL GAS COMPANY
By/s/ Joseph P. Pawlowski
Joseph P. Pawlowski, Treasurer
and Principal Accounting Officer
Date: January 27, 1995
<PAGE 1>
By-Laws with Amendments
to April 1, 1976
As Amended 5/28/76,
9/15/78, 12/21/78,
2/15/85, 12/16/94.
BY-LAWS
OF
NATIONAL FUEL GAS DISTRIBUTION CORPORATION
ARTICLE I.
OFFICES
Section 1. Principal Office. The principal office of the
Corporation shall be located in the City of Buffalo, County of Erie
and State of New York.
Section 2. Additional Offices. The Corporation may also
have offices and places of business at such other places, within or
without the State of New York, as the Board of Directors may from
time to time determine or the business of the Corporation may
require.
<PAGE 2>
- 2 -
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of
shareholders for the election of the directors and for the
transaction of such other business as may properly be brought before
the meeting shall be held at 11:00 a.m. or as soon thereafter as the
presiding officer may conveniently direct on the third Thursday of
February in each year (if not legal holiday, and if a legal holiday
then on the next succeeding business day), or on such other business
day as the Board of Directors may fix, at such time and at such
place within or without the State of New York as shall be determined
by the Board of Directors prior to the date for serving notice of
such meeting, or, if no such place is fixed, at the office of the
Corporation. The order of business shall be as follows: (a) call
of meeting to order; (b) proof of notice of meeting; (c) reading of
minutes of last previous annual meeting; (d) reports of officers;
(e) reports of committees; (f) election of directors; and (g)
miscellaneous business.
Section 2. Notice of Annual Meeting. Written notice of the
place, date and hour of the annual meeting, shall be given by mail
to each shareholder of record entitled to vote thereat, not less
than ten (10) nor more than fifty (50) days prior to the meeting.
If, at any meeting, action is proposed to be taken which would, if
taken, entitle shareholders fulfilling the requirements of Section
623 of the New York Business Corporation Law to receive
<PAGE 3>
- 3 -
payment for their shares, the notice of such meeting shall also
include a statement of such purpose and to that effect.
Section 3. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute or by the Certificate of Incorporation, may be
called by the Chairman of the Board, the President, or the Board of
Directors, or at the request in writing of shareholders owning at
least ten per cent (10%) in amount of the shares of the Corporation
issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting. Such meeting
shall be held at such time and at such place within or without the
State of New York as shall be determined by the chief executive
officer of the Corporation.
Section 4. Notice of Special Meeting. Written notice of a
special meeting of shareholders, stating the place, date and hour of
the meeting, the purpose or purposes for which the meeting is
called, by or at whose direction it is being called, and such other
matters as may be required by law, shall be given by mail to each
shareholder entitled to vote thereat, not less than ten (10) nor
more than fifty (50) days prior to the meeting. If, at any meeting,
action is proposed to be taken which would, if taken, entitle
shareholders fulfilling the requirements of Section 623 of the New
York Business Corporation Law to receive payment for their shares,
the notice of such meeting shall also include a statement to that
effect.
<PAGE 4>
- 4 -
Section 5. Quorum. Except as otherwise provided by statute
or the Certificate of Incorporation, the holders of record of a
majority of the shares of the Corporation issued and outstanding and
entitled to vote thereat upon a specified item of business, present
in person or represented by proxy, shall be necessary to and shall
constitute a quorum for the transaction of such specified item of
business at any meeting of the shareholders.
If, however, as to any item or items of business noticed to
come before any meeting of shareholders such quorum shall not be
present or represented at such meeting, the shareholders entitled to
vote thereon present in person or represented by proxy shall have
power to adjourn the meeting as to such item or items of business
for which a quorum is not present from time to time, until a quorum
for the transaction of such item or items of business shall be
present or represented. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally noticed.
The chairman of any meeting of shareholders shall, at the
beginning of such meeting, determine whether a quorum is present for
the transaction of each item of business noticed to come before such
meeting. A quorum for the transaction of any item of business, once
present, shall not be broken by the subsequent withdrawal of any
shareholders or their representatives.
Section 6. Voting. At any meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote in
person, or by proxy. Except as otherwise provided by law or the
<PAGE 5>
- 5 -
Certificate of Incorporation, each such shareholder of record shall
be entitled to one vote for each share of stock standing in his name
on the books of the Corporation. All elections shall be determined
by a plurality vote, and, except as otherwise provided by law or the
Certificate of Incorporation, all other matters shall be determined
by vote of a majority of the shares present or represented at such
meeting and voting on such questions.
Section 7. Proxies. Every proxy must be executed in writing
by the shareholder or by his attorney-in-fact. No proxy shall be
valid after the expiration of eleven (11) months from the date
thereof, unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the shareholder executing it, except
in those cases where an irrevocable proxy is permitted by law.
<PAGE 6>
- 6 -
ARTICLE III
DIRECTORS
Section 1. Number, Tenure. Subject to statutes, Certificate
of Incorporation and By-Laws, the business of the Corporation shall
be managed by a Board of Directors. Each director shall be at least
twenty-one years of age. The number of directors shall be eight,
and may be altered from time to time by resolution adopted by a vote
of a majority of the entire Board of Directors as then constituted,
provided that the number of directors shall not be reduced to less
than three. No decrease in the number of directors shall affect the
current term of any director then in office.
Directors shall be elected at the annual meeting of the
shareholders, except as provided in Section 3 of this Article III,
and each director shall be elected to serve until his successor has
been elected and has qualified.
Section 2. Resignation; Removal. Any director may resign at
any time by giving written notice to the President or the Secretary.
Such resignation shall take effect at the time stated therein. The
Board of Directors may, by majority vote of all directors then in
office, remove a director for cause. The shareholders entitled to
vote for the election of directors may remove a director, with or
without cause.
Section 3. Vacancies. If any vacancy should occur in the
Board of Directors by reason of the death, resignation, retirement,
or disqualification of any director, or the removal from office of
any director with or without cause, or if any new directorship is
created, all of the directors then in office, although less than a
<PAGE 7>
- 7 -
quorum, may, by majority vote, choose a successor or successors to
fill the vacated or newly created directorship, and any director so
chosen shall hold office through the next annual meeting of the
shareholders and until his successor shall be duly elected and
qualified. However, if the directors remaining in office shall be
unable, by majority vote, to fill such vacancy within thirty (30)
days of the occurrence thereof, the President or the Secretary may
call a special meeting of the shareholders at which such vacancy
shall be filled.
<PAGE 8>
- 8 -
ARTICLE IV.
MEETINGS OF THE BOARD
Section 1. Place. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or
without the State of New York.
Section 2. Regular Meetings. Regular meetings of the Board
of Directors shall be held at such time and at such place as shall
from time to time be determined by the Board.
Section 3. Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman of the Board, if any, or
by the President on one day's notice to each director, personally or
five days' notice by mail or by telegrams. On the written request
of three directors special meetings shall be called by the Chairman,
President or Secretary in like manner and on like notice.
Section 4. Action by Unanimous Written Consent. Any action
required or permitted to be taken by the Board of Directors may be
taken without a meeting upon the consent in writing of all the
members of the Board to the adoption of a resolution authorizing the
action, such resolution, together with such consents, to be filed
with the minutes of the proceedings of the Board of Directors.
Section 5. Quorum. At all meetings of the Board of
Directors a majority of the entire Board shall be necessary to and
constitute a quorum for the transaction of business, and the vote of
a majority of the directors present at the time of the vote if a
quorum is present shall be the act of the Board of Directors, except
as may be otherwise specifically provided by law or by the
<PAGE 9>
- 9 -
Certificate of Incorporation. If a quorum shall not be present at
any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, until a quorum shall be
present. Notice of any such adjournment shall be given to any
directors who were not present and, unless announced at the meeting,
to the other directors.
Section 6. Compensation. Each Director who is not a regular
full-time employee of the Corporation or one or more of its
affiliated corporations shall be paid an annual fee of $2,000.00 in
such manner as the Board of Directors may from time to time fix.
Each Director of the Corporation who is not a regular full-time
employee of the Corporation or one or more of its affiliated
corporations shall receive a fee of $200.00 for attendance at any
meeting of the Board of Directors or of any committee of the Board
of Directors. Each Director shall be reimbursed for the travel
expenses incurred by him in attending any meeting of the Board of
Directors or any committee of the Board of Directors.
Section 7. Meetings by Conference Telephone. Any one or
more members of the Board of Directors or any committee thereof may
participate in a meeting of such Board or committee by means of a
conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the
same time. Participation by such means shall constitute presence in
person at a meeting.
<PAGE 10>
- 10 -
ARTICLE V.
COMMITTEES OF THE BOARD
Section 1. Designation. The Board of Directors, by
resolution adopted by a majority of the entire Board, may designate
from among its members an Executive Committee and other committees,
each consisting of three or more directors, and each of which, to
the extent provided in such resolution, shall have all the authority
of the Board. However, no such committee shall have authority as to
any of the following matters:
(a) The submission to shareholders of any action as to which
shareholders' authorization is required by law;
(b) The filling of vacancies in the Board of Directors or on
any committee;
(c) The fixing of compensation of any director for serving
on the Board or on any committee;
(d) The amendment or repeal of these By-Laws or the adoption
of new By-Laws; and
(e) The amendment or repeal of any resolution of the Board
which by its terms shall not be so amendable or repealable.
The Board may designate one or more directors as alternate
members of any such committee who may replace any absent member or
members at any meeting of such committee.
Section 2. Tenure; Reports. Each committee shall serve at
the pleasure of the Board of Directors. It shall keep minutes of
its meetings and report the same to the Board of Directors.
<PAGE 11>
- 11 -
ARTICLE VI.
NOTICES
Section 1. Form: Delivery. Notices to directors and
shareholders shall be in writing and may be delivered personally or
by mail or telegram. Notice by mail shall be deemed to be given at
the time when deposited in the post office or letter box, in a
post-paid sealed wrapper, and addressed to directors or shareholders
at their addresses appearing on the records of the Corporation.
Section 2. Waiver. Whenever a notice is required to be
given by any statute, the Certificate of Incorporation or these
By-Laws, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein shall be deemed equivalent to such notice. In
addition, any shareholder attending a meeting of shareholders in
person or by proxy without protesting prior to the conclusion of the
meeting the lack of notice thereof to him, and any director
attending a meeting of the Board of Directors without protesting
prior to the meeting or at its commencement such lack of notice
shall be conclusively deemed to have waived notice of such meeting.
<PAGE 12>
- 12 -
ARTICLE VII.
OFFICERS
Section 1. Officers. The executive officers of the
Corporation shall be a Chairman of the Board, a President and one or
more Vice-Presidents, a Secretary, a Treasurer and a Controller.
Any two or more of the foregoing offices, except those of President
and Secretary, may be held by the same person. In its discretion,
the Board of Directors may leave unfilled for such period as it may
determine any of the foregoing offices, except the offices of
President, Treasurer and Secretary.
The Board of Directors may also from time to time appoint
such other officers and agents as they may deem necessary or
advisable for the transaction of the business of the Corporation to
perform such duties as may from time to time be designated or
assigned to them by said Board of Directors.
Section 2. Authority and Duties. All officers, as between
themselves and the Corporation, shall have such authority and
perform such duties in the management of the Corporation as may be
provided in these By-Laws, or, to the extent not so provided, by the
Board of Directors.
Section 3. Election and Appointment; Term of Office;
Removal. All executive officers shall be elected and all other
officers shall be appointed by the Board of Directors or a Committee
thereof and shall hold office at the pleasure of the Board or for
such term as may be prescribed by the Board. Any officer elected or
<PAGE 13>
- 13 -
appointed by the Board may be removed with or without cause at any
time by the Board.
Section 4. Vacancies. If an office becomes vacant for any
reason, the Board of Directors may fill such vacancy. Any officer
so appointed or elected by the Board shall serve only until such
time as the unexpired term of his predecessor shall have expired
unless reelected or appointed by the Board.
