- - -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
------------------
FORM U5S
ANNUAL REPORT
For the Fiscal Year Ended September 30, 1997
------------------
Filed Pursuant to the
Public Utility Holding Company Act of 1935
by
National Fuel Gas Company
10 Lafayette Square, Buffalo, N.Y. 14203
- - -------------------------------------------------------------------------------
<PAGE>
NATIONAL FUEL GAS COMPANY
-------------------------
FORM U5S - ANNUAL REPORT
------------------------
For the Fiscal Year Ended September 30, 1997
--------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF
SEPTEMBER 30, 1997 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, 1997 11
Part II. Financial connections as of September 30, 1997 15
Part III. Compensation and other related information 15
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS 20
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Intercompany sales and services
(1) Salaries of officers of the Registrant 21
(2) Services rendered by Statutory Subsidiaries 23
(3) Services rendered by Registrant 30
Part II. Contracts to purchase services or goods
between any System company and any affiliate 31
Part III. Employment of any person by any System
company for the performance on a continuing
basis of management services 31
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES 31
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements (Index) 32
Exhibits 59
SIGNATURE 67
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1997
- - ------ -----------------------------------------------------------------
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% $424,567 $424,567
Unsecured Debt (Note 10) - - $395,200 $395,200
National Fuel Gas Supply
Corporation (Supply
Corporation) (Note 2) 1,013,802 100% $236,091 $236,091
Unsecured Debt (Note 10) - - $193,165 $193,165
Seneca Resources Corporation
(Seneca Resources) (Note 3) 100,000 100% $157,413 $157,413
Unsecured Debt (Note 10) - - $218,600 $218,600
Empire Exploration Company,
Empire 1983 Drilling
Program, Empire 1983
Joint Venture (Note 11) N/A N/A $ 970 $ 970
Highland Land & Minerals, Inc.
(Highland) (Note 4) 4,500 100% $ 4,778 $ 4,778
Utility Constructors, Inc.
(UCI) *(Note 5) 1,000 100% $ 2,784 $ 2,784
Data-Track Account Services,
Inc. (Data-Track) (Note 6) 1,000 100% $ 662 $ 662
Leidy Hub, Inc. (Leidy Hub)
(Note 7) 4,000 100% $ 632 $ 632
Unsecured Debt (Note 10) - - $ 300 $ 300
Ellisburg-Leidy Northeast
Hub Company (Note 7) N/A 50% $ 268 $ 137
Enerchange L.L.C. (Note 7) N/A 14.5% $ 3,504 $ 896
National Fuel Resources, Inc.
(NFR) (Note 8) 10,000 100% $ 10,662 $ 10,662
Horizon Energy Development, Inc.
(Horizon) (Notes 9 and 12-14) 1,250 100% $(11,773) $(11,773)
Unsecured Debt (Note 10) - - $ 32,600 $ 32,600
Sceptre Power Company *(Note 12) N/A 100% $ 3,361 $ 3,361
Beheer-en-Beleggingmaatschappij
Bruwabel B.V. (Bruwabel)
(Note 13) 400 100% $ 21,774 $ 21,774
Severoceske Teplarny, a.s.
(SCT) (Note 13) N/A 70.8% $ 49,957 $ 18,887
Teplarna Liberec, a.s.
(TL) (Note 13) N/A 70% $ 15,317 $ 10,722
Energoservis Liberec, s.r.o.
(EL) (Note 13) N/A 100% $ 24 $ 24
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1997
- - ------ -----------------------------------------------------------------
(Continued)
-----------
Number of Common Percent of Issuer Owner's
Name of Company Shares Owned Voting Power Book Value Book Value
- - --------------- ---------------- ------------ ---------- ----------
Registrant: (Thousands of Dollars)
- - ----------
Zkusebna mericu tepla a
vodomeru Litomerice, s.r.o.
(ZL) (Note 13) N/A 100% $ 34 $ 34
SCT SoftMaker, s.r.o.
(SM) (Note 13) N/A 100% $ 11 $ 11
Zatecka teplarenska, a.s.
(ZT) (Note 13) N/A 34% $ 3,498 $ 1,189
Horizon Energy Development,
s.r.o.
(HED) (Note 13) N/A 100% $ 902 $ 902
Power Development, s.r.o.
(PD) (Note 13) N/A 100% $ 1,542 $ 1,542
Teplarna Kromeriz a.s.
(Kromeriz) (Note 13) N/A 100% $ 1,027 $ 1,027
Niagara Energy Trading Inc.
(NET) (Note 15) 100 100% $ 1 $ 1
Seneca Independence Pipeline
Company (SIP) (Note 16) 1,000 100% $ 1 $ 1
Niagara Independence Marketing
Company (NIM) (Note 17) 1,000 100% $ 1 $ 1
Notes:
*Inactive subsidiary.
(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 affiliated 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, Louisiana and Alabama, in California, in Wyoming and in the
Appalachian region of the United States. In addition, Seneca Resources
is engaged in the marketing of timber from its Pennsylvania land
holdings.
(4) Highland operates a sawmill and kiln in Kane, Pennsylvania and a sawmill
--------
in Kersey, Pennsylvania.
(5) UCI discontinued its operations (primarily pipeline construction) in
---
1995 and its affairs are being wound down.
(6) Data-Track provides collection services (principally issuing collection
----------
notices) for the subsidiaries of the Company, particularly Distribution
Corporation.
(7) Leidy Hub is engaged in providing various natural gas hub services to
---------
customers in the northeastern, mid-Atlantic, Chicago and Los Angeles
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1997
- - ------ -----------------------------------------------------------------
(Continued)
-----------
areas of the United States and Ontario, Canada, through (i) Leidy Hub's
50% ownership of Ellisburg-Leidy Northeast Hub Company and (ii) Leidy
Hub's 14.5% ownership of Enerchange, L.L.C. (Enerchange), which in turn
owns QuickTrade, L.L.C.
(8) NFR is engaged in the marketing and brokerage of natural gas and the
---
performance of energy management services for utilities and end-users
located in the northeastern and midwestern United States.
(9) Horizon was formed to engage in foreign and domestic energy projects
-------
through investment in various business entities (see Notes 12-14).
(10) Unsecured debt is presented on page 6.
(11) In December 1983, Empire Exploration, Inc. (which was subsequently
merged into Seneca Resources) 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.'s aggregate investment in
all three limited partnerships amounted to $970,150.
(12) Horizon became one of the partners in Sceptre Power Company, a
California general partnership, on September 15, 1995. This partnership
was dissolved as of December 23, 1996 and is currently winding down
operations.
(13) Horizon owns 100% of the capital stock of Bruwabel. Bruwabel in turn
owns 100% of the ownership interests of HED (formerly Power
International, s.r.o.) and PD (both Czech corporations). PD owns 100% of
the ownership interests of Kromeriz (also a Czech corporation). During
fiscal 1997, Bruwabel acquired 36.8% of the outstanding shares of SCT
and received an additional 34% voting interest subject to put and call
options, thus bringing total voting power to 70.8%. In December 1997,
owners of the additional 34% equity interest put the additional SCT
shares to Bruwabel, thus raising Bruwabel's total ownership to 70.8%.
SCT owns 100% of the ownership interests of EL, ZL and SM, 70% of the
ownership interest of TL and 34% of the ownership interest of ZT. All
SCT subsidiaries are Czech corporations. Bruwabel and its subsidiaries
are primarily engaged in district heating and power generation project
development in Eastern Europe.
(14) Horizon owns 60% of the voting power of Sceptre Kabirwala, L.L.C.
(SKLLC) (a Delaware limited liability company) which in turn owns 60% of
the voting power of KPP Investment, L.L.C. (KPP) (a Delaware limited
liability company. At September 30, 1996, KPP owned 48.19% of the voting
stock of Fauji Kabirwala Power Company Limited (FKPCL) (a Pakistan
public limited company). During 1997, KPP sold its interest in FKPCL.
(15) NET is a New York corporation formed in July 1997 to engage in wholesale
natural gas trading and other energy-related activities.
(16) SIP, a Delaware corporation formed in July 1997, has agreed to purchase,
upon receipt of regulatory approvals, a one-third general partnership
interest in Independence Pipeline Company (Independence), a Delaware
general partnership. Independence, after receipt of regulatory
approvals, plans to construct and operate the Independence Pipeline, a
370-mile interstate pipeline system which would transport about 900,000
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1997
- - ------ -----------------------------------------------------------------
(Concluded)
-----------
dekatherms per day of natural gas from Defiance, Ohio to Leidy,
Pennsylvania.
(17) NIM is a Delaware corporation formed in September 1997 to own a
one-third general partnership interest in DirectLink Gas Marketing
Company, which will engage in natural gas marketing and related
businesses, in part by subscribing for firm transportation capacity on
the Independence Pipeline.
Note (10) 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:
6.54% Due November 5, 1997 $ 7,000 $ 7,000 $ 7,000
5.72% Due March 1, 1999 50,000 50,000 50,000
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
7.50% Due June 13, 2025 50,000 50,000 50,000
6.26% Due August 12, 2027 30,000 30,000 30,000
5.601% System Money Pool* 39,200 39,200 39,200
-------- -------- --------
395,200 395,200 395,200
-------- -------- --------
Supply
Corporation Intercompany Notes:
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
6.26% Due August 12, 2027 10,000 10,000 10,000
5.601% System Money Pool* 2,200 2,200 2,200
-------- -------- --------
193,165 193,165 193,165
-------- -------- --------
Seneca
Resources Intercompany Notes:
6.54% Due November 5, 1997 18,000 18,000 18,000
6.22% Due July 2, 1998 50,000 50,000 50,000
5.72% Due March 1, 1999 50,000 50,000 50,000
6.26% Due August 12, 2027 50,000 50,000 50,000
5.601% System Money Pool* 50,600 50,600 50,600
-------- -------- --------
218,600 218,600 218,600
-------- -------- --------
Leidy Hub 5.601% System Money Pool* 300 300 300
-------- -------- --------
Horizon 6.26% Due August 12, 2027 10,000 10,000 10,000
5.601% System Money Pool* 22,600 22,600 22,600
-------- -------- --------
32,600 32,600 32,600
-------- -------- --------
$839,865 $839,865 $839,865
======== ======== ========
* Interest rate represents weighted average of all short-term securities
outstanding at September 30, 1997, pursuant to System money pool
arrangement, S.E.C. File No. 70-8297 (Release Nos. 25964, 26076 and 26196).
<PAGE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
- - ------ ---------------------------------------
None during fiscal year ended September 30, 1997.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
- - ------ -----------------------------------------------------------------
None during fiscal year ended September 30, 1997.
<PAGE>
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
- - ------ ----------------------------------------------------------
FISCAL YEAR ENDED SEPTEMBER 30, 1997
------------------------------------
<TABLE>
<CAPTION>
Name of
Company
Acquiring,
Redeeming Number of Shares or
or Retiring Principal Amount
---------------------------- Commission
Name of Issuer and Title of Issue Securities Acquired Redeemed Retired Consideration Authorization
- - --------------------------------- ----------- -------- -------- ------- ------------- -------------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
------------------------------------------
Registered Holding Company:
Seneca Resources:
6.26% Note maturing
August 12, 2027 Registrant $50,000 $50,000 File No. 70-9153
Distribution Corporation:
6.26% Note maturing
August 12, 2027 Registrant 30,000 30,000 File No. 70-9153
Supply Corporation:
6.26% Note maturing
August 12, 2027 Registrant 10,000 10,000 File No. 70-9153
Horizon Energy Development, Inc:
6.26% Note maturing
August 12, 2027 Registrant 10,000 10,000 File No. 70-9153
</TABLE>
<PAGE>
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
- - ------ ------------------------------------------------
Number of Aggregate
1. Name of Owner Persons Business of Persons Investment
------------- --------- ------------------- -----------
None.
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS
- - ------ ----------------------
Part I. Names, principal business address and positions held as of September
30, 1997
<TABLE>
<CAPTION>
Names of System Companies with Which Connected
---------------------------------------------------------------
National National Highland
Fuel Gas Fuel Gas Seneca Land &
Distribution Supply Resources Minerals,
Registrant Corp. Corp. Corp. Inc.
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
B. J. Kennedy Buffalo, NY (1) | D,COB,CEO,P,s | D, COB, s | D, COB, s | D, COB, s | s |
- - -------------------------------------------------------------------------------------------------------------
B. S. Lee Des Plaines, IL (2) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
G. L. Mazanec Houston, TX (3) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
L. F. Kahl Williamsville, NY (4) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
G. H. Schofield Buffalo, NY (1) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
E. T. Mann Buffalo, NY (1) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
R. T. Brady Buffalo, NY (5) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
W. J. Hill Buffalo, NY (1) | D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
J. V. Glynn Niagara Falls, NY (14)| D, df | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
P. C. Ackerman Buffalo, NY (1) | D, SVP, s | D, P, s | EVP | D, s | P, D, s |
- - -------------------------------------------------------------------------------------------------------------
J. R. Peterson Buffalo, NY (1) | AS, s | - | GC, s | - | - |
- - -------------------------------------------------------------------------------------------------------------
J. A. Beck Houston, TX (6) | - | - | - | D, P, s | - |
- - -------------------------------------------------------------------------------------------------------------
W. M. Petmecky Houston, TX (6) | - | - | - | SVP, S, s | - |
- - -------------------------------------------------------------------------------------------------------------
D. A. Brown Houston, TX (6) | - | - | - | VP, s | - |
- - -------------------------------------------------------------------------------------------------------------
G. E. Klefstad Houston, TX (6) | - | - | - | VP | - |
- - -------------------------------------------------------------------------------------------------------------
E. E. Wassell Houston, TX (6) | - | - | - | VP, s | - |
- - -------------------------------------------------------------------------------------------------------------
J. F. McKnight Houston, TX (6) | - | - | - | VP, s | - |
- - -------------------------------------------------------------------------------------------------------------
C. H. Friedrich Houston, TX (6) | - | - | - | T, AS, s | - |
- - -------------------------------------------------------------------------------------------------------------
A. M. Cellino Buffalo, NY (1) | S, s | VP, s | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
P. M. Ciprich Buffalo, NY (1) | - | AS, GC, s | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
W. E. DeForest Buffalo, NY (1) | - | SVP, D, s | s | s | - |
- - -------------------------------------------------------------------------------------------------------------
B. H. Hale Buffalo, NY (1) | s | - | D, SVP, s | - | - |
- - -------------------------------------------------------------------------------------------------------------
R. Hare Buffalo, NY (1) | - | - | D, P, s | - | - |
- - -------------------------------------------------------------------------------------------------------------
R. J. Kreppel Williamsville, NY (21)| - | - | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
J. P. Pawlowski Buffalo, NY (1) | T, s | D, SVP, T, s | T, S, s | s | S, T, 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 | - | - |
- - -------------------------------------------------------------------------------------------------------------
D. J. Seeley Buffalo, NY (1) | - | SVP, D, s | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
D. F. Smith Buffalo, NY (1) | - | SVP, D, S, s | s | D, s | D, s |
- - -------------------------------------------------------------------------------------------------------------
R. J. Tanski Buffalo, NY (1) | - | VP, C, s | - | - | - |
- - -------------------------------------------------------------------------------------------------------------
G. T. Wehrlin Buffalo, NY (1) | C, s | SVP, D, s | s | C, s | D, s |
- - -------------------------------------------------------------------------------------------------------------
R. W. Wilcox Buffalo, NY (1) | - | VP, s | s | s | s |
- - -------------------------------------------------------------------------------------------------------------
R. J. Wright Buffalo, NY (1) | - | VP, s | s | s | s |
- - -------------------------------------------------------------------------------------------------------------
</TABLE>
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
See page 14 for Notes.
<PAGE>
<TABLE>
<CAPTION>
Data-
Track National Horizon Niagara Niagara Seneca
Utility Account Fuel Energy Energy Independence Independence
Constructors Services, Resources, Development, Leidy Hub, Trading Marketing Pipeline
Inc. Inc. Inc. Inc.* Inc. ** Inc. Co.*** Co.
- - ---------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
COB | s | s | - | D | - | D, COB | D, COB |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
D, P | D, P | - | P, D, s | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | S |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | D, P | D, P | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | S, T | - | - | S | S | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | T | T | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | s | s | - | D, P, s | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | VP, s | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | D | D | D, P |
- - ---------------------------------------------------------------------------------------------------------
- | - | D, P, s | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
T | T, s | s | - | - | - | - | T |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | D | D, VP |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
D, S | D, S, s | D, s | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | - | - | T, S, s | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
D | D, s | D, s | VP, s |D, S, T, s | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | s | s | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
- | s | s | - | - | - | - | - |
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
* Directors of Horizon's subsidiaries are as follows:
Bruwabel
- - --------
Managing Directors:
B. H. Hale Buffalo, NY (1)
G. T. Wehrlin Buffalo, NY (1)
Hirsch Gebouw (Intra Beheer B.V.) Amsterdam, The Netherlands (8)
Horizon Energy Development, s.r.o.
- - ----------------------------------
Managing Director:
Vladimir Prerad Prague, Czech Republic (7)
Power Development, s.r.o.
- - -------------------------
Managing Director:
Vladimir Prerad Prague, Czech Republic (7)
Teplarna Kromeriz, a.s.
- - -----------------------
Directors:
Vladimir Prerad Prague, Czech Republic (7)
Lubos Jarolimek Prague, Czech Republic (7)
Jiri Stipek Prague, Czech Republic (7)
Severoceske Teplarny, a.s.
- - --------------------------
Board of Directors:
P. C. Ackerman Buffalo, NY (1)
B. H. Hale Buffalo, NY (1)
Lubos Jarolimek Prague, Czech Republic (7)
B. J. Kennedy Buffalo, NY (1)
Zdenek Kozesnik Most, Czech Republic (15)
Vladimir Prerad Prague, Czech Republic (7)
R. J. Tanski Buffalo, NY (1)
Josef Vanzura Most, Czech Republic (15)
E. Volkmann Most, Czech Republic (15)
G. T. Wehrlin Buffalo, NY (1)
Teplarna Liberec, a.s.
- - ----------------------
Board of Directors:
Jiri Drda Liberec, Czech Republic (16)
Lubos Jarolimek Prague, Czech Republic (7)
Jiri Jezek Liberec, Czech Republic (16)
Zdenek Kozesnik Most, Czech Republic (15)
Energoservis Liberec, s.r.o.
- - ----------------------------
Executive:
Jiri Samler Liberec, Czech Republic (17)
Zateca teplarenska, s.s.
- - ------------------------
Board of Directors:
Bohuslav Kunes Zatec, Czech Republic (18)
Josef Marik Zatec, Czech Republic (18)
Jiri Sachl Zatec, Czech Republic (18)
SCT SoftMaker, s.r.o.
- - ---------------------
Executive:
Zdenek Tapsik Most, Czech Republic (19)
Zkusebna mericu tepla a vodomeru Litomerice, s.r.o.
- - ---------------------------------------------------
Executive:
Karel Stejskal Litomerice, Czech Republic (20)
** Directors of Leidy Hub's subsidiaries are as follows:
Ellisburg-Leidy Northeast Hub Company
- - -------------------------------------
Executive Committee Members:
G. T. Wehrlin Buffalo, NY (1)
B. Heine Buffalo, NY (1)
S. Bergstrom NGC Corporation (9)
E. Werneke NICOR, Inc. (10)
Enerchange, L.L.C.
- - ------------------
Executive Committee Members:
B. Heine Buffalo, NY (1)
S. Bergstrom NGC Corporation (9)
E. Werneke NICOR, Inc. (10)
See page 14 for Notes
<PAGE>
*** NIM's sole subsidiary is the following general partnership:
DirectLink Gas Marketing Company
- - --------------------------------
Management Committee Members:
D. A. Rowekamp Buffalo, NY (1)
J. A. Brett MIDCON (11)
C. Smith ANR (12)
D. Jones Williams (13)
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) Duke Energy Corporation, P.O. Box 1642, Houston, TX 77251-1642
(4) The Vector Group, L.L.C., 6255 Sheridan Drive, Suite 100, Williamsville, NY
14221 - Resigned effective December 2, 1997
(5) Moog Inc., Plant 24/Seneca at Jamison Rd., East Aurora, NY 14052-0018
(6) Seneca Resources Corporation, 1201 Louisiana Street, Suite 400, Houston,
Texas 77002
(7) Horizon Energy Development, s.r.o., Maiselova 15, Praha 1 - Josefov, 11000,
Czech Republic
(8) Intra Beheer B.V., Leidseplein 29, 1017 PS, Amsterdam, The Netherlands
(9) NGC Corporation, 1000 Louisiana Street, Suite 5800, Houston, TX 77002-5050
(10) NICOR, Inc., 1844 Ferry Road, Naperville, IL 60563-9600
(11) MGS Marketing Corp., 3200 Southwest Freeway, Houston, TX 77027
(12) Coastal Gas Marketing DirectLink Corp., 9 Greenway Plaza, 22nd Floor,
Houston, TX 77046
(13) Williams Independence Marketing Company, One Williams Center, Tulsa,
Oklahoma 74172
(14) Maid of the Mist Corporation, 151 Buffalo Avenue, Niagara Falls, New York
14303 - Effective December 17, 1997
(15) Severoceske Teplarny, a.s., Jaroslava Seiferta 2179, 434 01 Most, Czech
Republic
(16) Teplarna Liberec, a.s., Dr. Milady Horakove 641/34a, 460 01 Liberec 4,
Czech Republic
(17) Energoservis Liberec, s.r.o., Zeyerova 296, 460 01 Liberec, Czech Republic
(18) Zatecka teplarenska, a.s., Svatovaclavska 1020, 438 34 Zatec, Czech
Republic
(19) SCT SoftMaker, s.r.o., Seifertova 2179, 434 00 Most, Czech Republic
(20) Zkusebna mericu tepla a vodomeru Litomerice, s.r.o., k vytopne 1978, 412 01
Litomerice, Czech Republic
(21) National Fuel Resources, Inc., 165 Lawrence Bell Drive, Williamsville, NY
14221
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- - ------ ----------------------------------
Part II. Financial connections as of September 30, 1997:
Position Held Applicable
Name of Officer Name and Location of in Financial Exemption
or Director Financial Institution Institution Rule
- - --------------- --------------------- ------------- ----------
R. T. Brady Manufacturers and Traders
Trust Company,
Buffalo, New York Director 70 (a)
First Empire State
Corporation,
Buffalo, New York Director 70 (a)
B. J. Kennedy Marine Midland Bank
Buffalo, New York Director 70 (a)
G. L. Mazanec Northern Trust Bank
of Texas, NA Director 70 (a)
J. V. Glynn Manufacturers and Traders
Trust Company,
Buffalo, New York Director 70 (a)
First Empire State
Corporation,
Buffalo, New York Director 70 (a)
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 6, and pages 9 to 19,
respectively, of National Fuel Gas Company Proxy Statement, dated December 31,
1997, included as exhibit A (3) 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 7 and 8 of the National
Fuel Gas Company Proxy Statement, dated December 31, 1997, included as Exhibit
A(3) of this Form U5S and is incorporated herein by reference.
