<PAGE>
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------
PEOPLES ENERGY CORPORATION
(Exact name of issuer as specified in charter)
Illinois 36-2642766
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 East Randolph Drive
Chicago, Illinois 60601
(Address of Principal Executive Offices)
Peoples Energy Corporation
Long-Term Incentive Compensation Plan
(Full title of the plan)
EMMET P. CASSIDY
Secretary and Treasurer
Peoples Energy Corporation
130 East Randolph Drive
Chicago, Illinois 60601
Telephone (312) 240-4288
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of securities to be registered Amount to be offering price aggregate Amount of
registered per unit* offering price* registration fee
Common Stock Without par value......... 400,000 Shares $27.4375 $10,975,000.00 $3,784.48
- ----------------------------------------------------------------------------------------------------------------------------
<FN>
*For purposes of calculation of registration fee; calculation based on the average high and low prices on the New York Stock
Exchange October 2, 1995, pursuant to Rule 457(c) and (h).
</TABLE>
<PAGE>
PEOPLES ENERGY CORPORATION
REGISTRATION OF AN ADDITIONAL 400,000 SHARES
OF COMMON STOCK WITHOUT PAR VALUE
LONG-TERM INCENTIVE COMPENSATION PLAN
The Long-Term Incentive Compensation Plan (the "Plan") was adopted by
the Board of Directors (the "Board") of Peoples Energy Corporation (the
"Company") and approved by its shareholders effective as of January 26, 1979,
and was further amended and restated effective on November 30, 1981, February
28, 1986, February 23, 1990, December 2, 1992, December 7, 1994 and February 24,
1995. Under the Plan, up to an aggregate of 1,800,000 shares of the Company's
common stock without par value ("Common Stock") may be purchased under
non-qualified stock options or awarded under restricted stock awards and/or up
to an aggregate of 1,800,000 stock appreciation rights may be granted during
the period ending October 31, 2000, to key employees of the Company and its
subsidiaries. As of October 3, 1995, 665,230 shares and 748,950 stock
appreciation rights are available for offering and issuance under the Plan.
The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and is not a qualified plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code").
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated in this Registration
Statement by reference:
1. The Form S-8 Registration Statement No. 33-33482 as filed on
February 23, 1990.
2. The Annual Report of the Company on Form 10-K for the fiscal year
ended September 30, 1994.
3. The Quarterly Reports of the Company on Form 10-Q for the
quarters ended December 31, 1994, March 31, 1995 and June 30, 1995.
4. The definitive Proxy Statement of the Company dated January 3,
1995, in connection with the Annual Meeting of Shareholders held on February 24,
1995.
All documents filed with the Commission by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents.
S-1
<PAGE>
Item 5. Interests of Named Experts and Counsel
The statements as to matters of law and legal conclusions under the
following headings in the Prospectus have been reviewed by Peter Kauffman,
Assistant General Counsel and an Officer of the Company, and are stated upon the
authority of such counsel: "Description of Plan" (except for statements under
the sub-heading of "General" regarding the application of ERISA and the
description of Options as not being "statutory") and "Description of Stock".
Mr. Kauffman owns, or holds options for, shares of Common Stock of the Company
having a fair market value as of the date hereof in excess of $50,000.
The statements as to matters of law and legal conclusions made under
the heading "Description of Plan" (sub-heading "General") with respect to the
application of ERISA and Section 401(a) of the Code and the description of
Options as not being "statutory" and under the heading "Tax Consequences"
contained in the prospectus are stated upon the authority of Hopkins & Sutter,
tax counsel for the Company.
The financial statements and financial statement schedules included or
incorporated by reference in the Company's Annual Report on Form 10-K and
incorporated herein by reference have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
Item 8. Exhibits
The exhibits listed below are filed herewith and made a part hereof.
Exhibit
Number Description of Document
------- -----------------------
4 Peoples Energy Corporation Long-Term Incentive Compensation
Plan (As amended and restated effective February 24, l995).
5a Opinion of Peter Kauffman, Assistant General Counsel for
the Company.
5b Opinion of Hopkins & Sutter, tax counsel for the Company.
23a Consent of Arthur Andersen LLP.
23b Consent of Peter Kauffman, Assistant General Counsel for
the Company, is contained in the opinion of counsel filed as
Exhibit 5a.
23c Consent of Hopkins & Sutter is contained in the opinion of
counsel filed as Exhibit 5b.
