(As filed on December 15, 2004)
File No. 70-[____]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-1
DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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NATIONAL FUEL GAS COMPANY
6363 Main Street
Williamsville, New York 14221
(Name of company filing this statement
and address of principal executive office)
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NATIONAL FUEL GAS COMPANY
(Name of top registered holding company)
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Philip C. Ackerman
Chairman of the Board, President, and Chief Executive Officer
National Fuel Gas Company
6363 Main Street
Williamsville, New York 14221
(Name and address of agent for service)
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The Commission is requested to send copies of all notices, orders and other
communications in connection with this Declaration to:
James P. Baetzhold, Esq. Andrew F. MacDonald, Esq.
National Fuel Gas Company Thelen Reid & Priest LLP
6363 Main Street 701 Pennsylvania Avenue, N.W.
Williamsville, New York 14221 Washington, DC 20004
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
1.1 Introduction. National Fuel Gas Company ("National" or the
Company"), a New Jersey corporation, is a public-utility holding company
registered under the Public Utility Holding Company Act of 1935, as amended (the
"Act"). Through its direct and indirect subsidiaries, National is engaged in all
phases of the natural gas business, namely: exploration, production, purchasing,
gathering, processing, transportation, storage, retail distribution, and
wholesale and retail marketing. National owns all of the issued and outstanding
common stock of National Fuel Gas Distribution Corporation, a gas-utility
company which distributes natural gas at retail to approximately 732,000
residential, commercial and industrial customers (including transportation-only
customers) in portions of western New York and northwestern Pennsylvania.
National's principal non-utility subsidiaries include National Fuel Gas Supply
Corporation, Empire State Pipeline, Seneca Resources Corporation, National Fuel
Resources, Inc., Highland Forest Resources, Inc., Horizon Energy Development,
Inc., and Horizon LFG, Inc. (formerly Upstate Energy Inc.).
For the twelve months ended September 30, 2004, National reported
operating revenues of approximately $2.0 billion, of which $1.1 billion (56%)
were attributable to regulated utility gas sales. As of September 30, 2004,
National and its subsidiaries had total assets of approximately $3.7 billion,
including approximately $3.0 billion in net property, plant and equipment.
National is currently authorized under the terms of its Restated Certificate of
Incorporation ("Certificate of Incorporation") (Exhibit A-1 hereto) to issue 200
million shares of common stock, $1 par value ("Common Stock"), of which
83,178,717 were issued and outstanding as of November 30, 2004, and 10 million
shares of preferred stock, $1 par value, of which none have been issued.
National's shares are listed for trading on the New York Stock Exchange
("NYSE").
In this Declaration, National is seeking Commission authorization to
amend its Certificate of Incorporation, as described below, as it relates to
voting by National's common stockholders on certain matters, in order to
eliminate an ambiguity in the Certificate of Incorporation and to harmonize the
requirements for shareholder votes under the Certificate of Incorporation with
the requirements under the New Jersey Business Corporation Act (the
"B.C.A."),/1/ and, in connection with such amendment, to solicit proxies from
its shareholders for use at the Company's annual meeting of shareholders
scheduled for February 17, 2005, and any adjournment or adjournments thereof
("Annual Meeting").
1.2 Amendment to Certificate of Incorporation. The Board of Directors
of the Company has proposed an amendment to Article EIGHTH of the Certificate of
Incorporation to revise the provisions relating to shareholder votes on certain
actions. The purpose of the proposed amendment is to enable National to engage
in relatively routine transactions or transactions that do not affect the rights
or voting power of stockholders, as described below, without incurring the
expense and delay of a stockholders meeting, while preserving the stockholders'
rights to vote on other transactions as described below. The proposed amendment
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1 New Jersey Statutes ss.14A:1-1 et seq.
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must be approved by the affirmative vote of a majority of the votes cast by the
holders of the outstanding shares of Common Stock entitled to vote at the Annual
Meeting. The proposed amendment to Article EIGHTH of the Certificate of
Incorporation is set forth as Appendix D to the Preliminary Proxy Statement
("Proxy Statement") filed by National under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), which is incorporated herein by reference as
Exhibit B. Appendix E to the Proxy Statement shows, with deletions indicated by
strike-throughs and additions by underlining, how Article EIGHTH would change if
the proposed amendment is approved by National's shareholders.