(C) Contracts and Transactions with System Companies:
Exhibit No. in Document
(Incorporated by Reference
as Indicated in Notes)
--------------------------
Employment Agreement, dated September 17,
1981, with Bernard J. Kennedy. 10.4 (6)
Ninth Extension to Employment Agreement
with Bernard J. Kennedy, dated September 19,
1996. 10.6 (8)
National Fuel Gas Company 1983 Incentive
Stock Option Plan, as amended and restated
through February 18, 1993. 10.2 (5)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- - ------ ----------------------------------
Part III. Compensation of Directors and Executive Officers (Continued)
National Fuel Gas Company 1984 Stock Plan,
as amended and restated through February 18,
1993. 10.3 (5)
Amendment to National Fuel Gas Company 1984
Stock Plan, dated December 11, 1996. 10.7 (8)
National Fuel Gas Company 1993 Award and
Option Plan, dated February 18, 1993. 10.1 (5)
Amendment to National Fuel Gas Company 1993
Award and Option Plan, dated October 27,
1995. 10.8 (7)
Amendment to National Fuel Gas Company 1993
Award and Option Plan, dated December 11,
1996. 10.8 (8)
Amendment to National Fuel Gas Company 1993
Award and Option Plan, dated December 18,
1996. 10 (9)
National Fuel Gas Company 1997 Award and
Option Plan. 10.9 (8)
Change in Control Agreement, dated May 1,
1992, with Philip C. Ackerman. 10.4 (3)
Change in Control Agreement, dated May 1,
1992, with Richard Hare. 10.5 (3)
Form of Change in Control Agreement, dated
May 1, 1992, with Walter E. DeForest, Bruce
H. Hale, Joseph P. Pawlowski, Dennis J. Seeley,
David F. Smith and Gerald T. Wehrlin and dated
March 16, 1995 with James A. Beck. 10.16 (8)
Agreement, dated August 1, 1989, with Richard
Hare. 10-Q (1)
Agreement, dated August 1, 1986, with Joseph
P. Pawlowski 10.1 (11)
Agreement, dated August 1, 1986, with Gerald
T. Wehrlin 10.2 (11)
National Fuel Gas Company Deferred
Compensation Plan, as amended and restated
through May 1, 1994. 10-7 (6)
Amendment to National Fuel Gas Company
Deferred Compensation Plan, dated September
27, 1995. 10.9 (7)
Amendment to National Fuel Gas Company
Deferred Compensation Plan, dated September
19, 1996. 10.10 (8)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- - ------ ----------------------------------
Part III. Compensation of Directors and Executive Officers (Continued)
National Fuel Gas Company Deferred
Compensation Plan, as amended and restated
through March 20, 1997. 10.3 (11)
Amendment to National Fuel Gas Company
Deferred Compensation Plan, dated June
16, 1997 10.4 (11)
National Fuel Gas Company Tophat Plan,
dated March 20, 1997 10 (10)
National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan as
amended and restated through November 1,1995. 10.10 (7)
National Fuel Gas Company and Participating
Subsidiaries 1996 Executive Retirement Plan
Trust Agreement II, dated May 10, 1996. 10.13 (8)
Amendments to National Fuel Gas Company and
Participating Subsidiaries Executive
Retirement Plan, dated September 18, 1997 10.9 (11)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement, dated
September 17, 1997, with Philip C. Ackerman 10.5 (11)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement, dated
September 15, 1997, with Richard Hare. 10.6 (11)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement,
dated September 15, 1997, with Joseph P.
Pawlowski. 10.7 (11)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement,
dated September 15, 1997, with Gerald T.
Wehrlin. 10.8 (11)
Death Benefits Agreement, dated August 28,
1991, with Bernard J. Kennedy. 10-TT (2)
Amendment to Death Benefit Agreement of
August 28, 1991, with Bernard J. Kennedy,
dated March 15, 1994. 10.11 (7)
Summary of Annual At Risk Compensation
Incentive Program. 10.10 (4)
Administrative Rules with Respect to At Risk
Awards under the 1993 Award and Option
Plan. 10.14 (8)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- - ------ ----------------------------------
Part III. Compensation of Directors and Executive Officers (Concluded)
Excerpts of Minutes from the National Fuel
Gas Company Board of Directors Meeting of
December 5, 1991 regarding change in
control agreements, non-employee director
retirement plan, and restrictions on
restricted stock. 10-UU (2)
Excerpts from Minutes from the
National Fuel Gas Company Board of
Directors Meeting of September 19, 1996,
regarding compensation of non-employee
directors and related amendments of By-Laws. 3.1 (8)
Administrative Rules of the Compensation
Committee of the Board of Directors of
National Fuel Gas Company as amended through
December 11, 1996. 10.15 (8)
Excerpts of Minutes from National Fuel Gas
Company Board of Directors Meeting of
February 20, 1997, regarding the Retirement
Benefits for Bernard J. Kennedy. 10.10 (11)
Excerpts of Minutes from National Fuel Gas
Company Board of Directors Meeting of
March 20, 1997, regarding the Retainer
Policy for Non-Employee Directors. 10.11 (11)
(Notes)
(1) Incorporated by reference from the Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1989 in
File No. 1-3880.
(2) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1991 in
File
No. 1-3880.
(3) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1992 in
File
No. 1-3880.
(4) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1993 in
File
No. 1-3880.
(5) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for quarterly period ended March 31, 1993 in
File No. 1-3880.
(6) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1994 in
File
No. 1-3880.
(7) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1995 in
File
No. 1-3880.
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Concluded)
- - ------ ----------------------------------
Part III. Compensation of Directors and Executive Officers (Concluded)
(8) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1996 in
File No. 1-3880.
(9) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for quarterly period ended December 31, 1996,
in File No. 1-3880.
(10) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for quarterly period ended June 30, 1997, in
File No. 1-3880.
(11) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1997 in
File No. 1-3880.
(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 "Directors'
Compensation," and "Executive Compensation," on page 6 and pages 9 to 19,
respectively, of the National Fuel Gas Company Proxy Statement, dated
December 31, 1997, included as exhibit A(3) to this Form U5S and
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 September 18,
1997. Such By-Laws are listed as Exhibit B(1)(iii) to this Form U5S and
are incorporated herein by reference as indicated.
The Company also purchases directors and officers liability insurance
coverage with an annual aggregate limit of $110 million, 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.
<PAGE>
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
- - ------ ----------------------------------
<TABLE>
<CAPTION>
Amount
Name of Recipient Accounts Charged Per Books Fiscal Year Ended
Name of Company or Beneficiary Purpose of Disbursing Company September 30, 1997
--------------- ----------------- ------- -------------------------- ------------------
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 $5,039
Distribution Corporation N/A *NYPAC Misc. Income Deductions $4,240
Distribution Corporation N/A *PAPAC Misc. Income Deductions $2,969
Supply Corporation N/A *FEDPAC Misc. Income Deductions $1,797
Supply Corporation N/A *NYPAC Misc. Income Deductions $1,264
Supply Corporation N/A *PAPAC Misc. Income Deductions $ 860
* Company labor and expenses relating to administration of political action funds.
(2) Any citizens group or public relations counsel:
Distribution Corporation Greater Buffalo
Partnership Civic Operation Expense $33,425
Distribution Corporation 34 Beneficiaries Civic Operation Expense $18,079
Supply Corporation 11 Beneficiaries Civic Operation Expense $ 4,627
National Fuel Resources 2 Beneficiaries Civic Operation Expense $ 385
Seneca Resources 5 Beneficiaries Civic Operation Expense $ 1,805
</TABLE>
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.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
- - ------ -----------------------------------------
Part I. Intercompany sales and services
(1) Salaries of officers of the Registrant
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY
-------------------------
REPORT OF OFFICERS' SALARIES
----------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
Distribution Supply Seneca Leidy Data-
Parent Corp. Corp. Resources Hub Highland Horizon Track NFR Total
------ ------------ ------ --------- ----- -------- ------- ----- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B. J. Kennedy $80,574 $296,853 $449,520 $10,602 $ - $2,120 $ - $4,240 $4,241 $848,150
P. C. Ackerman 23,500 376,000 - 61,100 - 4,700 4,700 - - 470,000
A. M. Cellino 7,062 134,188 - - - - - - - 141,250
J. P. Pawlowski 11,037 124,612 57,353 26,471 - 1,008 - 63 206 220,750
G. T. Wehrlin 11,037 28,857 13,282 6,131 6,623 233 154,525 14 48 220,750
</TABLE>
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries
<TABLE>
<CAPTION>
DISTRIBUTION CORPORATION
------------------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Common Expenses
-------------------------------------------------------------------------------------
Corporate Materials Industrial Accounts
Receiving Company Executive Purchasing Communications Management Accounting Engineering Payable
- - ----------------- --------- ---------- -------------- ---------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $ 717 $217 $212 $59 $ 878 $193 $170
Seneca Resources 331 13 7 - 108 - -
UCI - - - - - - -
Highland 23 1 1 - 10 - -
Data-Track 1 - - - 1 - -
NFR 8 - - - 3 - -
Leidy Hub - - - - - - -
Horizon - - - - - - -
------ ---- ---- --- ------ ---- ----
$1,080 $231 $220 $59 $1,000 $193 $170
====== ==== ==== === ====== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Common Expenses
-----------------------------------------------------------------------------------
Data Human Government Benefit
Receiving Company Processing Resources Legal Finance Affair Services CPR
- - ----------------- ---------- --------- ----- ------- ---------- -------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $342 $254 $52 $746 $76 $272 $215
Seneca Resources 9 117 25 91 - 125 -
UCI - - - - - - -
Highland 1 11 4 8 - 12 -
Data-Track - 1 - - - 1 -
NFR - 3 1 2 - 3 -
Leidy Hub - - - - - - -
Horizon - - - - - - -
---- ---- --- ---- --- ---- ----
$352 $386 $82 $847 $76 $413 $215
==== ==== === ==== === ==== ====
</TABLE>
<TABLE>
<CAPTION>
Common Expenses
-------------------
Total Total Total Convenience or Total Service
Common Clearing Direct Accommodation Rendered By
Receiving Company Payroll Expense Charges* Charges* Payments* Statutory Subsidiaries
- - ----------------- ------- ------- -------- -------- -------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Supply Corporation $125 $4,528 $2,675 $2,927 $ 8,590 $18,720
Seneca Resources - 826 157 188 1,354 2,525
UCI - - - - 81 81
Highland - 71 5 10 25 111
Data-Track - 4 15 80 61 160
NFR - 20 51 35 165 271
Leidy Hub - - - 16 - 16
Horizon - - - 460 24 484
---- ------ ------ ------ ------- -------
$125 $5,449 $2,903 $3,716 $10,300 $22,368
==== ====== ====== ====== ======= =======
</TABLE>
* Analysis of Clearing Charges, Direct Charges & Convenience or Accommodation
Payments is presented on pages 24 and 25.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries
<TABLE>
<CAPTION>
DISTRIBUTION CORPORATION
------------------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Clearing Charges
--------------------------------------------------------------------------------------
Material Total
Issue & Data Messenger Clearing
Receiving Company Transfer Telecommunications Rental Postage Processing Expense Charges
- - ----------------- -------- ------------------ ------ ------- ---------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $1,180 $170 $25 $13 $1,200 $ 87 $2,675
Seneca Resources 3 35 - - 107 12 157
UCI - - - - - - -
Highland - - - - 5 - 5
Data-Track 1 11 - - - 3 15
NFR 5 15 - - 28 3 51
Leidy Hub - - - - - - -
Horizon - - - - - - -
------ ---- --- --- ------ ---- ------
$1,189 $231 $25 $13 $1,340 $105 $2,903
====== ==== === === ====== ==== ======
</TABLE>
<TABLE>
<CAPTION>
Direct Charges
---------------------------------------------------------------------------------------
Contract Facilities
Receiving Company Land MMD Telecommunications Risk Operations Administration Management Accounting
- - ----------------- ---- --- ------------------ ---- ---------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $173 $48 $16 $281 $1,721 $28 $146 $ -
Seneca Resources - - - - 7 - - -
UCI - - - - - - - -
Highland - - - - - - - -
Data-Track - - - - 69 - - -
NFR - - 1 - - - - -
Leidy Hub - - - - - - - -
Horizon - - - - - - - 17
---- --- --- ---- ------ --- ---- ---
$173 $48 $17 $281 $1,797 $28 $146 $17
==== === === ==== ====== === ==== ===
</TABLE>
<TABLE>
<CAPTION>
Direct Charges
------------------------------------------------------------------------------------
Total
Government Gas Revenue Direct
Receiving Company Legal Valuation Affairs Finance Planning Executive Recovery Charges
- - ----------------- ----- --------- ---------- ------- -------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $ 1 $1 $175 $208 $23 $106 $ - $2,927
Seneca Resources - - - 30 - 151 - 188
UCI - - - - - - - -
Highland - - - - - 10 - 10
Data-Track - - - - - - 11 80
NFR 23 - - 10 - 1 - 35
Leidy Hub - - - - - 16 - 16
Horizon 10 - - 204 - 229 - 460
--- -- ---- ---- --- ---- --- ------
$34 $1 $175 $452 $23 $513 $11 $3,716
=== == ==== ==== === ==== === ======
</TABLE>
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
<TABLE>
DISTRIBUTION CORPORATION
------------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
-------------------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Receiving Company
-----------------------------------------------------------------
Supply Seneca Data-
Corporation Resources UCI Track Highland NFR Horizon Total
----------- --------- --- ----- -------- --- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Material $ 825 $ 38 $ - $ 1 $ - $ - $ - $ 864
Rents 283 - - - - - - 283
Transportation 12 - - - - - - 12
Utilities 250 65 3 38 - 15 2 373
Contractors &
Outside Services 692 46 - - - 84 13 835
Equipment Purchases
& Rentals 1,115 52 - - - 28 1 1,196
Employee Benefits 3,180 47 3 - 3 1 3 3,237
Office Expense 617 43 65 1 - 20 4 750
Dues & Subscriptions 273 - - - - - - 273
Other Insurance 779 1,011 - - 21 13 - 1,824
Environmental 5 - - - - - - 5
Other 559 52 10 21 1 4 1 648
------ ------ --- --- --- ---- --- -------
$8,590 $1,354 $81 $61 $25 $165 $24 $10,300
====== ====== === === === ==== === =======
</TABLE>
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
<TABLE>
<CAPTION>
SUPPLY CORPORATION
------------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Clearing Accounts Direct Charges
------------------------------------ -----------------------------
Material Total
Production Issue & Rental Clearing Interstate
Receiving Company Clearing Transfer Clear Charges Valuation Marketing Finance
- - ----------------- ---------- -------- ------ -------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Distribution Corp. $ - $621 $2,671 $3,292 $18 $21 $ -
Seneca Resources 699 8 11 718 - - -
Horizon - - - - - - 110
Highland - - - - - - -
Data Track - - - - - - -
NFR - 1 - 1 - - -
---- ---- ------ ------ --- --- ----
$699 $630 $2,682 $4,011 $18 $21 $110
==== ==== ====== ====== === === ====
</TABLE>
<TABLE>
<CAPTION>
Direct Charges Continued
-----------------------------------------------------------------------
Operations,
Construction &
Human Gas Customer
Receiving Company Engineering Resources Land Control Executive Service Legal
- - ----------------- ----------- --------- ---- ------- --------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Distribution Corp. $249 $102 $318 $797 $131 $1,912 $ -
Seneca Resources - - 85 - 13 55 -
Horizon - - - - 186 - 1
Highland - - - - 3 - -
Data Track - - - - 6 - -
NFR - - 14 5 - -
---- ---- ---- ---- ---- ------ ---
$249 $102 $403 $811 $344 $1,967 $ 1
==== ==== ==== ==== ==== ====== ===
</TABLE>
Total Services
Total Total Convenience or Rendered By
Direct Clearing Accommodation Statutory
Receiving Company Charges Charges Payments* Subsidiaries
- - ----------------- ------- -------- -------------- --------------
Distribution Corp. $3,548 $3,292 $3,015 $ 9,855
Seneca Resources 153 718 178 1,049
Horizon 297 - 5 302
Highland 3 - 1 4
Data Track 6 - 22 28
NFR 19 1 11 31
------ ------ ------ -------
$4,026 $4,011 $3,232 $11,269
====== ====== ====== =======
* Analysis of Convenience or Accommodation Payments is presented on page 27.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
<TABLE>
<CAPTION>
SUPPLY CORPORATION
------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
-------------------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Receiving Company
--------------------------------------------------------------
Distribution Seneca Horizon Data-
Corporation Resources Energy Highland Track NFR Total
------------ --------- ------- -------- ----- --- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Material $ 172 $ - $- $- $ - $ - $ 172
Rents (28) 32 - - - - 4
Transportation 6 1 - - - - 7
Utilities 60 9 - - - 2 71
Contractors &
Outside Services 134 18 - - 19 - 171
Equipment Purchases
& Rentals 179 4 - - - - 183
Employee Benefits 587 27 - 1 3 3 621
Office Expense 78 3 - - - 6 87
Dues & Memberships 41 - - - - - 41
Other 1,756 - 5 - - - 1,761
Other Insurance 27 84 - - - - 111
Postage 3 - - - - - 3
------ ---- -- -- --- --- ------
$3,015 $178 $5 $1 $22 $11 $3,232
====== ==== == == === === ======
</TABLE>
<PAGE>
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, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Total
Services
Convenience or Rendered By
Timber Accommodation Statutory
Receiving Company Sales Operations Payments Subsidiaries
- - ----------------- ------ ---------- -------------- ------------
Distribution Corporation $ - $ - $2,769 $ 2,769
Supply Corporation - 677 637 1,314
Highland 5,193 - - 5,193
Horizon - 21 - 21
NFR - 879 21 900
Leidy Hub - - - -
Data-Track - - 1 1
------ ------ ------ -------
$5,193 $1,577 $3,428 $10,198
====== ====== ====== =======
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
-------------------------------------------------
Receiving Company
----------------------------------------------------
Distribution Supply Data-
Corporation Corporation NFR Track Total
------------ ----------- --- ----- -----
Employee Benefits $2,767 $636 $ - $- $3,403
Other 2 1 21 1 25
------ ---- --- -- ------
$2,769 $637 $21 $1 $3,428
====== ==== === == ======
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
HIGHLAND
--------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Total Services
Rendered By
Convenience Statutory
Receiving Company Payments Subsidiaries
- - ----------------- ----------- --------------
Supply Corporation $ 2 $ 2
Seneca Resources 1,451 1,451
------ ------
$1,453 $1,453
====== ======
NFR
---
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Convenience Total Services
or Rendered By
Accommodation Statutory
Receiving Company Payments Subsidiaries
- - ----------------- -------- ------------
Distribution Corporation $2 $2
Supply Corporation 2 2
-- --
$4 $4
== ==
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- - ------ -----------------------------------------------------
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, 1997
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Total Services
Rendered by
Collection Statutory
Receiving Company Services Subsidiaries
- - ----------------- ---------- --------------
Distribution
Corporation $375 $375
---- ----
$375 $375
==== ====
(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,
1997.
<PAGE>
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, 1997:
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 $ 59,490
consulting services for
Highland.
Vladimir Prerad Performs management and $156,855
consulting services for
Horizon relating to the
development, ownership and
operation of energy-related
assets of Horizon and its
subsidiaries in the Czech
Republic.
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
- - ------- --------------------------------------------------
At September 30, 1996, Horizon, through its investments in Sceptre
Kabirwala, L.L.C. and KPP Investment, L.L.C., owned 48.19% of the voting stock
of Fauji Kabirwala Power Company Limited (FKPCL). FKPCL was identified as an
exempt wholesale generator. During fiscal 1997, Horizon sold its interests in
FKPCL. At September 30, 1997, neither Horizon nor the Registrant had any
interests in exempt wholesale generators or foreign utility companies.
<PAGE>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
- - -------- ---------------------------------
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
------------------------------------------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1997
------------------
Page
----
National Fuel Gas Company and Subsidiaries:
Report of Independent Accountants 33
Consolidating and Consolidated Balance Sheet at September 30, 1997 35-38
Consolidating and Consolidated Statement of Income for the Fiscal
Year Ended September 30, 1997 39-40
Consolidating and Consolidated Statement of Earnings Reinvested in
the Business for the Fiscal Year Ended September 30, 1997 41-42
Consolidating and Consolidated Statement of Cash Flows for the
Fiscal Year Ended September 30, 1997 43-46
Horizon:
Consolidating Balance Sheet at September 30, 1997 47
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1997 48
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1997 49
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1997 50
Bruwabel:
Consolidating Balance Sheet at September 30, 1997 51
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1997 52
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1997 53
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1997 54
Power Development:
Consolidating Balance Sheet at September 30, 1997 55
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1997 56
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1997 57
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1997 58
Notes to Consolidated Financial Statements *
* The Notes to Consolidated Financial Statements included in Item 8 of
National Fuel Gas Company's Form 10-K for the fiscal year ended September
30, 1997, are incorporated herein by reference.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
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 32 present fairly, in all material respects, the
financial position of National Fuel Gas Company and its subsidiaries at
September 30, 1997, and the results of their operations and their cash flows for
the year then ended, 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 audit. We conducted our audit 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 audit provides a reasonable basis for the opinion expressed
above.
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 35
through 58 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 35 through 58 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
Buffalo, New York
October 24, 1997
<PAGE>
THIS PAGE LEFT BLANK INTENTIONALLY
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
National National Highland Data-Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corp. Inc. Inc. Inc. Inc.
-------- ------------ -------- --------- ------ --------- ------------- -----------
ASSETS
------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PROPERTY, PLANT
& EQUIPMENT $ 132 $1,188,596 $704,286 $768,667 $ 3 $4,560 $ 632 $129
- - -------------
Less: Accumulated
Depreciation,
Depletion and
Amortization 121 299,381 253,420 293,516 3 1,675 562 27
---------- ---------- -------- -------- ------ ------ ------ ----
11 889,215 450,866 475,151 - 2,885 70 102
---------- ---------- -------- -------- ------ ------ ------ ----
CURRENT ASSETS:
- - --------------
Cash and Temporary
Cash Investments 7,065 611 600 1,434 63 472 100 74
Notes Receivable
-Intercompany 214,900 - - 3,400 - 1,200 1,100 500
Allowance for
Uncollectible
Accounts - (7,349) - (107) - - (292) -
Accounts Receivable
-Intercompany 13,539 11,273 10,839 774 - 48 10 31
Accounts Receivable 7,901 73,179 10,370 13,927 - 581 325 -
Unbilled Utility
Revenue - 20,433 - - - - - -
Dividends Receivable
-Intercompany 14,101 - - - - - - -
Materials and Supplies
- at average cost - 5,729 12,394 475 - 554 - -
Gas Stored
Underground - 29,856 - - - - - -
Prepayments 1,062 9,329 2,592 4,495 6 111 14 -
---------- ---------- -------- -------- ------ ------ ------ ----
258,568 143,061 36,795 24,398 69 2,966 1,257 605
---------- ---------- -------- -------- ------ ------ ------ ----
OTHER ASSETS:
- - ------------
Recoverable Future
Taxes - 86,287 4,724 - - - - -
Unamortized Debt
Expense 4,792 14,421 4,181 - - - - -
Other Regulatory
Assets 4,841 31,849 11,660 - - - - -
Deferred Charges 2,653 1,652 7,105 2,725 2 - - -
Investment in
Associated
Companies 835,277 - 61 - - - - -
Notes of
Subsidiaries 624,965 - - - - - - -
Investment in
Unconcolidated
Foreign Susidiary - - - - - - - -
Other 5,644 9,400 6,799 1,271 1,032 - 2,067 -
---------- ---------- -------- -------- ------ ------ ------ ----
1,478,172 143,609 34,530 3,996 1,034 - 2,067 -
---------- ---------- -------- -------- ------ ------ ------ ----
$1,736,751 $1,175,885 $522,191 $503,545 $1,103 $5,851 $3,394 $707
========== ========== ======== ======== ====== ====== ====== ====
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Niagara Seneca Nigara
Fuel Development, Energy Indep. Indep. Total Before Eliminations Consolidated
Resources, Inc. Trading Pipeline Marketing Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Company & Adjustments Dr (Cr) Subsidiaries
- - ---------- -------------- ------- --------- --------- ------------- ------------- ------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ 165 $ 1,308 $ - $ - $ - $2,668,478 $ - $2,668,478
42 365 - - - 849,112 - 849,112
------- ------- --- --- --- ---------- ----------- ----------
123 943 - - - 1,819,366 - 1,819,366
------- ------- --- --- --- ---------- ----------- ----------
2,326 1,188 1 1 1 13,936 103 14,039
7,000 - - - - 228,100 (228,100) -
(543) - - - - (8,291) - (8,291)
38 - - - - 36,552 (36,552) -
6,952 570 - - - 113,805 1,903 115,708
- - - - - 20,433 - 20,433
- - - - - 14,101 (14,101) -
- - - - - 19,152 (37) 19,115
- - - - - 29,856 - 29,856
193 6 - - - 17,808 (1) 17,807
------- ------- --- --- --- ---------- ----------- ----------
15,966 1,764 1 1 1 485,452 (276,785) 208,667
------- ------- --- --- --- ---------- ----------- ----------
- - - - - 91,011 - 91,011
- - - - - 23,394 - 23,394
- - - - - 48,350 - 48,350
163 - - - - 14,299 (2,274) 12,025
- - - - - 835,338 (835,338) -
- - - - - 624,965 (624,965) -
- 18,887 - - - 18,887 - 18,887
831 2,437 - - - 29,481 16,150 45,631
------- ------- --- --- --- ---------- ----------- ----------
994 21,324 - - - 1,685,725 (1,446,427) 239,298
------- ------- --- --- --- ---------- ----------- ----------
$17,083 $24,031 $ 1 $ 1 $ 1 $3,990,543 $(1,723,212) $2,267,331
======= ======= === === === ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
National National Highland Data-Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corp. Inc. Inc. Inc. Inc.