S-2
<PAGE>
Item 9. Undertakings
(a)The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b)The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
S-3
<PAGE>
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given a copy of the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act and,
where interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(d) Pursuant to the Illinois Business Corporation Act, as amended, and the
Articles of Incorporation and the By-Laws of the Company, a director, officer or
employee of the Company may be entitled, under certain specified circumstances,
to indemnification by the Company for liabilities arising under the Securities
Act. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
S-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, Peoples Energy Corporation certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on October 4, 1995.
PEOPLES ENERGY CORPORATION
By /s/R. E. TERRY
---------------------
R. E. Terry
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title
--------- -----
/s/ R. E. TERRY Chairman of the Board and Principal
--------------- Executive Officer
R. E. Terry
/s/ K. S. BALASKOVITS Vice President, Controller, and Principal
--------------------- Financial and Accounting Officer
K. S. Balaskovits
/s/ PASTORA SAN JUAN CAFFERTY Director
-----------------------------
Pastora San Juan Cafferty
/s/ FRANKLIN A. COLE Director
---------------------
Franklin A. Cole
/s/ J. BRUCE HASCH President and Director
-------------------
J. Bruce Hasch
/s/ FREDERICK C. LANGENBERG Director
----------------------------
Frederick C. Langenberg
/s/ HOMER J. LIVINGSTON, JR. Director
----------------------------
Homer J. Livingston, Jr.
/s/ WILLIAM G. MITCHELL Director
-----------------------
William G. Mitchell
/s/ EARL L. NEAL Director
-----------------
Earl L. Neal
S-5
<PAGE>
/s/ MICHAEL S. REEVES Executive Vice President
--------------------- and Director
Michael S. Reeves
/s/ RICHARD P. TOFT Director
--------------------
Richard P. Toft
/s/ ARTHUR R. VELASQUEZ Director
------------------------
Arthur R. Velasquez
S-6
<PAGE>
EXHIBITS INDEX
The exhibits listed below are filed herewith and made a part hereof.
Exhibit Page
Number Description of Document Number
- ------- ----------------------- ------
4 Peoples Energy Corporation Long-Term Incentive
Compensation Plan (As amended and restated effective
February 24, 1995). . . . . . . . . . . . . . . . . . . . .
5a Opinion of Peter H. Kauffman, Assistant General Counsel
for the Company . . . . . . . . . . . . . . . . . . . . . .
5b Opinion of Hopkins & Sutter, tax counsel for the Company. .
23a Consent of Arthur Andersen LLP. . . . . . . . . . . . . . .
23b Consent of Peter H. Kauffman, Assistant General Counsel
for the Company, is contained in the opinion of counsel
filed as Exhibit 5a . . . . . . . . . . . . . . . . . . . .
23c Consent of Hopkins & Sutter is contained in the opinion of
counsel filed as Exhibit 5b . . . . . . . . . . . . . . . .
S-7
<PAGE>
LONG-TERM INCENTIVE COMPENSATION PLAN
Effective February 22, 1990
(Amended December 2, 1992, December 7, 1994 and February 24, 1995)
1. PURPOSE
The purpose of the Long-Term Incentive Compensation Plan ("the Plan")
is to attract, retain and motivate strong management employees by providing
additional incentive to key employees of Peoples Energy Corporation (the
"Company") and its Subsidiaries (as defined by paragraph 13) to acquire a
proprietary interest in the business of the Company and its Subsidiaries and by
encouraging the interest of such persons in the financial success and growth of
the Company. The Plan contemplates the granting of non-qualified stock options
(i.e. options which are not "statutory" within the meaning of Section 1.421-7(b)
of the regulations under the Internal Revenue Code of 1986, as amended)
("Options"), Stock Appreciation Rights ("SARs") or restricted stock awards, or
combinations thereof. A key employee may be granted and may hold one or more
Options, SARs, restricted stock awards or any combination thereof under this
Plan.
2. ADMINISTRATION
(a) GENERALLY
Except to the extent that this Plan applies to the Chief Executive
Officer, this Plan shall be administered solely by the Compensation-Nominating
Committee of the Board of Directors of the Company (the "Committee"). The
Committee shall be
<PAGE>
-2-
composed of not less than three persons who shall be appointed by the Board of
Directors of the Company (the "Board") from the membership of the Board. No
person who is an officer or employee of the Company or a Subsidiary shall be a
member of the Committee nor shall any person be a member of the Committee whose
membership would disqualify the Plan from complying with the requirements of
Rule 16b-3 under the Securities Exchange Act of 1934 or any successor rule
thereunder. Except to the extent that this Plan applies to the Chief Executive
Officer, the Committee is solely authorized to prescribe the form and content of
Options, SARs and restricted stock awards to be granted under the Plan, to
interpret the Plan, to prescribe, amend or rescind rules and regulations
relating to it, and to make all other determinations necessary or advisable for
its administration.