Section 5. The Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the Board of Directors. In
the absence of the President, or in the event that there is a
vacancy in the office of President, the Chairman of the Board shall
be the Chief Executive Officer of the Corporation and shall exercise
the powers and perform the duties of the President, as well as those
of Chairman of the Board.
Section 6. The President. In addition to the duties and
responsibilities specified in the laws of the State of New York and
these By-Laws, the President shall be Chief Executive Officer of the
Corporation, shall preside at all shareholders' meetings, shall, in
general, supervise, manage, and control all of the business and
affairs of the Corporation, subject to direction by the Board of
Directors, and shall perform such other duties as from time to time
may be assigned to him by the Board of Directors.
<PAGE 14>
- 14 -
Section 7. Vice President. The Vice President, or if there
be more than one, the Vice Presidents (who may have such
designations, if any, as the Board of Directors may determine), in
the order of their seniority or in any other order determined by the
Board shall, in the absence or disability of the president and the
Chairman of the Board, exercise the powers and perform the duties of
the President and each Vice President shall exercise such other
powers and perform such other duties as may be prescribed by the
President or the Board of Directors.
Section 8. The Secretary. The Secretary shall attend all
meetings of the Board of Directors and all meetings of the
shareholders and record all votes and the minutes of all proceedings
in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause
to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or President,
under whose supervision he shall act. He shall keep in safe custody
the seal of the Corporation and, when authorized by the Board, affix
the same to any instrument requiring it and, when so affixed, it
shall be attested by his signature or by the signature of the
Treasurer or an Assistant Secretary or Assistant Treasurer. He
shall keep in safe custody the certificate books and shareholder
records and shall perform all other duties incident to the office of
Secretary as the Board of Directors shall prescribe.
<PAGE 15>
- 15 -
Section 9. Assistant Secretaries. The Assistant
Secretaries, if any, in order of their seniority or in any other
order determined by the Board of Directors shall, in the absence or
disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such other duties as the
Board of Directors or the Secretary shall prescribe.
Section 10. The Treasurer. The Treasurer shall have the
care and custody of the corporate funds, and other valuable effects,
including securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and
to the credit of the Corporation in such depositories as may be
designated by the Board of Directors. The Treasurer shall disburse
the funds of the Corporation as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the
President and directors, at the regular meetings of the Board, or
whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation. If
required by the Board of Directors, the Treasurer shall give the
Corporation a bond for such term, in such sum and with such surety
or sureties as shall be satisfactory to the Board for the faithful
performance of the duties of his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control
belonging to the Corporation.
<PAGE 16>
- 16 -
Section 11. Assistant Treasurers. The Assistant Treasurers,
if any, in the order of their seniority or in any other order
determined by the Board, shall in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties as the Board of
Directors or the Treasurer shall prescribe.
Section 12. Controller. The Controller shall see that
adequate records of all assets, liabilities, and transactions of the
Corporation are maintained that adequate audits thereof are
currently and regularly made, and in conjunction with other officers
initiate and enforce measures and procedures whereby the business of
the Corporation shall be conducted with maximum efficiency, safety
and economy. He shall also perform all such other duties as usually
pertain to the office of Controller. He shall be in all matters
subject to the control of and responsible to Board of Directors
alone.
<PAGE 17>
- 17 -
ARTICLE VIII.
SHARE CERTIFICATES
Section 1. Form; Signature. The certificates for shares of
the Corporation shall be in such form as shall be determined by the
Board of Directors and shall be numbered consecutively and entered
in the books of the Corporation as they are issued. Each
certificate shall exhibit the registered holder's name and the
number and class of shares, and shall be signed by the President or
a Vice President and the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, and shall bear the seal of the
Corporation or a facsimile thereof. Where any such certificate is
countersigned by a transfer agent, or registered by a registrar, the
signature of any such officer may be a facsimile signature. In case
any officer who signed, or whose facsimile signature or signatures
were placed on any such certificate shall have ceased to be such
officer before such certificate is issued, it may nevertheless be
issued by the Corporation with the same effect as if he were such
officer at the date of issue.
Section 2. Lost, Destroyed or Stolen Certificates. The
Board of Directors or an officer or officers duly authorized
thereunto by the Board may direct a new share certificate or
certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have
been lost, destroyed or wrongfully taken upon the making of a sworn
<PAGE 18>
- 18 -
affidavit of that fact by the person claiming the certificate to
have been lost, destroyed or wrongfully taken. When authorizing
such issue of a new certificate or certificates, the Board of
Directors or any authorized officer or officers may, in its, his or
their discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, destroyed or wrongfully
taken certificate or certificates, or his legal representative, to
give the Corporation a bond in such sum as may be directed as
indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, destroyed
or wrongfully taken.
Section 3. Registration of Transfer. Subject to the
provisions of the Federal Securities Laws and to any contractual
restriction which may be evidenced by a legend upon the face of such
certificate, upon surrender to the Corporation or any 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 or
such transfer agent to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. Registered Shareholders. Except as otherwise
provided by law, the Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends or other distributions, and to vote as
such owner, and shall not be bound to recognize any equitable or
<PAGE 19>
- 19 -
legal claim to or interest in such share or shares on the part of
any other person.
Section 5. Record Date. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to or
dissent from any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividend
or the allotment of any rights, or for the purpose of any other
action affecting the interests of shareholders, the Board of
Directors may fix, in advance, a record date. Such date shall not
be more than fifty (50) nor less than ten (10) days before the date
of any such meeting, nor more than fifty (50) days prior to any
other action.
In each such case, except as otherwise provided by law, only
such persons as shall be shareholders of record on the date so fixed
shall be entitled to notice of, and to vote at, such meeting and any
adjournment thereof, or to express such consent or dissent, or to
receive payment of such dividend, or such allotment or rights, or
otherwise to be recognized as shareholders for the related purpose,
notwithstanding any registration of transfer of shares on the books
of the Corporation after any such record date so fixed.
<PAGE 20>
- 20 -
ARTICLE IX
GENERAL PROVISIONS
Section 1. Dividends. Subject to the applicable provisions
of the Certificate of Incorporation, if any, dividends upon the
outstanding shares of the Corporation, may be declared by the Board
of Directors at any regular or special meeting, pursuant to law and
may be paid in cash, in property or in shares of the Corporation.
Section 2. Reserves. Before payment of any dividend, there
may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the Board of Directors from time to
time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for
such other purpose as the Board shall think conducive to the
interest of the Corporation, and the Board may modify or abolish any
such reserve in the manner in which it was created.
Section 3. Instruments Under Seal. All deeds, bonds,
mortgages, contracts and other instruments requiring a seal may be
signed in the name of the Corporation by the President or by any
other officer authorized to sign such instrument by the President or
the Board of Directors.
<PAGE 21>
- 21 -
Section 4. Checks, etc. All checks or demands for money and
notes or other instruments evidencing indebtedness or obligations of
the Corporation shall be signed by such officer or officers or such
other person or persons as the President or Vice President and
Treasurer or Secretary, or the Board of Directors, may from time to
time designate.
Section 5. Fiscal Year. The fiscal year of the Corporation
shall, unless otherwise fixed by the Board of Directors, begin on
the 1st day of October in each calendar year and end on the 30th
day of September of the next succeeding calendar year.
Section 6. Seal. The corporate seal shall have inscribed
thereon the words "National Fuel Gas Distribution Corporation,
Corporate Seal, New York, 1973."
<PAGE 22>
- 22 -
ARTICLE X.
INDEMNIFICATION AND INSURANCE
Section 1. Indemnification. Any person made, or threatened
to be made, a party to an action or proceeding, by reason of the
fact that he, his testator or intestate is or was a director or
officer of the Corporation, or by reason of the fact that he, his
testator or intestate, while serving as a director or officer of the
Corporation, served in any capacity any other domestic or foreign
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise at the request of the Corporation, shall be
indemnified by the Corporation against the expenses (including
attorney's fees, judgments, fines and amounts paid in settlement)
actually incurred by him as a result of such action or proceeding,
or any appeal therein, to the full extent permissible under Sections
721 through 726 of the New York Business Corporation Law, or any
amendments thereto.
Section 2. Insurance. The Corporation may purchase and
maintain insurance to indemnify the Corporation and the directors
and officers to the extent permitted under Section 727 of the New
York Business Corporation Law or any successor provisions.
<PAGE 23>
- 23 -
ARTICLE XI.
AMENDMENTS
Section 1. Power to Amend. The Board of Directors shall
have power to amend, repeal or adopt By-Laws at any regular or
special meeting of the Board. However, any By-Law adopted by the
Board may be amended or repealed by vote of the holders of shares
entitled at the time to vote for the election of directors.
Section 2. Amendment Affecting Election of Directors;
Notice. If any By-Law regulating an impending election of directors
is adopted, amended or repealed by the Board, there shall be set
forth in the notice of the next meeting of shareholders for the
election of directors the By-Law so adopted, amended or repealed,
together with a concise statement of the changes effected by such
adoption, amendment or repeal.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<CAPITAL-SURPLUS-PAID-IN> 379,156
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<LONG-TERM-DEBT-NET> 462,500
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<TOTAL-COMMON-STOCKHOLDERS-EQ> 195,902
0
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<LONG-TERM-DEBT-NET> 209,465
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0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 124,495
<TOT-CAPITALIZATION-AND-LIAB> 551,262
<GROSS-OPERATING-REVENUE> 155,879
<INCOME-TAX-EXPENSE> 18,680
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<TOTAL-OPERATING-EXPENSES> 110,714
<OPERATING-INCOME-LOSS> 45,165
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<INCOME-BEFORE-INTEREST-EXPEN> 46,422
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0
<EARNINGS-AVAILABLE-FOR-COMM> 30,651
<COMMON-STOCK-DIVIDENDS> 17,523
<TOTAL-INTEREST-ON-BONDS> 0
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</TABLE>
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THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SENECA
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REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
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</LEGEND>
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<ARTICLE> OPUR1
<LEGEND>
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</LEGEND>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DATA TRACK
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BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL
FUEL RESOURCES, INC.'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
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</TABLE>
<PAGE 1>
EXHIBIT A
PARTNERSHIP AGREEMENT
THIS PARTNERSHIP AGREEMENT entered into and effective of
September 1, 1994, by Leidy Hub, Inc. or its designated affiliate,
a New York corporation with its principal offices at 10 Lafayette
Square, Buffalo, New York 14203 ("LHI"), and Hub Services, Inc. or
its designated affiliate, a Delaware corporation with its principal
offices at 13430 Northwest Freeway, Suite 1200, Houston, Texas
77040 ("Hub Services"). LHI and Hub are sometimes referred to as
"Partners".
WITNESSETH
WHEREAS, the parties to this Agreement previously entered into
an Agreement dated September 1, 1993 (the "Pre-Partnership
Agreement") pursuant to which LHI and Hub Services agreed, subject
to all the terms and conditions of the Pre-Partnership Agreement,
to organize and begin operation of the Ellisburg-Leidy Northeast
Hub and to cause the formation of a Partnership (the "Partnership")
for the purposes of gathering, purchasing, transporting, storing,
marketing natural gas, and owning and operating the Ellisburg-Leidy
Northeast Hub; and
WHEREAS, the Pre-Partnership Agreement contemplated that LHI
and Hub Services would become Partners in the Partnership pursuant
to this Partnership Agreement, which is intended to govern the
terms of the relationship between LHI and Hub Services as Partners
and to set forth certain covenants, representations and warranties
of the parties;
NOW, THEREFORE, in consideration of the covenants exchanged
herein and in reliance on the representations and warranties given
in the Pre-Partnership Agreement, the parties agree as follows:
ARTICLE I
ORGANIZATION OF PARTNERSHIP
1.1 General Partnership. LHI and Hub Services by this
Agreement form a general partnership under the laws of the State of
Pennsylvania named The Ellisburg-Leidy Northeast Hub Company, with
its principal offices at 100 First Avenue, Suite 700A, Pittsburgh,
Pennsylvania 15222. The principal place of business may be changed
from time to time, and other offices may be established by actions
taken in accordance with the provision of this Agreement.