-------- ------------ -------- --------- ----- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAPITALIZATION
AND LIABILITIES
- - ---------------
CAPITALIZATION:
- - --------------
Common Stock $1 Par
Value; Authorized -
100,000,000 Shares;
Issued and
Outstanding -
38,165,888 Shares $ 38,166 $ - $ - $ - $ - $ - $ - $ -
Capital Stock of
Subsidiaries - 59,170 25,345 500 4 5 1 1
Paid in Capital 405,028 121,668 35,894 104,035 1,365 445 4,159 499
Earnings Reinvested
in the Business 472,595 243,729 174,852 52,878 (737) 4,328 (1,376) 162
Cumulative
Translation
Adjustment (2,085) - - - - - - -
---------- ---------- -------- -------- ------ ------ ------ ----
Total Common
Stock Equity 913,704 424,567 236,091 157,413 632 4,778 2,784 662
Long-Term Debt,
Net of Current
Portion 574,000 - - 7,640 - - - -
Notes Payable -
Intercompany - 349,000 165,965 100,000 - - - -
---------- ---------- -------- -------- ------ ------ ------ ----
Total Capitalization 1,487,704 773,567 402,056 265,053 632 4,778 2,784 662
---------- ---------- -------- -------- ------ ------ ------ ----
CURRENT AND ACCRUED
LIABILITIES:
- - -----------
Notes Payable to
Banks and
Commercial Paper 92,400 - - - - - - -
Notes Payable -
Intercompany 13,200 46,200 27,200 118,600 300 - - -
Current Portion of
Long-Term Debt 100,000 - - 3,359 - - - -
Accounts Payable 137 38,807 11,493 20,460 - 6 16 (15)
Accounts Payable to
Customers - 10,183 333 - - - - -
Accounts Payable -
Intercompany 8,272 17,216 7,871 2,369 11 753 - 11
Dividends Payable -
Intercompany - 7,512 6,154 - - 200 200 -
Other Accruals and
Current Liabilities 32,507 46,056 5,743 (1,814) (62) 69 79 30
---------- ---------- -------- -------- ------ ------ ------ ----
246,516 165,974 58,794 142,974 249 1,028 295 26
---------- ---------- -------- -------- ------ ------ ------ ----
DEFERRED CREDITS:
- - ----------------
Accumulated Deferred
Income Taxes (572) 144,895 50,883 93,784 222 (9) (437) (14)
Taxes Refundable to
Customers - 20,471 (1,044) - - - - -
Unamortized
Investment Tax
Credit - 11,665 376 - - - - -
Other Deferred
Credits 3,103 59,313 11,126 1,734 - 54 752 33
---------- ---------- -------- -------- ------ ------ ------ ----
2,531 236,344 61,341 95,518 222 45 315 19
---------- ---------- -------- -------- ------ ------ ------ ----
$1,736,751 $1,175,885 $522,191 $503,545 $1,103 $5,851 $3,394 $707
========== ========== ======== ======== ====== ====== ====== ====
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Niagara Seneca Niagara
Fuel Development, Energy Indep. Indep. Total Before Eliminations Consolidated
Resources, Inc. Trading Pipeline Marketing Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Company & Adjustments (Dr) Cr Subsidiaries
- - ---------- -------------- ------- -------- --------- ------------- -------------- -------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ - $ 38,166 $ - $ 38,166
10 1 1 1 1 85,040 (85,040) -
3,490 3,249 - - - 679,832 (274,804) 405,028
7,162 (12,938) - - - 940,655 (468,060) 472,595
- (2,085) - - - (4,171) 2,086 (2,085)
------- ------- --- --- --- ---------- ----------- ----------
10,662 (11,773) 1 1 1 1,739,522 (825,818) 913,704
- - - - - 581,640 - 581,640
- 10,000 - - - 624,965 (624,965) -
------- ------- --- --- --- ---------- ----------- ----------
10,662 (1,773) 1 1 1 2,946,127 (1,450,783) 1,495,344
------- ------- --- --- --- ---------- ----------- ----------
- - - - - 92,400 - 92,400
- 22,600 - - - 228,100 (228,100) -
- - - - - 103,359 - 103,359
3,278 825 - - - 75,007 (902) 74,105
- - - - - 10,516 - 10,516
39 874 - - - 37,416 (37,416) -
35 - - - - 14,101 (14,101) -
(175) 1,360 - - - 83,793 - 83,793
------- ------- --- --- --- ---------- ----------- ----------
3,177 25,659 - - - 644,692 (280,519) 364,173
------- ------- --- --- --- ---------- ----------- ----------
(733) (110) - - - 287,909 646 288,555
- - - - - 19,427 - 19,427
- - - - - 12,041 - 12,041
3,977 255 - - - 80,347 7,444 87,791
------- ------- --- --- --- ---------- ----------- ----------
3,244 145 - - - 399,724 8,090 407,814
------- ------- --- --- --- ---------- ----------- ----------
$17,083 $24,031 $ 1 $ 1 $ 1 $3,990,543 $(1,723,212) $2,267,331
======= ======= === === === ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(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 $ - $943,575 $ - $ 560 $ - $ -
Other Operating Revenues - 47,792 172,694 126,602 - 10,654
-------- -------- -------- -------- ---- -------
- 991,367 172,694 127,162 - 10,654
-------- -------- -------- -------- ---- -------
OPERATING EXPENSE:
- - -----------------
Purchased Gas - 560,953 533 473 - -
Operation 3,221 171,342 56,270 26,476 25 8,782
Maintenance - 16,028 9,565 33 - -
Property, Franchise & Other
Taxes 527 86,216 11,343 1,738 3 116
Depreciation, Depletion and
Amortization 3 32,971 21,459 56,779 - 299
Income Taxes - Net 707 35,510 21,027 10,739 (25) 659
-------- -------- -------- -------- ---- -------
4,458 903,020 120,197 96,238 3 9,856
-------- -------- -------- -------- ---- -------
Operating Income (Loss) (4,458) 88,347 52,497 30,924 (3) 798
-------- -------- -------- -------- ---- -------
OTHER INCOME:
- - ------------
Unremitted Earnings of
Subsidiaries 59,552 - - - - -
Dividends from Subsidiaries 54,054 - - - - -
Interest-Intercompany 56,051 27 8 62 - 95
Other 495 1,453 323 348 (27) 38
-------- -------- -------- -------- ---- -------
170,152 1,480 331 410 (27) 133
-------- -------- -------- -------- ---- -------
Income (Loss) Before
Interest Charges 165,694 89,827 52,828 31,334 (30) 931
-------- -------- -------- -------- ---- -------
INTEREST CHARGES:
- - ----------------
Interest on Long-Term Debt 41,576 - - 555 - -
Interest-Intercompany 614 27,611 15,505 11,782 18 -
Other Interest 8,816 4,996 563 176 - 1
-------- -------- -------- -------- ---- -------
51,006 32,607 16,068 12,513 18 1
-------- -------- -------- -------- ---- -------
Net Income (Loss) Available
for Common Stock $114,688 $ 57,220 $ 36,760 $ 18,821 $(47) $ 930
======== ======== ======== ======== ==== =======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy
Utility Data-Track Fuel Development, Total Before Eliminations Consolidated
Constructors, Account Resources, Inc. Eliminations & Adjustments Company and
Inc. Services, Inc. Inc. (Consolidated) & Adjustments (Dr) Cr Subsidiaries
- - -------------- -------------- ---------- -------------- ------------- ------------- ------------
<C> <C> <C> <C> <C> <C> <C>
$ - $ - $68,346 $ - $1,012,481 $ - $1,012,481
- 370 1,752 1,910 361,774 (108,443) 253,331
---- ---- ------- ------- ---------- --------- ----------
- 370 70,098 1,910 1,374,255 (108,443) 1,265,812
---- ---- ------- ------- ---------- --------- ----------
- - 65,532 - 627,491 98,881 528,610
200 333 2,158 4,481 273,288 10,960 262,328
- - - 71 25,698 - 25,698
23 5 341 237 100,549 - 100,549
- 18 14 107 111,650 - 111,650
61 18 931 (953) 68,674 - 68,674
---- ---- ------- ------- ---------- --------- ----------
284 374 68,976 3,943 1,207,350 109,841 1,097,509
---- ---- ------- ------- ---------- --------- ----------
(284) (4) 1,122 (2,033) 166,905 1,398 168,303
---- ---- ------- ------- ---------- --------- ----------
- - - - 59,552 (59,552) -
- - - - 54,054 (54,054) -
74 28 320 - 56,665 (56,665) -
404 - 158 (85) 3,108 88 3,196
---- ---- ------- ------- ---------- --------- ----------
478 28 478 (85) 173,379 (170,183) 3,196
---- ---- ------- ------- ---------- --------- ----------
194 24 1,600 (2,118) 340,284 (168,785) 171,499
---- ---- ------- ------- ---------- --------- ----------
- - - - 42,131 - 42,131
- - 1 1,134 56,665 56,665 -
- - 32 96 14,680 - 14,680
---- ---- ------- ------- ---------- --------- ----------
- - 33 1,230 113,476 56,665 56,811
---- ---- ------- ------- ---------- --------- ----------
$194 $ 24 $ 1,567 $(3,348) $ 226,808 $(112,120) $ 114,688
==== ==== ======= ======= ========== ========= ==========
</TABLE>
<TABLE>
<S> <C>
Earnings Per Common Share
-------------------------
Net Income Available for Common Stock $3.01
=====
Weighted Average Common Shares Outstanding 38,083,514
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(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 $422,874 $219,746 $157,969 $34,057 $(690) $4,198
Net Income (Loss) Available
for Common Stock 114,688 57,220 36,760 18,821 (47) 930
Dividends on Common Stock
(1997-$1.71) (64,967) (33,237) (19,877) - - (800)
-------- -------- -------- ------- ----- ------
Balance at End of Year $472,595 $243,729 $174,852 $52,878 $(737) $4,328
======== ======== ======== ======= ===== ======
</TABLE>
At September 30, 1997
---------------------
Intercompany Eliminations:
- - -------------------------
Earnings Reinvested in the Business:
Unremitted Earnings of Subsidiaries
Since Acquisition $470,486
Earnings Reinvested in the Business
of Subsidiaries at Acquisition 7,095
Consolidating Adjustment (9,521)
--------
$468,060
========
Net Income Available for Common Stock:
Subsidiaries-Dividends on
Common Stock $ 54,054
Unremitted Earnings of Subsidiaries 59,553
Consolidating Adjustment (1,487)
--------
$112,120
========
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy
Utility Data-Track Fuel Development, Total Before Eliminations Consolidated
Constructors, Account Resources, Inc. Eliminations & Adjustments Company and
Inc. Services, Inc. Inc. (Consolidated) & Adjustments (Dr) Cr Subsidiaries
- - -------------- -------------- ---------- -------------- ------------- ------------- ------------
<C> <C> <C> <C> <C> <C> <C>
$(1,569) $138 $5,735 $ (9,590) $832,868 $(409,994) $422,874
194 24 1,567 (3,348) 226,808 (112,120) 114,688
- - (140) - (119,021) 54,054 (64,967)
------- ---- ------ -------- -------- --------- --------
$(1,375) $162 $7,162 $(12,938) $940,655 $(468,060) $472,595
======= ==== ====== ======== ======== ========= ========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF INVESTMENTS IN ASSOCIATED COMPANIES AT SEPTEMBER 30, 1997
Par or Earnings Total Investment
Stated Value Reinvested in Unremitted in Associated
of Paid the Business Earnings Cumulative Companies
Subsidiary in at Since Translation at
Stock Capital Acquisition Acquisition Adjustment Equity
------------ ------- -------------- ----------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Registrant:
Distribution
Corporation $59,170 $121,668 $4,636 $239,093 $ - $424,567
Supply Corporation 25,345 35,833 2,453 172,399 - 236,030
Seneca Resources 500 104,035 6 52,872 - 157,413
Leidy Hub 4 1,365 - (737) - 632
Highland 5 445 - 4,328 - 4,778
UCI 1 4,159 - (1,376) - 2,784
Data-Track 1 499 - 162 - 662
NFR 10 3,490 - 7,162 - 10,662
Horizon 1 3,249 - (12,938) (2,085) (11,773)
Niagara Energy 1 - - - - 1
Seneca Independence 1 - - - - 1
Niagara Independence 1 - - - - 1
Consolidating
Adjustment - - - 9,519 - 9,519
------- -------- ------ -------- ------- --------
85,040 274,743 7,095 470,484 (2,085) 835,277
Supply Corporation:
Seneca Resources - 61 - - - 61
------- -------- ------ -------- ------- --------
$85,040 $274,804 $7,095 $470,484 $(2,085) $835,338
======= ======== ====== ======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Data-
National National Highland Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors Services,
Company Corp. Corp. Corp. Inc. Inc. Inc. Inc.
-------- ------------ -------- --------- ------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
- - --------------------
Net Income (Loss) Available
for Common Stock $114,688 $ 57,220 $36,760 $18,821 $ (47) $ 930 $194 $24
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Unremitted Earnings of
Subsidiaries (59,552) - - - - - - -
Depreciation, Depletion
and Amortization 3 32,971 21,459 56,779 - 299 - 18
Deferred Income Taxes (161) (5,778) (2,850) 12,844 26 2 (41) (7)
Other 739 732 2,699 - 27 - (9) -
Change in:
Receivables and Unbilled
Utility Revenue (97) (299) (3,220) (2,213) 1 (306) 78 -
Accounts Receivable-Intercompany (1,567) (2,146) (1,704) 1,063 - 123 2 4
Gas Stored Underground
and Material and Supplies - 6,845 755 (126) - (174) - -
Prepayments (519) 8,210 2,350 (178) - (14) - -
Accounts Payable (18) (1,824) 3,807 9,740 - (1) (1) (23)
Amounts Payable to Customers - 6,412 (514) - - - - -
Accounts Payable-Intercompany 443 3,677 1,125 254 - 172 - (3)
Other Accruals and Current
Liabilities 6,253 7,402 (5,132) (7,025) 50 135 (72) (15)
Other Assets and
Liabilities-Net (5,163) 29,686 3,714 310 - 24 106 28
-------- -------- ------- ------- ------ ------ ---- ---
Net Cash Provided by
(Used in) Operating
Activities $ 55,049 $143,108 $59,249 $90,269 $ 57 $1,190 $257 $26
-------- -------- ------- ------- ------ ------ ---- ---
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
(Consolidating Statement of Cash Flows continues on pages 45 and 46)
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Niagara Seneca Niagara
Fuel Development, Energy Indep. Indep. Total Before Consolidated
Resources, Inc. Trading Pipeline Marketing Eliminations Eliminations Company and
Inc. (Consolidated) Inc. Company Company & Adjustments & Adjustments Subsidiaries
- - ---------- -------------- ------- -------- --------- ------------- ------------- ------------
<C> <C> <C> <C> <C> <C> <C> <C>
$1,567 $(3,348) $ - $ - $ - $ 226,808 $(112,120) $ 114,688
- - - - - (59,552) 59,552 -
14 107 - - - 111,650 - 111,650
(169) (66) - - - 3,800 - 3,800
511 337 - - - 5,036 2,994 8,030
(4,047) (228) - - - (10,331) (1) (10,332)
3 - - - - (4,222) 4,222 -
- - - - - 7,300 - 7,300
192 48 - - - 10,089 (24) 10,065
717 (2,361) - - - 10,036 (541) 9,495
- - - - - 5,898 - 5,898
(1,079) 42 - - - 4,631 (4,631) -
(1,489) 4,006 - - - 4,113 (6,233) (2,120)
2,980 (1,171) - - - 30,514 5,674 36,188
------ ------- ----- ---- ----- --------- --------- ---------
$ (800) $(2,634) $ - $ - $ - $ 345,770 $ (51,108) $ 294,662
------ ------- ----- ---- ----- --------- --------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Data-
National National Highland Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corp. Inc. Inc. Inc. Inc.