(b) CHIEF EXECUTIVE OFFICER
With respect to the Chief Executive Officer, this Plan shall be
administered by the Committee subject to the approval of the majority of all
members of the Board (including members of the Committee) who are not officers
or employees of the Company or a subsidiary and who are disinterested persons as
defined under Rule 16b-3 under the Securities Exchange Act of 1934 (the "Outside
Directors"). The Outside Directors shall not include any person whose inclusion
would disqualify the Plan from complying with the requirements of Rule 16b-3
under the Securities Exchange Act of 1934 or any successor rule thereunder.
With respect to the Chief Executive Officer, the Committee is authorized to
prescribe the form and content of
<PAGE>
-3-
Options, SARs and restricted stock awards to be granted under the Plan to
interpret the Plan, to prescribe, amend, or rescind rules and regulations
relating to it, and to make all other determinations necessary or advisable for
its administration, subject to the approval of the majority of the Outside
Directors. All references to the "Committee" contained in any provision of
paragraphs 3 through 13 of this Plan shall, to the extent that such provision
applies to the Chief Executive Officer, be deemed and construed to mean the
Committee, the decisions of which shall be subject to the approval of the
majority of the Outside Directors.
3. INCENTIVE AWARDS
Under the Plan participants may be granted any one or more of the
following:
(a) OPTIONS: non-qualified stock options to purchase stock of the
Company at a purchase price of 100 percent of the fair market
value of such Common Stock on the date that the Option is
granted. The stock under Options granted under the Plan shall be
shares of the Company's authorized but unissued common stock,
without par value ("Common Stock").
(b) SARS: a right to receive, for each SAR granted, cash in an
amount equal to the excess of the fair market value of one share
of the Common Stock of the Company on the date the SAR is
exercised
<PAGE>
-4-
over the fair market value of such Common Stock on the date the
SAR is granted.
(c) RESTRICTED STOCK AWARDS: shares of Common Stock which are
restricted as provided in paragraph 8.
Up to 1,800,000 shares of Common Stock (500,000 originally authorized
under the Plan plus an additional 500,000 authorized for grant by the
stockholders on February 28, 1986 plus an additional 400,000 authorized for
grant by the stockholders on February 23, 1990 plus an additional 400,000
authorized for grant by the stockholders on February 24, 1995) may be sold under
Options granted pursuant to the Plan or awarded pursuant to restricted stock
awards granted under the Plan, provided that the number of shares available for
sale or award hereunder shall be subject to adjustment as provided in paragraph
9. Up to 1,800,000 SARs (1,000,000 originally authorized under the Plan plus an
additional 400,000 authorized for grant by the stockholders on February 23, 1990
plus an additional 400,000 authorized for grant by the stockholders on February
24, 1995) may be granted pursuant to the Plan, provided that the number of SARs
available for granting hereunder shall be subject to adjustment as provided in
paragraph 9.
If an Option or SAR ceases to be exercisable in whole or in part by
reason of the expiration of the term of the Option or SAR, the termination of
the employment of the recipient or the waiver by a recipient of the right to
exercise an Option or SAR, the shares or SAR which were subject to such exercise
but as to which
<PAGE>
-5-
the recipient has not exercised, shall again become available for further grants
under the Plan. If a restricted stock award is forfeited in whole or in part by
reason of the termination of the employment of the recipient before such award
has become fully vested, the shares which were subject to such restricted stock
award but which were not vested shall again become available for further grants
under the Plan.
4. DESIGNATION OF RECIPIENTS AND ALLOTMENT OF SHARES AND SARS
The Committee shall determine and designate from time to time those
key employees of the Company and its Subsidiaries (including officers and
directors employed in capacities other than as directors only) to whom Options,
SARs and restricted stock awards, or any combination thereof, shall be granted
and who shall thereby become recipients. The Committee shall also determine the
number of shares of Common Stock to be optioned, the number of SARs to be
granted and the number of shares of restricted stock to be granted from time to
time to each recipient.
