(As filed on January 5, 2005)
File No. 70-10273
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-1/A
AMENDMENT NO. 1
TO
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
The Declaration filed in this proceeding on December 15, 2004 is hereby
amended and restated in its entirety to read as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
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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 Article EIGHTH of 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 Article EIGHTH and to harmonize the
requirements for shareholder votes under Article EIGHTH of 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 2005 annual meeting of
shareholders, currently scheduled for February 17, 2005 ("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 proposed amendment 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
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1 New Jersey Statutes Annotated ss.14A:1-1 et seq.
2
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, subject to certain
exceptions for circumstances in which the rights and voting power of existing
shareholders may be adversely affected, amendments which would change a
company's authorized shares in connection with transactions such as share
dividends, divisions (i.e., stock splits) or combinations (i.e., reverse stock
splits). 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. also 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 unlike current Article EIGHTH 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
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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
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 this
exception applicable to the Company and thereby eliminate the cost of soliciting
shareholder approvals in cases where it is not otherwise required by law.
Accordingly, if the amendment is approved, shareholder approval would
not be required under the B.C.A. for a merger in which the Company is the
surviving corporation if (1) no change is made to the Certificate of
Incorporation in connection with the merger, (2) each existing shareholder of
the Company holds the same number of shares of Common Stock, with the same
designations, preferences, limitations and rights, after the merger as he or she
held before the merger, and (3) the additional number of shares, if any, of
Common Stock (which has full voting and participation rights) issued in
connection with the merger is not greater than 40% of the number of shares
outstanding prior to the merger./2/
The B.C.A. also provides an exception to the requirement of shareholder
approval for mergers by a New Jersey corporation with or into a single indirect
wholly-owned subsidiary corporation, provided certain conditions are met. Such
mergers are essentially corporate reorganizations designed to create a holding
company structure. The Company is already a holding company and has no present
plans, agreements or commitments, and is not herein seeking authorization, to
enter into a reorganization transaction.
(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
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2 It should be noted, however, 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
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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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
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 currently scheduled for February 17, 2005. In order to allow for timely
receipt of proxies for the Annual Meeting, National intends to commence the
solicitation on January 6, 2005. Accordingly, National is requesting that the
Commission's notice of the proposed transaction be issued not later than January
5, 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.
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It is estimated that the expenses to be incurred by National in
connection with the proposed transactions are as follows:
Printing, processing and mailing of proxy material $100,000
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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
and out-of-pocket expenses) $14,000
Legal fees (including New Jersey counsel) $12,000
Miscellaneous out-of-pocket expenses $ 2,000
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Total $165,500
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
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3.1 General. Sections 6(a)(2), 7 and 12(e) of the Act and Rules 54, 62
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.
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No State commission and no Federal commission, other than the
Commission, has jurisdiction over any of the proposed transactions.
ITEM 5. PROCEDURE.
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National requests that the Commission issue a notice under Rule 23 with
respect to the filing of this Declaration not later than January 5, 2005, 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
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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.
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The following exhibits and financial statements are made a part of this
Declaration:
(a) Exhibits
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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).
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 (filed herewith).
F-2 Opinion of special New Jersey counsel (filed herewith).
G Proposed form of Federal Register Notice (previously filed).
(b) Financial Statements
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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.)
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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.
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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.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this amended 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: January 5, 2005
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