-------- ------------ -------- --------- ----- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTING ACTIVITIES:
- - --------------------
Capital Expenditures $ - $(66,908) $(22,562) $(123,053) $ - $(1,071) $ - $ (19)
Capital Contribution - - - - - - (800) -
Investment in Unconsolidated
Foreign Subsidiary - - - - - - - -
Investment in Associated
Companies 797 - - - - - - -
Other - - - 1,970 - - 83 -
-------- -------- -------- -------- ------ ------- ----- -----
Net Cash Provided by (Used In)
Investing Activities 797 (66,908) (22,562) (121,083) - (1,071) (717) (19)
-------- -------- -------- --------- ------ ------- ----- -----
FINANCING ACTIVITIES:
- - --------------------
Change in Notes Payable to
Banks and Commercial Paper (107,300) - - - - - - -
Change in Notes
Payable-Intercompany 100 (44,800) (19,300) 34,200 - - - -
Change in Notes and Dividends
Receivable-Intercompany 5,868 - - (3,400) - 900 500 -
Net Proceeds from Issuance of
Long-Term Debt 99,500 - - - - - - -
Reduction of Long-Term Debt - - - (1,310) - - - -
Proceeds from Issuance of
Common Stock 10,068 - - - - - - -
Dividends Paid on Common Stock (64,260) (34,830) (19,252) - - (800) - -
-------- -------- -------- --------- ------ ------- ----- -----
Net Cash Provided by (Used in)
Financing Activities (56,024) (79,630) (38,552) 29,490 - 100 500 -
-------- -------- -------- --------- ------ ------- ----- -----
Net Increase (Decrease) in
Cash and Temporary Cash
Investments (178) (3,430) (1,865) (1,324) 57 219 40 7
Cash and Temporary Cash
Investments at Beginning
of Year 7,243 4,041 2,465 2,758 6 253 60 67
-------- -------- -------- --------- ------ ------- ----- -----
Cash and Temporary Cash
Investments at End of Year $ 7,065 $ 611 $ 600 $ 1,434 $ 63 $ 472 $ 100 $ 74
======== ======== ======== ========= ====== ======= ===== =====
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Niagara Seneca Niagara
Fuel Development, Energy Indep. Indep. Total Before Consolidated
Resources, Inc. Trading Pipeline Marketing Eliminations Eliminations Company and
Inc. (Consolidated) Inc. Company Company & Adjustments & Adjustments Subsidiaries
- - ---------- -------------- ------- -------- --------- ------------- ------------- -------------
<C> <C> <C> <C> <C> <C> <C> <C>
$ (96) $ (292) $ - $ - $ - $(214,001) $ - $(214,001)
- - 1 1 1 (797) 797 -
- (21,075) - - - (21,075) - (21,075)
- - - - - 797 (797) -
- (128) - - - 1,925 (495) 1,429
------ -------- ---- ---- ---- --------- ------- ---------
(96) (21,495) 1 1 1 (233,151) (495) (233,647)
------ -------- ---- ---- ---- --------- ------- ---------
- - - - - (107,300) - (107,300)
- 25,000 - - - (4,800) 4,800 -
1,900 - - - - 5,768 (5,768) -
- - - - - 99,500 - 99,500
- - - - - (1,310) - (1,310)
- - - - - 10,068 (2,995) 7,074
(140) - - - - (119,282) 55,022 (64,260)
------ -------- ---- ---- ---- --------- ------- ---------
1,760 25,000 - - - (117,356) 51,059 (66,296)
------ -------- ---- ---- ---- --------- ------- ---------
864 871 1 1 1 (4,736) (545) (5,281)
1,462 317 - - - 18,672 648 19,320
------ -------- ---- ---- ---- --------- ------- ---------
$2,326 $ 1,188 $ 1 $ 1 $ 1 $ 13,936 $ 103 $ 14,039
====== ======== ==== ==== ==== ========= ======= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Horizon
Energy Sceptre Consolidated
Development, Power Bruwabel Total Before Horizon and
Inc. Company (Consolidated) Eliminations Eliminations Subsidiaries
------------ ------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- - ------
PROPERTY, PLANT & EQUIPMENT $ - $ - $ 1,308 $ 1,308 $ - $ 1,308
- - ---------------------------
Accumulated DD&A - - 365 365 - 365
-------- ------- ------- -------- -------- --------
- - 943 943 - 943
-------- ------- ------- -------- -------- --------
CURRENT ASSETS:
- - --------------
Cash and Temporary Cash Investments 9 52 1,127 1,188 - 1,188
Accounts Rec. Interco. 1,472 - - 1,472 (1,472) -
Accounts Receivable 1 10 559 570 - 570
Prepayments - - 6 6 - 6
-------- ------- ------- -------- -------- --------
1,482 62 1,692 3,236 (1,472) 1,764
-------- ------- ------- -------- -------- --------
OTHER ASSETS:
- - ------------
Investment in Associated Companies 25,135 - - 25,135 (25,135) -
Investment in Unconsolidated
Foreign Subsidiary - - 18,887 18,887 - 18,887
Other Assets 127 - 2,310 2,437 - 2,437
-------- ------- ------- -------- -------- --------
25,262 - 21,197 46,459 (25,135) 21,324
-------- ------- ------- -------- -------- --------
TOTAL ASSETS $ 26,744 $ 62 $23,832 $ 50,638 $(26,607) $ 24,031
======== ======= ======= ======== ======== ========
CAPITALIZATION & LIABILITIES
- - ----------------------------
CAPITALIZATION:
- - --------------
Common Stock $ 1 $ - $ 29 $ 30 $ (29) 1
Paid - in - Capital 3,249 - 25,487 28,736 (25,487) 3,249
Capital Contribution from Horizon - 10,916 - 10,916 (10,916) -
Earnings Reinvested in the Business (12,938) (7,555) (1,657) (22,150) 9,212 (12,938)
Cumulative Translation Adjustment (2,085) - (2,085) (4,170) 2,085 (2,085)
-------- ------- ------- -------- -------- --------
(11,773) 3,361 21,774 13,362 (25,135) (11,773)
-------- ------- ------- -------- -------- --------
Long-Term Debt-Intercompany 10,000 - - 10,000 - 10,000
-------- ------- ------- -------- -------- --------
(1,773) 3,361 21,774 23,362 (25,135) (1,773)
-------- ------- ------- --------- -------- --------
CURRENT AND ACCRUED LIABILITIES:
- - -------------------------------
Notes Payable Intercompany 22,600 - - 22,600 - 22,600
Accounts Payable 74 8 808 890 (65) 825
Accounts Payable - Intercompany 874 - 1,407 2,281 (1,407) 874
Other Accruals and Current
Liabilities 5,027 (3,287) (380) 1,360 - 1,360
-------- ------- ------- -------- -------- --------
28,575 (3,279) 1,835 27,131 (1,472) 25,659
-------- ------- ------- -------- -------- --------
DEFERRED CREDITS:
- - ----------------
Accumulated Deferred Income Taxes (89) (21) - (110) - (110)
Other Deferred Credits 31 1 223 255 - 255
-------- ------- ------- -------- -------- --------
(58) (20) 223 145 - 145
-------- ------- ------- -------- -------- --------
TOTAL CAPITALIZATION & LIABILITIES $ 26,744 $ 62 $23,832 $ 50,638 $(26,607) $ 24,031
======== ======= ======= ======== ======== ========
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Horizon
Energy Sceptre Consolidated
Development, Power Bruwabel Total Before Horizon and
Inc. Company (Consolidated) Eliminations Eliminations Subsidiaries
------------ ------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
-----------------
Other Operating Revenues $ - $ - $ 1,910 $ 1,910 $ - $ 1,910
------- ------- ------- ------- ------ -------
- - 1,910 1,910 - 1,910
------- ------- ------- ------- ------ -------
OPERATING EXPENSE:
-----------------
Operation (1,057) 2,688 2,850 4,481 - 4,481
Maintenance - - 71 71 - 71
Property, Franchise & Other Taxes 1 - 236 237 - 237
Depreciation, Depletion and
Amortization - - 107 107 - 107
Income Taxes - Net (13) (940) - (953) - (953)
------- ------- ------- ------- ------ -------
(1,069) 1,748 3,264 3,943 - 3,943
------- ------- ------- ------- ------ -------
Operating Income (Loss) 1,069 (1,748) (1,354) (2,033) - (2,033)
------- ------- ------- ------- ------ -------
OTHER INCOME:
------------
Unremitted Earnings of Subsidiaries (3,308) - - (3,308) 3,308 -
Equity Interest in Unconsolidated
Foreign Subsidiary - - (198) (198) - (198)
Other 25 - 88 113 - 113
------- ------- ------- ------- ------ -------
(3,283) - (110) (3,393) 3,308 (85)
------- ------- ------- ------- ------ -------
Loss Before Interest Charges (2,214) (1,748) (1,464) (5,426) 3,308 (2,118)
------- ------- ------- ------- ------ -------
INTEREST CHARGES - Other Interest 1,134 - 96 1,230 - 1,230
---------------- ------- ------- ------- ------- ------ -------
Net Loss $(3,348) $(1,748) $(1,560) $(6,656) $3,308 $(3,348)
======= ======= ======= ======= ====== =======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of
National Fuel Gas Company's Form 10-K for the fiscal year ended September
30, 1997, incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Horizon
Energy Sceptre Consolidated
EARNINGS REINVESTED Development, Power Bruwabel Total Before Horizon and
IN THE BUSINESS Inc. Company (Consolidated) Eliminations Eliminations Subsidiaries
- - ------------------- ------------ ------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at Beginning of Year $ (9,590) $(5,807) $ (97) $(15,494) $5,904 $ (9,590)
Net Loss (3,348) (1,748) (1,560) (6,656) 3,308 (3,348)
-------- ------- ------- -------- ------ --------
Balance at End of Year $(12,938) $(7,555) $(1,657) $(22,150) $9,212 $(12,938)
======== ======= ======= ======== ====== ========
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Horizon
Energy Sceptre Total Before Eliminations Consolidated
Development, Power Bruwabel Eliminations and Horizon and
Inc. Company (Consolidated) & Adjustments Adjustments Subsidiaries
------------ ------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- - ------------------------------------
Net Loss $ (3,348) $(1,748) $ (1,560) $ (6,656) $ 3,308 $ (3,348)
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiaries 3,308 - - 3,308 (3,308) -
Depreciation, Depletion &
Amortization - - 107 107 - 107
Deferred Income Taxes (46) (20) - (66) - (66)
Other - 107 230 337 - 337
Change in:
Accounts Receivable - Intercompany (843) - - (843) 843 -
Accounts Receivable 8 45 (281) (228) - (228)
Prepayments - 14 34 48 - 48
Accounts Payable (2,130) (1,074) 924 (2,280) (81) (2,361)
Accounts Payable - Intercompany 43 (331) 1,092 804 (762) 42
Other Accruals and Current
Liabilities 4,539 (178) (356) 4,005 1 4,006
Other Assets and Liabilities 18 56 (1,245) (1,171) - (1,171)
-------- ------- -------- -------- -------- --------
Net Cash Provided by (Used in)
Operations 1,549 (3,129) (1,055) (2,635) 1 (2,634)
-------- ------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
- - ------------------------------------
Capital Expenditures - - (292) (292) - (292)
Investment in Unconsolidated
Foreign Subsidiary - - (21,075) (21,075) - (21,075)
Investment in Associated Companies (26,446) - - (26,446) 26,446 -
Capital Contribution - 3,160 23,286 26,446 (26,446) -
Other (127) - - (127) (1) (128)
-------- ------- -------- -------- -------- --------
Net Cash Provided by (Used in)
Investing Activities (26,573) 3,160 1,919 (21,494) (1) (21,495)
-------- ------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
- - ------------------------------------
Change in Notes Payable Intercompany 25,000 - - 25,000 - 25,000
-------- ------- -------- -------- -------- --------
Net Cash Provided by Financing
Activities 25,000 - - 25,000 - 25,000
-------- ------- -------- -------- -------- --------
Net Increase (Decrease) in Cash
and Temporary Cash Investments (24) 31 864 871 - 871
Cash and Temporary Cash Investments
at Beginning of Year 33 21 263 317 - 317
-------- ------- -------- -------- -------- --------
Cash and Temporary Cash Investments
at End of Year $ 9 $ 52 $ 1,127 $ 1,188 $ - $ 1,188
======== ======= ======== ======== ======== ========
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
BRUWABEL AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Power
Development, Consolidated
s.r.o. Horizon Energy Total Before Bruwabel and
Bruwabel (Consolidated) Development, s.r.o. Eliminations Eliminations Subsidiaries
-------- -------------- ------------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- - ------
PROPERTY, PLANT & EQUIPMENT $ - $1,087 $ 221 $ 1,308 $ - $ 1,308
- - ----------------------------
Accumulated DD&A - 163 202 365 - 365
------- ------ ------ ------- ------- -------
- 924 19 943 - 943
------- ------ ------ ------- ------- -------
CURRENT ASSETS:
- - --------------
Cash and Temporary Cash
Investments 993 75 59 1,127 - 1,127
Accounts Receivable -
Intercompany 272 - - 272 (272) -
Accounts Receivable 3 96 460 559 - 559
Prepayments - 2 4 6 - 6
------- ------ ------ ------- ------- -------
1,268 173 523 1,964 (272) 1,692
------- ------ ------ ------- ------- -------
OTHER ASSETS:
- - ------------
Investment in Unconsolidated
Foreign Subsidiary 18,887 - - 18,887 - 18,887
Other 2,444 1,008 1,302 4,754 (2,444) 2,310
------- ------ ------ ------- ------- -------
21,331 1,008 1,302 23,641 (2,444) 21,197
------- ------ ------ ------- ------- -------
$22,599 $2,105 $1,844 $26,548 $(2,716) $23,832
======= ====== ====== ======= ======= =======
CAPITALIZATION & LIABILITIES
- - ----------------------------
CAPITALIZATION:
- - --------------
Common Stock $ 29 $ 760 $1,567 $ 2,356 $(2,327) $ 29
Paid in Capital 25,487 1,097 - 26,584 (1,097) 25,487
Earnings Reinvested in the
Business (1,657) (161) (724) (2,542) 885 (1,657)
Cumulative Translation
Adjustment (2,085) (154) 59 (2,180) 95 (2,085)
------- ------ ------ ------- ------- -------
Total Common Stock Equity 21,774 1,542 902 24,218 (2,444) 21,774
------- ------ ------ ------- ------- -------
CURRENT AND ACCRUED LIABILITIES:
- - -------------------------------
Accounts Payable 370 275 336 981 (173) 808
Accounts Payable - Intercompany 420 488 598 1,506 (99) 1,407
Other Accruals and Current
Liabilities 35 (423) 8 (380) - (380)
------- ------ ------ ------- ------- -------
Total Current Liabilities 825 340 942 2,107 (272) 1,835
------- ------ ------ ------- ------- -------
DEFERRED CREDITS:
- - ----------------
Other Deferred Credits - 223 - 223 - 223
------- ------ ------ ------- ------- -------
- 223 - 223 - 223
------- ------ ------ ------- ------- -------
$22,599 $2,105 $1,844 $26,548 $(2,716) $23,832
======= ====== ====== ======= ======= =======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
BRUWABEL AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Power Consolidated
Development, Bruwabel
s.r.o. Horizon Energy Total Before and
Bruwabel (Consolidated) Development, s.r.o. Eliminations Eliminations Subsidiaries
-------- -------------- ------------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
- - ------------------
Other Operating Revenues $ - $1,887 $ 82 $ 1,969 $(59) $ 1,910
------- ------ ----- ------- ---- -------
- 1,887 82 1,969 (59) 1,910
------- ------ ----- ------- ---- -------
OPERATING EXPENSES:
- - ------------------
Operation 269 1,903 658 2,830 20 2,850
Maintenance - 50 21 71 - 71
Property Franchise & Other Taxes 235 1 - 236 - 236
Depreciation, Depletion &
Amortization - 75 32 107 - 107
------- ------ ----- ------- ---- -------
504 2,029 711 3,244 20 3,264
------- ------ ----- ------- ---- -------
Operating Loss (504) (142) (629) (1,275) (79) (1,354)
------- ------ ----- ------- ---- -------
OTHER INCOME:
- - ------------
Unremitted Earnings of Subsidiaries (911) - - (911) 911 -
Equity Interest in Unconsolidated
Foreign Subsidiary (198) - - (198) - (198)
Other 53 10 27 90 (2) 88
------- ------ ----- ------- ---- -------
(1,056) 10 27 (1,019) 909 (110)
------- ------ ----- ------- ---- -------
Loss Before Interest (1,560) (132) (602) (2,294) 830 (1,464)
------- ------ ----- ------- ---- -------
INTEREST CHARGES:
- - ----------------
Other Interest - 94 4 98 (2) 96
------- ------ ----- ------- ---- -------
Net Loss $(1,560) $ (226) $(606) $(2,392) $832 $(1,560)
======= ====== ===== ======= ==== =======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
BRUWABEL AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Power Total Before
Development, Horizon Eliminations Eliminations Consolidated
EARNINGS REINVESTED s.r.o. Energy and and Bruwabel and
IN THE BUSINESS Bruwabel (Consolidated) Development, s.r.o. Adjustments Adjustments Subsidiaries
- - ------------------- -------- -------------- ------------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at Beginning of Year $ (97) $ 65 $(117) $ (149) $ 52 $ (97)
Net Loss (1,560) (226) (606) (2,392) 832 (1,560)
------- ----- ----- ------- ---- -------
Balance at End of Year $(1,657) $(161) $(723) $(2,541) $884 $(1,657)
======= ===== ===== ======= ==== =======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
BRUWABEL AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Power
Development, Horizon Energy Total Before Bruwabel and
s.r.o. Development, Eliminations Subsidiaries
Bruwabel (Consolidated) s.r.o. & Adjustments Eliminations Consolidated
-------- -------------- -------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- - ------------------------------------
Net Loss $ (1,481) $(226) $(606) $ (2,313) $ 753 $ (1,560)
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiaries 832 - - 832 (832) -
Depreciation, Depletion & Amortization - 75 32 107 - 107
Other 198 20 12 230 - 230
Change in:
Accounts Receivable - Intercompany (272) - 37 (235) 235 -
Accounts Receivable - 120 (401) (281) - (281)
Prepayments - 6 28 34 - 34
Accounts Payable 334 402 324 1,060 (136) 924
Accounts Payable - Intercompany 375 369 448 1,192 (100) 1,092
Other Accruals and Current Liabilities 35 (417) 26 (356) - (356)
Other Assets and Liabilities (1,198) (116) 69 (1,245) - (1,245)
-------- ----- ---- -------- ----- --------
Net Cash Provided by (Used in)
Operations (1,177) 233 (31) (975) (80) (1,055)
-------- ----- ---- -------- ----- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
- - ------------------------------------
Capital Expenditures - (251) (41) (292) - (292)
Investment in Unconsolidated
Foreign Subsidiary (21,155) - - (21,155) 80 (21,075)
Capital Contribution 23,286 - - 23,286 - 23,286
-------- ----- ---- -------- ------ --------
Net Cash Provided by (Used in)
Investing Activities 2,131 (251) (41) 1,839 80 1,919
-------- ----- ---- -------- ------ --------
Net Increase (Decrease) in Cash
and Temporary Cash Investments 954 (18) (72) 864 - 864
Cash and Temporary Cash Investments
at Beginning of Year 39 93 131 263 - 263
-------- ----- ---- -------- ------ --------
Cash and Temporary Cash Investments
at End of Year $ 993 $ 75 $ 59 $ 1,127 $ - $ 1,127
======== ===== ==== ======== ====== ========
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, s.r.o. AND SUBSIDIARY
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Development
Development, Kromeriz, Total Before and
s.r.o. a.s. Eliminations Eliminations Subsidiary
------------ --------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS
- - ------
PROPERTY, PLANT & EQUIPMENT $ - $1,087 $1,087 $ - $1,087
- - -----------------------------
Accumulated DD&A - 163 163 - 163
------ ------ ------ ------- ------
- 924 924 - 924
------ ------ ------ ------- ------
CURRENT ASSETS:
- - --------------
Cash and Temporary Cash Investments 15 60 75 - 75
Accounts Receivable - Intercompany 1,038 - 1,038 (1,038) -
Accounts Receivable 17 79 96 - 96
Prepayments - 2 2 - 2
------ ------ ------ ------- ------
1,070 141 1,211 (1,038) 173
------ ------ ------ ------- ------
OTHER ASSETS:
- - ------------
Other Assets 1,028 1,008 2,036 (1,028) 1,008
------ ------ ------ ------- ------
$2,098 $2,073 $4,171 $(2,066) $2,105
====== ====== ====== ======= ======
CAPITALIZATION & LIABILITIES
- - ----------------------------
CAPITALIZATION:
- - --------------
Common Stock $ 760 $ 36 $ 796 $ (36) $ 760
Paid - in - Capital 1,097 1,140 2,237 (1,140) 1,097
Earnings Reinvested in the Business (161) (113) (274) 113 (161)
Cumulative Translation Adjustment (154) (36) (190) 36 (154)
------ ------ ------ ------- ------
1,542 1,027 2,569 (1,027) 1,542
------ ------ ------ ------- ------
CURRENT AND ACCRUED LIABILITIES:
- - -------------------------------
Accounts Payable 67 640 707 (432) 275
Accounts Payable - Intercompany 488 607 1,095 (607) 488
Other Accruals and Current Liabilities 1 (424) (423) - (423)
------ ------ ------ ------- ------
556 823 1,379 (1,039) 340
------ ------ ------ ------- ------
DEFERRED CREDITS:
- - ----------------
Other Deferred Credits - 223 223 - 223
------ ------ ------ ------- ------
- 223 223 - 223
------ ------ ------ ------- ------
$2,098 $2,073 $4,171 $(2,066) $2,105
====== ====== ====== ======= ======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, s.r.o. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Development
Development, Kromeriz, Total Before and
s.r.o. a.s. Eliminations Eliminations Subsidiary
------------ --------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES:
- - ------------------
Other Operating Revenues $ 40 $1,887 $1,927 $(40) $1,887
----- ------ ------ ---- ------
40 1,887 1,927 (40) 1,887
----- ------ ------ ---- ------
OPERATING EXPENSES:
- - ------------------
Operation 104 1,839 1,943 (40) 1,903
Maintenance - 50 50 - 50
Property, Franchise & Other Taxes - 1 1 - 1
Depreciation, Depletion & Amortization - 75 75 - 75
----- ------ ------ ---- ------
104 1,965 2,069 (40) 2,029
----- ------ ------ ---- ------
Operating Loss (64) (78) (142) - (142)
----- ------ ------ ---- ------
OTHER INCOME:
- - ------------
Unremitted Earnings of Subsidiaries (161) - (161) 161 -
Other 1 9 10 - 10
----- ------ ------ ---- ------
(160) 9 (151) 161 10
----- ------ ------ ---- ------
Loss Before Interest (224) (69) (293) 161 (132)
----- ------ ------ ---- ------
INTEREST CHARGES:
- - ----------------
Other Interest 2 92 94 - 94
--- ------ ------ ---- ------
2 92 94 - 94
--- ------ ------ ---- ------
Net Loss $(226) $ (161) $ (387) $161 $ (226)
===== ====== ====== ==== ======
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, s.r.o. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Development
EARNINGS REINVESTED Development, Kromeriz, Total Before and
IN THE BUSINESS s.r.o. a.s. Eliminations Eliminations Subsidiary
- - ------------------- ------------ --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Year $ 65 $ 49 $ 114 $(49) $ 65
Net Loss (226) (161) (387) 161 (226)
----- ----- ----- ---- -----
Balance at End of Year $(161) $(112) $(273) $112 $(161)
===== ===== ===== ==== =====
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, s.r.o. AND SUBSIDIARY
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Total Before Development
Development, Kromeriz, Eliminations Eliminations and
s.r.o. a.s. & Adjustments & Adjustments Subsidiary
------------ --------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- - ------------------------------------
Net Loss $(226) $(161) $(387) $ 161 $(226)
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiaries 161 - 161 (161) -
Depreciation, Depletion & Amortization - 75 75 - 75
Other - 20 20 - 20
Change in:
Accounts Receivable - Intercompany (285) - (285) 285 -
Accounts Receivable (12) 132 120 - 120
Prepayments - 6 6 - 6
Accounts Payable 32 285 317 85 402
Accounts Payable - Intercompany 369 370 739 (370) 369
Other Accruals and Current Liabilities - (417) (417) - (417)
Other Assets and Liabilities (106) (10) (116) - (116)
----- ----- ----- ----- -----
Net Cash Provided by (Used in)
Operations (67) 300 233 - 233
----- ----- ----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
- - ------------------------------------
Capital Expenditures - (251) (251) - (251)
----- ----- ----- ----- -----
Net Cash Used in Investing Activities - (251) (251) - (251)
----- ----- ----- ----- -----
Net Increase (Decrease) in Cash
and Temporary Cash Investments (67) 49 (18) - (18)
Cash and Temporary Cash Investments
at Beginning of Period 82 11 93 - 93
----- ----- ----- ----- -----
Cash and Temporary Cash Investments
at End of Period $ 15 $ 60 $ 75 $ - $ 75
===== ===== ===== ===== =====
</TABLE>
Note: Individual columns or rows may not add due to rounding.
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1997,
incorporated herein by reference.
<PAGE>
EXHIBITS
A. *(1) Annual Report on Form 10-K for fiscal year ended September 30,
1997 filed December 23, 1997 (File No. 1-3880).
(2) National Fuel Gas Company 1997 Annual Report to Shareholders
(paper copy submitted under cover of Form SE).
*(3) National Fuel Gas Company Proxy Statement, dated and filed
December 31, 1997 (File No. 1-03880)
B. Articles of Incorporation, By-Laws and Partnership Agreements
(1) National Fuel Gas Company
*i Restated Certificate of Incorporation of National Fuel
Gas Company, dated March 15, 1985 (Exhibit 10-00, Form
10-K for fiscal year ended September 30, 1991 in File
No. 1-3880)
*ii 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 in
File No. 1-3880)
*iii National Fuel Gas Company By-Laws as amended through
September 18, 1997. (Exhibit 3.1, Form 10-K for fiscal
year ended September 30, 1997 in File No. 1-3880)
*iv Certificate of Amendment of Restated Certificate of
Incorporation of National Fuel Gas Company, dated
March 9, 1987 (Exhibit 3.1, Form 10-K for fiscal year
ended September 30, 1995 in File No. 1-3880)
*v Certificate of Amendment of Restated Certificate of
Incorporation of National Fuel Gas Company, dated
February 22, 1988 (Exhibit 3.2, Form 10-K for fiscal
year ended September 30, 1995 in File No. 1-3880)
(2) National Fuel Gas Distribution Corporation
*i By-Laws, as amended (Exhibit 2(i), designated as
Exhibit EX-3(b) for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1994)
*ii Restated Certificate of Incorporation of National Fuel
Gas Distribution Corporation, dated May 9, 1988
(Exhibit B-1 in File No. 70-7478)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(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)
*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. (Exhibit (3)v,
designated as Exhibit EX-99-3 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1994)
(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. (Exhibit
(4)iv, designated as Exhibit EX-99-1 for EDGAR
purposes, Form U5S for fiscal year ended September 30,
1994)
*v Ellisburg-Leidy Northeast Hub Company Admission
Agreement dated June 12, 1995. (Exhibit (4)v,
designated as Exhibit EX-99-1 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1995)
*vi Letter Agreement between Leidy Hub, Inc. and Hub
Services, Inc. dated June 12, 1995. (Exhibit (4)vi,
designated as Exhibit EX-99-2 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1995)
*vii Consent and waiver by Leidy Hub, Inc. dated June 12,
1995. (Exhibit (4)vii, designated as Exhibit EX-99-3
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1995)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*viii Limited Liability Company Agreement of Enerchange,
L.L.C. dated June 12, 1995 and related documents.
(Exhibit (4)viii, designated as Exhibit EX-99-1 for
EDGAR purposes, Form U5S for fiscal year ended
September 30, 1996) [Portions of this document are
subject to a request for confidential treatment under
Rule 104(b)]
(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. (Exhibit (5)vi, designated as
Exhibit EX-99-2 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1994)
*(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)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(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)
(13) Horizon Energy Development, Inc.
*i Certificate of Incorporation. (Exhibit (13)i,
designated as Exhibit EX-3(a) for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1995)
*ii By-Laws. (Exhibit (13)ii, designated as Exhibit
EX-3(b) for EDGAR purposes, Form U5S for fiscal year
ended September 30, 1995)
(14) Beheeren-Beleggingmaatschappij Bruwabel B.V.
*i Articles of Incorporation. (Exhibit (14), designated
as exhibit EX-99-2 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1996)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(15) Horizon Energy Development, s.r.o. (formerly Power
International, s.r.o.)
*i Founding Notarial Deed, dated May 8, 1991. (Exhibit
(15)i, designated as Exhibit EX-99-9 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996)
*ii Notarial Deed, dated December 2, 1993. (Exhibit
(15)ii, designated as Exhibit EX-99-10 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996)
*iii Notarial Deed, dated June 28, 1996. (Exhibit (15)iii,
designated as Exhibit EX-99-11 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1996)
*iv Notarial Deed, dated November 27, 1996. (Exhibit
(15)iv, designated as Exhibit EX-99-12 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996)
(16) Power Development, s.r.o.
*i Founding Notarial Deed, dated May 4, 1994. (Exhibit
(16)i, designated as Exhibit EX-99-13 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996)
*ii Notarial Deed, dated June 28, 1996. (Exhibit (16)ii,
designated as Exhibit EX-99-14 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1996)
*iii Notarial Deed, dated November 27, 1996. (Exhibit
(16)iii, designated as Exhibit EX-99-15 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996)
(17) Teplarna Kromeriz a.s.
*i Statutes, dated June 1996. (Exhibit (17), designated
as Exhibit EX-99-16 for EDGAR purposes, Form U5S/A for
fiscal year ended September 30, 1996)
(18) KPP Investment, L.L.C.
*i Limited Liability Company Agreement dated January 11,
1996. (Exhibit (18)i, designated as exhibit EX-99-3
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1996)
*ii Certificate of Formation, dated January 15, 1997.
(Exhibit (18)ii, designated at Exhibit EX-99-4 for
EDGAR purposes, Form U5S for fiscal year ended
September 30, 1996)
(19) Sceptre Kabirwala, L.L.C.