In selecting the key employees to whom Options, SARs or restricted
stock awards, or any combination thereof, shall be granted, as well as in
determining the number of SARs, shares under Option, or shares of restricted
stock to be granted to key employees, the Committee shall weigh the positions
and responsibilities of the individuals being considered, the nature of their
services to the Company, their past, present and potential contributions to the
success of the Company or its Subsidiaries, and such other factors as the
Committee shall deem relevant to accomplish the
<PAGE>
-6-
purposes of the Plan; provided, however, that a restricted stock award shall be
granted only in recognition of and as consideration for the performance of
services by the recipient or other consideration received by the Company prior
to the time of grant. Directors of the Company or its Subsidiaries who are not
officers or employees of the Company or its Subsidiaries shall not be eligible
to become recipients under the Plan. No Option, SAR or restricted stock award
shall be granted to any individual possessing more than 5 percent of the total
combined voting power or value of all classes of stock of the Company or of any
of its Subsidiaries. Each recipient shall agree to continue such recipient's
employee status for such period (not less than one year) as shall be provided in
the Option, SAR or restricted stock award, subject to the right of the
recipient's employer to terminate the recipient's employment at any time.
Options, SARs and restricted stock awards shall contain such conditions and
restrictions as to exercise, the purchase and delivery of shares, and the
forfeiture of shares, and such provisions as to the rights of the Company or its
Subsidiaries, as may be deemed advisable by the Committee.
The Committee may grant Options, SARs or restricted stock awards to
any key employee at any time or from time to time during the period of such
employee's employment under the Plan, in accordance with such determinations as
the Committee shall make from time to time. Options, SARs and restricted stock
awards need not contain similar provisions.
<PAGE>
-7-
5. TERM OF PLAN
No Option, SAR or restricted stock award may be granted under this
Plan after October 31, 2000.
6. OPTION AND SAR PRICE
Shares of the Common Stock of the Company shall be optioned and SARs
shall be granted from time to time at 100 percent of the fair market value of
the Common Stock on the date the Option or SAR is granted (rounded, in the case
of a fraction of a cent, to the nearest full cent above). The day on which the
Committee approves the granting of an Option or SAR shall be considered the date
on which such Option or SAR is granted. The fair market value of the Common
Stock on the date the Option or SAR is granted shall be the mean between the
highest and lowest quoted selling price in the New York Stock Exchange Composite
Transactions on such date or, if such stock was not traded on such date, on the
last preceding date on which such stock was traded.
7. TERMS OF OPTIONS AND SARS
Each Option or SAR granted under the Plan shall be evidenced by a
written agreement which shall comply with and be subject to the following terms
and conditions:
<PAGE>
-8-
(a) Full payment for shares purchased shall be made in cash and/or
Common Stock of the Company at the time or times the Option is
exercised in whole or in part. Payment in Common Stock may be
made at the recipient's election by the Company's deducting from
the number of shares otherwise deliverable upon the exercise of
the Option such number of shares of Common Stock as shall have a
value equal to the amount of the Option exercise price. Any such
Common Stock submitted in payment for an Option shall be valued
at the mean between the highest and lowest quoted selling price
of such Common Stock of the Company in the New York Stock
Exchange Composite Transactions on the date of exercise or, if
such stock was not traded on such date, on the last preceding
date on which such stock was traded. No shares shall be issued
pursuant to the exercise of an Option until full payment thereof
has been made and no person shall have any of the rights of a
stockholder with respect to Options held, except to the extent
such Options have been exercised and the shares issued to such
person.
(b) A recipient's rights to exercise an Option or SAR shall terminate
when the recipient is no longer an employee of the Company or any
of its Subsidiaries unless such recipient's employment is
<PAGE>
-9-
terminated by reason of such recipient's death, disability or
retirement.
(c) If a recipient dies prior to termination of such recipient's
Option or SAR without having fully exercised such Option or SAR,
the estate of the recipient or any person who acquires the right
to exercise such Option or SAR by bequest or inheritance or by
reason of the death of the recipient shall have the right to
exercise the Option or SAR during its term within the eighteen
month period after the recipient's death, but only to the extent
such Option or SAR was exercisable by such recipient immediately
prior to such recipient's death.
(d) If a recipient's employment is terminated by reason of such
recipient's disability (as determined in the sole discretion of
the Committee) prior to termination of such recipient's Option or
SAR without the recipient's having fully exercised such Option or
SAR, such recipient shall have the right to exercise the Option
or SAR during its term within such period as may be provided at
the time of the grant, not to exceed three years after
termination of employment, but only to the extent such Option or
SAR was exercisable by such recipient immediately prior to such
recipient's termination of employment.
<PAGE>
-10-
(e) If a recipient retires prior to termination of such recipient's
Option or SAR without having fully exercised such Option or SAR,
such recipient shall have the right to exercise the Option or SAR
during its term within such period as may be provided at the time
of the grant, not to exceed three years after retirement, but
only to the extent such Option or SAR was exercisable by the
recipient immediately prior to such recipient's retirement.