1.2 Partnership Business. The business of the Partnership
will be to operate and administer a natural gas marketing hub in
the general vicinity of Leidy, Pennsylvania and to provide services
associated with operation of the hub. No Partner will have any
<PAGE 2>
right or claim of right to the property contributed to the
Partnership by the Partners or to control the use of such property
or any other property of the Partnership, other than as set forth
in this Agreement or established by law.
1.3 Partnership Authority. The Partnership is empowered to
take any and all action necessary, appropriate, or convenient for
the accomplishment of its purposes, and for the benefit of the
Partnership and its properties, including, but not limited to:
(1) Entering into and performing contracts of any kind;
(2) Acquiring, constructing, operating, maintaining,
owning, transferring, renting, or leasing any property, real,
personal or mixed;
(3) Applying for and obtaining governmental
authorizations and approvals;
(4) Bringing and defending actions at law or equity; and
(5) Subject to the provisions of this Agreement,
admitting additional parties as Partners or purchasing the
interest of any Partner.
1.4 Initial Capital. Contemporaneously with the execution of
this Agreement, each Partner shall initially contribute to the
Partnership's capital the amount of $14,406.00 in assets,
consisting of the property listed on Exhibit 1.4, which property
was previously owned by Hub Services under the Pre-Partnership
Agreement. Exhibit 1.4 also sets forth the amounts that the
Partners agree are the market values of the properties.
1.5 Interest on Capital. No Partner shall be entitled to
receive any interest on its capital contribution.
1.6 Additional Capital. Whenever the Executive Committee
determines, in accordance with the provisions of Article II of this
Agreement, that the Partnership's capital is, or is presently
likely to become, insufficient for the conduct of Partnership
business, the Executive Committee may issue a call for additional
contributions to capital. These contributions shall be payable in
cash no later than five business days after the date specified in
the call.
1.7 Additional Partners. In order to raise additional
capital, to acquire assets, or for any other Partnership purpose,
the Partnership may issue Partnership units to Partners or to other
persons, and admit such other persons to the Partnership as
Partners, for the consideration and on the terms and conditions
agreed upon by the Partners. For purposes of this Agreement,
"Partnership unit" means a percentage ownership of the Partnership,
with one percentage point (1%) equaling one unit.
<PAGE 3>
ARTICLE II
MANAGEMENT
2.1 Executive Committee - Powers.
(a) Except as otherwise provided in this Agreement, the
property, business and affairs of the Partnership shall be under
the direction of the Executive Committee. Except for matters
requiring the action of the Partners under the terms of this
Agreement, the Executive Committee shall have the power to take any
action that the Partners may take under law, subject to any
restrictions set forth in this Agreement.
(b) The approval by all members of the Executive
Committee present at a meeting of the Executive Committee at which
a quorum is present shall be required before any of the following
acts involving the Partnership or any of its Subsidiaries may be
taken:
(i) borrowing transactions in excess of $25,000,
lending transactions or the guaranteeing of any third
party indebtedness;
(ii) approving a capital budget and an operating
budget for each fiscal year, which shall not be exceeded
without the express consent of the Executive Committee
(except as provided in (iii) below); provided, however,
that:
(A) the operating budget for any year for
which the Partners fail to adopt such budget shall
be limited to eighty-five percent (85%) of the
previous year's operating budget; and
(B) the capital budget for any year for which
the Partners fail to adopt such budget shall be the
lesser of eighty-five percent (85%) of the previous
year's capital budget or $50,000.
(iii) making any capital expenditure in excess of
$5,000 unless such expenditure is reflected in a budget
for the current fiscal year that has been approved by the
Executive Committee;
(iv) entering into an agreement with a term in
excess of one year or involving payments in excess of
$50,000 over the term of the agreement;
(v) entering into an agreement for the
transportation, balancing, storage, parking, wheeling,
purchase, or sale of natural gas with a term in excess of
one year involving an average daily volume obligation of
more than 25,000 MMBtu;
<PAGE 4>
(vi) executing or otherwise entering into any
contract or commitment to transfer any asset, the fair
market value of which exceeds $50,000 or which is
material to the ongoing operations of the Partnership;
(vii) executing or otherwise entering into any
contract or commitment for any purchases or sales of gas
in the ordinary course of business from a Partner, an
officer or employee of the Partnership or any of its
Subsidiaries, an Affiliate of a Partner or of an officer
or employee of the Partnership or any of its
Subsidiaries, or a person related by blood or marriage to
an officer or employee of the Partnership or any of its
Subsidiaries, involving aggregate consideration and fair
market value of which exceeds $50,000;
(viii) the indemnification of any Officer or any other
Person except as specifically provided herein;
(ix) executing or otherwise entering into any
employment agreement or the hiring or firing of any
Officer or other similarly compensated person with or
without cause;
(x) setting or amending the compensation level of
any Officer or other similarly compensated person;
(xi) revaluating of any property or asset;
(xii) taking any action in its capacity as a
shareholder or partner of any Person (defined as any
individual, partnership or other legal entity);
(xiii) making an investment in any Person;
(xiv) (A) filing any claim or lawsuit against any
Person except where the amount claimed is for less than
$100,000 or (B) settling any claim or lawsuit except
where the fair market value of the settlement amount is
less than $100,000;
(xv) taking any other action not in the ordinary
course of business;
(xvi) amending this Agreement;
(xvii) transferring all or substantially all of the
assets of the Partnership or any of its Subsidiaries;
(xviii) merging or consolidating the Partnership with
or into any other Person; or
<PAGE 5>
(xix) authorizing or issuing any additional
Partnership interests or admitting any additional Person
as a Partner.
Any other action required or permitted by the Executive
Committee under this Agreement may be taken only with the
approval in advance by all members of the Executive Committee
present at a meeting of the Executive Committee at which a
quorum is present.
2.2 Composition and Term.
(a) The Executive Committee shall be composed of two
members for each Partner. Each Partner is entitled to select two
members of the Executive Committee. All members shall be entitled
to receive notices and agendas of upcoming Executive Committee
meetings, attend all Executive Committee meetings and participate
in all discussions, and receive minutes from previous Executive
Committee meetings.
(b) Until replaced pursuant to the terms of this
Agreement, LHI's members shall be Bruce D. Heine and Gerald T.
Wehrlin. Hub Services' members shall be Stephen W. Bergstrom and
Arthur R. Cipriani. Gerald T. Wehrlin will be the Chairman, and
Stephen W. Bergstrom will be the Vice Chairman. Each member shall
be entitled to hold office until death, resignation or removal.
Partners who are entitled to appoint a member may replace that
member in the event of a vacancy. Any member may be removed at any
time without cause by the Partner entitled to appoint such member,
but not otherwise. Any member may appoint a proxy (including
another member) to attend meetings and vote (including, without
limitation, voting on any matter before the Executive Committee).
Without limiting the generality of the foregoing, in determining if
a quorum is present, all members in attendance by means of a proxy
shall be included in the count of a quorum.
2.3 Annual and Regular Meetings. The Executive Committee
shall hold an annual meeting, and may hold regular meetings at such
time and place as the Executive Committee determines by resolution
but in any event the Executive Committee shall, unless the
Executive Committee otherwise agrees, hold regular meetings at the
offices of the Partnership in Pittsburgh, Pennsylvania during the
months of January, April, July and October of each year.
2.4 Special Meetings. Special meetings of the Executive
Committee may be called by the Chairman, Vice Chairman, the
Executive Committee or any Partner, upon notice to all members of
the Executive Committee.
2.5 Notice of Meetings. Notice of a special meeting shall
state the purpose of the meeting and notice of special and regular
meetings must be given in writing at least ten days in advance of
such meeting. Notice of such meeting may be waived in writing.
<PAGE 6>
2.6 Quorum and Manner of Acting. The presence of one member
designated by each Partner shall constitute a quorum. If a quorum
is present, the action of all those present shall constitute the
action of the Executive Committee. Any action the Executive
Committee may take, may be taken without a meeting by unanimous
written consent of the members. Meetings of the Executive
Committee may take place by telephone or any means where any
persons attending can hear and speak to each other.
2.7 No Compensation. No member of the Executive Committee
shall be entitled to compensation for its services, or any
reimbursement of expenses incurred, as a member of the Executive
Committee.
2.8 Vote Required. The action of the Executive Committee
shall be by unanimous consent of those members present (assuming
there is a quorum present).
2.9 Officers.
(a) Generally. The Partnership shall have agents,
referred to as "Officers" of the Partnership. These agents (whose
authority is limited pursuant to the following sentence) shall be
appointed in the manner specified below, and shall have the titles
and authority specified in this Section 2.9. Each Officer shall
have only the authority specified below, and shall not be a general
agent of the Partnership. Unless otherwise decided by the
Executive Committee, no Officer of the Partnership (other than a
member of the Executive Committee) may simultaneously serve as an
officer of any Partner, or of any affiliate of a Partner.
(b) Titles and Number. The managing executives of the
Partnership shall be the members of the Executive Committee, the
Chief Operating Officer, the Secretary and the Treasurer. There
shall be appointed from time to time, in accordance with subsection
(c) below, such Vice Presidents, Secretaries, Assistant
Secretaries, Treasurers and Assistant Treasurers as the Executive
Committee may desire. Any person may hold two or more offices,
except that the offices of Chief Operating Officer and Secretary
may not be held by the same person.
(c) Election and Term of Office. The Officers shall be
elected by the Executive Committee at the annual meeting; provided
that the following Officers are hereby installed and authorized to
act until the first such annual meeting of the Executive Committee:
Paul Drexelius, Chief Operating Officer; Gerald T. Wehrlin,
Secretary; and Robert T. Ray, Treasurer. Each Officer shall hold
office until the annual meeting following the date of election of
such Officer. Any Officer may be removed by the Executive
Committee with or without cause. Vacancies in any office shall be
filled by the Executive Committee. Any vacancy in the office of
Chief Operating Officer shall be filled by unanimous consent of the
Partners.
<PAGE 7>
(d) Chairman and Vice Chairman of the Executive
Committee. The Chairman, and in the absence of the Chairman, the
Vice Chairman, shall preside at meetings of the Executive
Committee, and shall exercise such powers and perform such duties
as may be assigned to him by this Agreement or the Executive
Committee.
(e) Chief Operating Officer. The Chief Operating
Officer, subject to the general control of the Executive Committee,
shall be responsible for the day-to-day management and direction of
the affairs of the Partnership, employees and agents, shall
supervise generally the affairs of the Partnership, and, subject to
the limitations imposed by this Agreement, any employment
agreement, any employee plan, or any resolution of the Executive
Committee, shall have full authority to execute all documents and
take all actions that the Partnership may legally take. The Chief
Operating Officer shall exercise such other powers and perform such
other duties as may be assigned to him by this Agreement or the
Executive Committee, including such duties and powers stated in any
employment agreement.
(f) Vice Presidents. In the absence of the Chairman,
the Vice Chairman and the Chief Operating Officer, the Vice
President designated by the Executive Committee shall, except as
hereinafter provided, have all of the powers and duties conferred
upon the Chief Operating Officer. Each of the Vice Presidents
shall have the same power as the Chairman, the Vice Chairman or the
Chief Operating Officer to sign certificates, contracts and other
instruments of the Partnership; provided, however, no Vice
President may execute or otherwise enter into any contract or
commitment referred to in Section 2.1(b)(v) unless the Executive
Committee approves the execution of that contract or commitment by
a Vice President. Any Vice President shall perform such other
duties and may exercise such other powers as may from time to time
be assigned to him by this Agreement, the Executive Committee, the
Chairman, the Vice Chairman or the Chief Operating Officer.