The proposed amendment would conform the requirements for obtaining
shareholder votes on certain actions, as set forth in Article EIGHTH of the
Certificate of Incorporation, to the requirements of the B.C.A. The actions
affected by the proposed amendment are: (1) amendments to the Certificate of
Incorporation, (2) approval of a plan of merger or consolidation, (3) a sale,
lease, exchange or other disposition of all, or substantially all, the assets of
the Company otherwise than in the usual and regular course of business, and (4)
dissolution. The B.C.A. generally requires shareholder approval of all of these
actions. However, for each of these actions, the B.C.A. provides one or more
exceptions to the requirement of shareholder approval. In contrast, under
Article EIGHTH of the Certificate of Incorporation, only the exceptions relating
to amendments to a certificate of incorporation are currently applicable to the
Company. The proposed amendment would make the remaining exceptions provided
under the B.C.A. applicable to the Company as well. Each of the actions affected
by the proposed amendment is discussed below.
(a) Amendments to the Certificate of Incorporation. Article
EIGHTH of the Certificate of Incorporation currently requires shareholder
approval for "amendments to the Certificate of Incorporation, including
restatements, where shareholder approval is required or requested." (Emphasis
added.) As previously indicated, the B.C.A. also generally requires shareholder
approval of amendments to a company's certificate of incorporation, but provides
that such shareholder approval is not required for certain types of non-critical
amendments, including, but not limited to, amendments which would change a
company's registered office or registered agent and amendments which would
change a company's authorized shares in connection with transactions such as
share dividends, divisions or combinations. The proposed amendment would simply
delete from Article EIGHTH the ambiguous term "or requested," because it is not
clear whether the term refers to requests made by the Board of Directors,
management, shareholders, or any of them, and no procedures are specified in the
Certificate of Incorporation regarding the form or timing of requests.
(b) Plan of Merger or Consolidation. Article EIGHTH of the
Certificate of Incorporation further provides that "a plan of merger or
consolidation" approved by the Board of Directors must be approved by
shareholders. The B.C.A., in contrast, requires shareholder approval of
consolidations, in which two or more companies consolidate to form a new
company, and of mergers that change the rights of shareholders or materially
affect shareholder voting power, but permits certain other merger transactions
to proceed without the approval of shareholders of the surviving corporation.
Specifically, the B.C.A. provides that the approval of the
shareholders of the surviving corporation in a merger is not required to
authorize the merger (unless the corporation's certificate of incorporation
otherwise provides) if the following four conditions are met: (1) the plan of
merger does not make an amendment of the certificate of incorporation of the
surviving corporation which
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is required by the provisions of the B.C.A. to be approved by the shareholders,
(2) each shareholder of the surviving corporation whose shares were outstanding
immediately before the effective date of the merger will hold the same number of
shares, with identical designations, preferences, limitations, and rights,
immediately after, (3) the number of voting shares outstanding immediately after
merger, plus the number of voting shares issuable on conversion of other
securities or on exercise of rights and warrants issued pursuant to the merger,
will not exceed by more than 40% the total number of voting shares of the
surviving corporation outstanding immediately before the merger, and (4) the
number of participating shares outstanding immediately after the merger, plus
the number of participating shares issuable on conversion of other securities or
on exercise of rights and warrants issued pursuant to the merger, will not
exceed by more than 40% the total number of participating shares of the
surviving corporation outstanding immediately before merger. The proposed
amendment to Article EIGHTH of the Certificate of Incorporation would make these
statutory exceptions applicable to the Company and thereby eliminate the cost of
soliciting shareholder approvals in cases where it is not otherwise required by
law./2/
(c) Sale of All or Substantially All Assets. The third action for
which shareholder approval is required under Article EIGHTH of the Certificate
of Incorporation is "a sale, lease, exchange or other disposition of all, or
substantially all, the assets of the corporation otherwise than in the usual and
regular course of business." The Company's shareholders will continue to have
the right to vote on the sale of substantially all the Company's assets to a
third party. However, the B.C.A. provides that a parent corporation may
transfer, without shareholder approval, any or all of its assets to any
corporation all of the outstanding shares of which are owned, directly or
indirectly, by the parent corporation, unless the parent corporation's
certificate of incorporation otherwise requires. The proposed amendment would
permit National to transfer all or substantially all of its assets to any wholly
owned subsidiary without shareholder approval. National has no present plans,
agreements or commitments to transfer any significant portion of its assets to
any other corporation (affiliated or unaffiliated) and is not requesting
authorization herein to engage in any such transaction.