(f) Options and SARs shall not be transferable other than by will or
by the laws of descent and distribution and during a recipient's
lifetime shall be exercisable only by the recipient or the
recipient's guardian or legal representative.
(g) Subject to paragraph 7(k) below, no Option or SAR granted under
this Plan shall be exercisable before the expiration of one year
from the date of grant of such Option or SAR.
(h) Options and SARs granted under this Plan shall contain such
provisions as may be deemed advisable by the Committee.
(i) Subject to paragraph 7(k) below, until a recipient has completed
five years of service, the total number of Options and SARs that
may be exercised by such recipient during the first four years
after such Options and SARs are granted thereto shall not exceed
the
<PAGE>
-11-
following percentages of the number of Options and SARs so
granted:
Years Since Option Percentage of Options
Or SAR Is Granted Or SARs Exercisable
------------------ ---------------------
less than 1 None
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
Notwithstanding the above, the Committee may, in its sole
discretion, accelerate the exercisability under this paragraph
7(i) of any or all Options and/or SARs granted under the Plan.
(j) In no event shall any Option or SAR granted under the Plan be
exercisable after the expiration of ten years from the date such
Option or SAR is granted.
(k) All outstanding Options and SARs granted under the Plan shall
immediately become exercisable upon the occurrence of a Change in
Control (as defined by paragraph 13).
8. TERMS OF RESTRICTED STOCK AWARDS
Each restricted stock award granted under the Plan shall be evidenced
by a written agreement which shall comply with and be subject to the following
terms and conditions:
<PAGE>
-12-
(a) Shares of Common Stock covered by a restricted stock award may
not be sold, assigned, transferred or otherwise disposed of, or
mortgaged, pledged or otherwise encumbered until such shares have
become fully vested pursuant to paragraph 8(d) or 8(f).
(b) The recipient of a restricted stock award shall have the right to
vote the shares of Common Stock covered by such award and to
receive dividends thereon, unless and until such shares are
forfeited pursuant to paragraph 8(e).
(c) Shares of Common Stock covered by a restricted stock award will
be held by the Company until such shares have become vested
pursuant to paragraph 8(d) or 8(f), and will thereupon, subject
to the satisfaction of the withholding obligations described in
paragraph 11, be delivered to the recipient.
(d) Shares of Common Stock covered by a restricted stock award
granted to a recipient shall vest in accordance with the terms of
the grant; provided, however, that shares of Common Stock covered
by a restricted stock award granted to a recipient shall vest
with respect to 100% of the shares covered by the restricted
stock award upon the termination of the recipient's employment by
reason of death, disability (as determined in the sole discretion
of the Committee) or retirement after attaining age 65 (or such
earlier
<PAGE>
-13-
date as determined by the Committee). In addition, the Committee
may, in its sole discretion, accelerate the vesting of any or all
restricted stock awards granted under the Plan.
(e) In the event of the termination of employment of the recipient of
a restricted stock award other than by reason of death,
disability (as determined in the sole discretion of the
Committee) or retirement after attaining age 65 (or such earlier
date as determined by the Committee) the recipient will forfeit
the shares of Common Stock covered by the restricted stock award
which are not vested.
(f) All outstanding restricted stock awards granted under the Plan
shall immediately become fully vested upon the occurrence of a
Change in Control (as defined by paragraph 13).
(g) Restricted stock awards granted under this Plan shall contain
such provisions as may be deemed advisable by the Committee.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
In the event there is any change in the Common Stock of the Company
through the declaration of stock dividends, or through recapitalization
resulting in stock split-ups, or combinations or exchanges of shares, or
otherwise, then the number of SARs and shares remaining available for future
grants of Options and restricted stock awards under the Plan and exercisable
under existing grants of SARs and Options
<PAGE>
-14-
shall be appropriately adjusted by the Committee. Appropriate adjustment shall
also be made in the SAR price and the Option price per share.
10. AMENDMENT
The Board may, by resolution, at any time and from time to time,
amend, revise or terminate this Plan, except that, without stockholder approval,
no amendment shall increase the maximum number of SARs or shares which may be
sold pursuant to Options or covered by restricted stock awards granted under the
Plan or reduce the Option price of any Option or the SAR price of any SAR
(except as provided by paragraph 9), change the class of employees eligible to
receive SARs, Options or restricted stock awards under the Plan, or extend the
term of the Plan. Except as otherwise provided in the Plan, no SAR, Option or
restricted stock award previously granted under the Plan may be altered or
impaired without the consent of the holder of the SAR, Option or restricted
stock award.