(g) Secretary and Assistant Secretaries. The Secretary
shall record or cause to be recorded in books provided for that
purpose the minutes of the meetings or actions of the Partners and
the meetings or actions of the Executive Committee or any
subcommittees thereof, shall see that all notices are duly given in
accordance with the provisions of this Agreement and as required by
law, shall be custodian of all records (other than financial),
shall see that the books, reports, statements, certificates and all
other documents and records required by law are properly kept and
filed, and, in general, shall perform all duties incident to the
office of Secretary and such other duties as may, from time to
time, be assigned to him by the Executive Committee, the Chairman,
or the Vice Chairman. The Assistant Secretaries shall exercise the
powers of the Secretary during that Officer's absence or inability
or refusal to act. Each of the Assistant Secretaries shall possess
the same power as the Secretary to sign certificates, contracts,
obligations and other instruments of the Partnership.
<PAGE 8>
(h) Treasurer and Assistant Treasurers. The Treasurer
shall keep or cause to be kept the books of account of the
Partnership and shall render statements of the financial affairs of
the Partnership in such form and as often as required by this
Agreement, the Executive Committee, the Chairman, or the Vice
Chairman. The Treasurer, subject to the order of the Executive
Committee, shall have the custody of all funds and securities of
the Partnership. The Treasurer shall perform all other duties
commonly incident to his office and shall perform such other duties
and have such other powers as the Executive Committee, the
Chairman, or the Vice Chairman shall designate from time to time.
The Assistant Treasurers shall exercise the power of the Treasurer
during that Officer's absence or inability or refusal to act. Each
of the Assistant Treasurers shall possess the same power as the
Treasurer to sign all certificates, contracts, obligations and
other instruments of the Partnership.
(i) Powers of Attorney. The Executive Committee may
grant powers of attorney or other authority as appropriate to
establish and evidence the authority of the Officers.
2.10 Expenses. The Partnership shall pay only those expenses
that are directly attributable to the Partnership's business.
ARTICLE III
COVENANTS, REPRESENTATIONS AND WARRANTIES
3.1 Pre-Partnership Representations - LHI. LHI hereby
reaffirms to the Partnership for the benefit of Hub Services and
the Partnership the covenants, representations and warranties it
made in the Pre-Partnership Agreement, and affirms that those
covenants, representations and warranties are true as of the date
of this Agreement.
3.2 Pre-Partnership Representations - Hub Services. Hub
Services hereby reaffirms to the Partnership for the benefit of LHI
and the Partnership the covenants, representations and warranties
it made in the Pre-Partnership Agreement, and affirms that those
covenants, representations and warranties are true as of the date
of this Agreement.
ARTICLE IV
LOANS TO THE PARTNERSHIP
4.1 No Partner shall lend or advance money to or for the
Partnership's benefit without the approval of the Executive
Committee. If any Partner, with the requisite consent of the
Executive Committee, lends any money to the Partnership in addition
to its contribution to the Partnership's capital, the loan shall be
a debt of the Partnership to that Partner and shall bear interest
at a rate established and approved by the Executive Committee. The
<PAGE 9>
liability shall not be regarded as an increase in the lending
Partner's capital, and it shall not entitle the lending partner to
any increased share of Partnership profits.
ARTICLE V
CAPITAL ACCOUNTS
5.1 Capital Accounts. The Partnership will establish for
each Partner a Capital Account, which will be maintained in
accordance with the following:
(a) To each Partner's Capital Account will be credited
(i) that Partner's capital contributions to the Partnership, (ii)
items in the nature of income or gain that are allocated to that
Partner pursuant to Article VI of this Agreement, and (iii) the
amount of any Partnership liabilities that are assumed by that
Partner or that are secured by any property that is distributed to
that Partner. Notwithstanding anything else in this Agreement, the
initial balance of the Capital Accounts of LHI and Hub Services
shall be deemed to be $14,406.00 each.
(b) From each Partner's Capital Account will be debited
the amount of (i) distributions made to that partner pursuant to
Article VI of this Agreement, (ii) any items in the nature of
expenses or losses that are allocated to that Partner pursuant to
Article VI of this Agreement, and (iii) the amount of any
liabilities of that Partner that are assumed by the Partnership or
that are secured by any property that is contributed by that
Partner to the Partnership.
5.2 Assignment. In the event any Partner's interest in the
Partnership is assigned to an affiliate in accordance with the
terms of this Agreement, the affiliate shall succeed to the Capital
Account of the Partner which assigns its interest.
5.3 Maintenance of Capital Accounts. Partners' Capital
Accounts will be maintained otherwise in accordance with Treasury
Regulation Section 1.704-1(b) or corresponding provisions of future
regulations. The foregoing provisions and other provisions of this
Agreement relating to Capital Accounts are intended to comply with
Treasury Regulation 1.704-1(b) and will be interpreted and applied
in a manner consistent with that Regulation.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1 Partnership Profit and Loss. The profits, losses and
credits of the Partnership will be determined at the end of each
fiscal year of the Partnership, which will end on December 31 of
each calendar year unless otherwise agreed by the Partners.
Accounting principles will be applied in a consistent manner.
<PAGE 10>
Profits and losses will be allocated annually based upon the
results of an annual audit, unless otherwise agreed by the Parties.
6.2 Allocation of Profit and Loss.
(a) Except as otherwise provided in this Section 6.2,
the profits, losses and credits of the partnership shall be
allocated 50 percent to each Partner.
(b) Notwithstanding any other provision of this Section
6.2, if there is a net decrease in Partnership minimum gain (as
defined in Treasury Regulation Section 1.704-2 (b) (2) and computed
in accordance with Treasury Regulation Section 1.704-2(d)) during
any Partnership taxable year, then each Partner shall be allocated
such amount of Partnership income and gain for such year (and
subsequent years, if necessary) determined under and in the manner
required by Treasury Regulation Sections 1.704-2(f) and (g) as is
necessary to meet the requirements for a minimum gain chargeback as
provided in such Regulation.
(c) Notwithstanding any other provision of this Section
6.2 except Section 6.2(b), if there is a net decrease in Partner
nonrecourse debt minimum gain (as determined in accordance with
Treasury Regulation Section 1.704-2(i)(5)) attributable to a
Partner nonrecourse debt (as defined in Treasury Regulation Section
1.704-2(b) (4)) during any Partnership taxable year, any Partner
who has a share of the Partner nonrecourse debt minimum gain
attributable to such Partner nonrecourse debt, determined in
accordance with Treasury Regulation Section 1.704-2(g)(2), shall be
allocated such amount of income and gain for such year (and
subsequent years, if necessary) determined under and in the manner
required by Treasury Regulation Section 1.704-2(i)(4) as is
necessary to meet the requirements for a Partner nonrecourse debt
minimum gain chargeback as is provided in such Regulation.
(d) To the extent that an adjustment to the basis of any
asset pursuant to Code Section 734(b) or Code Section 743(b) is
required to be taken into account in determining Capital Accounts
as provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
the adjustment shall be treated (if an increase) as an item of gain
or (if a decrease) as an item of loss, and such gain or loss shall
be allocated to the Partners consistent with the allocation of the
adjustment pursuant to such Regulation.
(e) Nonrecourse deductions (as defined in Treasury
Regulation Section 1.704-2(b)(1)) of any fiscal year shall be
allocated among the Partners in proportion to their interests in
the Partnership.
(f) Any Partner nonrecourse deduction shall be allocated
pursuant to Treasury Regulation Section 1.704-2(i)(1) to the
Partner who bears the economic risk of loss with respect to the
Partner nonrecourse debt to which it is attributable.
<PAGE 11>
(g) Notwithstanding any other provision of this Section
6.2 except Sections 6.2(b) and 6.2(c), if during any Partnership
taxable year any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) and, as a result of
such adjustment, allocation or distribution, such Partner's Capital
Account balance is reduced below zero in an amount exceeding the
amount of such Partner's deficit amount that it is obligated to
restore within the meaning of Treasury Regulation Section 1.704-
1(b)(2)(ii), items of Partnership income and gain for such year
(and, if necessary, subsequent years) shall be allocated to such
Partner in an amount and manner sufficient to eliminate such
deficit balance as quickly as possible.
(h) The purpose and the intent of the special
allocations provided for in Section 6.2(b) through 6.2(g) are to
comply with the provisions of Treasury Regulation Sections 1.704-1
and 1.704-2 and such special allocations are to be made so as to
accomplish that result. However, to the extent possible, the
Partners in allocating items of income, gain, loss or deduction
between the Partners shall take into account the special
allocations in such a manner that the net amount of allocations to
each Partner shall be the same as such Partner's distributive share
of profits and losses would have been had the events requiring the
special allocations not taken place. The Partners shall apply the
provisions of Section 6.2(b) through 6.2(g) in whatever order they
reasonably believe will minimize any economic distortion that
otherwise might result from the application of the special
allocations.
(i) Solely for income tax purposes, any item of income,
gain, loss, deduction or credit with respect to any property (other
than money) that has been contributed by a Partner to the capital
of the Partnership and which is required to be allocated to
Partners for income tax purposes under Code Section 704(c) so as to
take into account the variation between the tax basis of such
property and its fair market value at the time of its contribution,
shall be allocated to the Partners for income tax purposes in the
manner required by Code Section 704(c) and the Regulations
promulgated thereunder. If and when the Capital Accounts of the
Partners are required to be adjusted pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(f) or (g) with respect to a
revaluation of any asset of the Partnership, subsequent allocations
of income, gain, loss and deduction, including, without limitation,
depreciation or deductions for cost recovery with respect to such
asset, shall take account of any variation between the then exiting
adjusted basis of such asset for federal income tax purposes and
the fair market value, as adjusted, of such asset, as such
computations may be required under Code Sections 704(b) and 704(c).
6.3 Partnership Cash Flow. The term "Partnership Cash Flow"
means the excess from time to time of the total of cash on hand of
the Partnership over the reasonable working capital requirements of
the Partnership.
<PAGE 12>
6.4 Distributions of Partnership Cash Flow. Partnership Cash
Flow available for distribution will be determined annually by the
Executive Committee in connection with its approval of the Annual
Operating Budget, or more frequently as determined by the Executive
Committee. The Partnership Cash Flow determined to be available
for distribution shall be distributed 50 percent to each Partner.
ARTICLE VII
TERM AND DISSOLUTION
7.1 Term of Partnership. The Partnership shall continue for
two (2) years from the date of execution of this Agreement, and
shall be automatically continued for additional terms of one (1)
year unless a Partner notifies the other Partner(s), at least three
months prior to the end of the term, that the Partnership shall not
automatically be continued for an additional term. If the
Partnership has not previously been dissolved, it shall dissolve
twenty (20) years after the death of the last to die of the
employees of the Partners as of the date of execution of this
Agreement. Otherwise, the Partnership shall continue until it is
sooner dissolved in accordance with the provision of this Article
or as otherwise required by law.
7.2 Dissolution.
(1) The Partnership shall be dissolved upon the
occurrence of any of the following events:
(a) The express will of all of the Partners who
have not suffered their interests in the Partnership to be charged
for their separate debts;
(b) The expiration of the term of the Partnership;
(c) The withdrawal, bankruptcy, or dissolution of
any Partner, unless all remaining Partners agree within 90 days to
continue the Partnership; or
(d) The material breach of this Agreement by any
Partner; provided that any Partner seeking to dissolve the
Partnership for this reason shall first give the allegedly
breaching Partner a sworn statement ("Notice of Breach") specifying
the nature of the breach, after which the Partners shall in good
faith attempt to resolve dispute. If the Partners have not
resolved the matter within six (6) months after the Notice of
Breach is given, the Partner alleging the breach must give the
allegedly breaching Partner a second sworn statement alleging that
such breach has continued and that the Partner alleging the breach
thereby dissolves the Partnership effective at least six (6) months
and a day after the Notice of Breach was given. If the Partner
alleged to have breached this Agreement believes that there was no
material breach, or that such breach was cured during the six
<PAGE 13>
months following the Notice of Breach, such Partner may attempt to
recover from the alleging Partner damages for wrongful termination
of this Agreement.
(2) On application by or for a Partner the court shall
decree a dissolution upon the occurrence of an event designated in
Section 7.2(1) should the Partners not agree that the Partnership
is dissolved.