*i Limited Liability Company Agreement dated January 26,
1996. (Exhibit (19)i, designated as exhibit EX-99-5
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1996)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*ii Certificate of Formation, dated January 10, 1997.
(Exhibit (19)ii, designated as Exhibit EX-99-6 for
EDGAR purposes, Form U5S for fiscal year ended
September 30, 1996)
(20) Severoceske Teplarny, a.s. - Governing documents to be filed
by amendment when available.
(21) Teplarna Liberec, a.s. - Governing documents to be filed by
amendment when available.
(22) Energoservis Liberec, s.r.o. - Governing documents to be filed
by amendment when available.
(23) Zateca teplarenska, a.s. - Governing documents to be filed by
amendment when available.
(24) SCT Softmaker, s.r.o. - Governing documents to be filed by
amendment when available.
(25) Zkusebna mericu tepla a vodomeru Litomerice, s.r.o. -
Governing documents to be filed by amendment when available.
(26) Niagara Energy Trading Inc.
i Certificate of Incorporation dated July 15, 1997.
Designated as exhibit EX-99-1 for EDGAR purposes.
ii By-Laws. Designated as exhibit EX-99-2 for EDGAR
purposes.
(27) Niagara Independence Marketing Company
i Certificate of Incorporation dated September 17, 1997.
Designated as exhibit EX-99-3 for EDGAR purposes.
ii By-Laws. Designated as exhibit EX-99-4 for EDGAR
purposes.
iii Marketing Partnership Agreement among Coastal Gas
Marketing DirectLink Corp., MGS Marketing Corp.,
Niagara Independence Marketing Company and Williams
Independence Marketing Company. Designated as exhibit
EX-99-5 for EDGAR purposes.
(28) Seneca Independence Pipeline Company
i Certificate of Incorporation of Empire Oklahoma, Inc.
dated April 16, 1996. Designated as exhibit EX-99-6
for EDGAR purposes.
ii Certificate of Amendment of Certificate of
Incorporation of Empire Oklahoma, Inc. dated July 24,
1997. Designated as exhibit EX-99-7 for EDGAR
purposes.
iii By-Laws. Designated as exhibit EX-99-8 for EDGAR
purposes.
* Incorporated herein by reference as indicated.
<PAGE>
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) in
File No. 2-51796)
* Third Supplemental Indenture dated as of December 1, 1982, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a)(4)
in File No. 33-49401)
* 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 in File No. 1-3880)
* Fifteenth Supplemental Indenture dated as of September 1, 1996 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, 1996 in File No. 1-3880)
* Rights Agreement between National Fuel Gas Company and Marine
Midland Bank dated June 13, 1996 (Exhibit 99.1, Form 8-K dated June
13, 1996 in File No. 1-3880)
D. Tax Allocation Agreement pursuant to Rule 45(c). Designated as exhibit
EX-99-10 for EDGAR purposes.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Concluded)
E. (1) Employee Relocation Manual filed pursuant to Rule 48(b).
Designated as exhibit EX-99-9 for EDGAR purposes.
(2) Enerchange, L.L.C. Audited Financial Statements as of
December 31, 1996. Filed in paper only under cover of
Form SE as prescribed by Rule 16(c).
F. Schedules of Supporting Items of this Report - None.
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>
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 28, 1998
----------------
<PAGE>
EXHIBIT INDEX
-------------
EX27-1 Financial Data Schedule of National Fuel Gas Company for period
ending September 30, 1997
EX27-2 Financial Data Schedule of National Fuel Gas Distribution
Corporation for period ending September 30, 1997
EX99-1 Certificate of Incorporation of Niagara Energy Trading Inc.
dated July 15, 1997
EX99-2 By-Laws of Niagara Energy Trading Inc.
EX99-3 Certificate of Incorporation of Niagara Independence Marketing
Company dated September 17, 1997
EX99-4 By-Laws of Niagara Independence Marketing Company
EX99-5 Marketing Partnership Agreement among Coastal Gas Marketing
DirectLink Corp., MGS Marketing Corp., Niagara Independence
Marketing Company and Williams Independence Marketing Company
EX99-6 Certificate of Incorporation of Empire Oklahoma, Inc. dated
April 16, 1996
EX99-7 Certificate of Amendment of Certificate of Incorporation of
Empire Oklahoma, Inc. dated July 24, 1997
EX99-8 By-Laws of Seneca Independence Pipeline Company
EX99-9 Employee Relocation Manual
EX99-10 Tax Allocation Agreement pursuant to Rule 45(c).
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL FUEL
GAS COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,819,366
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 208,667
<TOTAL-DEFERRED-CHARGES> 12,025
<OTHER-ASSETS> 227,273
<TOTAL-ASSETS> 2,267,331
<COMMON> 38,166
<CAPITAL-SURPLUS-PAID-IN> 405,028
<RETAINED-EARNINGS> 472,595
<TOTAL-COMMON-STOCKHOLDERS-EQ> 913,704
0
0
<LONG-TERM-DEBT-NET> 581,640
<SHORT-TERM-NOTES> 32,400
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 60,000
<LONG-TERM-DEBT-CURRENT-PORT> 103,359
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 576,228
<TOT-CAPITALIZATION-AND-LIAB> 2,267,331
<GROSS-OPERATING-REVENUE> 1,265,812
<INCOME-TAX-EXPENSE> 68,674
<OTHER-OPERATING-EXPENSES> 1,028,835
<TOTAL-OPERATING-EXPENSES> 1,097,509
<OPERATING-INCOME-LOSS> 168,303
<OTHER-INCOME-NET> 3,196
<INCOME-BEFORE-INTEREST-EXPEN> 171,499
<TOTAL-INTEREST-EXPENSE> 56,811
<NET-INCOME> 114,688
0
<EARNINGS-AVAILABLE-FOR-COMM> 114,688
<COMMON-STOCK-DIVIDENDS> 64,967
<TOTAL-INTEREST-ON-BONDS> 41,576
<CASH-FLOW-OPERATIONS> 294,662
<EPS-PRIMARY> 3.01
<EPS-DILUTED> 3.01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL FUEL
GAS DISTRIBUTION CORPORATION'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 1
<NAME> NATIONAL FUEL GAS DISTRIBUTION CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 889,215
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 143,061
<TOTAL-DEFERRED-CHARGES> 1,652
<OTHER-ASSETS> 141,957
<TOTAL-ASSETS> 1,175,885
<COMMON> 59,170
<CAPITAL-SURPLUS-PAID-IN> 121,668
<RETAINED-EARNINGS> 243,729
<TOTAL-COMMON-STOCKHOLDERS-EQ> 424,567
0
0
<LONG-TERM-DEBT-NET> 349,000
<SHORT-TERM-NOTES> 46,200
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 356,118
<TOT-CAPITALIZATION-AND-LIAB> 1,175,885
<GROSS-OPERATING-REVENUE> 991,367
<INCOME-TAX-EXPENSE> 35,510
<OTHER-OPERATING-EXPENSES> 867,510
<TOTAL-OPERATING-EXPENSES> 903,020
<OPERATING-INCOME-LOSS> 88,347
<OTHER-INCOME-NET> 1,480
<INCOME-BEFORE-INTEREST-EXPEN> 89,827
<TOTAL-INTEREST-EXPENSE> 32,607
<NET-INCOME> 57,220
0
<EARNINGS-AVAILABLE-FOR-COMM> 57,220
<COMMON-STOCK-DIVIDENDS> 33,237
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 143,108
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
CERTIFICATE OF INCORPORATION
OF
NIAGARA ENERGY TRADING INC.
Under Section 402 of the Business Corporation Law
The undersigned for the purpose of forming a corporation pursuant to
Section 402 of the Business Corporation Law of the State of New York does hereby
certify and set forth:
1. The name of this corporation is Niagara Energy Trading Inc.
2. The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Business Corporation
Law of the State of New York. The corporation is not formed to engage in any act
or activity requiring the consent or approval of any state official, department,
board, agency or other body without such consent or approval first being
obtained.
3. The office of this corporation is to be located in the County of
Erie, State of New York.
4. The corporation shall have authority to issue an aggregate of 100
shares, which shall be of one class only, and which shall have a par value of
one dollar ($1.00) per share.
5. The Secretary of the State of New York is hereby designated the
agent of this corporation upon whom process against this corporation may be
served. The post office address to which the Secretary of State shall mail a
copy of any process against this corporation is Legal Department, 10 Lafayette
Square, City of Buffalo, County of Erie, State of New York 14203.
In witness whereof, the undersigned has subscribed this certificate of
incorporation this 15th day of July 1997, and I affirm the statements contained
therein as true under penalties of perjury.
/s/ James R. Peterson
--------------------------
James R. Peterson
Incorporator
10 Lafayette Square
Buffalo, New York 14203
<PAGE>
CERTIFICATE OF INCORPORATION
OF
NIAGARA ENERGY TRADING INC.
Under Section 402 of the Business Corporation Law
filer:
JAMES R. PETERSON
NATIONAL FUEL GAS SUPPLY CORP.
10 LAFAYETTE SQUARE
SUITE 1500
BUFFALO, NY 14203
Amended 10/8/97
BY-LAWS
OF
NIAGARA ENERGY TRADING INC.
ARTICLE I
OFFICES
-------
Section 1. Principal Office. The principal office of this corporation
-----------------
shall be in the City of Buffalo, State of New York.
Section 2. Other Offices. The corporation may have such other offices
-------------
and places of business, within or without the State of New York, as may be
determined by the Directors.
ARTICLE II
SHAREHOLDERS
------------
Section 1. Place of Meetings. Meetings of the shareholders may be held
-----------------
at such place or places, within or without the State of New York, as shall be
fixed by the Directors and stated in the notice of the meeting.
Section 2. Annual Meeting. The annual meeting of shareholders for the
--------------
election of Directors and the transaction of such other business as may properly
come before the meeting shall be held at one o'clock p.m., or as soon thereafter
as the presiding officer may conveniently direct, on the third Thursday in
February of each year (if not a legal holiday, and if a legal holiday, then at
the same hour on the next succeeding business day) or on such other business day
as the Board of Directors may fix.
Section 3. Notice of Annual Meeting. Written notice of the annual
-------------------------
meeting shall be given to each shareholder entitled to vote, at least ten (10)
days but no more than fifty (50) days prior to the meeting.
Section 4. Special Meetings. Special meetings of the shareholders for
-----------------
any purpose or purposes may be called by the President or Board of Directors and
must be called by the President or Secretary upon receipt by either of them of
the written request of the holders of twenty-five (25) percent of the stock then
outstanding and entitled to vote.
Section 5. Notice of Special Meeting. Written notice of a special
---------------------------
meeting, stating the time, place and purpose or purposes thereof, shall be given
to each shareholder entitled to vote, at least ten (10) days but no more than
fifty (50) days prior to the meeting. The notice shall also be set forth at
whose direction it is being issued.
Section 6. Quorum. At any meeting of the shareholders, the holders of
------
record of a majority of the shares of stock then entitled to vote shall
constitute a quorum for all purposes, except as otherwise provided by law or the
Certificate of Incorporation.
Section 7. Voting. Except as may be otherwise provided by the
------
Certificate of Incorporation, at each meeting of the shareholders, every holder
of stock then entitled to vote may vote in person or by proxy and shall have one
vote for each share registered in his name.
Section 8. Adjourned Meetings. Any meeting of shareholders may be
-------------------
adjourned to a designated time and place by a vote of a majority in interest of
the shareholders present in person or by proxy and entitled to vote, even though
less than a quorum is so present. No notice of such an adjourned meeting need be
given, other than by announcement at the meeting, and any business may be
transacted which might have been transacted at the meeting as originally called.
Section 9. Action by Written Consent of Shareholders. Whenever by any
------------------------------------------
provision of statute or of the Certificate of Incorporation or of these By-Laws,
shareholders are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote thereon.
Section 10. Appraisal Rights. If, at any meeting, action is proposed to
----------------
be taken which would, if taken, entitle shareholders to receive payment for
shares, the notice of such meeting shall include a statement of that purpose and
to that effect.
ARTICLE III
DIRECTORS
---------
Section 1. Number. The number of Directors of the corporation shall be
------
two (2), who shall hold office for one year and/or until their successors are
elected and qualify. Directors shall be elected at the annual meetings of
shareholders. The number of Directors may be increased or decreased from time to
time by amendment to these By-Laws made by a majority of the Board of Directors
or by the shareholders. Directors need not be shareholders.
Section 2. Powers. The Board of Directors may adopt such rules and
------
regulations for the conduct of business of its meetings, the exercise of its
powers and the management of the affairs of the corporation as it may deem
proper, not inconsistent with the laws of the State of New York, the Certificate
of Incorporation or these By-Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
corporation and do such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
Neither the Board of Directors nor any Director who is not an officer
shall have (i) any day-to-day duties or responsibilities for planning,
directing, organizing or carrying out gas-related operations, including gas
transportation, gas sales or gas marketing activities, or (ii) any duties
involving day-to-day gas purchasing, marketing, sales, transportation,
operations, dispatching, storage or related activities. No Director who is an
officer, operating employee or non-operating employee of a "natural gas company"
(as defined in the federal Natural Gas Act of 1938, as amended) shall disclose
to any Director, officer, operating employee, non-operating employee,
contractor, agent or representative of the corporation either:
any information received by such natural gas company
from a nonaffiliated shipper or potential nonaffiliated
shipper; or
any information related to transportation (including
storage, exchange, backhaul, displacement or other
methods of transportation) of natural gas, unless such
natural gas company provides that information
contemporaneously to all shippers, affiliated and
nonaffiliated, on its system.
Section 3. Meeting, Quorum, Meeting by Telephone, Action Without
-----------------------------------------------------------
Meeting. Meetings of the Board of Directors may be held at any place, either
- - -------
within or without the State of New York, provided a quorum be in attendance.
Except as may be otherwise provided by the Certificate of Incorporation or by
the corporate laws of the State of New York, a majority of the Directors in
office shall constitute a quorum at any meeting of the Board and the vote of a
majority of a quorum of Directors shall constitute the act of the Board.
The Board of Directors may hold an annual meeting, without notice,
immediately after the annual meeting of the shareholders. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by the Board of Directors. The Chairman
of the Board (if any) or the President or Secretary may call, and at the request
of any two Directors must call, a special meeting of the Board of Directors by
appropriate notice. Five days' notice is required when given personally or by
telegraph, cable or facsimile transmission to each Director.
Any one or more members of the Board of Directors or any Committee
thereof may participate in a meeting of such Board or any Committee by means of
a conference telephone or similar communication 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.
Any action required or permitted to be taken by the Board of Directors
or any Committee thereof may be taken without a meeting if all members of the
Board or the Committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the Board or Committee shall be filed with the minutes of the
proceedings of the Board or Committee.
Section 4. Resignation, Vacancies, 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. Except as otherwise
provided in the Certificate of Incorporation or in the following paragraph,
vacancies occurring in the membership of the Board of Directors, from whatever
cause arising, may be filled by a majority vote of the remaining Directors,
though less than a quorum.
Any one or more of the Directors may be removed for cause by action of
the Board of Directors taken by a vote of a majority of all Directors then in
office at any regular or special meeting of the Board.
Section 5. Committees. The Board of Directors, by resolution adopted by
----------
a majority of the entire Board, may designate from its members an Executive
Committee or other committee or committees, each consisting of three or more
members, and each of which shall have such powers and authority (to the extent
permitted by law) as may be provided in said resolution.
Section 6. Compensation. Directors, as such, shall not receive any
------------
stated salary for their services, but by resolution of the Board of Directors a
fixed fee and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board or of any committee of the Board,
provided that nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
OFFICERS
--------
Section 1. Executive Officers. The executive officers of the
--------------------
corporation shall be a President, one or more Vice-Presidents, a Treasurer and a
Secretary, each of whom shall be elected annually by the Directors and shall
hold office for such term as may be prescribed by the Board. All vacancies
occurring among any of the offices may be filled by the Board of Directors or,
in its discretion, the Board may leave unfilled at its pleasure any of the
foregoing offices except the offices of President, Treasurer and Secretary. Any
officer may be removed at any time with or without cause by the Board of
Directors.
Section 2. Other Officers. The Board of Directors may appoint such
---------------
other officers and agents with such powers and duties as it shall deem
necessary.
Section 3. The President. The President shall, in the absence or
--------------
non-election of a Chairman of the Board, preside at all meetings of the
shareholders and Directors and perform such other duties as from time to time
may be assigned to him by the Board of Directors. The President shall be the
Chief Executive Officer of the corporation and shall perform all of the duties
of the Chairman of the Board as well as those of President.
Section 4. The 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, exercise the powers and perform the duties of the President, and each
Vice-President shall exercise such other duties as may be prescribed by the
President or the Board.
Section 5. The Treasurer. The Treasurer shall have custody of all
--------------
funds, securities and other valuable effects of the corporation; he shall
receive and give receipts and acquittances for moneys paid in on account of the
corporation; he 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; he shall pay out of the funds on hand all bills,
payrolls and other just debts of the corporation, of whatever nature, upon
maturity; he shall enter regularly, in books to be kept by him for that purpose,
full and accurate accounts of all moneys received and paid out by him on account
of the corporation; and he shall perform all other duties incident to the office
of Treasurer and as may be prescribed by the Board.
Section 6. The Secretary. The Secretary shall keep the minutes of all
-------------
proceedings of the Board of Directors and of the shareholders; he shall attend
to the giving and serving of all notices to the shareholders and Directors or
other notice required by law or by these By-Laws; he shall affix the seal of the
corporation to deeds, contracts and other instruments in writing requiring a
seal, when duly signed on behalf of the corporation; he shall have charge of the
certificate books and stock books and such other books and papers as the Board
may direct; and he shall perform all other duties incident to the office of
Secretary as the Board may prescribe.
ARTICLE V
CAPITAL STOCK
-------------
Section 1. Form and Execution of Certificates. Certificates of stock
-----------------------------------
shall be in such form as required by the laws of the State of New York and as
shall be adopted by the Board of Directors. They shall be numbered and
registered in the order issued, shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall be sealed with
the corporate seal or a facsimile thereof. If such a certificate is
countersigned by a transfer agent or registered by a registrar, the signatures
of any such officers may be facsimile.
Section 2. Transfer. Transfer of shares shall be made only upon the
--------
books of the corporation by the registered holder in person or by attorney, duly
authorized, and upon surrender of the certificate or certificates for such
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer. A record shall be made of each transfer, and whenever
a transfer shall be made for collateral security, and not absolutely, it shall
be so expressed in the entry of the transfer on the record of shareholders of
the corporation.
Section 3. Lost or Destroyed Certificates. The holder of any
----------------------------------
certificate representing shares of stock of the corporation may notify the
corporation of any loss, theft or destruction thereof, and the Board of
Directors may thereupon, in its discretion, cause a new certificate for the same
number of shares, to be issued to such holder upon satisfactory proof of such
loss, theft or destruction, and the deposit of indemnity by way of bond or
otherwise, in such form and amount and with such surety or sureties as the Board
of Directors may require, to indemnify the corporation against loss or liability
by reason of the issuance of such new certificates.
Section 4. Record Date. In lieu of closing the books of the
------------
corporation, the Board of Directors may fix in advance a date, not exceeding
fifty days nor less than ten days, as the record date for the determination of
shareholders entitled to receive notice of, or to vote at, any meeting of
shareholders, or to consent to any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividends, or allotment of any rights, or for the purpose of any other action.
ARTICLE VI
MISCELLANEOUS
-------------
Section 1. Dividends. Subject to the applicable provisions of the
---------
Certificate of Incorporation, the Board of Directors may declare dividends from
time to time upon the capital stock of the corporation from the surplus or net
profits available therefor.
Section 2. Fiscal Year. The fiscal year of the corporation shall 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 3. Checks, Notes, etc. Checks, notes, drafts, bills of exchange
------------------
and orders for payment of money shall be signed or endorsed in such manner as
shall be determined by the Board of Directors.
The funds of the corporation shall be deposited in such bank or trust
company, and checks drawn against such funds shall be signed in such manner as
may be determined from time to time by the Board of Directors.
Section 4. Notice and Waiver of Notice. Any notice required to be given
---------------------------
under these By-Laws may be waived by the person entitled thereto, in writing, by
telegram, cable, facsimile transmission or radiogram, and the presence of any
person at a meeting shall constitute waiver of notice thereof as to such person.
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated; and any notice so required shall
be deemed to be sufficient if given by depositing it in a post office or post
box in a sealed postpaid wrapper, addressed to such shareholder, officer or
director, at such address as appears on the books of the corporation, and such
notice shall be deemed to have been given on the day of such deposit.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
-----------------------------
Section 1. Indemnification. Any person made a party to an action or
---------------
proceeding, by reason of the fact that he, his testator or his intestate is or
was a director or officer of the corporation, or of any other corporation,
domestic or foreign, that he, his testator or intestate served in any capacity
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.
Section 2. Insurance. The corporation may purchase and maintain
---------
insurance to indemnify the corporation and the directors and officers to the
extent permitted.
ARTICLE VIII
AMENDMENTS
----------
Section 1. The authority to make, alter, amend or repeal these By-Laws
is expressly vested in the Board of Directors, subject to the power of the
shareholders to change or repeal such By-Laws.
CERTIFICATE OF INCORPORATION
OF
Niagara Independence Marketing Company
1. The name of the corporation is:
Niagara Independence Marketing Company
2. The address of its registered office in the State of Delaware is
Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805. The
name of its registered agent at such address is Corporation Service Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which
corporations may be organized under the General Corporation
Law of Delaware.
4. The total number of shares of common stock which the corporation
shall have authority to issue is One Thousand (1,000) and the par value of each
of such shares is One Dollar ($1.00), amounting in the aggregate to one Thousand
Dollars ($1,000.00).
5A. The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Sarah J. Mugel 10 Lafayette Square
Buffalo, New York 14203
5B. The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is ejected and qualified, is as follows:
NAME MAILING ADDRESS
---- ---------------
James A. Beck Suite 400
1201 Louisiana St.
Houston, Texas 77002
6. The corporation is to have perpetual existence.
7. The shareholder of the Corporation shall not be entitled to
cumulative voting rights in the election of directors.
8. Holders of shares of stock of the Corporation shall not have any
pre-emptive rights and the Corporation shall have the right to issue and to sell
to any person or persons any shares of its capital stock or any option rights or
any securities having conversion or option rights, without first offering such
shares, rights or securities to any holder of the stock.
9. The by-laws may be altered or amended at any meeting of
shareholders, by a vote of the holders entitled to cast a majority of the votes
present or represented at the meeting, or at any duly constituted meeting of the
Board of Directors, by a majority vote of the Directors then in office, subject
always to the power of the shareholders to change such action, and provided that
only the shareholders may amend the by-laws providing for meeting of
shareholders.
10. Election of Directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the by-laws of the Corporation.
11. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by the statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
12. A Director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the Director derived any improper
personal benefit.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 17 th day of September, 1997.
/s/ Sarah J. Mugel
----------------------------------------
Sarah J. Mugel
Incorporator
10 Lafayette Square
Buffalo, New York 14203
Amended 10/8/97
BY-LAWS
OF
NIAGARA INDEPENDENCE MARKETING COMPANY
ARTICLE I
OFFICES
-------
Section 1. Principal Office. The principal office of this corporation
-----------------
shall be in the City of Buffalo, State of New York.
Section 2. Other Offices. The corporation may have such other offices
-------------
and places of business, within or without the State of Delaware, as may be
determined by the Directors.
ARTICLE II
SHAREHOLDERS
------------
Section 1. Place of Meetings. Meetings of the shareholders may be held
-----------------
at such place or places, within or without the State of Delaware, as shall be
fixed by the Directors and stated in the notice of the meeting.