11. TAXES
The Company may make such provisions and take such steps as it may
deem necessary or appropriate for the withholding of all federal, state and
local taxes required by law to be withheld with respect to Options, SARs and
restricted stock awards granted pursuant to the Plan including, but not limited
to (a) deducting the amount required to be withheld from any other amount then
or thereafter payable to a
<PAGE>
-15-
recipient or legal representative, and (b) requiring a recipient or legal
representative to pay to the Company the amount required to be withheld as a
condition of releasing shares of Common Stock. In addition, subject to the
Committee's sole discretion and to such rules and regulations as the Committee
shall from time to time establish, a recipient shall be permitted to satisfy
federal, state and local taxes, if any, imposed upon the exercise of an Option
or the vesting of a restricted stock award at a rate up to such recipient's
maximum marginal tax rate with respect to each such tax by (i) electing to have
the Company deduct from the number of shares of Common Stock otherwise
deliverable upon the exercise of an Option or the vesting of a restricted stock
award such number of shares of Common Stock as shall have a value equal to the
amount of tax to be withheld, or (ii) delivering to the Company such number of
shares of Common Stock or combination of shares of Common Stock and cash as
shall have a value equal to the amount of tax to be withheld.
12. EFFECTIVE DATE
Any amendment to this Plan requiring shareholder approval shall become
effective upon approval thereof by the holders of a majority of the Company's
outstanding shares of Common Stock, provided such approval occurs within twelve
months of the date such amendment is adopted by the Board. No SARs or shares of
Common Stock shall be issued pursuant to this Plan prior to compliance with
requirements under applicable laws and regulations.
<PAGE>
-16-
13. DEFINITIONS AND MISCELLANEOUS
For purposes of this Plan, a Subsidiary is any corporation more than
50 percent of the total combined voting power of which is owned by the Company
or by another corporation qualifying as a Subsidiary within this definition, or
by a combination of any of them.
For purposes of this Plan, a Change in Control means that any of the
following events has occurred:
(a) twenty percent (20%) or more of the Company's outstanding shares
of Common Stock have been acquired by any person (as defined by
Section 3(a)(9) of the Securities Exchange Act of 1934) other
than directly from the Company;
(b) there has been a merger or equivalent combination after which
forty-nine percent (49%) or more of the voting stock of the
surviving corporation is held by persons other than former
stockholders of the Company; or
(c) twenty percent (20%) or more of the directors elected by
stockholders to the Board of Directors of the Company are persons
who were not nominated by management in the most recent proxy
statement of the Company.
<PAGE>
-17-
The transfer of an employee from the Company to a Subsidiary or from a
Subsidiary to the Company or another Subsidiary shall not be a termination of
employment or an interruption of continuous employment for the purposes of this
Plan.
No SAR, Option, restricted stock award, shares of Common Stock
issuable upon the exercise of an Option or cash payable incident to the exercise
of an SAR granted under this Plan shall be transferable or assignable by
anticipation either by the voluntary or involuntary act of the recipient or by
operation of law, or be liable for any debts or liabilities of the recipient,
except as provided herein.
Nothing herein shall entitle any employee to remain in the employ of
the Company or any of its Subsidiaries or affect the right of such employer to
discharge such employee with or without cause.
This Plan shall be construed according to the laws of the State of
Illinois.
<PAGE>
[PEOPLES ENERGY CORPORATION LETTERHEAD]
October 3, 1995
Peoples Energy Corporation
130 East Randolph Drive
Chicago, Illinois 60601
Re: Peoples Energy Corporation
Long-Term Incentive Compensation Plan
-------------------------------------
Ladies and Gentlemen:
Reference is made to that certain Registration Statement on Form S-8
dated October 4, 1995 (the "Registration Statement") prepared for filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, in connection with the registration by Peoples Energy Corporation (the
"Company") of 400,000 shares of common stock of the Company reserved for
purchase by key employees of the Company and its participating subsidiaries
under options granted pursuant to the Peoples Energy Corporation Long-Term
Incentive Compensation Plan (the "Plan") or for award to such employees under
restricted stock awards and/or stock appreciation rights granted pursuant to the
Plan, it is the opinion of the undersigned that:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Illinois.
2. The number of shares of common stock which the Company is
authorized to issue is 60,000,000, of which, as of September 30, 1995,
34,913,426 shares, all fully paid and nonassessable, are issued and outstanding.