7.3 Purchase Option. If any Partner (herein, the "Affected
Partner") becomes bankrupt, or dissolves, merges or consolidates
with any other Person (other than with an affiliate of a Partner),
the provisions of this Section 7.3 shall apply:
(a) Any Partner (other than the Affected Partner), or
its designee (the "Purchasing Partner"), shall have the right to
purchase all of the Affected Partner's interest in the Partnership
by so notifying the Affected Partner within 90 days after the event
giving rise to such Partner becoming an Affected Partner. The
purchase price shall be equal to the fair market value of the
Affected Partner's interest in the Partnership. The fair market
value shall be determined as of the date of the notice to the
Affected Partner of the election to purchase its interest in the
Partnership. Fair market value shall be determined by a national
investment banking firm mutually acceptable to the Affected Partner
and the Purchasing Partner. Fees, if any, charged by the
investment banking firm shall be paid by the Partnership. The
closing shall be held at a date mutually satisfactory to the
Affected Partner and the Purchasing Partners, but not later than
120 days after the notice of election to purchase the Affected
Partner's interest in the Partnership. The purchase price shall be
payable in cash at the closing. The payment to be made shall be
conclusively deemed to be, in complete liquidation and satisfaction
of all the rights and interest of the Affected Partner in respect
of the Partnership, including, without limitation, any interest in
the Partnership, any rights in specific Partnership property, and
any rights against the Partnership and (insofar as the affairs of
the Partnership are concerned) against the Partners.
(b) If at any time a liability is asserted against the
Partnership based on acts or transactions that occurred wholly or
in part before the notice of the election to purchase the Affected
Partner's interest in the Partnership, the Affected Partner's share
of the asserted liability (determined in accordance with the
Affected Partner's allocated share of profits or losses pursuant to
Section 6.2) may be withheld from any amounts otherwise payable to
the Affected Partner under this Section 7.3 until the amount of the
liability is determined by adjudication, settlement, compromise or
otherwise, at which time so much of the withheld amount as equals
the Affected Partner's share of the liability shall be applied
toward payment thereof and the balance shall be paid to the
Affected Partner. If, at the time the amount of the liability is
finally determined, all payments under this Section 7.3 have been
<PAGE 14>
made to the Affected Partner or the amount withheld is not
sufficient to offset the Affected Partner's share of the liability,
the Affected Partner shall reimburse the Partnership for its share
of the liability immediately upon demand.
7.4 Liquidation. Upon the dissolution of the Partnership,
unless it is reconstituted and continued, a liquidator designated
by the Executive Committee ("Liquidator") shall wind up the affairs
of the Partnership. The Liquidator shall take full account of the
Partnership's property and liabilities and the Partnership's
property shall be liquidated as promptly as is consistent with
obtaining the fair value thereof. As promptly as possible after
the dissolution and final liquidation of the Partnership, the
Liquidator shall cause a proper accounting to be made by the
Partnership's auditors of the Partnership's assets, liabilities,
and operations through the last day of the calendar month in which
the liquidation shall occur or the final liquidation shall be
completed, as applicable. The Liquidator shall obtain the approval
of the Executive Committee before selling, assigning, transferring
or encumbering any of the Partnership's assets and shall wind up
and liquidate the affairs of the Partnership in an orderly and
businesslike manner. All proceeds from the liquidation of the
Partnership's assets shall be applied in the following order of
priority: (a) first, to the payment of debts and liabilities of
the Partnership, including without limitation, any loans or
advances to the Partnership by any Partners, and the costs and
expenses of liquidation; (b) second, to the establishment of such
reserves as the Executive Committee deems necessary or advisable;
(c) third, to the Partners in accordance with their positive
Capital Account balances, determined after taking into account all
Capital Account adjustments for the Partnership taxable year in
which the liquidation occurs; and (d) any remaining amount, 50
percent to each of the Partners. In the event that any Partner's
Capital Account balance is negative after taking into account all
Capital Account adjustments for the Partnership taxable year in
which the liquidation occurs, the Partner shall have no obligation
to contribute any amount to the Partnership as a result of the
negative Capital Account except to the extent necessary to meet the
debts and obligations of the Partnership, including, without
limitation, any loans or advances to the Partnership by any
Partner, but excluding any return of capital or other Partnership
distribution to the Partners. Any distribution to or contribution
from a Partner under this Article VII shall be made by the end of
the taxable year of the "liquidation" of the Partnership, or, if
later, within 90 days of such "liquidation" as such term is defined
in Treasury Regulation Section 1.704-1(b)(2)(ii)(g), except as
otherwise permitted by Treasury Regulation Section 1.704-
1(b)(2)(ii)(b). The distribution of cash and/or property to a
Partner in accordance with the provisions of this Section 7.4 shall
constitute a complete return to the Partner of its capital
contributions to the Partnership and a complete distribution to the
Partner of its interest in the Partnership and all the
Partnership's property.
<PAGE 15>
7.5 Distribution in Kind. If any Partnership assets are to
be distributed in kind to the Partners, the liquidator shall obtain
an independent appraisal of the fair market value of such assets at
a date reasonably close to the date of liquidation and shall adjust
the Partners' Capital Accounts for any unrealized gain or loss in
the same manner as such Capital Accounts would be adjusted under
Article VI upon an actual sale of such assets at such appraised
value. Fees, if any, associated with the appraisal shall be paid
by the Partnership. The assets shall be distributed in kind to the
Partners in accordance with Section 7.4. The Capital Account of
each Partner shall be debited by the appraised value of the assets
distributed to it. All distributions in kind to the Partners shall
be made subject to the liability of each distributee for costs,
expenses, and liabilities theretofore incurred or for which the
Partnership shall have committed prior to the date of termination.
7.6 Withdrawal of a Partner. Each Partner covenants and
agrees that it will not withdraw from the Partnership. If a
Partner shall so withdraw from the Partnership in violation of such
covenant and agreement, such withdrawal shall be effective only
upon at least 90 days prior notice to all other Partners, and the
Partnership may recover from such Partner damages for breach of
such covenant, and offset the damages just described against the
amount otherwise distributable to such Partner and/or may pursue
any remedies otherwise available under applicable law.
7.7 Limitations on Partition and Dissolution. Except as
specifically provided in this Article VII, no Partner shall be
entitled to bring an action at law or equity for the partition or
dissolution of the Partnership.
7.8 Removal. No Partner may be removed as a Partner.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Survival. The covenants, representations and warranties
of the Partners shall survive for two years from execution of this
Agreement.
8.2 Indemnification by Hub Services. Hub Services hereby
agrees to indemnify and hold harmless LHI and the Partnership from
and against any and all damages, claims, liabilities, losses, costs
and expenses whatsoever arising out of, attributable to, or
incurred with respect to (i) any breach of warranty or
misrepresentation by or on behalf of Hub Services under this
Agreement, or the breach or nonperformance of any covenant,
agreement, or obligation to be performed by Hub Services; and (ii)
any misrepresentation in, or omission from, any certificate or
instrument executed and delivered or to be executed and delivered
by or on behalf of Hub Services in connection with this Agreement.
<PAGE 16>
8.3 Indemnification by LHI. LHI agrees to indemnify and hold
harmless Hub Services and the Partnership from and against any and
all damages, claims, liabilities, losses, costs and expenses
whatsoever arising out of, attributable to, or incurred with
respect to (i) any breach of warranty or misrepresentation by or on
behalf of LHI under this Agreement, or the breach or nonperformance
of any covenant, agreement or obligation to be performed by LHI;
and (ii) any misrepresentation in, or omission from, any
certificate or instrument executed and delivered or to be executed
and delivered by or on behalf of LHI in connection with this
Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Partnership. Subject to the
provisions of Section 9.2, the Partnership shall indemnify each
Partner from and against all losses, liabilities, costs, and
expenses incurred on account of such Partner's liability for
obligations of the Partnership; provided, however, that such
indemnity shall not apply to actions or omissions constituting
gross negligence, willful misconduct, bad faith or breach of the
provisions of this Agreement.
9.2 Unauthorized Acts. Except as otherwise expressly
provided herein, no Partner, in its capacity as a Partner, shall
have the authority to act as agent for or on behalf of the
Partnership or another Partner, to do any act which would be
binding on the Partnership or another Partner or to incur any
expenditures on behalf of or with respect to the Partnership. If
the Partnership or a Partner sustains any loss or liability
attributable to any act of another Partner which is unauthorized
under the terms of this Agreement, then the Partner who has taken
such unauthorized action shall indemnify the Partnership or such
Partner, as the case may be, for the amount of such loss or
liability so sustained.
ARTICLE X
ACCOUNTING AND INFORMATION
10.1 Books. The Partnership shall maintain complete and
accurate books of account of the Partnership's affairs for both
accounting and tax purposes, at the Partnership's principal place
of business. The Partnership's books shall be kept on the accrual
method of accounting generally applicable to partnerships, except
that another method may be applied with the approval of the
Executive Committee for financial statement reporting purposes, on
the advice of the Partnership's accountants. The Partnership's
accounting period, taxable year and fiscal year shall be the
calendar year or such other year for income tax purposes as may be
required by the Code or Treasury Regulations.
<PAGE 17>
10.2 Reports and Information. The Executive Committee shall
mail to each Partner (i) monthly, within 15 days after the end of
each month, a balance sheet and statement of income, cash flow and
Partner's capital for the Partnership, covering the month then
ended, prepared on a consistent basis and in accordance with
generally accepted accounting principles and past practices of the
Partnership; (ii) subject to the approval of the Executive
Committee, within 60 days after the end of the fiscal year,
financial statements of the same type and prepared in accordance
with the same standards as in (i) above, covering the fiscal year
ended, audited by the accounting firm of Arthur Anderson or another
national accounting firm acceptable to the Executive Committee with
copies of all audit reports, and drafts thereof, delivered
simultaneously to all members of the Executive Committee; and (iii)
subject to the approval of the Executive Committee, annually, by
not later than March 10th of each year, sufficient financial
information concerning the results of Partnership operations as is
necessary for each Partner to file its own federal and state income
tax return for the preceding year. Each Partner or its authorized
representative shall have access at the Partnership's principal
place of business and other appropriate locations, during ordinary
business hours, to all properties, books, records, accounts and
information regarding the Partnership, its Subsidiaries or their
respective activities, whether in possession of the Partnership or
any affiliate of a Partner.
10.3 Tax Returns and Elections. The Executive Committee shall
cause to be prepared and timely filed all federal, state and local
income and other tax returns and reports as may be required as a
result of the business of the Partnership. All elections made on
such returns shall be subject to the prior approval of the
Partners. Not more than 10 days after the date on which the
Partnership actually files its federal income tax return, a copy of
the return so filed shall be furnished to all Partners.
10.4 Allocation of Expenses to Partnership. The Partnership
may (i) share space and office equipment and facilities in offices
leased and occupied by Natural Gas Clearinghouse's ("NGC")
Pittsburgh office, and (ii) borrow NGC or Hub Services employees
from time to time on a temporary basis for purposes associated with
operating the Ellisburg-Leidy Hub. Expenses or salaries associated
with such shared space and borrowed employees shall be treated as
expenses incurred by the Partnership, subject to the limit set
forth in this Section 10.4. The allocations of such costs from NGC
or Hub Services to the Partnership shall total no more than twenty-
two thousand dollars ($22,000) per month, except as otherwise
approved by the Executive Committee. The Executive Committee shall
review this limit at least every six months, and shall endeavor in
good faith to set that limit, and approve requested monthly
allocations exceeding that limit, at amounts which compensate NGC
or Hub Services for the actual proportionate cost of prudently
shared facilities and prudently borrowed employees. NGC or Hub
Services shall furnish all members of the Executive Committee with
<PAGE 18>
a monthly statement of such expenses, supported by invoices or
other supporting documents, and shall maintain adequate records in
accordance with GAAP supporting the allocation of expenses between
the Partnership and Hub Services or NGC. Nothing in this Agreement
shall obligate NGC or Hub Services to provide facilities or furnish
borrowed employees at a cost in excess of the cost subject to
compensation under this Section 10.4.