Section 2. Annual Meeting. The annual meeting of shareholders for the
--------------
election of Directors and the transaction of such other business as may properly
come before the meeting shall be held at one o'clock p.m., or as soon thereafter
as the presiding officer may conveniently direct, on the third Thursday in
February of each year (if not a legal holiday, and if a legal holiday, then at
the same hour on the next succeeding business day) or on such other business day
as the Board of Directors may fix.
Section 3. Notice of Annual Meeting. Written notice of the annual
-------------------------
meeting shall be given to each shareholder entitled to vote, at least ten (10)
days but no more than fifty (50) days prior to the meeting.
Section 4. Special Meetings. Special meetings of the shareholders for
-----------------
any purpose or purposes may be called by the President or Board of Directors and
must be called by the President or Secretary upon receipt by either of them of
the written request of the holders of twenty-five (25) percent of the stock then
outstanding and entitled to vote.
Section 5. Notice of Special Meeting. Written notice of a special
---------------------------
meeting, stating the time, place and purpose or purposes thereof, shall be given
to each shareholder entitled to vote, at least ten (10) days but no more than
fifty (50) days prior to the meeting. The notice shall also be set forth at
whose direction it is being issued.
Section 6. Quorum. At any meeting of the shareholders, the holders of
------
record of a majority of the shares of stock then entitled to vote shall
constitute a quorum for all purposes, except as otherwise provided by law or the
Certificate of Incorporation.
Section 7. Voting. Except as may be otherwise provided by the
------
Certificate of Incorporation, at each meeting of the shareholders, every holder
of stock then entitled to vote may vote in person or by proxy and shall have one
vote for each share registered in his name.
Section 8. Adjourned Meetings. Any meeting of shareholders may be
-------------------
adjourned to a designated time and place by a vote of a majority in interest of
the shareholders present in person or by proxy and entitled to vote, even though
less than a quorum is so present. No notice of such an adjourned meeting need be
given, other than by announcement at the meeting, and any business may be
transacted which might have been transacted at the meeting as originally called.
Section 9. Action by Written Consent of Shareholders. Whenever by any
------------------------------------------
provision of statute or of the Certificate of Incorporation or of these By-Laws,
shareholders are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote thereon.
Section 10. Appraisal Rights. If, at any meeting, action is proposed to
----------------
be taken which would, if taken, entitle shareholders to receive payment for
shares, the notice of such meeting shall include a statement of that purpose and
to that effect.
ARTICLE III
DIRECTORS
---------
Section 1. Number. The number of Directors of the corporation shall
------
four (4), who shall hold office for one year and/or until their successors are
elected and qualify. Directors shall be elected at the annual meetings of
shareholders. The number of Directors may be increased or decreased from time to
time by amendment to these By-Laws made by a majority of the Board of Directors
or by the shareholders. Directors need not be shareholders.
Section 2. Powers. The Board of Directors may adopt such rules and
------
regulations for the conduct of business of its meetings, the exercise of its
powers and the management of the affairs of the corporation as it may deem
proper, not inconsistent with the laws of the State of Delaware, the Certificate
of Incorporation or these By-Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
corporation and do such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
Section 3. Meeting, Quorum, Meeting by Telephone, Action Without
-----------------------------------------------------------
Meeting. Meetings of the Board of Directors may be held at any place, either
- - -------
within or without the State of Delaware, provided a quorum be in attendance.
Except as may be otherwise provided by the Certificate of Incorporation or by
the corporate laws of the State of Delaware, a majority of the Directors in
office shall constitute a quorum at any meeting of the Board and the vote of a
majority of a quorum of Directors shall constitute the act of the Board.
The Board of Directors may hold an annual meeting, without notice,
immediately after the annual meeting of the shareholders. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by the Board of Directors. The Chairman
of the Board (if any) or the President or Secretary may call, and at the request
of any two Directors must call, a special meeting of the Board of Directors by
appropriate notice. Five days' notice is required when given personally or by
telegraph, cable or facsimile transmission to each Director.
Any one or more members of the Board of Directors or any Committee
thereof may participate in a meeting of such Board or any Committee by means of
a conference telephone or similar communication 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.
Any action required or permitted to be taken by the Board of Directors
or any Committee thereof may be taken without a meeting if all members of the
Board or the Committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the Board or Committee shall be filed with the minutes of the
proceedings of the Board or Committee.
Section 4. Resignation, Vacancies, 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. Except as otherwise
provided in the Certificate of Incorporation or in the following paragraph,
vacancies occurring in the membership of the Board of Directors, from whatever
cause arising, may be filled by a majority vote of the remaining Directors,
though less than a quorum.
Any one or more of the Directors may be removed for cause by action of
the Board of Directors taken by a vote of a majority of all Directors then in
office at any regular or special meeting of the Board.
Section 5. Committees. The Board of Directors, by resolution adopted by
----------
a majority of the entire Board, may designate from its members an Executive
Committee or other committee or committees, each consisting of three or more
members, and each of which shall have such powers and authority (to the extent
permitted by law) as may be provided in said resolution.
Section 6. Compensation. Directors, as such, shall not receive any
------------
stated salary for their services, but by resolution of the Board of Directors a
fixed fee and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board or of any committee of the Board,
provided that nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
OFFICERS
--------
Section 1. Executive Officers. The executive officers of the
--------------------
corporation shall be a President, one or more Vice-Presidents, a Treasurer and a
Secretary, each of whom shall be elected annually by the Directors and shall
hold office for such term as may be prescribed by the Board. All vacancies
occurring among any of the offices may be filled by the Board of Directors or,
in its discretion, the Board may leave unfilled at its pleasure any of the
foregoing offices except the offices of President, Treasurer and Secretary. Any
officer may be removed at any time with or without cause by the Board of
Directors.
Section 2. Other Officers. The Board of Directors may appoint such
---------------
other officers and agents with such powers and duties as it shall deem
necessary.
Section 3. The President. The President shall, in the absence or
--------------
non-election of a Chairman of the Board, preside at all meetings of the
shareholders and Directors and perform such other duties as from time to time
may be assigned to him by the Board of Directors. The President shall be the
Chief Executive Officer of the corporation and shall perform all of the duties
of the Chairman of the Board as well as those of President.
Section 4. The 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, exercise the powers and perform the duties of the President, and each
Vice-President shall exercise such other duties as may be prescribed by the
President or the Board.
Section 5. The Treasurer. The Treasurer shall have custody of all
--------------
funds, securities and other valuable effects of the corporation; he shall
receive and give receipts and acquittances for moneys paid in on account of the
corporation; he 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; he shall pay out of the funds on hand all bills,
payrolls and other just debts of the corporation, of whatever nature, upon
maturity; he shall enter regularly, in books to be kept by him for that purpose,
full and accurate accounts of all moneys received and paid out by him on account
of the corporation; and he shall perform all other duties incident to the office
of Treasurer and as may be prescribed by the Board.
Section 6. The Secretary. The Secretary shall keep the minutes of all
-------------
proceedings of the Board of Directors and of the shareholders; he shall attend
to the giving and serving of all notices to the shareholders and Directors or
other notice required by law or by these By-Laws; he shall affix the seal of the
corporation to deeds, contracts and other instruments in writing requiring a
seal, when duly signed on behalf of the corporation; he shall have charge of the
certificate books and stock books and such other books and papers as the Board
may direct; and he shall perform all other duties incident to the office of
Secretary as the Board may prescribe.
ARTICLE V
CAPITAL STOCK
-------------
Section 1. Form and Execution of Certificates. Certificates of stock
-----------------------------------
shall be in such form as required by the laws of the State of Delaware and as
shall be adopted by the Board of Directors. They shall be numbered and
registered in the order issued, shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall be sealed with
the corporate seal or a facsimile thereof. If such a certificate is
countersigned by a transfer agent or registered by a registrar, the signatures
of any such officers may be facsimile.
Section 2. Transfer. Transfer of shares shall be made only upon the
--------
books of the corporation by the registered holder in person or by attorney, duly
authorized, and upon surrender of the certificate or certificates for such
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer. A record shall be made of each transfer, and whenever
a transfer shall be made for collateral security, and not absolutely, it shall
be so expressed in the entry of the transfer on the record of shareholders of
the corporation.
Section 3. Lost or Destroyed Certificates. The holder of any
----------------------------------
certificate representing shares of stock of the corporation may notify the
corporation of any loss, theft or destruction thereof, and the Board of
Directors may thereupon, in its discretion, cause a new certificate for the same
number of shares, to be issued to such holder upon satisfactory proof of such
loss, theft or destruction, and the deposit of indemnity by way of bond or
otherwise, in such form and amount and with such surety or sureties as the Board
of Directors may require, to indemnify the corporation against loss or liability
by reason of the issuance of such new certificates.
Section 4. Record Date. In lieu of closing the books of the
------------
corporation, the Board of Directors may fix in advance a date, not exceeding
fifty days nor less than ten days, as the record date for the determination of
shareholders entitled to receive notice of, or to vote at, any meeting of
shareholders, or to consent to any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividends, or allotment of any rights, or for the purpose of any other action.
ARTICLE VI
MISCELLANEOUS
-------------
Section 1. Dividends. Subject to the applicable provisions of the
---------
Certificate of Incorporation, the Board of Directors may declare dividends from
time to time upon the capital stock of the corporation from the surplus or net
profits available therefor.
Section 2. Fiscal Year. The fiscal year of the corporation shall 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 3. Checks, Notes, etc. Checks, notes, drafts, bills of exchange
------------------
and orders for payment of money shall be signed or endorsed in such manner as
shall be determined by the Board of Directors.
The funds of the corporation shall be deposited in such bank or trust
company, and checks drawn against such funds shall be signed in such manner as
may be determined from time to time by the Board of Directors.
Section 4. Notice and Waiver of Notice. Any notice required to be given
---------------------------
under these By-Laws may be waived by the person entitled thereto, in writing, by
telegram, cable, facsimile transmission or radiogram, and the presence of any
person at a meeting shall constitute waiver of notice thereof as to such person.
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated; and any notice so required shall
be deemed to be sufficient if given by depositing it in a post office or post
box in a sealed postpaid wrapper, addressed to such shareholder, officer or
director, at such address as appears on the books of the corporation, and such
notice shall be deemed to have been given on the day of such deposit.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
-----------------------------
Section 1. Indemnification. Any person made a party to an action or
---------------
proceeding, by reason of the fact that he, his testator or his intestate is or
was a director or officer of the corporation, or of any other corporation,
domestic or foreign, that he, his testator or intestate served in any capacity
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.
Section 2. Insurance. The corporation may purchase and maintain
---------
insurance to indemnify the corporation and the directors and officers to the
extent permitted.
ARTICLE VIII
AMENDMENTS
----------
Section 1. The authority to make, alter, amend or repeal these By-Laws
is expressly vested in the Board of Directors, subject to the power of the
shareholders to change or repeal such By-Laws.
MARKETING PARTNERSHIP AGREEMENT
This Partnership Agreement ("Agreement") is made and entered into as of
this 23rd day of September, 1997, by and among Coastal Gas Marketing DirectLink
Corp., a Delaware corporation ("ANR Participant"), MGS Marketing Corp., a
Delaware corporation ("MidCon Participant"), Niagara Independence Marketing
Company, a Delaware corporation ("NF Participant") and Williams Independence
Marketing Company a Delaware corporation ("Transco Participant") (herein
referred to collectively as the "Participants" and individually as a
"Participant").
WHEREAS, ANR Participant's Affiliate, ANR Independence Pipeline Company
("ANRIP") and Transco Participant's Affiliate, Transco Independence Pipeline
Company ("TIP"), have formed a general partnership known as Independence
Pipeline Company pursuant to a General Partnership Agreement dated September 23,
1997("Partnership Agreement") (for all purposes of this Agreement, capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Partnership Agreement);
WHEREAS, ANRIP, TIP and Seneca Independence Pipeline Company ("SIP")
have negotiated a Partnership Interest Purchase and Sale Agreement ("SIP
Agreement"), and ANRIP, TIP and NGPL Independence Pipeline Company ("NGPLIP")
are involved in negotiations which, if successfully concluded, would lead to the
implementation of a Partnership Interest Purchase and Sale Agreement ("NGPLIP
Agreement") pursuant to which SIP, an Affiliate of NF Participant, and NGPLIP,
an Affiliate of MidCon Participant, would become Partners in the Partnership
pursuant to the terms and conditions of, and upon satisfaction of the conditions
precedent set forth in, the SIP Agreement and the NGPLIP Agreement,
respectively;
WHEREAS, the Participants have had discussions regarding the formation
of a partnership to buy and sell gas on, and to be a firm shipper on, the
Facilities and the SupplyLink Expansion Project ("SupplyLink ") of ANR Pipeline
Company ("ANR") and such other expansion projects and/or other available
capacity as the Participants may mutually agree to include ("Other Projects");
and
WHEREAS, the Participants desire to form such partnership pursuant to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and intending to be bound, the Participants hereby
agree as follows:
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ARTICLE I
BUSINESS ORGANIZATION/OWNERSHIP/MANAGEMENT
1.1 Formation of General Partnership. The Participants hereby create a
--------------------------------
general partnership pursuant to the partnership law of the State of Delaware
effective as of the date of execution of this Agreement, which shall be the date
first above written. The name of the partnership shall be DIRECTLINK GAS
MARKETING COMPANY ("Marketing Partnership"). The purpose of the Marketing
Partnership shall be to buy and sell gas on, and to be a firm shipper on, the
Facilities, the SupplyLink and/or the Other Projects and to conduct such other
business activities as may be necessary or incidental in connection therewith.
The principal offices of the Marketing Partnership shall be at 9 Greenway Plaza,
22nd Floor, Houston, Texas 77046. The term of the Marketing Partnership shall be
twenty five years or such other period to which the Participants shall agree.
1.2 Ownership Interests. Subject to the other provisions of this
--------------------
Article 1, the Participants will each have a twenty-five percent (25%) ownership
interest in the Marketing Partnership. Each of the Participants has (i) the
right to participate in the management and conduct the business of the Marketing
Partnership in proportion to its ownership interest in the Marketing
Partnership, (ii) the right to share in all items of the Marketing Partnership's
income, gain, loss deduction or credits and in all cash or other distributions
in proportion to its respective ownership interest, and (iii) the obligation to
contribute the funds necessary to carry out the purpose for which the Marketing
Partnership was formed in proportion to its respective ownership interest. All
matters to be decided by the Participants or the Management Committee of the
Marketing Partnership shall be decided by a unanimous vote of the Participants,
or their representatives on such Management Committee unless otherwise agreed.
1.3 Additional Participants. Unless the Participants otherwise agree,
------------------------
if a new party is admitted as an Additional Partner in the Partnership, then
each of the Participants shall convey (at the value of the appropriate
proportion of the Participants' capital accounts or such other compensation as
the Participants shall agree) a pro rata portion of its ownership interest in
the Marketing Partnership to such of its Affiliates as the Additional Partner
shall designate so that the Additional Partner's Affiliate will have the same
ownership interest in the Marketing Partnership as the Additional Partner has in
the Partnership.
1.4 Transfer of Interests. Unless the Participants otherwise agree, if
---------------------
a Partner transfers all or part of its Percentage Interest in the Partnership
pursuant to Sections 11.1.2 and 11.1.3 of the Partnership Agreement, the
Participant which is an Affiliate of such transferring Partner shall be required
to transfer to such Affiliate designated by the Person to whom the Percentage
Interest in the Partnership is transferred an equivalent ownership interest in
the Marketing Partnership. The transfer of a Participant's ownership interest in
the Marketing Partnership shall be on the same terms and conditions as the offer
for the
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<PAGE>
purchase of the interest in the Marketing Partnership made by the Offeror in the
case of a transfer under Section 11.1.2 of the Partnership Agreement or equal to
the amount of such Participant's capital account in the Marketing Partnership at
the time of transfer in the case of a transfer under Section 11.1.3 of the
Partnership Agreement. Except as otherwise provided herein, no Participant shall
be allowed to transfer all or any portion of its ownership interest in the
Marketing Partnership.
1.5 Withdrawal.
----------
(a) If, in the case of MidCon Participant, the NGPLIP Agreement is
not signed by October 15, 1997, or if either NGPLIP or SIP does
not close their respective purchase of a Percentage Interest in
the Partnership pursuant to the NGPLIP Agreement or the SIP
Agreement, as the case may be, or if either MidCon Participant
or NF Participant does not receive requisite Board or SEC
approval(s), as the case may be, MidCon Participant or NF
Participant shall withdraw from the Marketing Partnership. Upon
such withdrawal, the MidCon Participant or NF Participant will
be paid the positive balance of its capital account in the
Marketing Partnership within sixty (60) days of such withdrawal.
(b) Unless the Participants otherwise agree, if a Partner withdraws
from the Partnership, the Affiliate of such Partner that is a
Participant must withdraw from the Marketing Partnership and
will only be entitled to a return of its capital account in the
Marketing Partnership if its Affiliate is entitled to a return
of its Capital Account in the Partnership which return shall be
made at the same time its Affiliate's Capital Account is
returned.
(c) Except as provided in Sections 1.5(a) and 1.5(b) above, a
Participant that withdraws from the Marketing Partnership shall
not be entitled to any compensation, return of capital or other
payment from the Marketing Partnership.
(d) Any Participant that withdraws from the Marketing Partnership
shall remain obligated for all liabilities attributable to its
respective ownership interest accruing on or prior to the date
of its withdrawal, excluding any such liabilities maturing after
such withdrawal but originating from actions taken prior thereto
including, without limitation, the Precedent Agreements
referenced in Section 2.1 of this Agreement. Moreover, if a
Participant that withdraws has a deficit balance in its capital
account due to its failure to make a required capital
contribution, such Participant shall contribute to the Marketing
Partnership cash equal to the amount of such deficit balance
within sixty (60) days after the date of withdrawal.
(e) Effective on the date of a Participant's withdrawal, the
ownership interest of the remaining Participants shall be
increased pro rata so that the total of all ownership interests
continues to be 100% after such withdrawal.
Page 3
<PAGE>
1.6 Management Committee. The business of the Marketing Partnership
---------------------
shall be managed by a management committee ("MP Management Committee") which
shall have exclusive authority and full discretion with respect to management of
the business of the Marketing Partnership, except that the Participants may
create a separate operating company, or otherwise arrange to manage the various
day-to-day activities of the Marketing Partnership, or as otherwise provided in
the restated partnership agreement referred to below. The MP Management
Committee shall consist of one representative designated by each of the
Participants by written notice to the other Participants. Each representative
shall have a vote equal to the ownership interest of the Participant he/she
represents. No Participant shall have authority to act for, or to assume any
obligation or responsibility on behalf of, the Marketing Partnership except as
otherwise provided in Section 2.1 below or except with the prior approval of the
MP Management Committee.
1.7 Business Procedures. The procedures to be utilized by the Marketing
-------------------
Partnership to buy and sell gas and to manage capacity will be established by
the MP Management Committee.
1.8 Capital Accounts. A capital account in the Marketing Partnership
-----------------
shall be maintained for each Participant in accordance with generally accepted
accounting principles as practiced on a consistent basis in the United States at
the time prevailing for companies engaged in a business similar to that of the
Marketing Partnership.
1.9 Representations and Warranties. Except as provided in Sections 1.11
------------------------------
and 1.12 below, each Participant hereby represents and warrants that the
execution and delivery of this Agreement, the formation or continuation of the
Marketing Partnership, as the case may be, and the performance of its
obligations hereunder will not contravene or conflict with any provision of law
applicable to or of the charter or bylaws of such Participant, or contravene,
conflict with or constitute a default under any indenture, mortgage, instrument
or other agreement of such Participant or any order, rule or regulation of any
court, commission or governmental agency applicable to such Participant. Each
Participant further represents, warrants and covenants that (a) it is, and for
as long as it is a Participant hereunder it will do or cause to be done all
things reasonably necessary to continue to be, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, (b) it will not, without the prior consent of the MP Management
Committee, (i) incur any indebtedness (direct or contingent) for borrowed money
or through guarantees of third party obligations (except indebtedness incurred
as a result of being a Participant) or (ii) acquire any assets or enter into or
conduct any business or activity of any kind, except to the extent necessary or
appropriate in connection with the performance by it of the terms of this
Agreement or incidental to its status as a Participant, (c) this Agreement has
been duly authorized, executed and delivered by such Participant and is its
valid and binding agreement, enforceable in accordance with the terms hereof,
except as such enforceability may be limited by applicable law, and (d) the
Person that owns 100% of the capital stock of such Participant is listed in
Appendix A and that such Person has, and at all times while such s:\ ...
Page 4
<PAGE>
Person owns such capital stock it will continue to have, material and
substantial assets other than such capital stock.
1.10 PUHCA.
-----
a. Each Participant other than NF Participant represents and
warrants to each other Participant, and not otherwise, that it
is neither (i) a "holding company" nor (ii) a "subsidiary
company" or "affiliate" of a "holding company" other than a
"holding company" that is exempt from all liabilities,
obligations and duties imposed upon a "holding company" by the
provisions of PUHCA and the rules and regulations promulgated
thereunder (other than Section 9(a)(2) of PUHCA).
b. No Participant shall make any transfer or take any other action
which, at the time of such transfer or action, would cause the
Marketing Partnership or any other Participant to be (or to be
subject to any liability, duty or obligation of) a "holding
company", "subsidiary company" or an "affiliate" of a "holding
company," other than a "holding company" which is exempt from
all liabilities, obligations and duties imposed upon a "holding
company" by the provisions of PUHCA and the rules and
regulations promulgated thereunder (other than Section 9(a)(2)
of PUHCA).
c. No Participant shall make any transfer or take any other action
which, at the time of such transfer or action, would cause the
Marketing Partnership or any Participant to be subject to
regulation, or otherwise subject to any liability, duty or
obligation under a Successor Statute.
d. In the event that, due to a Participant's ownership of its
ownership interest, another Participant or the Marketing
Partnership (i) is subject to regulation under PUHCA or loses
its exemption under Rule 16, or (ii) is subject to any
liability, obligation or duty imposed by a Successor Statute,
the Participant owning such ownership interest shall diligently
and in good faith find another Person to whom its ownership
interest may be transferred in accordance with the provisions of
Section 1.4 of this Agreement, and subject to the prior
unanimous approval of the MP Management Committee which shall
not be unreasonably withheld.
e. Each Participant represents and warrants to each other
Participant, and not otherwise, that such Participant will not
transfer any interest in the Marketing Partnership or take any
other action, which transfer or action would cause fifty percent
(50%) or more of the ownership interests in the Marketing
Page 5
<PAGE>
Partnership to be held by Persons which are regulated "holding
companies", or "subsidiaries" or "affiliates" of regulated
"holding companies".
f. For the purposes of this Section 1.10, (i) the terms
"affiliate", "subsidiary", "subsidiary company", and "holding
company" shall be defined as those respective terms are defined
in PUHCA, and (ii) neither the actual nor the potential exercise
by any Governmental Authority of any discovery device respecting
any Person, nor any Person's amenability to such exercise shall
constitute "regulation" of such Person under any Successor
Statute or be deemed a "liability", "duty", or "obligation" of
such Person, as the quoted words are used in this Section 1.10.
1.11 Board Approvals. MidCon Participant's continued participation in
---------------
the Marketing Partnership is subject to receipt of approval from the Occidental
Petroleum Corporation's Board of Directors authorizing such continued
participation in the Marketing Partnership. MidCon Participant will take such
actions as may be necessary to seek such requisite Board approval no later than
November 30, 1997. The other Participants hereby acknowledge that (a) they have
received no assurance that such approvals will be obtained, and (b) such
approvals may be withheld for any reason. In the event MidCon Participant does
not obtain such Board approval on or before November 30, 1997, MidCon
Participant shall (i) provide written notification to the Participants by
December 1, 1997 and (ii) withdraw from the Marketing Partnership pursuant to
Section 1.5.