3. No approval or authorization of, or registration or declaration
with any public regulatory body, state or federal, is required for the valid
authorization, issuance and sale of the common stock under and pursuant to the
Plan, except the registration effected by the Registration Statement and except
any filings and approval required under state securities or blue sky laws.
4. Subject to the effectiveness of the Registration Statement and
subject to compliance with securities or blue sky laws of the several states
wherever required to permit the valid offer, issuance and sale of the Company's
common stock, said common stock, when issued and sold or granted in the manner
contemplated by the Registration Statement, will be legally issued, fully paid
and nonassessable shares of common stock of the Company.
<PAGE>
Peoples Energy Corporation
October 3, 1995
Page 2
In arriving at the foregoing opinions, I have supervised and
participated in preparing and amending the Plan. I have examined or caused to
be examined originals or copies of all such other agreements and instruments,
certificates of public officials and such other documents and instruments, and
have made or caused to be made such investigations of law and fact as I have
deemed relevant and necessary for the purpose of rendering the foregoing
opinions. In making such investigations and examinations, I have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
me as originals and the conformity with the originals of all documents submitted
to me as copies.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and further hereby consent to the reference to my name
under the heading "Interests of Named Experts and Counsel" in the Registration
Statement.
Very truly yours,
/s/ Peter Kauffman
---------------------------------
Peter Kauffman
Assistant General Counsel
<PAGE>
[HOPKINS & SUTTER LETTERHEAD]
STEWART R. SHEPHERD 61732-XX001
(312) 558-6697
September 29, 1995
Mr. Emmet P. Cassidy
Secretary and Treasurer
Peoples Energy Corporation
130 East Randolph Drive
Chicago, Illinois 60601
Re: Peoples Energy Corporation Long-Term
Incentive Compensation Plan (the "Plan")
----------------------------------------
Dear Mr. Cassidy:
You have requested our opinion with respect to (i) the Federal income tax
consequences of the Plan, (ii) the applicability to the Plan of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), (iii) the status
of the Plan under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and (iv) the status of the stock options granted pursuant
to the Plan under Section 1.421-7(b) of the regulations under the Code.
In our opinion, the Federal income tax consequences of the Plan are as
follows:
A recipient will not realize taxable income at the time of the grant of a
non-qualified stock option (an "Option") under the Plan. However, upon the
exercise of an Option, a recipient who is not subject to the short-swing profit
liability provisions of Section 16(b) of the Securities Exchange Act of 1934
will realize ordinary income in an amount measured by the excess, if any, of the
fair market value of the shares of Peoples Energy Corporation (the "Company")
common stock ("Common Stock") acquired upon exercise of the Option on the date
of exercise over the Option price, and the Company will be entitled to a
corresponding deduction at the same time and in the same amount. Upon a
subsequent disposition of such shares, the recipient will realize short-term or
long-term capital gain or loss depending upon the recipient's holding period for
such shares, with the basis for computing such gain or loss equal to the Option
price plus the amount of ordinary income realized upon exercise.
<PAGE>
Mr. Emmet P. Cassidy
September 29, 1995
Page 2
A recipient will not realize taxable income at the time of the grant of a
stock appreciation right (an "SAR"). Upon exercise, however, such recipient
will realize ordinary income measured by the cash received (including taxes
withheld); and the Company will be entitled to a corresponding deduction at the
same time and in the same amount.
The exercise of an Option through the exchange of shares of previously
acquired Company Common Stock will generally be treated as a nontaxable exchange
as to the number of shares given up and the identical number of shares received
under the Option. That number of shares will take the same basis and, for
capital gain purposes, the same holding period as the shares which are given up.
The fair market value of the shares received upon such an exchange which are in
excess of the number given up will be taxed to the recipient at the time of the
exercise as ordinary income. The excess shares will have a new holding period
for capital gain purposes and a basis equal to the fair market value of such
shares determined at the time of exercise.
The so-called "cashless" exercise of an Option under which the number of
shares received under the Option is reduced by that number of shares with a fair
market value equal to the Option price results in taxable ordinary income to the
recipient at the time of exercise in an amount equal to the fair market value of
the shares received. The holding period of such shares for capital gain
purposes will begin on the day following the date of exercise and such shares
will have a basis for tax purposes equal to the fair market value of the shares
on the date of exercise.