ARTICLE XI
TRANSFER OF PARTNERSHIP INTEREST
11.1 Restrictions on Transfer. Transfers of Partnership
interests to any Person (in this Article XI, a "Transferee") shall
be subject to the purchase rights and other terms provided below.
Additionally, except as otherwise provided in Section 11.3(c), no
Transfer of a Partnership interest may be made (i) without the
consent of all of the other Partners, which consent shall not be
unreasonably withheld or (ii) if the Partnership would be
considered to have terminated within the meaning of Section 708 of
the Internal Revenue Code. The consent of all of the other
Partners to such a Transfer shall, except as provided in
Section 11.3(c), constitute the consent of such Partners to the
admission of the Transferee as a partner in the Partnership. No
Transfer shall be effective until the transferring Partner and its
Transferee shall have executed and delivered to the other Partners
an appropriate document whereby the Transferee agrees to be bound
by the terms of this Agreement, and all the other agreements and
plans of the Partnership, and the transferring Partner and its
Transferee each represents and warrants to the other Partners and
the Partnership that such Transfer was made in accordance with all
applicable laws and regulations, including, without limitation,
securities laws. Any Transfer of a Partnership interest permitted
under this Article XI shall not release the transferring Partner
from any of its liabilities and obligations under this Agreement,
whether theretofore accrued or arising after such transfer.
11.2 Reflecting Transfers on the Books of the Partnership.
The Partnership shall not transfer upon its books any interest held
or owned by any of the Partners to any person except in accordance
with this Agreement.
11.3 Certain Restrictions and Permitted Transfers.
(a) No Partner shall grant any proxy or enter into or
agree to be bound by any voting trust with respect to the
interests.
(b) Any Transferee acquiring Partnership interest(s)
pursuant to a Transfer in accordance with the provisions of this
Article XI shall, as a successor or assignee hereunder, be deemed
to take such interest subject to all of the other provisions of
this Agreement.
<PAGE 19>
(c) A Partner shall be entitled to pledge up to twenty-
five percent (25%) of its Partnership interest to a commercial
lending institution (the "Lender") as security for indebtedness of
such Partner if (i) the Lender executes a written agreement in
favor of the other Partners pursuant to which it agrees (A) not to
Transfer such interests except in compliance with the provisions of
this Agreement, (B) that any Transfer of such interests upon or in
lieu of foreclosure of its security interest will be subject to the
provisions of Section 11.4 and that it must offer to sell the
interests pursuant to Section 11.4 before it may accept any offer
at foreclosure or in lieu of foreclosure and (C) that if the Lender
shall acquire such interests, whether by foreclosure or otherwise,
it will assume and be bound by all the obligations of the pledging
Partner under this Agreement but the Lender and its assignees shall
not be admitted to the Partnership as a Partner or otherwise have
the right to vote on any matter and the Lender and its assignees
shall only have the right to receive distributions, and (ii) such
pledge does not reduce the Partnership's borrowing capacity. The
consent requirement of Section 11.1 and the provisions of
Section 11.4 shall not apply to the pledging of interests under the
preceding sentence.
11.4 Sale of Partnership Interest.
(a) If any Partner (as used in this Section, the
"Transferor") receives a bona fide offer to purchase all or any
portion of the Transferor's interest in the Partnership that the
Transferor desires to accept, the Transferor shall give written
notice (as used in this Section, the "Transfer Notice") to the
Partnership and the other Partners (as used in this Section, the
"Remaining Partners"), stating the Transferor's desire to make such
Transfer, the identity of the Person that made such bona fide offer
to purchase (as used in this Section, the "Offeror"), the interest
to be transferred (as used in this Section, the "Offered
Interest"), the cash price and other consideration which has been
offered for the Offered Interest and the other terms and conditions
of such proposed sale. The Partnership and the Remaining Partners
shall then have the prior right to purchase all, but not less than
all, of the Offered Interest in accordance with Section 11.5.
(b) If the Partnership and the Remaining Partners elect
not to exercise the rights to purchase all of the Offered Interest
set forth in Section 11.4(a), then, subject to Section 11.1, the
Transferor may transfer all of the Offered Interest to the Offeror
at any time within 120 days after the date the Partnership received
the Transfer Notice. Any such sale shall be to the Offeror, at not
less than the price for the Offered Interest specified in the
Transfer Notice and upon other terms and conditions, if any, not
more favorable to the Offeror than those specified in the Transfer
Notice. If the Transferor does not effect such sale within such
120 day period, the proposed disposition shall again become subject
to the rights of purchase set forth in Section 11.4.
<PAGE 20>
11.5 Prior Rights to Purchase.
(a) The provisions of this Section 11.5 shall apply to
any Transfer referred to in Section 11.4.
(b) The Partnership, acting through the Executive
Committee, shall have the irrevocable option to purchase or redeem
all of the Offered Interest, and may exercise its option by written
notice to the Transferor (the "Partnership Notice"), with copies to
the Remaining Partners, within 20 days from the date the
Partnership receives the Transfer Notice (as used in this Section,
the "Offer Date"). The failure of the Partnership to so notify the
Transferor and the Remaining Partners within such 20 day period
shall be deemed an election not to purchase or redeem the Offered
Interest.
(c) In the event the Partnership elects not to purchase
or redeem the Offered Interest, each of the Remaining Partners
shall have the irrevocable option to purchase all of the Offered
Interest in accordance with their Proportionate Shares, or on such
other basis as they may agree. The option of the Remaining
Partners shall be exercisable by each Remaining Partner by written
notice from such Remaining Partner to the Transferor, with a copy
to the Partnership and the other Remaining Partners, given within
30 days from the Offer Date, setting forth (a) whether such
Remaining Partner elects to purchase its Proportionate Share and
(b) whether such Remaining Partner elects to purchase its
Proportionate Share of the Proportionate Share of any other
Remaining Partner that declines to exercise its option. The
failure of a Remaining Partner to so notify the Transferor, the
Partnership and the other Remaining Partners within such 30 day
period shall be deemed an election by such Remaining Partner not to
purchase the Offered interest. If the Remaining Partners do not,
in the aggregate, exercise their options to acquire all of the
Offered Interest, the Transferor may Transfer the offered interest
in accordance with Section 11.4(b).
(d) The parties, if any, that exercise their rights
under this Section are referred to in this Section as the
"Purchasing Parties". In the case of a Transfer subject to
Section 11.4, the Offered Interest shall be purchased and sold for
the consideration and on the other terms and conditions offered by
the Offeror; provided, however, that if such consideration consists
of or includes consideration other than cash, the Purchasing
Parties, at their sole option, may pay such non-cash portion (if
any) of the purchase price with either (i) substantially similar
consideration of equivalent value or (ii) cash in an amount equal
to the fair market value of the non-cash consideration as valued in
either case by an independent third party accounting firm,
evaluation firm or investment banker (the "Appraiser") selected by
the Transferor and approved by the Purchasing Parties (the fee of
which shall be borne one-half by the Purchasing Parties and one-
half by the Transferor) promptly after a request by the Transferor.
<PAGE 21>
If the Transferor and the Purchasing Parties cannot agree on an
Appraiser within ten days after the Purchasing Parties' receipt of
written notice of the Appraiser selected by the Transferor, then
[insert alternative selection procedure].
(e) The closing (the "Closing") of the purchase of the
Offered Interest under this Section will be held at the
Partnership's offices not later than 30 days after the giving of
the last notice of the election to purchase the Offered Interest,
or if such day is not a business day, on the next following
business day. At the Closing, the Purchasing Parties shall tender
t<PAGE>
o the Transferor the consideration required under this
Section 11.5, and the Transferor will duly execute and deliver
assignments of the Offered Interest to the Purchasing Parties,
conveying the Offered Interest with general warranty of title and
free and clear of all liens, adverse claims and encumbrances.
11.6 Assignment to Affiliates and Successors. Notwithstanding
anything to the contrary in this Agreement except the prohibition
set forth in Section 11.1(ii), any Partner may assign its right,
interest and obligations hereunder to an affiliate or successor in
interest by merger or consolidation. No such assignment shall
relieve the assignor of any of its obligations, duties or
liabilities hereunder to the other parties.
ARTICLE XII
COMPETITION
12.1 Competing Hubs. Except as provided in this Section 12.1
and 12.3, no Partner, nor any entity which owns more than 50% of
the outstanding voting stock of a Partner (a "Parent"), nor any
subsidiary of a Parent (a "Sibling"), shall establish or operate
any business covering the area of Ellisburg and Leidy,
Pennsylvania, which is or purports to be a "market hub" or "market
center" as those terms are used in FERC publications. This
Section 12.1 shall not be interpreted to prohibit any Partner,
Parent or Sibling from buying or selling gas, or buying or
releasing capacity, involving points in the area of Ellisburg and
Leidy, Pennsylvania, without utilizing the services of the
Partnership. The prohibition contained in this Section shall be in
effect during the term of this Partnership, and for twelve (12)
months after dissolution of this Partnership.
12.2 Use of Partnership Identity. Unless the Partners agree
otherwise in a signed written agreement, no Partner, Parent or
Sibling shall use the Partnership's telephone number, address, name
(or any deceptively similar name) or logo for twelve (12) months
after the termination of this Partnership.
12.3 Permitted Competition by National Fuel. Notwithstanding
the prohibition contained in Section 12.1 above, LHI Siblings
National Fuel Gas Supply Corporation ("Supply") and National Fuel
<PAGE 22>
Gas Distribution Corporation ("Distribution") shall be permitted to
comply with the laws, regulations and tariffs applicable to them as
an "open access" interstate natural gas pipeline and a state-
regulated public utility, respectively. For example, potential
Partnership customers will be able to make requests for service
directly to Supply which may be in competition with the services
offered by the Partnership, and Supply may be required to perform
those services.
12.4 Partner Dealings with the Partnership. The Partners
expect that Partners and/or Siblings may become customers of the
Partnership, and otherwise engage in natural gas marketing or
brokering activities which may effectively compete with the
Partnership. Other than the specific prohibition in Section 12.1
above, nothing in this Agreement is intended to prohibit or limit
such competition.
12.5 Competition Between Partners. Except as specifically
provided in this Article XII, nothing shall limit or restrict the
Partners' ability to compete with each other.
ARTICLE XIII
MISCELLANEOUS
13.1 Entire Agreement. This Agreement and its Exhibits and
Schedules constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter hereof and no
Partner shall be liable or bound to the other in any manner by any
warranties or representations, except as specifically set forth
therein.
13.2 Amendment. Any amendment, change or modification of this
Agreement shall be void unless in writing and signed by all
Partners.
13.3 Confidentiality. The Partners will use all reasonable
efforts to cause all confidential information obtained from each
other to be treated as such and will use all reasonable efforts not
to use such information in a manner detrimental to each other. In
the event that the transactions contemplated hereby are not
consummated for any reason, each will destroy or expeditiously
return to the others all copies of information furnished to it and
its representatives.
13.4 Successors and Assigns. This Agreement and the rights
and obligations hereunder will be binding upon and will inure to
the benefit of the Partners and their respective, permitted
successors and assigns, but nothing in this Agreement is intended
to confer on any person not a party hereto any benefit or right.
<PAGE 23>
13.5 Transaction Costs. Each party shall each bear and pay
its own transaction costs relating to the negotiation and execution
of this Agreement.
13.6 Notices. Any notices or other communications required or
permitted to be given pursuant to this Agreement shall be deemed to
have been given if delivered personally or sent by certified mail,
postage prepaid, addressed as follows:
(a) To LHI:
Mr. Gerald T. Wehrlin
10 Lafayette Square
Buffalo, New York 14203
With a copy to:
James R. Peterson, Esq.
National Fuel Gas Company
10 Lafayette Square, Room 1500
Buffalo, New York 14203
(b) To Hub Services:
Stephen W. Bergstrom
Hub Services, Inc.