1.12 PUHCA Approvals. NF Participant's continued participation in the
---------------
Marketing Partnership is subject to receipt of the approvals and authorizations
from the Securities and Exchange Commission pursuant to PUHCA which are
necessary to enable NF Participant to continue to participate in the Marketing
Partnership. NF Participant will file all material applications and other
documents necessary or appropriate with respect to such SEC approvals and
authorizations within ten (1 0) business days of its execution of this
Agreement, and will exercise its best efforts to cause each relevant Affiliate
of NF Participant to do likewise. NF Participant will take such further actions
as may be appropriate and reasonably necessary to obtain such SEC approvals and
authorizations on or before February 27, 1998, and will exercise its best
efforts to cause each relevant Affiliate to do likewise. In the event NF
Participant does not obtain such SEC approvals on or before such date, NF
Participant shall (i) provide written notification to the Participants prior to
February 27, 1998 and (ii) withdraw from the Marketing Partnership pursuant to
Section 1.5.
1.13 Antitrust and Regulatory Guidelines. The operation of the
--------------------------------------
Marketing Partnership shall be executed in a manner consistent with antitrust
guidelines which shall be adopted by the unanimous consent of the Participants,
within 90 days of the date hereof, prior to the Marketing Partnership planning
its strategies with regard to any of the transactions contemplated in Section
1.1 above or engaging in any such transactions, except for the commitments set
forth in Section 2.1 of this Agreement. The Marketing
Page 6
<PAGE>
Partnership shall also comply with all applicable rules and regulations of any
Governmental Authority having jurisdiction.
1.14 Assignment to Affiliate. Any Participant may assign its ownership
-----------------------
interest in the Marketing Partnership to a financially responsible Affiliate
without the prior written consent of the other Participants subject always to
compliance with the terms of this Agreement.
ARTICLE 11
COMMITMENTS FOR TRANSPORTATION CAPACITY
2.1 Initial Capacity Commitments. The Marketing Partnership will
------------------------------
initially execute a Precedent Agreement in the form attached hereto as Appendix
B with Independence Pipeline Company for 500,000 Dth per day of firm annual
capacity and 62,500 Dth per day of winter capacity for a term of 10 years at the
maximum tariff rate. The Marketing Partnership shall also execute a Precedent
Agreement in the form attached hereto as Appendix C with ANR for 506,586 Dth per
day of firm annual capacity on the SupplyLink from receipt point(s) at the
interconnection of the SupplyLink with the facilities of Natural Gas Pipeline
Company of America and the proposed facilities of Northern Border Pipeline
Company and those of Alliance Pipeline LP in northeastern Illinois to a delivery
point at the interconnection of the SupplyLink with the Facilities of the
Partnership for a term of 1 0 years at a rate of $0.13 per Dth. The Marketing
Partnership shall specify the volumes for each receipt point prior to execution
of a Transportation Service Agreement with ANR. These Precedent Agreements will
be executed by September 24, 1997. Donald H. Gullquist is hereby appointed as
agent and attorney-in-fact of the Marketing Partnership and is hereby authorized
to execute the Precedent Agreements and such other documents as are unanimously
approved by the Participants on behalf of the Marketing Partnership.
2.2 SIP's Capacity. The Marketing Partnership will not be responsible
--------------
for marketing SIP's Affiliate's individual capacity subscription pursuant to the
SIP Agreement if SIP withdraws from the Partnership.
2.3 Capacity on Other Projects. The Marketing Partnership will evaluate
--------------------------
committing to capacity on Other Projects including, but not limited to Transco's
MarketLink Expansion Project and will notify Transco of its decision with
respect to the MarketLink no later than thirty (30) days after the date hereof.
Page 7
<PAGE>
ARTICLE III
EXPENDITURES
3.1 Costs. All third party costs and expenses of the Marketing
-----
Partnership will be shared by the Participants in proportion to their ownership
interests. Sharing of other costs and expenses shall be as determined by the MP
Management Committee.
3.2 Limit on Expenditures. Between the date of this Agreement and the
----------------------
date that the restated partnership agreement is executed as provided in Section
4.1. below, each Participant will obtain consent (written or oral) from each
other Participant prior to incurring any single expense greater than $10,000 or
total expenditures greater than $25,000 in furtherance of the Marketing
Partnership.
ARTICLE IV
MISCELLANEOUS
4.1 Partnership Agreement. The Participants shall proceed immediately
----------------------
and in good faith to negotiate the terms and conditions of a restated
partnership agreement which will include all of the terms and conditions of this
Agreement and terms and conditions substantially similar to those contained in
Sections 5.2 through 5.6, Sections 6 through 8, Section 9.1.1, Section 9.2,
Sections 9.6 through 9.8, Sections 10 through 14 (except for Sections 1 1. 1.2
and 1 1. 1.3) of the Partnership Agreement, and no Participant shall be required
to agree to any other terms and conditions. The restated partnership agreement
shall be executed by the Participants within ninety (90) days of the date
hereof.
4.2 Entire Agreement. From and after the date hereof, this Agreement
-----------------
reflects the whole and entire agreement among the Participants and supersedes
all prior agreements among the Participants related to the subject matter
hereof.
4.3 Notice. If any Participant receives a notice to or on behalf of the
------
Marketing Partnership, such Participant shall immediately transmit such notice
to all Participants. Any notice or other communication shall be in writing and
may be sent by (a) personal delivery (including delivery by a courier service),
(b) registered or certified mail, postage prepaid, addressed to each of the
Participants at the addresses set forth below or (c) facsimile transmission to
the following telephone numbers:
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<PAGE>
Coastal Gas Marketing DirectLink Corp.
9 Greenway Plaza, 22nd Floor
Houston, Texas 77046
Attention: President
Telephone: (713) 877-7800
Fax: (713) 877-7512
MGS Marketing Corp.
3200 Southwest Freeway
Houston, Texas 77027
Attention: Executive Vice President
Telephone: (713) 963-5633
Fax: (713) 964-5868
Niagara Independence Marketing Company
1201 Louisiana Street, Suite 400
Houston, Texas 77002
Attention: President
Telephone: (713) 654-2671
Fax: (713) 654-2656
Williams Independence Marketing Company
One Williams Center
Tulsa, Oklahoma 74172
Attention: President
Telephone: (918) 588-3770
Fax:
Notices shall be deemed given upon receipt, and a notice to all
Participants or multiple Participants shall be deemed given when received by the
last Participant to receive same. Any Participant may change its address or
facsimile number for notices by providing notice of any such change to each of
the other Participants.
4.4 Governing Law. This Agreement shall be governed by and interpreted
-------------
in accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws. In the event that any provision of this
Agreement shall be deemed to conflict with any provision of the partnership law
of the State of Delaware the provisions of such law shall, to the extent
required by such law, be controlling.
4.5 Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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<PAGE>
4.6 No Waiver. No waiver by any Participant of any default by any other
---------
Participant in the performance of any provision, condition or requirement herein
shall be deemed to be a waiver of, or in any manner release said Participant
from the performance of any other provision, condition or requirement herein;
nor shall such waiver be deemed to be a waiver of, or in any manner a release
of, said Participant from future performance of the same provision, condition or
requirement. Any delay or omission of any Participant to exercise any right
hereunder shall not impair the exercise of any such right, or any like right,
accruing to it thereafter. No waiver of a right created by this Agreement by one
or more Participants shall constitute a waiver of such right by the other
Participants except as may otherwise be required by law with respect to Persons
not parties hereto. The failure of one or more Participants to perform their
obligations hereunder shall not release the other Participants from the
performance of their obligations.
4.7 Subject to Applicable Laws. This Agreement and the obligations of
---------------------------
the Participants hereunder are subject to all applicable laws, rules, orders and
regulations of Governmental Authorities having jurisdiction and, in the event of
conflict, such laws, rules, orders and regulations of Governmental Authorities
having jurisdiction shall control.
4.8 Future Business Activities. Participation in the Marketing
-----------------------------
Partnership shall not in any way restrain any Participant's Affiliates in other
present or future business activities, whether or not any such activity is
directly or indirectly competitive with the business of the Marketing
Partnership or any other Participant's Affiliates, or in any way preclude or
restrict any of such Affiliates from entering into a joint venture, partnership
or other business arrangement with the Marketing Partnership. No Participant's
Affiliate shall under any circumstances be obliged or bound to offer or present
to the Marketing Partnership any business opportunity offered to such Affiliate
as a prerequisite to the acquisition of or investment in such business
opportunity by such Affiliate or owe any fiduciary obligation to the Marketing
Partnership or any Participant's Affiliate.
4.9 Confidentiality. Except as hereinafter provided, the Marketing
---------------
Partnership and each Participant shall treat as confidential, and not disclose
to any Person not authorized by the MP Management Committee to receive
confidential information, any information obtained either directly or indirectly
from any other Participant pursuant to this Agreement and designated by such
Participant as confidential, or other confidential information developed or
acquired by the MP Management Committee, unless such confidential information
(a) was already properly in the possession of the receiving Participant at the
time it obtained such confidential information hereunder, (b) was or is
published or otherwise is or becomes generally available to the public through
no fault of such receiving Participant, (c) was or is made available to such
Participant without restriction by any Person or entity which is not bound by,
and does not impose, an obligation of confidentiality or use with respect
thereto or (d) was or is required to be disclosed by applicable law, rule or
regulation or pursuant to an order of a court or administrative body having
jurisdiction. Furthermore, neither the Marketing Partnership nor any Participant
shall (i) use any such confidential information (other than its own) for any
Page 10
<PAGE>
purpose other than in connection with the activities of the Marketing
Partnership pursuant to this Agreement or (ii) disclose, reveal or otherwise
make any such confidential information (other than its own) available to any
unauthorized Person without the prior written consent of the other Participants
hereunder, unless such disclosure is required by operation of law or regulation.
The Participants and the MP Management Committee shall establish and enforce
reasonable procedures for the protection of confidential information and shall
restrict disclosure of such information to as few as possible of the employees,
officers, agents of each Participant and the Marketing Partnership, and only to
those who need to know such information in connection with the purposes of the
Marketing Partnership as set forth herein. Each Participant and the MP
Management Committee shall take such reasonable and prudent steps and
precautionary measures as are required to ensure compliance with this Section
4.9. by such of their employees, officers, agents, and other Persons as shall be
given access to such confidential information and shall be responsible for
compliance by their employees, officers, agents and such other Persons. The
obligations of the Participants pursuant to this Section 4.9. shall survive the
termination of this Agreement for a period of two years. The Participants agree
that no adequate remedy at law exists for a material breach or threatened
material breach of any of the provisions of this Section 4.9., the continuation
of which unremedied will cause the injured Participant to suffer irreparable
harm. Accordingly, the Participants agree that the injured Participant shall be
entitled, in addition to other remedies which may be available to it, to
immediate injunctive relief from any material breach of any of the provisions of
this Section 4.9. and to specific performance of its rights hereunder, as well
as to any other remedies available at law or in equity.
4.10 No Third Party Beneficiary. Except as expressly provided in this
---------------------------
Agreement, nothing herein expressed or implied is intended or shall be construed
to impose any obligation upon any person not a party hereto, or to confer upon
or to give to any Person not a party hereto any rights or remedies under or by
reason of this Agreement.
4.11 Publicity. Unless otherwise agreed, no press releases, public
---------
notices or other disclosures or publicity regarding this Agreement or the
transactions contemplated thereunder shall be made except to the extent required
by law or governmental regulations, and, then only after the content of such
release(s), notice(s) or disclosures has been agreed upon by the Participants.
Page 11
<PAGE>
IN WITNESS WHEREOF, the Participants have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
Coastal Gas Marketing DirectLink Corp. Niagara Independence Marketing
Company
By: /s/ Donahld H. Gullquist By: /s/ James A. Back
------------------------------- -------------------------
Title: Title:
MGS Marketing Corp. Williams Independence Marketing
Company
By: /s/ Steven M. Salato By: /s/ H. D. Jones II
------------------------------- -------------------------
Title: Senior Vice President Title:
Page 12
<PAGE>
Marketing Partnership Agreement
Appendix A
Participant Person Owning Capital
- - ----------- ---------------------
Coastal Gas Marketing DirectLink Corp. Coastal Gas Marketing Corp.
MGS Marketing Corp. MidCon Gas Services Corp.
Niagara Independence Marketing Company National Fuel Gas Company
Williams Independence Marketing Company Williams Energy Services Company
Page 13
CERTIFICATE OF INCORPORATION
OF
Empire Oklahoma, Inc.
1. The name of the corporation is:
Empire Oklahoma, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which
corporations may be organized under the General Corporation
Law of Delaware.
4. The total number of shares of common stock which the corporation
shall have authority to issue is One Thousand (1,000) and the par value of each
of such shares is One Dollar ($1.00), amounting in the aggregate to one Thousand
Dollars ($1,000.00).
5A. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
L. J. Vitalo Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
K. A. Widdoes Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
D. M. Dembkowski Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
5B. The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is elected and qualified, is as follows:
NAME MAILING ADDRESS
---- ---------------
Richard Hare 18th Floor
10 Lafayette Square
Buffalo, NY 14203
6. The corporation is to have perpetual existence.
7. The shareholder of the corporation shall not be entitled to
cumulative voting rights in the election of directors.
8. Holders of shares of stock of the Corporation shall not have any
preemptive rights and the Corporation shall have the right to issue and to sell
to any person or persons any shares of its capital stock or any option rights or
any securities having conversion or option rights, without first offering such
shares, rights or securities to any holder of the stock.
9. The by-laws may be altered or amended at any meeting of
shareholders, by a vote of the holders entitled to cast a majority of the votes
present or represented at the meeting, or at any duly constituted meeting of the
Board of Directors, by a majority vote of the Directors then in office, subject
always to the power of the shareholders to change such action, and provided that
only the shareholders may amend the by-laws providing for meeting of
shareholders.
10. Election of Directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.
11. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by the statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
12. A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this Certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this 16 th day of
April, 1996.
L. J. Vitalo
--------------------------------------
K. A. Widdoes
--------------------------------------
D. M. Dembkowski
--------------------------------------
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF EMPIRE OKLAHOMA, INC.
BEFORE RECEIPT OF PAYMENT OF STOCK
Empire Oklahoma, Inc., a Delaware corporation, CERTIFIES:
1. The corporation has not received any payment for any of its stock.
2. The amendment to the corporation's Certificate of Incorporation set forth in
the following resolution has been duly adopted by the corporation's sole
director in accordance with the provisions of Section 241 of the General
Corporation Law of the State of Delaware:
"RESOLVED, that the Certificate of Incorporation of the
corporation be amended by striking Article 1 in its entirety and
replacing therefor:
`1. The name of the corporation is Seneca
Independence Pipeline Company.'"
IN WITNESS WHEREOF, Empire Oklahoma, Inc. has caused this Certificate
of Amendment to be executed by its sole director this 24th day of July, 1997.
Empire Oklahoma, Inc.
By: /s/ Richard Hare
----------------------
Richard Hare
Director
Amended 10/8/97
BY-LAWS
OF
SENECA INDEPENDENCE PIPELINE COMPANY
ARTICLE I
OFFICES
-------
Section 1. Principal Office. The principal office of this corporation
-----------------
shall be in the City of Buffalo, State of New York.
Section 2. Other Offices. The corporation may have such other offices
-------------
and places of business, within or without the State of Delaware, as may be
determined by the Directors.
ARTICLE II
SHAREHOLDERS
------------
Section 1. Place of Meetings. Meetings of the shareholders may be held
-----------------
at such place or places, within or without the State of Delaware, as shall be
fixed by the Directors and stated in the notice of the meeting.
Section 2. Annual Meeting. The annual meeting of shareholders for the
--------------
election of Directors and the transaction of such other business as may properly
come before the meeting shall be held at one o'clock p.m., or as soon thereafter
as the presiding officer may conveniently direct, on the third Thursday in
February of each year (if not a legal holiday, and if a legal holiday, then at
the same hour on the next succeeding business day) or on such other business day
as the Board of Directors may fix.
Section 3. Notice of Annual Meeting. Written notice of the annual
-------------------------
meeting shall be given to each shareholder entitled to vote, at least ten (10)
days but no more than fifty (50) days prior to the meeting.
Section 4. Special Meetings. Special meetings of the shareholders for
-----------------
any purpose or purposes may be called by the President or Board of Directors and
must be called by the President or Secretary upon receipt by either of them of
the written request of the holders of twenty-five (25) percent of the stock then
outstanding and entitled to vote.
Section 5. Notice of Special Meeting. Written notice of a special
---------------------------
meeting, stating the time, place and purpose or purposes thereof, shall be given
to each shareholder entitled to vote, at least ten (10) days but no more than
fifty (50) days prior to the meeting. The notice shall also be set forth at
whose direction it is being issued.
Section 6. Quorum. At any meeting of the shareholders, the holders of
------
record of a majority of the shares of stock then entitled to vote shall
constitute a quorum for all purposes, except as otherwise provided by law or the
Certificate of Incorporation.
Section 7. Voting. Except as may be otherwise provided by the
------
Certificate of Incorporation, at each meeting of the shareholders, every holder
of stock then entitled to vote may vote in person or by proxy and shall have one
vote for each share registered in his name.
Section 8. Adjourned Meetings. Any meeting of shareholders may be
-------------------
adjourned to a designated time and place by a vote of a majority in interest of
the shareholders present in person or by proxy and entitled to vote, even though
less than a quorum is so present. No notice of such an adjourned meeting need be
given, other than by announcement at the meeting, and any business may be
transacted which might have been transacted at the meeting as originally called.
Section 9. Action by Written Consent of Shareholders. Whenever by any
------------------------------------------
provision of statute or of the Certificate of Incorporation or of these By-Laws,
shareholders are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote thereon.
Section 10. Appraisal Rights. If, at any meeting, action is proposed to
----------------
be taken which would, if taken, entitle shareholders to receive payment for
shares, the notice of such meeting shall include a statement of that purpose and
to that effect.
ARTICLE III
DIRECTORS
---------
Section 1. Number. The number of Directors of the corporation shall be
------
three (3), who shall hold office for one year and/or until their successors are
elected and qualify. Directors shall be elected at the annual meetings of
shareholders. The number of Directors may be increased or decreased from time to
time by amendment to these By-Laws made by a majority of the Board of Directors
or by the shareholders. Directors need not be shareholders.
Section 2. Powers. The Board of Directors may adopt such rules and
------
regulations for the conduct of business of its meetings, the exercise of its
powers and the management of the affairs of the corporation as it may deem
proper, not inconsistent with the laws of the State of Delaware, the Certificate
of Incorporation or these By-Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
corporation and do such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
Section 3. Meeting, Quorum, Meeting by Telephone, Action Without
-----------------------------------------------------------
Meeting. Meetings of the Board of Directors may be held at any place, either
- - -------
within or without the State of Delaware, provided a quorum be in attendance.
Except as may be otherwise provided by the Certificate of Incorporation or by
the corporate laws of the State of Delaware, a majority of the Directors in
office shall constitute a quorum at any meeting of the Board and the vote of a
majority of a quorum of Directors shall constitute the act of the Board.
The Board of Directors may hold an annual meeting, without notice,
immediately after the annual meeting of the shareholders. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by the Board of Directors. The Chairman
of the Board (if any) or the President or Secretary may call, and at the request
of any two Directors must call, a special meeting of the Board of Directors by
appropriate notice. Five days' notice is required when given personally or by
telegraph, cable or facsimile transmission to each Director.
Any one or more members of the Board of Directors or any Committee
thereof may participate in a meeting of such Board or any Committee by means of
a conference telephone or similar communication 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.
Any action required or permitted to be taken by the Board of Directors
or any Committee thereof may be taken without a meeting if all members of the
Board or the Committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the Board or Committee shall be filed with the minutes of the
proceedings of the Board or Committee.
Section 4. Resignation, Vacancies, 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. Except as otherwise
provided in the Certificate of Incorporation or in the following paragraph,
vacancies occurring in the membership of the Board of Directors, from whatever
cause arising, may be filled by a majority vote of the remaining Directors,
though less than a quorum.
Any one or more of the Directors may be removed for cause by action of
the Board of Directors taken by a vote of a majority of all Directors then in
office at any regular or special meeting of the Board.
Section 5. Committees. The Board of Directors, by resolution adopted by
----------
a majority of the entire Board, may designate from its members an Executive
Committee or other committee or committees, each consisting of three or more
members, and each of which shall have such powers and authority (to the extent
permitted by law) as may be provided in said resolution.
Section 6. Compensation. Directors, as such, shall not receive any
------------
stated salary for their services, but by resolution of the Board of Directors a
fixed fee and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board or of any committee of the Board,
provided that nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
OFFICERS
--------
Section 1. Executive Officers. The executive officers of the
--------------------
corporation shall be a President, one or more Vice-Presidents, a Treasurer and a
Secretary, each of whom shall be elected annually by the Directors and shall
hold office for such term as may be prescribed by the Board. All vacancies
occurring among any of the offices may be filled by the Board of Directors or,
in its discretion, the Board may leave unfilled at its pleasure any of the
foregoing offices except the offices of President, Treasurer and Secretary. Any
officer may be removed at any time with or without cause by the Board of
Directors.
Section 2. Other Officers. The Board of Directors may appoint such
---------------
other officers and agents with such powers and duties as it shall deem
necessary.
Section 3. The President. The President shall, in the absence or
--------------
non-election of a Chairman of the Board, preside at all meetings of the
shareholders and Directors and perform such other duties as from time to time
may be assigned to him by the Board of Directors. The President shall be the
Chief Executive Officer of the corporation and shall perform all of the duties
of the Chairman of the Board as well as those of President.
Section 4. The 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, exercise the powers and perform the duties of the President, and each
Vice-President shall exercise such other duties as may be prescribed by the
President or the Board.
Section 5. The Treasurer. The Treasurer shall have custody of all
--------------
funds, securities and other valuable effects of the corporation; he shall
receive and give receipts and acquittances for moneys paid in on account of the
corporation; he 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; he shall pay out of the funds on hand all bills,
payrolls and other just debts of the corporation, of whatever nature, upon
maturity; he shall enter regularly, in books to be kept by him for that purpose,
full and accurate accounts of all moneys received and paid out by him on account
of the corporation; and he shall perform all other duties incident to the office
of Treasurer and as may be prescribed by the Board.
Section 6. The Secretary. The Secretary shall keep the minutes of all
-------------
proceedings of the Board of Directors and of the shareholders; he shall attend
to the giving and serving of all notices to the shareholders and Directors or
other notice required by law or by these By-Laws; he shall affix the seal of the
corporation to deeds, contracts and other instruments in writing requiring a
seal, when duly signed on behalf of the corporation; he shall have charge of the
certificate books and stock books and such other books and papers as the Board
may direct; and he shall perform all other duties incident to the office of
Secretary as the Board may prescribe.
ARTICLE V
CAPITAL STOCK
-------------
Section 1. Form and Execution of Certificates. Certificates of stock
-----------------------------------
shall be in such form as required by the laws of the State of Delaware and as
shall be adopted by the Board of Directors. They shall be numbered and
registered in the order issued, shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall be sealed with
the corporate seal or a facsimile thereof. If such a certificate is
countersigned by a transfer agent or registered by a registrar, the signatures
of any such officers may be facsimile.
Section 2. Transfer. Transfer of shares shall be made only upon the
--------
books of the corporation by the registered holder in person or by attorney, duly
authorized, and upon surrender of the certificate or certificates for such
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer. A record shall be made of each transfer, and whenever
a transfer shall be made for collateral security, and not absolutely, it shall
be so expressed in the entry of the transfer on the record of shareholders of
the corporation.
Section 3. Lost or Destroyed Certificates. The holder of any
----------------------------------
certificate representing shares of stock of the corporation may notify the
corporation of any loss, theft or destruction thereof, and the Board of
Directors may thereupon, in its discretion, cause a new certificate for the same
number of shares, to be issued to such holder upon satisfactory proof of such
loss, theft or destruction, and the deposit of indemnity by way of bond or
otherwise, in such form and amount and with such surety or sureties as the Board
of Directors may require, to indemnify the corporation against loss or liability
by reason of the issuance of such new certificates.