A recipient who is subject to the short-swing profit liability provisions
of Section 16(b) of the Securities Exchange Act of 1934 and who acquires shares
of Common Stock pursuant to the exercise of an Option will generally realize
ordinary income at the later of (a) the time of exercise or (b) the end of a
period of six months following the date of grant of such Option, in an amount
equal to the excess, if any, of the fair market value of the Option shares at
that time over the Option price. The Company will be entitled to a deduction
equal to the amount of ordinary income realized by the recipient. Such
deduction is allowed in the taxable year of the Company which includes the end
of the recipient's taxable year in which the amount is included in the
recipient's income. For purposes of determining whether the recipient would
have long-term or short-term capital gain upon the subsequent sale of the
shares, the recipient's holding period begins to run on the date the recipient
realizes ordinary income.
A recipient who is subject to the limitations imposed by Section 16(b) of
the Securities Exchange Act of 1934 and who acquires shares of Company Common
Stock pursuant to the exercise of an Option may, by filing an election with the
Internal Revenue Service within 30 days of the date of exercise of the Option,
elect to be taxed
<PAGE>
Mr. Emmet P. Cassidy
September 29, 1995
Page 3
as if the limitations of Section 16(b) did not apply to him. If such an
election is made, the Company will be entitled to a deduction equal to the
amount of ordinary income realized by the recipient. Such deduction is allowed
in the taxable year of the Company which includes the end of the recipient's
taxable year in which the amount is included in the recipient's income. Any
subsequent disposition of the shares will result in capital gain or loss with
the holding period beginning on the day following the date of exercise. In
determining the amount of gain or loss, the recipient's basis will be the fair
market value of the shares on the date of exercise.
A recipient will not realize taxable income at the time of grant of a
restricted stock award, assuming that the restrictions constitute a substantial
risk of forfeiture for Federal income tax purposes. Upon the vesting of shares
of Company Common Stock subject to an award, the recipient will realize ordinary
income in an amount equal to the excess of the fair market value of such shares
at such time over the amount paid by the recipient, if any. The Company will be
entitled to a deduction equal to the amount of ordinary income realized by the
recipient. Such deduction is allowed in the taxable year of the Company which
includes the end of the recipient's taxable year in which the amount is included
in the recipient's income. Dividends paid to the recipient during the
restriction period will be taxable as compensation income to the recipient at
the time paid and will be deductible at such time by the Company. The recipient
of a restricted stock award may, by filing an election with the Internal Revenue
Service within 30 days of the date of grant of the restricted stock award,
elect to be taxed at the time of grant of the award on the excess of the then
fair market value of the shares of Company Common Stock over the amount paid by
the recipient, if any, in which case (1) the Company will be entitled to a
deduction equal to the amount of ordinary income realized by the recipient (such
deduction is allowed in the taxable year of the Company which includes the end
of the recipient's taxable year in which the amount is included in the
recipient's income), (2) dividends paid to the recipient during the restriction
period will be taxable as dividends to the recipient and not deductible by the
Company, and (3) there will be no further tax consequences to either the
recipient or the Company when the restrictions lapse.
Upon exercise of an Option or the vesting of shares included in a
restricted stock award, the Company is obligated to withhold against the
recipient's Federal and state income and employment tax liability. Payment of
the withholding obligation can be made from other amounts due from the Company
to the recipient or with shares of Company Common Stock owned by the recipient.
If the recipient elects to tender shares of Company Common Stock or to reduce
the number of shares the recipient is otherwise entitled to receive to satisfy
the withholding obligation, the shares tendered or reduced will be treated as
having been sold to the Company.
<PAGE>
Mr. Emmet P. Cassidy
September 29, 1995
Page 4
It is our further opinion that (i) the Plan is not subject to the
provisions of ERISA, (ii) the Plan is not a qualified plan under Section 401(a)
of the Code, and (iii) Options granted under the Plan are not "statutory"
options within the meaning of Section 1.421-7(b) of the regulations under the
Code.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement on Form S-8 to be filed by Peoples Energy Corporation
under the Securities Act of 1933, as amended, and further hereby consent to the
reference to our name under the heading "Tax Consequences" in the prospectus
comprising a part of such Registration Statement and under the hearing
"Interests of Named Experts and Counsel" in the Registration Statement.
Sincerely,
HOPKINS & SUTTER
By: /s/ Stewart R. Shepherd
------------------------------------
Stewart R. Shepherd, a Partner
SRS/wvd
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement related to Peoples Energy
Corporation's (the "Company's") Long-Term Incentive Compensation Plan of our
report, dated November 2, 1994, included in the Company's annual report on Form
10-K for the year ended September 30, 1994, and to all references to our firm
included in this Registration Statement.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois,
October 3, 1995