13430 Northwest Freeway, #1200
Houston, Texas 77040
With a copy to:
John Herbert, Esq.
Natural Gas Clearinghouse
13430 Northwest Freeway, #1200
Houston, Texas 77040
or to such other addresses as shall be furnished in writing by the
parties.
13.7 Headings. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect
the meaning of the provisions hereof.
13.8 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument.
13.9 Choice of Law. This Agreement shall be governed,
construed and enforced in accordance with the internal laws of the
State of New York without regard to principles of conflicts of law.
<PAGE 24>
13.10 Additional Documents. The Partners agree to execute
any additional documents and to perform any additional acts as are
or may become necessary or convenient to carry out the purposes of
this Agreement.
13.11 Setoff Rights. In the event that any sum is payable to
any Partner pursuant to this Agreement, any amounts owed by such
Partner to the Partnership shall be deducted from such sum before
payment to the Partner.
13.12 Severability. In the event that any provision of this
Agreement is held to be illegal, invalid or unenforceable under
present or future laws, then (i) such provision shall be fully
severable and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision were not a part of
this Agreement; (ii) the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by
such illegal, invalid, or unenforceable provision or by its
severance from this Agreement; and (iii) there shall be added
automatically as a part of this Agreement a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be
possible and still be legal, valid and enforceable.
IN WITNESS WHEREOF, each of the parties hereto have duly
executed this Agreement as of the date first above written.
LEIDY HUB, INC.
By:_/s/ Walter E. DeForest______
Title: President________________
HUB SERVICES, INC.
By: /s/ Stephen W. Bergstrom____
Title:__________________________
JCH\AGR\120
<PAGE 25>
EXHIBIT 1.4
Schedule of Partnership Assets
as of September 1, 1994
Assets Market Value
A. Communications Equipment
1. Merlin AT&T Phone System $ 3,489.00
2. AT&T Answering Machine 58.00
3. AT&T Cellular Phone 1,279.00
Subtotal $ 4,826.00
B. Computer Equipment
1. P.C. $ 4,982.00
2. Computer Monitor (2) 600.00
3. Computer Docking Station (2) 1,200.00
4. H.P. Printer 2,500.00
5. Computer Mobile Arm 100.00
6. Software 2,000.00
Subtotal $11,382.00
C. Office Furnishings
1. Executive Desk $ 2,751.00
2. Desk Chairs (3) 2,064.00
3. Guest Chairs (4) 1,225.00
4. Bookcases (3) 1,221.00
5. Lateral Files (2) 1,403.00
6. Executive Credenza 780.00
Subtotal $ 9,444.00
D. Leasehold Improvements $ 2,855.00
E. Miscellaneous
1. Plants $ 305.00
F. Hub Service Agreements and
Gas Transportation Agreements -0-
TOTAL $28,812.00
JCH\608
<PAGE 26>
Exhibit 1.4(b)
Schedule of Ellisburg-Leidy Northeast Hub Company's
Hub Service Agreements and Gas Transportation Agreements
A. Fully Executed Agreements
Agreement Type Date Parties
1. Hub Service 3/15/94 HSI/Chatauqua Energy
Agreement Marketing
2. Hub Service 4/1/94 HSI/Columbia Energy Services
Agreement
3. Hub Service 2/15/94 HSI/Gaslantic Corp.
Agreement
4. Hub Service 11/1/93 HSI/Goetz Oil & Gas
Agreement
5. Hub Service 12/1/93 HSI/Natural Gas
Agreement Clearinghouse
6. Hub Service 12/1/93 HSI/National Fuel Gas
Agreement Distribution
7. Hub Service 12/1/93 HSI/National Fuel Resources
Agreement
8. Gas 11/1/93 HSI/Tennessee Gas Pipeline
Transportation Company
Agreement
9. Gas Storage 11/9/93 HSI/Tennessee Gas Pipeline
Agreement Company
10. Gas 9/1/93 HSI/National Fuel Gas Supply
Transportation Corporation
Agreement
11. Service Agreement 9/1/93 HSI/National Fuel Gas Supply
(ISS) Corporation
12. Service Agreement 1/21/94 HSI/National Fuel Gas Supply
(W-1) Corporation
13. Service Agreement 1/21/94 HSI/National Fuel Gas Supply
(IR-1) Corporation
14. Service Agreement 1/21/94 HSI/National Fuel Gas Supply
(P-1) Corporation
<PAGE 27>
B. Agreements Not Fully Executed - Hub Business Conducted
Agreement Type Parties
15. Hub Service Agreement HSI/Catex Vitol
16. Hub Service Agreement HSI/CC Pace Resources
17. Hub Service Agreement HSI/Cenergy
18. Hub Service Agreement HSI/Con Ed Gas
Marketing
19. Hub Service Agreement HSI/Enron/Access
20. Hub Service Agreement HSI/Enron Gas Services
21. Hub Service Agreement HSI/Enserch
22. Hub Service Agreement HSI/Equitable Resource
Marketing
23. Hub Service Agreement HSI/J. Makowski & Assoc.
24. Hub Service Agreement HSI/Indeck Energy Services
25. Hub Service Agreement HSI/KCS Energy
Marketing
26. Hub Service Agreement HSI/O&R Energy Marketing
27. Hub Service Agreement HSI/Philbro Energy
28. Hub Service Agreement HSI/Superior Energy
29. Hub Service Agreement HSI/Tenngasco
30. Hub Service Agreement HSI/Transco Energy Marketing
31. Hub Service Agreement HSI/Western Gas Marketing
32. Hub Service Agreement HSI/Western Gas Resources
33. Hub Service Agreement HSI/Xenergy
JCH\609
<PAGE 28>
Attached to and made part of the Partnership Agreement dated as of
September 1, 1994, between Leidy Hub, Inc. and Hub Services, Inc.
to form Ellisburg-Leidy Northeast Hub Company.
Gentlemen:
The following serves as notice and certification that: Leidy
Hub, Inc. is a corporation duly organized and existing under the
laws of the State of Pennsylvania; that Walter E. DeForest is an
officer of Leidy Hub, Inc. and thus fully authorized to execute
that certain Partnership Agreement dated September 1, 1994,
executed by Hub Services, Inc. and Leidy Hub, Inc.
I, Gerald T. Wehrlin, Secretary and Treasurer of Leidy Hub,
Inc. certify that the foregoing representations and statements are
true and correct and in full accordance with Leidy Hub, Inc.'s
Articles of Incorporation and Bylaws as of this 1st day of
September, 1994.
/s/ Gerald T. Wehrlin___________
Secretary and Treasurer of
Leidy Hub, Inc.
JCH\619
<PAGE 29>
Attached to and made part of the Partnership Agreement dated as of
September 1, 1994, between Leidy Hub, Inc. and Hub Services, Inc.
to form Ellisburg-Leidy Northeast Hub Company.
Gentlemen:
The following serves as notice and certification that: Hub
Services, Inc. is a corporation duly organized and existing under
the laws of the State of Delaware; that Stephen W. Bergstrom is an
officer of Hub Services, Inc. and thus fully authorized to execute
that certain Partnership Agreement dated September 1, 1994,
executed by Hub Services, Inc. and Leidy Hub, Inc.
I, John C. Herbert, Vice President and Assistant Secretary of
Hub Services, Inc. certify that the foregoing representations and
statements are true and correct and in full accordance with Hub
Services, Inc.'s Articles of Incorporation and Bylaws as of this
1st day of September, 1994.
/s/ John C. Herbert_____________
Assistant Secretary of
Hub Services, Inc.
JCH\619
<PAGE 1>
CERTIFICATE OF MERGER
OF
SENECA RESOURCES CORPORATION
AND
EMPIRE EXPLORATION, INC.
INTO
SENECA RESOURCES CORPORATION
UNDER SECTION 907 OF THE BUSINESS CORPORATION LAW
Pursuant to Section 907 of the Business Corporation
Law of the State of New York, the undersigned hereby certify
as follows:
1. The name of each corporation to be merged is
Empire Exploration, Inc., a New York corporation ("Empire"),
and Seneca Resources Corporation, a Pennsylvania corporation
("Seneca"). The name under which Seneca was formed is Mars
Natural Gas Company.
2. The name of the surviving corporation is Seneca
Resources Corporation ("Surviving Corporation").
3. The designation and number of outstanding shares
of each class and series, and the specification of each class
and series entitled to vote, of each corporation to be merged
are as follows:
<PAGE 2>
Designation and Classes and
Number of Out- Series Entitled
Name of the Corporation standing Shares to Vote
Seneca Resources 100,000 common, common,
Corporation with par value with par value
of Five Dollars of Five Dollars
Empire Exploration 1,000 common, common,
Inc. with par value with par value
of Ten Dollars of Ten Dollars
4. The effective date of the merger is July 1, 1994.
5. The merger was authorized by the unanimous
written consent of the board of directors of Empire followed
by the written consent of the holder of all outstanding
shares of Empire entitled to vote. The merger is permitted
by the laws of the jurisdiction of the Surviving Corporation,
and is in compliance therewith.
6. The Certificate of Incorporation of Empire was
filed by the Department of State on March 26, 1982.
7. The Surviving Corporation was formed under the
laws of the Commonwealth of Pennsylvania on June 9, 1913, and
its application for authority to do business in the State of
New York was filed by the Department of State on November 23,
1976.
8. The Surviving Corporation agrees that it may be
served with process in the State of New York in any action or
special proceeding for the enforcement of any liability or
obligation for the enforcement of any liability or obligation
of the Surviving Corporation for which the Surviving
Corporation is previously amenable to suit in the State of
<PAGE 3>
New York, and for the enforcement, as provided in the
Business Corporation Law of the State of New York, of the
right of shareholders of Empire to receive payment for their
shares against the Surviving Corporation.
9. The Surviving Corporation agrees that, subject
to the provisions of Section 623 of the Business Corporation
Law of the State of New York, it will promptly pay to the
shareholders of Empire the amount, if any, to which they
shall be entitled under the provisions of the Business
Corporation Law of the State of New York relating to the
rights of shareholders to receive payment for their shares.
10. The Surviving Corporation hereby designates the
Secretary of State of the State of New York as its agent upon
whom process against it may be served in the manner set forth
in paragraph (b) of Section 306 of the Business Corporation
Law of the State of New York in any action or special
proceeding. The post office address to which the said
Secretary of State shall mail a copy of any process against
the Surviving Corporation served upon him is:
Seneca Resources Corporation
c/o Treasurer
10 Lafayette Square
Buffalo, New York 14203
<PAGE 4>
IN WITNESS WHEREOF, this certificate has been signed
on the 29th day of April, 1994, and the statements contained
herein are affirmed as true under penalties of perjury.
EMPIRE EXPLORATION, INC.
By/s/Philip C. Ackerman
Philip C. Ackerman, President
By /s/Ronald J. Tanski
Ronald J. Tanski, Secretary
SENECA RESOURCES CORPORATION
By /s/Philip C. Ackerman
Philip C. Ackerman, President
By /s/Gerald T. Wehrlin
Gerald T. Wehrlin, Secretary
<PAGE 5>
PLAN OF MERGER approved on April 29, 1994 by Seneca
Resources Corporation (sometimes referred to hereinafter as
"Seneca"), a business corporation incorporated under the laws
of the Commonwealth of Pennsylvania, and by resolution
adopted by its Board of Directors as of such date, and
approved on April 29, 1994 by Empire Exploration, Inc.
(sometimes referred to hereinafter as "Empire"), a business
corporation incorporated under the laws of the State of New
York, and by resolution adopted by its Board of Directors as
of such date.
1. The names of the corporations to be merged are
Seneca Resources Corporation and Empire Exploration, Inc.
The name under which Seneca was formed is The Mars Company.