Section 4. Record Date. In lieu of closing the books of the
------------
corporation, the Board of Directors may fix in advance a date, not exceeding
fifty days nor less than ten days, as the record date for the determination of
shareholders entitled to receive notice of, or to vote at, any meeting of
shareholders, or to consent to any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividends, or allotment of any rights, or for the purpose of any other action.
ARTICLE VI
MISCELLANEOUS
-------------
Section 1. Dividends. Subject to the applicable provisions of the
---------
Certificate of Incorporation, the Board of Directors may declare dividends from
time to time upon the capital stock of the corporation from the surplus or net
profits available therefor.
Section 2. Fiscal Year. The fiscal year of the corporation shall 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 3. Checks, Notes, etc. Checks, notes, drafts, bills of exchange
------------------
and orders for payment of money shall be signed or endorsed in such manner as
shall be determined by the Board of Directors.
The funds of the corporation shall be deposited in such bank or trust
company, and checks drawn against such funds shall be signed in such manner as
may be determined from time to time by the Board of Directors.
Section 4. Notice and Waiver of Notice. Any notice required to be given
---------------------------
under these By-Laws may be waived by the person entitled thereto, in writing, by
telegram, cable, facsimile transmission or radiogram, and the presence of any
person at a meeting shall constitute waiver of notice thereof as to such person.
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated; and any notice so required shall
be deemed to be sufficient if given by depositing it in a post office or post
box in a sealed postpaid wrapper, addressed to such shareholder, officer or
director, at such address as appears on the books of the corporation, and such
notice shall be deemed to have been given on the day of such deposit.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
-----------------------------
Section 1. Indemnification. Any person made a party to an action or
---------------
proceeding, by reason of the fact that he, his testator or his intestate is or
was a director or officer of the corporation, or of any other corporation,
domestic or foreign, that he, his testator or intestate served in any capacity
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.
Section 2. Insurance. The corporation may purchase and maintain
---------
insurance to indemnify the corporation and the directors and officers to the
extent permitted.
ARTICLE VIII
AMENDMENTS
----------
Section 1. The authority to make, alter, amend or repeal these By-Laws
is expressly vested in the Board of Directors, subject to the power of the
shareholders to change or repeal such By-Laws.
NATIONAL FUEL GAS COMPANY
AND ITS
SUBSIDIARIES
EMPLOYEE RELOCATION MANUAL
MAY, 1997
<PAGE>
TABLE OF CONTENTS
INTRODUCTION.................................................................3
STEP 1 - INITIAL MEETING WITH YOUR RELOCATION COORDINATOR....................3
STEP 2 - THE APPRAISAL PROCESS...............................................3
STEP 3 - SELECTING A LISTING REALTOR.........................................4
STEP 4 - ENTERING INTO A LISTING AGREEMENT WITH YOUR REALTOR.................4
STEP 5 - PURCHASE OF YOUR HOME BY NATIONAL FUEL OR, IN THE ALTERNATIVE,
REQUEST FOR AN EQUITY LOAN.................................6
STEP 6 - POLICY FOR REIMBURSEMENT OF EXPENSES FOR TRANSFERRED
SUPERVISORY EMPLOYEES......................................7
APPENDIX A - SUMMARY OF REIMBURSABLE EXPENSES...............................10
APPENDIX B - TAX CONSIDERATIONS ............................................11
<PAGE>
INTRODUCTION
This relocation policy manual has been developed to assist you with your
move. It includes information regarding all of the necessary procedures and
focuses on providing a complete description of your entitlements. New York
relocations will be coordinated by Richard J. Miga in the Buffalo Land
Department and Pennsylvania relocations will be coordinated by Kevin J. Karg in
the Erie Land Department (hereinafter referred to as "your relocation
coordinator"). Any questions should be addressed to your relocation coordinator.
We are cognizant of the fact that a relocation involves your family. In
particular, we want to include your spouse as an integral part of the process.
The goal of the company relocation policy is to enable you and your family to
relocate with minimal inconvenience and without unnecessary expense. The
function of this manual is to provide step by step guidelines to ensure that
these objectives will be attained.
On behalf of the management of National Fuel, we extend our best wishes to
you on your relocation and are ready to help you along the way.
Step 1 - Initial Meeting with Your Relocation Coordinator
Once officer approval has been given for your transfer, please contact your
relocation coordinator at your earliest convenience to schedule a meeting. The
initial meeting will provide you with the opportunity to review all of the
relocation steps with your relocation coordinator.
Step 2 - The Appraisal Process
In order to determine the market value of your home, two appraisals must be
conducted. One certified appraiser is chosen by you and one is chosen by
National Fuel. National Fuel will pay the fees
<PAGE>
for both appraisals. If there is a wide disparity in the two appraisals,
National Fuel may arrange for a third appraisal and consider it in place of the
appraisal that is, in National Fuel's judgment, inaccurate. Your relocation
coordinator can provide you with a list of several certified appraisers in your
geographical area. Do not select an appraiser you are considering as a potential
listing agent because that could result in a conflict of interest for the agent.
The two appraisals will be averaged to determine the "market value" which
enables you to offer your home at a fair and marketable suggested listing price.
In addition, this figure will enable you to determine the net equity you have in
your home. (Net equity equals the average of the two appraisals less any
outstanding mortgages or home equity loans or liens).
Once you know the value of your home and the underlying equity, you will be
able to make an informed decision about the price range of home you should be
looking for at your new location. It is important to remember that no
consideration will be given by National Fuel if you move to a more or less
expensive residence, or because of disparate property values in different
geographical areas.
* Please remember to provide your relocation coordinator with a copy of
your appraisal in a timely manner. Your relocation coordinator will provide you
with a copy of the appraisal which National Fuel receives as well.
Step 3 - Selecting a Listing Realtor
After the appraisals have been completed, you will need to contact a
Realtor to have your home listed. If you sell the home through a board certified
Realtor, the sales commission will be reimbursed by National Fuel. If you are
uncertain about choosing a Realtor, your relocation coordinator will provide you
with a list of several Realtors in your geographical area.
Step 4 - Entering Into a Listing Agreement With Your Realtor
Most listing agreements are standardized, but please feel free to ask your
relocation coordinator about any uncertainty you may have regarding specific
terms and conditions of the agreement. National
<PAGE>
Fuel has a reimbursement cap of 6% on Realtors' commissions. If your Realtor's
standard commission exceeds 6%, you have the following options:
1) Negotiate with your Realtor to lower the rate to 6% (most Realtors
are agreeable to this reduction);
2) Pay the additional commission yourself;
3) Select another Realtor.
The following provisions must appear in your listing agreement:
1) The term must not exceed 90 days; and
2) This exact language:
"In the event National Fuel Gas Company or any of
its subsidiaries elects to purchase this residence, it
is understood and agreed that there shall be no
commission or fees of any nature payable to the Realtor,
agency and/or associates involved with this residence."
Be careful about determining a listing price for your home. Keep in mind
that National Fuel may purchase your home, but only after it is listed with a
Realtor and if it does not sell within 90 days after the listing agreement date.
If during the above three-month period you receive a purchase offer at less than
the market value, the company may, subject to Senior Officer approval, pay the
difference to consummate the sale.
Your Realtor may provide you with a booklet outlining some helpful hints to
prepare your home for showings. In most instances these cosmetic adjustments may
be made at a small expense; however, National Fuel does not reimburse for these
types of expenses.
<PAGE>
Step 5 - Purchase of Your Home by National Fuel or,
in the Alternative, Request for an Equity Loan
If your home does not sell in 90 days, National Fuel will purchase your
home for its market value (see Step 2 - The Appraisal Process). If National does
purchase the home, the amount you receive will be:
THE AVERAGE OF TWO APPRAISALS (MARKET VALUE)
LESS: ANY OUTSTANDING MORTGAGE, HOME EQUITY LOAN BALANCE, OR LIEN
LESS: 3% REALTOR COMMISSION (HALF STANDARD BROKER'S FEE)
----------------------------------------------------------
= NET AMOUNT YOU WILL RECEIVE
In the alternative, National Fuel will, at your request, consider
loaning to you, on a demand note at no interest, money in an amount not
exceeding your equity in the home being sold. This loan amount is calculated by
determining the market value of the property, less the amount of any outstanding
mortgages. Such demand note is to be repaid:
1) within 30 days after the sale of your home, and
2) not more than one year from the date the loan was made, or
3) upon demand by National Fuel.
When an equity loan is provided National Fuel may, after the expiration of the
90 day listing period and upon your request, make mortgage payments to support
the residence until it is sold.
<PAGE>
Step 6 - Policy for Reimbursement of Expenses for
Transferred Supervisory Employees
National Fuel shall reimburse relocation expenses for supervisors who
are requested by the company to change their place of residence as follows*:
1) Living expenses. Living expenses for you at your new
----------------
location for a duration to be determined by the appropriate
Senior Officer in accordance with the following:
a) Payment will be made for sleeping accommodations
b) Payment for meals, breakfast, supper and also
lunch when this is in accordance with National Fuel's policy.
c) Payment for or provision of round-trip
transportation home not more often than once a week.
2) Costs associated with sale of existing residence and
----------------------------------------------------------
purchase of new residence. Costs that are incurred when you
--------------------------
sell your existing residence and purchase a new residence are
reimbursed in accordance with the following:
a) Mortgage rate differential. Because of the
-----------------------------
potential disparity between mortgage rates at the time of
relocation and historical rates, National Fuel will pay, when
applicable, annually to you, for the three years beginning on
the first anniversary of the move, a cash allowance equal to
the interest rate on the new mortgage less the interest rate
on your prior mortgage (on the residence being moved from),
times the principle balance remaining on the prior mortgage at
the time of the transfer. If you are no longer in the employ
of National Fuel or sell the new house before the end of the
three-year period, the allowance will immediately terminate.
You must provide the relocation coordinator with a bank
statement indicating the interest rate and mortgage balance.
This allowance will be treated as ordinary income.
- - -------------------
*All expenses associated with the relocation should be submitted to your
relocation coorindator for reimbursement.
<PAGE>
b) Closing expenses. National Fuel will pay, in
-----------------
connection with the transfer, within one year of the date of
the transfer, the "Reimbursable Expenses" set forth on
Appendix A. Immediately after the closing, you should provide
closing statements to the relocation coordinator for
appropriate reimbursement.
c) Salary allowance. You will be paid a five percent
----------------
(5%) allowance on salary in effect at the time of transfer in
the year of the transfer, and a two and one-half percent (2
1/2%) allowance in the subsequent year, payable on the
anniversary of the move, to cover the incidental expenses of
the required move. These allowances will be treated as
ordinary income.
3) House-hunting expenses. Payment for any reasonable expenses
----------------------
incurred in the process of looking for a residence at your new
location. Reimbursable expenses include mileage, meals and
hotel.
4) Household moving costs. Reasonable direct moving costs of
----------------------
furniture and personal possessions, including mileage, packing
and necessary unpacking charges, in accordance with the
following:
a) You should receive a cost estimate from at least
two reputable moving companies and, unless otherwise directed
by National Fuel, select the moving company which submits the
least expensive estimate. National Fuel may, at its option,
receive a cost estimate from an additional moving company and
require you to select such company.
<PAGE>
b) The moving company's bill will be paid either
directly by National Fuel or you may pay the bill and present
the receipted bill to your relocation coordinator for
reimbursement.
c) No cash allowances for moving costs will be made
by National Fuel.
d) Any exceptional costs, such as those involving the
storage of furniture, etc., will be considered by National
Fuel on an individual basis.
<PAGE>
APPENDIX A
SUMMARY - REIMBURSABLE EXPENSES
PURCHASE OF NEW HOME
REIMBURSABLE NON-REIMBURSABLE
------------ ----------------
Title Insurance Interest Adjustments
Legal Services Points a/k/a Loan Origination
Recording Fees Fees or Loan Discount Fees
Mortgage Tax1 Tax/Utility Adjustments
Judgment Search Property Assessments Adjustments
Bank Appraisal Fees )
Credit Investigation )
Mortgage Application ) These items reimbursed
Bank Attorney's fees ) up to $1,000 total
Reasonable inspections; limited to:)
Radon Tests
Engineer Reports
Others, with prior approval
One year's Private Mortgage Insurance
SALE OF EXISTING HOME
REIMBURSABLE NON-REIMBURSABLE
------------ ----------------
Real Estate Broker's Fee2 Tax/Utility Adjustments
Legal Services Property Assessment Adjustments
Local Transfer Taxes Pre-Sale Renovations
State Transfer Taxes
Lien Information Search
Survey
Recording Fees
- - --------------------------
1) 3/4 of 1% less $25.00 - New York only.
2) See pages 5 and 6
<PAGE>
APPENDIX B
TAX CONSIDERATIONS
In general, certain moving expense reimbursements are excludable from
an employee's income if the following conditions are met:
The expenses must be incurred in connection with the commencement
of work at a new location.
The employee's commute to the new place of work must be at least
50 miles farther than the employee's commute from his or her old
residence, and;
The employee must work in the new location for 39 weeks during
the 12-month period following the move.
QUALIFIED MOVING EXPENSES
Qualified moving expenses incurred by and reimbursed either directly to
or indirectly for an employee are excluded from Gross Income on Form W-2.
Qualified moving expenses are:
Traveling expenses, (including Lodging), from the former
residence to the new residence, and;
Moving expenses for transporting household goods and personal
effects from the former residence to the new residence.
NON-QUALIFIED MOVING EXPENSES
Reimbursements relating to non-qualified moving expenses are includable
as income to the employee. Non-qualified moving expenses are any expenses other
than qualified moving expenses incurred by or reimbursed either directly or
indirectly in association with a move. To offset the increased tax liability
related to such reimbursements, National Fuel will "gross up" these expense
reimbursements except for the interest rate differential and salary allowance,
so that any additional tax liability relating to such reimbursement is
minimized. (If questions arise regarding this "gross up" calculation, please
contact the Payroll Department.) Non-qualified moving expenses include the
following:
Salary Allowance - 5% first year and 2 1/2% second year
Interest Rate Differential
Storage Charges
Purchase of the employee's residence
Expenses associated with the sale of the old or purchase of the
new residence
Cost of meals or other personal costs reimbursed
Reasonable expenses associated with house hunting visits
Temporary living expenses - if applicable
Expenses incurred in the settling of an unexpired lease or the
acquisition of a new lease on property to be used as the new
residence - if applicable
These expense reimbursements will be grossed-up for tax purposes with
the exception of the Salary Allowance and Interest Rate Differential.
There may be other non-qualified expenses associated with moving. If
you have any questions, please contact your relocation coordinator.
AGREEMENT PURSUANT TO RULE 45 (c)
---------------------------------
UNDER THE PUBLIC UTILITY HOLDING ACT OF 1935
--------------------------------------------
WHEREAS, National Fuel Gas Company ("National"), a corporation
organized under the laws of the State of New Jersey and a registered holding
company under the Public Utility Holding Company Act of 1935 ("Act"), together
with its wholly-owned subsidiaries, listed below:
National Fuel Gas Distribution Corporation
National Fuel Gas Supply Corporation
Seneca Resources Corporation
Leidy Hub, Inc.
Highland Land & Minerals, Inc.
Utility Constructors, Inc.
Data-Track Account Services, Inc.
National Fuel Resources, Inc.
Horizon Energy Development, Inc.
Seneca Independence Pipeline Company
Niagara Energy Trading Inc.
Niagara Independence Marketing Company
join annually in the filing of a consolidated federal income tax return; and
WHEREAS, it is the intention of National and its subsidiaries
(hereinafter collectively referred to as the "System"), to enter into a Tax
Agreement for the allocation of current federal income taxes; and
WHEREAS, Rule 45 (c) of the Act has been adopted by the Securities and
Exchange Commission with the specific intention of providing a method of
allocation of consolidated federal income taxes by a registered holding company
and its subsidiaries;
NOW, THEREFORE, the System does hereby covenant and agree with one
another that the consolidated current federal income tax liability of the System
shall be allocated pursuant to Rule 45 (c) of the Act, so that each company of
the System will benefit mutually from the application of said Rule, as follows:
<PAGE>
FIRST: There shall be allocated and preserved to each company the tax
effects of its own capital gains or losses which shall be subject to the capital
gains rate, if applicable, its tax credits, investment tax credit recapture and
the effects of any other material items taxed at different rates or involving
special benefits or limitations as may result from an unexpected event,
including changes to the Internal Revenue Code which may be applicable to a
particular company, including its carry-over amounts to the extent those amounts
are absorbed in the taxable year.
SECOND: After giving effect to the special allocations described in
paragraph First above, the balance of the current tax liability of the System
shall be allocated to each System company on the basis of each of their
respective contributions of corporate taxable income to the total consolidated
taxable income of the System, excluding income subject to taxation at the
capital gains rate, if applicable. The tax attributable to such income will have
been separately allocated pursuant to paragraph First above. However, so long as
National has negative corporate taxable income, no portion of the current tax
liability shall be allocated to National as a corporate tax credit. Instead, the
negative corporate taxable income of National shall be allocated to those System
companies which have positive corporate taxable income, on the basis of each of
these companies' contribution of positive corporate taxable income to the total
positive corporate taxable income of the System. The tax allocated to a company
under this paragraph, which may be either positive or negative (except for
National) shall be equal to the consolidated tax liability multiplied by a
fraction, the numerator of which is the positive corporate taxable income of the
Company (as adjusted by National's negative corporate taxable income described
in this paragraph Second above and in paragraph Third); or the negative
corporate taxable income of the Company (as adjusted in paragraph Third),
including any carry-over loss attributable to the Company to the extent absorbed
in the taxable year, and the denominator of which is the consolidated taxable
income of the System (as adjusted in paragraphs First and Third). Companies with
<PAGE>
taxable income will be allocated a tax liability under this method while
companies with net operating losses (except National) will be allocated a tax
benefit or credit.
THIRD: The tax effect of intercompany transactions eliminated in the
calculation of consolidated taxable income shall be eliminated from the
corporate taxable income of the companies involved in such transactions in the
calculations provided in paragraph Second.
FOURTH: Any consolidated alternative minimum income tax and
environmental tax arising from consolidated alternative minimum taxable income
(AMTI) will be allocated among the companies on the basis of each of their
respective contributions of positive AMTI to the total positive AMTI of the
System.
FIFTH: Under the method of allocation described in paragraphs First
through Fourth above, the companies agree that the tax allocated to each company
(except National) shall not exceed the amount of tax of such company based upon
a separate return computed as if such company had always filed its tax returns
on a separate return basis. However, in computing the separate return tax
liability of a company, items of carry-forward, carry-back and intercompany
transactions, to the extent that any or all of these items have been utilized by
the System in a prior taxable year's allocation, will be disregarded in order to
comply with the separate return limitation provisions set forth in Rule 45 (c)
of the Act and regulations promulgated under Section 1552 of the Internal
Revenue Code. Thus, to the extent that a company receives a tax benefit or
credit pursuant to paragraph Second above, such benefit or credit would be
applied to reduce any tax credits in future years to which such company might
otherwise become entitled under the separate return limitation provisions of
Rule 45 (c) of the Act and regulations promulgated under Section 1552 of the
Internal Revenue Code.
<PAGE>
IT IS FURTHER AGREED by and among the System as follows:
I. PAYMENTS: It is agreed that those companies allocated a current
--------
federal income tax liability under this agreement will pay the Internal Revenue
Service a portion of that liability in the amounts and on the dates directed by
National, as determined and pursuant to the applicable sections of the Internal
Revenue Code. Another portion of the current federal income tax liability of
those companies shall be paid by them to the other companies which were
allocated a tax benefit. Such payments will also be made in the amounts and on
the dates directed by National.
II. SEPARATE RETURN LIABILITY: The System intends that the result of
--------------------------
the proposed method of allocation and payment will be:
(a) No company will pay more than its separate return liability as if
it had always filed separate returns. However, the qualifications set
out in paragraph Fifth above concerning the calculation of a separate
return tax shall apply;
(b) Each company having a net operating loss or other net tax benefit
will receive in current cash payments the benefit of its own net
operating loss (except as described in paragraph Second) or other net
tax benefits to the extent that the other companies can utilize such
items to offset the tax liability they would otherwise have on a
separate return basis.
III. EFFECTIVE DATE: This Tax Agreement will be effective for
---------------
allocation of the current income tax liability of the system for the fiscal year
1997 and all subsequent years until this Tax Agreement shall be amended in
writing by each of the companies which is a party thereto.
IV. APPROVAL AND AMENDMENTS: Any amendments to this Tax Agreement may
------------------------
be made only with the unanimous written consent of all the parties hereto. A
<PAGE>
copy of this Tax Agreement is being filed as an exhibit to National's Form U5S
Annual Report to the Securities and Exchange Commission for the year ended
September 30, 1997. Any amendments to this Tax Agreement will be filed as an
exhibit to National's Form U5S for the year when the amendment becomes
effective. It is contemplated that any additional companies which hereafter
become associated with the System shall have the option of joining in and
becoming a party to this Tax Agreement by amendment thereto.
V. PRIOR AGREEMENTS SUPERSEDED: Any prior agreements relating to the
allocation of income tax liability among the System are superseded.
IN WITNESS WHEREOF, each of the parties hereto have caused this Tax
Agreement to be executed in its name and on its behalf by one of its officers
duly authorized, and its corporate seal to be affixed hereto by its Secretary on
this 28th day of January 1998.
---- -------
ATTEST: NATIONAL FUEL GAS COMPANY
- - ----------------------------- By:----------------------------------
Anna Marie Cellino Joseph P. Pawlowski
Secretary Treasurer
ATTEST: NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
- - ----------------------------- By:----------------------------------
David F. Smith Joseph P. Pawlowski
Secretary Treasurer
ATTEST: NATIONAL FUEL GAS SUPPLY
CORPORATION
- - ----------------------------- By:----------------------------------
Joseph P. Pawlowski Richard Hare
Treasurer President
<PAGE>
ATTEST: SENECA RESOURCES CORPORATION
- - ----------------------------- By:----------------------------------
William M. Petmecky Calvin H. Friedrich
Secretary Treasurer
ATTEST: LEIDY HUB, INC.
- - ----------------------------- By:----------------------------------
Gerald T. Wehrlin Walter E. DeForest
Secretary President
ATTEST: HIGHLAND LAND & MINERALS, INC.
- - ----------------------------- By:----------------------------------
Joseph P. Pawlowski Philip C. Ackerman
Secretary President
ATTEST: UTILITY CONSTRUCTORS, INC.
- - ----------------------------- By:----------------------------------
David F. Smith Joseph P. Pawlowski
Secretary Treasurer
ATTEST: DATA-TRACK ACCOUNT SERVICES,
INC.
- - ----------------------------- By:----------------------------------
David F. Smith Joseph P. Pawlowski
Secretary Treasurer
ATTEST: NATIONAL FUEL RESOURCES, INC.
- - ----------------------------- By:----------------------------------
William M. Petmecky Robert J. Kreppel
Secretary President
<PAGE>
ATTEST: HORIZON ENERGY DEVELOPMENT,
INC.
- - ----------------------------- By:----------------------------------
Ronald J. Tanski Philip C. Ackerman
Secretary President
ATTEST: SENECA INDEPENDENCE PIPELINE
COMPANY
- - ----------------------------- By:----------------------------------
James R. Peterson Joseph P. Pawlowski
Secretary Treasurer
ATTEST: NIAGARA ENERGY TRADING INC.
- - ----------------------------- By:----------------------------------
William M. Petmecky Calvin H. Friedrich
Secretary Treasurer
ATTEST: NIAGARA INDEPENDENCE
MARKETING COMPANY
- - ----------------------------- By:----------------------------------
William M. Petmecky Calvin H. Friedrich
Secretary Treasurer