(d) Dissolution. The fourth action for which shareholder approval
is required under Article EIGHTH of the Certificate of Incorporation is
dissolution of the Company. In contrast, under the B.C.A., a corporate officer
may dissolve a corporation without shareholder approval in the following
circumstances: (1) the corporation has no assets, (2) the corporation has ceased
doing business and does not intend to recommence doing business, (3) the
corporation has not made any distributions of cash or property to its
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2 It should be noted that the proposed amendment to Article EIGHTH of the
Certificate of Incorporation would not change the applicability to National of
the requirements of the NYSE regarding shareholder votes in connection with
certain transactions, including mergers, even where National would be the
surviving corporation. For example, the NYSE currently requires shareholder
approval prior to the issuance of common stock in a merger transaction if (1)
the common stock has, or will have upon issuance, voting power equal to or in
excess of 20% of the voting power outstanding before the issuance of such stock,
or (2) the number of shares of common stock to be issued is, or will be upon
issuance, equal to or in excess of 20% of the number of shares of common stock
outstanding before the issuance of the common stock. Thus, National would be
required by the NYSE to obtain shareholder approval of a merger, even though it
is the surviving corporation and even though the four conditions of the B.C.A.
noted in the text are met, if the number of shares of Common Stock to be issued
by National would equal or exceed 20% of the number of shares outstanding before
the merger.
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shareholders within the last 24 months and does not intend to make any
distribution following its dissolution, and (4) the officer has given 30 days
prior written notice of his intention to dissolve the corporation by mail or
personal service to all known directors and shareholders at their last known
address and no director or shareholder has objected to the proposed dissolution.
The proposed amendment would permit an officer of the Company to dissolve the
Company without shareholder approval in these limited circumstances. However,
National is not requesting authorization herein to engage in any transaction
that would constitute or result in a dissolution of the Company.
1.3 The Proxy Solicitation. National requests an order pursuant to
Rule 62(d) authorizing it to solicit proxies from its shareholders for the
approval of the proposed amendment to the Certificate of Incorporation. Such
proxies are being solicited by National's Board of Directors for use at the
Annual Meeting, which is scheduled for February 17, 2005. In order to allow for
timely receipt of proxies for the Annual Meeting, National intends to file the
definitive proxy materials with the Commission under Section 14 of the 1934 Act
on January 6, 2005, and commence the solicitation immediately thereafter.
Accordingly, National is requesting that the Commission's notice of the proposed
transaction be issued not later than January 6, 2005, and that such notice
include an order authorizing commencement of the solicitation.
The costs of solicitation will be paid by National. (See Item 2
below.) In addition to the use of the mails, proxies may be solicited on behalf
of the directors personally, or by telephone or telecopy, by employees of
National and its subsidiaries with no special compensation to these employees.
Morrow & Co., Inc., has been retained to assist in the solicitation of proxies.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
It is estimated that the expenses to be incurred by National in
connection with the proposed transactions are as follows:
Printing and mailing of proxy material $60,000
Expenses associated with the Annual
Meeting of Shareholders $20,000
Fees and expenses of The Bank of New York
(transfer agent and registrar) $17,500
Morrow & Co., Inc. (proxy solicitation services fee) $62,000
Legal fees (including New Jersey counsel) $12,000
Miscellaneous out-of-pocket expenses $ 2,000
________
Total $173,500
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ITEM 3. APPLICABLE STATUTORY PROVISIONS.
3.1 General. Sections 6(a)(2), 7 and 12(e) of the Act and Rules 54,
62(d) and 65 are deemed applicable to the amendment of the Certificate of
Incorporation and the solicitation of proxies for use at the Company's Annual
Meeting in 2005.