2. The designation and number of outstanding shares
of each class and series, and the specification of each class
and series entitled to vote, of each corporation to be merged
are as follows:
Designation and Classes and
Number of Out- Series Entitled
Name of the Corporation standing Shares to Vote
Seneca Resources 100,000 common, common,
Corporation with par value with par value
of Five Dollars of Five Dollars
Empire Exploration 1,000 common, common,
Inc. with par value with par value
of Ten Dollars of Ten Dollars
<PAGE 6>
3. Empire shall, pursuant to the provisions of the
Pennsylvania Business Corporation Law of 1988 and pursuant to
the provisions of the New York Business Corporation Law, be
merged into Seneca, which shall be the surviving corporation
("Surviving Corporation") upon the effective date of the
merger ("Merger") in the jurisdiction of its organization and
which shall continue to exist as the Surviving Corporation
pursuant to the provisions of the New York Business
Corporation Law. The separate existence of Empire shall
cease upon the effective date of the Merger in accordance
with the provisions of the New York Business Corporation Law.
4. The Articles of Incorporation of Seneca, as
amended, as in effect upon the effective date of the Merger
shall be the Articles of Incorporation, as amended, of the
Surviving Corporation.
5. The By-Laws of Seneca as in effect upon the
effective date of the Merger shall be the By-Laws of the
Surviving Corporation, and shall continue in full force and
effect until altered, amended or repealed.
6. The issued shares of Empire shall not be
converted or exchanged in any manner upon the effective date
of the Merger, but shall be surrendered and cancelled upon
the effective date of the Merger. The issued shares of
<PAGE 7>
Seneca shall not be converted or exchanged in any manner, but
each share which is issued as of the effective date of the
Merger shall continue to represent one issued share of the
Surviving Corporation.
7. All persons who are directors and officers of
Seneca on the effective date of the Merger shall be the
directors and officers of the Surviving Corporation, until
their successors are elected and shall have qualified.
8. In the event that this Plan of Merger shall have
been duly adopted and approved on behalf of Seneca in
accordance with the provisions of the Pennsylvania Business
Corporation Law of 1988 and duly approved and adopted on
behalf of Empire in accordance with the New York Business
Corporation Law, Seneca and Empire hereby stipulate that they
will cause to be executed and filed and/or recorded any
document or documents prescribed by the laws of the State of
New York and the laws of the Commonwealth of Pennsylvania,
and that they will cause to be performed all necessary acts
therein and elsewhere to effectuate the Merger.
9. The proper officers of Seneca and the proper
officers of Empire are herby authorized to execute the
Articles of Merger on behalf of such corporations,
respectively, in accordance with the provisions of the
Pennsylvania Business Corporation Law of 1988 and the
Certificate of Merger on behalf of such corporations in
<PAGE 8>
accordance with the provisions of the New York Business
Corporation Law; and the Board of Directors and the proper
officers of Seneca and of Empire, respectively, are hereby
authorized, empowered, and directed to do any and all acts,
and to make, execute, deliver, file and/or record any and all
instruments, papers, and documents which shall be or become
necessary, proper, or convenient to carry out or put into
effect any of the provisions of this Plan of Merger or the
merger.
10. Notwithstanding the full adoption and approval
of this Plan of Merger on behalf of Seneca in accordance with
the provisions of the Pennsylvania Business Corporation law
of 1988 and the full authorization of the Merger, and
notwithstanding the full approval and adoption of this Plan
of Merger on behalf of Empire in accordance with the
provisions of the New York Business Corporation Law and the
full authorization of the Merger, this Plan of Merger may be
amended or terminated at any time prior to the filing of the
Articles of Merger with the Department of State of the
Commonwealth of Pennsylvania or the filing of the Certificate
of Merger with the Department of State of the State of New
York by the Board of Directors of either Seneca or Empire.
11. The effective date and hour of this Plan of
Merger and of the Merger shall, insofar as the provisions of
the Pennsylvania Business Corporation Law of 1988 shall
govern the same, be July 1, 1994 at 12:01 A.M.
<PAGE 1>
CERTIFICATE OF MERGER
OF
PENN-YORK ENERGY CORPORATION
AND
NATIONAL FUEL GAS SUPPLY CORPORATION
INTO
NATIONAL FUEL GAS SUPPLY CORPORATION
UNDER SECTION 907 OF THE BUSINESS CORPORATION LAW
Pursuant to Section 907 of the Business Corporation
Law of the State of New York, the undersigned hereby certify
as follows:
1. The name of each corporation to be merged is
Penn-York Energy Corporation, a New York corporation
("Penn-York"), and National Fuel Gas Supply Corporation, a
Pennsylvania corporation ("Supply"). The name under which
Penn-York was formed is National Gas Storage Corporation.
The name under which Supply was formed is United Natural Gas
Company.
2. The name of the surviving corporation is
National Fuel Gas Supply Corporation ("Surviving
Corporation").
3. The designation and number of outstanding shares
of each class and series, and the specification of each class
and series entitled to vote, of each corporation to be merged
are as follows:
<PAGE 2>
Designation and Classes and
Number of Out- Series Entitled
Name of the Corporation standing Shares to Vote
National Fuel Gas 1,013,802 common, common,
Supply Corporation without par value without par value
Penn-York Energy 200 common, common,
Corporation without par value without par value
4. The effective date of the merger is July 1, 1994.
5. The merger was authorized by the unanimous
written consent of the board of directors of Penn-York
followed by the written consent of the holder of all
outstanding shares of Penn-York entitled to vote. The merger
is permitted by the laws of the jurisdiction of the Surviving
Corporation, and is in compliance therewith.
6. The Certificate of Incorporation of Penn-York
was filed by the Department of State on June 9, 1976.
7. The Surviving Corporation was formed by
consolidation under the laws of the Commonwealth of
Pennsylvania on January 2, 1951, and its application for
authority to do business in the State of New York was filed
by the Department of State on July 5, 1974.
8. The Surviving Corporation agrees that it may be
served with process in the State of New York in any action or
special proceeding for the enforcement of any liability or
obligation for the enforcement of any liability or obligation
of the Surviving Corporation for which the Surviving
Corporation is previously amenable to suit in the State of
New York, and for the enforcement, as provided in the
Business Corporation Law of the State of New York, of the
<PAGE 3>
right of shareholders of the Penn-York to receive payment for
their shares against the Surviving Corporation.
9. The Surviving Corporation agrees that, subject
to the provisions of Section 623 of the Business Corporation
Law of the State of New York, it will promptly pay to the
shareholders of Penn-York the amount, if any, to which they
shall be entitled under the provisions of the Business
Corporation Law of the State of New York relating to the
rights of shareholders to receive payment for their shares.
10. The Surviving Corporation hereby designates the
Secretary of State of the State of New York as its agent upon
whom process against it may be served in the manner set forth
in paragraph (b) of Section 306 of the Business Corporation
Law of the State of New York in any action or special
proceeding. The post office address to which the said
Secretary of State shall mail a copy of any process against
the Surviving Corporation served upon him is:
National Fuel Gas Supply Corporation
c/o Treasurer
10 Lafayette Square
Buffalo, New York 14203
IN WITNESS WHEREOF, this certificate has been signed
on the 1st day of April, 1994, and the statements contained
herein are affirmed as true under penalties of perjury.
<PAGE 4>
PENN-YORK ENERGY CORPORATION
By /S/Richard Hare
Richard Hare, Sr. Vice President
By s/sRichard M. DiValerio
Richard M. DiValerio, Secretary
NATIONAL FUEL GAS SUPPLY CORPORATION
By /s/Richard Hare
Richard Hare, President
By /s/Richard M. DiValerio
Richard M. DiValerio, Secretary
<PAGE 5>
PLAN OF MERGER approved on April 1, 1994 by National
Fuel Gas Supply Corporation (sometimes referred to
hereinafter as "Supply"), a business corporation incorporated
under the laws of the Commonwealth of Pennsylvania, and by
resolution adopted by its Board of Directors as of such date,
and approved on April 1, 1994 by Penn-York Energy Corporation
(sometimes referred to hereinafter as "Penn-York"), a
business corporation incorporated under the laws of the State
of New York, and by resolution adopted by its Board of
Directors as of such date.
1. The names of the corporations to be merged are
National Fuel Gas Supply Corporation and Penn-York Energy
Corporation. The name under which Supply was formed is
United Natural Gas Company. The name under which Penn-York
was formed is National Gas Storage Corporation.
2. The designation and number of outstanding shares
of each class and series, and the specification of each class
and series entitled to vote, of each corporation to be merged
are as follows:
Designation and Classes and
Number of Out- Series Entitled
Name of the Corporation standing Shares to Vote
National Fuel Gas 1,013,802 common, common,
Supply Corporation without par value without par value
Penn-York Energy 200 common, common,
Corporation without par value without par value
<PAGE 6>
3. Penn-York shall, pursuant to the provisions of
the Pennsylvania Business Corporation Law of 1988 and
pursuant to the provisions of the New York Business
Corporation Law, be merged into Supply, which shall be the
surviving corporation ("Surviving Corporation") upon the
effective date of the merger ("Merger") in the jurisdiction
of its organization and which shall continue to exist as the
Surviving Corporation pursuant to the provisions of the New
York Business Corporation Law. The separate existence of
Penn-York shall cease upon the effective date of the Merger
in accordance with the provisions of the New York Business
Corporation Law.
4. The Articles of Incorporation of Supply, as
amended, as in effect upon the effective date of the Merger
shall be the Articles of Incorporation, as amended, of the
Surviving Corporation.
5. The By-Laws of Supply as in effect upon the
effective date of the Merger shall be the By-Laws of the
Surviving Corporation, and shall continue in full force and
effect until altered, amended or repealed.
6. The issued shares of Penn-York shall not be
converted or exchanged in any manner upon the effective date
of the Merger, but shall be surrendered and cancelled upon
the effective date of the Merger. The issued shares of
<PAGE 7>
Supply shall not be converted or exchanged in any manner, but
each share which is issued as of the effective date of the
Merger shall continue to represent one issued share of the
Surviving Corporation.
7. All persons who are directors and officers of
Supply on the effective date of the Merger shall be the
directors and officers of the Surviving Corporation, until
their successors are elected and shall have qualified.
8. In the event that this Plan of Merger shall have
been duly adopted and approved on behalf of Supply in
accordance with the provisions of the Pennsylvania Business
Corporation Law of 1988 and duly approved and adopted on
behalf of Penn-York in accordance with the New York Business
Corporation Law, Supply and Penn-York hereby stipulate that
they will cause to be executed and filed and/or recorded any
document or documents prescribed by the laws of the State of
New York and the laws of the Commonwealth of Pennsylvania,
and that they will cause to be performed all necessary acts
therein and elsewhere to effectuate the Merger.
9. The proper officers of Supply and the proper
officers of Penn-York are herby authorized to execute the
Articles of Merger on behalf of such corporations,
respectively, in accordance with the provisions of the
Pennsylvania Business Corporation Law of 1988 and the
Certificate of Merger on behalf of such corporations in
<PAGE 8>
accordance with the provisions of the New York Business
Corporation Law; and the Board of Directors and the proper
officers of Supply and of Penn-York, respectively, are hereby
authorized, empowered, and directed to do any and all acts
and things, and to make, execute, deliver, file and/or record
any and all instruments, papers, and documents which shall be
or become necessary, proper, or convenient to carry out or
put into effect any of the provisions of this Plan of Merger
or the merger.
10. Notwithstanding the full adoption and approval
of this Plan of Merger on behalf of Supply in accordance with
the provisions of the Pennsylvania Business Corporation law
of 1988 and the full authorization of the Merger, and
notwithstanding the full approval and adoption of this Plan
of Merger on behalf of Penn-York in accordance with the
provisions of the New York Business Corporation Law and the
full authorization of the Merger, this Plan of Merger may be
amended or terminated at any time prior to the filing of the
Articles of Merger with the Department of State of the
Commonwealth of Pennsylvania or the filing of the Certificate
of Merger with the Department of State of the State of New
York by the Board of Directors of either Supply or Penn-York.
11. The effective date and hour of this Plan of
Merger and of the Merger shall, insofar as the provisions of
the Pennsylvania Business Corporation Law of 1988 shall
govern the same, be July 1, 1994 at 12:01 A.M.