3.2 Rule 54 Analysis.Rule 54 provides that, in determining whether to
approve any transaction by a registered holding company that is unrelated to any
"exempt wholesale generator" ("EWG") or "foreign utility company" ("FUCO"), the
Commission shall not consider the effect of the capitalization or earnings of
any EWG or FUCO on the holding company system if the requirements of Rule 53(a),
(b) and (c) are met. National is currently in compliance with all requirements
of Rule 53(a). Specifically, National's "aggregate investment" (as defined in
Rule 53(a)(1)) in all EWGs and FUCOs is $153.4 million as of September 30, 2004,
or 22% of National's "consolidated retained earnings" (also as defined in Rule
53(a)(1)) as of September 30, 2004 ($712.0 million). National is in compliance
with and will continue to comply with the requirements of Rule 53(a)(2), (a)(3)
and (a)(4). Further, none of the conditions or circumstances described in Rule
53(b) has occurred or is continuing. Accordingly, Rule 53(c) is by its terms
inapplicable.
ITEM 4. REGULATORY APPROVAL.
No State commission and no Federal commission, other than the
Commission, has jurisdiction over any of the proposed transactions.
ITEM 5. PROCEDURE.
National requests that the Commission issue a notice under Rule 23
with respect to the filing of this Declaration as soon as practicable after the
proxy statement with respect to the solicitation has been declared effective
under the 1934 Act, and that such notice include an order authorizing
commencement of the solicitation. National further requests that the
Commission's order approving the proposed transaction be issued as soon as the
rules allow, and that there should not be a 30-day waiting period between
issuance of the Commission's order and the date on which the order is to become
effective. National hereby waives a recommended decision by a hearing officer or
any other responsible officer of the Commission and consents to the assistance
of the Division of Investment Management in the preparation of the Commission's
decision and/or order, unless the Division opposes the matters proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
The following exhibits and financial statements are made a part of
this Declaration:
(a) Exhibits
A-1 Certificate of Incorporation of Incorporation (incorporated
by reference to Exhibit 3.1, Annual Report of National on
Form 10-K for fiscal year ended September 30, 1998 in File
No. 1-3880).
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A-2 Bylaws of National, as amended on December 9, 2004
(incorporated by reference to Exhibit 3(ii), Current Report
of National on Form 8-K dated December 9, 2004 in File No.
1-3880).
A-3 Form of Proposed Amendment to Certificate of Incorporation
of Incorporation (included as Appendix D to the Proxy
Statement) (Exhibit B hereto).
B Notice of Annual Meeting, Proxy Statement and Proxy Card of
National filed on December 13, 2004 (incorporated by
reference to Schedule 14A/Preliminary Proxy Statement in
File No. 1-3880).
C Not Applicable.
D Not Applicable.
E Not Applicable.
F-1 Opinion of counsel (to be filed by amendment). F-2 Opinion
of special New Jersey counsel (to be filed by amendment).
G Proposed form of Federal Register Notice.
(b) Financial Statements
FS-1 Consolidated Balance Sheets of National and subsidiaries as
of September 30, 2004. (Incorporated by reference to the
Annual Report on Form 10-K of National for the fiscal year
ended September 30, 2004.) (File No. 1-3880.)
FS-2 Consolidated Statements of Income and Retained Earnings of
National and subsidiaries for the fiscal year ended
September 30, 2004. (Incorporated by reference to the Annual
Report on Form 10-K of National for the fiscal year ended
September 30, 2004.) (File No. 1-3880.)
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
The proposed transaction outlined herein does not involve a major
action which will significantly adversely affect the quality of the U.S.
environment. No federal agency has prepared or is preparing an environmental
impact statement with respect to the matters contemplated in this Declaration.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Declaration to be signed
on its behalf by the undersigned thereunto duly authorized.
NATIONAL FUEL GAS COMPANY
By: /s/ P. C. Ackerman
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Name: P. C. Ackerman
Title: Chairman of the Board of
Directors, President, and
Chief Executive Officer
Date: December 15, 2004
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