December 22, 1994
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
CONSOLIDATED NATURAL GAS COMPANY
ARTICLE I
1.1 Name and Purpose. The name of this plan is the "Deferred
Compensation Plan for Directors of Consolidated Natural Gas Company" (the
"Plan"). Its purpose is to provide non-employee Directors of the Company with
increased flexibility in timing the receipt of board service fees and to
assist the Company in attracting and retaining qualified individuals to serve
as Directors.
1.2 Definitions. Whenever used in the Plan, the following terms shall
have the meaning set forth below:
(a) "Company" means Consolidated Natural Gas Company.
(b) "Closing Price" means the NYSE closing price of the Company's
Common Stock as reported in The Wall Street Journal, for the
day at issue or the previous trading day if the day at issue is
not a trading day.
(c) "Common Stock" means the Common Stock ($2.75 par value) of the
Company.
(d) "Stock Credit" means a credit that is equivalent to one share
of CNG Common Stock.
(e) "Compensation" means all remuneration paid to a Director for
service as a Director other than reimbursement for expenses and
shall include, but not be limited to, annual retainer and fees
for attendance at meetings.
(f) "Director" means any individual serving on the Board of
Directors of the Company who is not an employee of the Company
or any of its subsidiaries.
(g) "Participant" means a Director who has filed an election to
participate under Section 3.1 with regard to any Plan Year.
(h) "Plan Administrator" means a Committee consisting of the
Secretary, Assistant Secretary, and the Controller of the
Company.
(i) "Plan Year" means the calendar year.
ARTICLE II
2.1 Participation in the Plan. Any individual who is a non-employee
Director may participate in the Plan.
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ARTICLE III
3.1 Election to Participate. Each Director may elect annually to have
payment of all or any portion of his or her Compensation for that Plan Year
deferred. If the Participant ceases to be a Director, the Participant's
account balance will be paid as soon as practicable following the end of the
Plan Year during which the Participant ceased to be a Director. Except for the
election for the 1987 Plan Year which may be made during January 1987, no
election to defer under this Plan may be made after December 31 of the year
preceding the Plan Year during which Compensation would otherwise be paid or
within thirty days after the date a Director becomes a Director. An election
to defer any Compensation shall be in writing and shall be received by the
Secretary in a form prescribed by the Plan Administrator. An election to
defer shall be irrevocable by the Director and shall be effective only for the
Plan Year immediately following the date on which it was filed. In the absence
of a signed Director's election to defer delivered to the Secretary, any
Compensation will be paid directly to the Director.
3.2 Mode of Deferral. Payment of a Participant's Compensation may be
deferred by means of a Cash Credit, a Stock Credit, or a combination of the
two as the Participant shall elect in writing at the same time as the election
provided for in Section 3.1. If a Participant fails to make an election as to
mode of deferral, he or she shall be deemed to have elected deferral by means
of a Cash Credit. Cash Credits and Stock Credits shall be recorded in accounts
established in each Participant's name on the books of the Company.
(a) Cash Credits. If the deferral is wholly or partly by means of
a Cash Credit, the Participant's Cash Credit account shall be
credited with the dollar amount of Compensation deferred by
means of a Cash Credit at the time it is earned. As of the last
day of each calendar quarter, the Participant's Cash Credit
account shall be credited with an interest equivalent in an
amount determined by applying to the current balance in the
account an interest rate for such quarter which shall be equal
to the closing prime commercial rate on that date at the Chase
Manhattan Bank (National Association) located in New York City.
(b) Stock Credits. If the deferral is wholly or partly by means of
a Stock Credit, the Participant's Stock Credit account shall be
credited with a Common Stock equivalent equal to the number of
shares of Common Stock (including fractions of a share) that
could have been purchased with the amount of the Compensation
deferred at the Closing Price of Common Stock on the day the
Compensation is earned. As of the date any dividend is paid to
shareholders of Common Stock, the Participant's Stock Credit
account shall also be credited with an additional Common Stock
equivalent equal to the number of shares of Common Stock
(including fractions of a share) that could have been purchased
at the Closing Price of Common Stock on such date with the
dividend paid on the number of shares of Common Stock to which
the Participant's Stock Credit account is then equivalent. In
case of dividends paid in property, the dividend shall be
deemed to be the fair market value of the property at the time
of distribution of the dividend, as determined by the Plan
Administrator.
(c) Current Directors who have been accumulating Cash Credits
under the prior plan, will have a one-time opportunity to
convert some or all of those Cash Credits to Stock Credits on
the Election Form dated January 1987.
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3.3 Distribution of Credits.
(a) Unless a Participant has elected a different number of
Installments as provided below, payment of a Participant's
account balance shall be made in one installment as soon as
practicable following the end of the Plan Year in which the
Participant ceases to be a Director.
At the written request of a Participant, the Plan
Administrator, in its sole discretion, may authorize payment of
all or a part of the Participant's account balance prior to his
or her termination of service as a Director or acceleration of
payment of any installments if the Plan Administrator finds
that continued deferral will result in financial hardship to
the Participant. Under this paragraph, conversion of Stock
Credits to cash will be made by multiplying the number of Stock
Credits converted by the Closing Price of the Common Stock on
the day the request is received.
(b) Distribution of a Participant's Cash Credit account balance
shall be made in cash. Distribution of his or her Stock Credit
account balance shall also be made in cash with the amount of
the distribution determined by multiplying the number of Stock
Credits attributable to the installment by the Closing Price of
Common Stock on the last business day in December immediately
prior to the Plan Year in which the installment is to be paid.
(c) At the one-time election of a Participant made in writing to
the Secretary, all or any designated portion of the Stock
Credit account may be changed to, and such Participant shall
instead be credited with, a Cash Credit account as of the first
day of the calendar quarter following the quarter in which the
election is made. The amount credited to the Cash Credit
account shall be determined by multiplying the number of shares
of Common Stock to which the Stock Credit account is then
equivalent and as to which such election has been made, by the
Closing Price of the Company's Common Stock on the last
business day of the last month of the calendar quarter
preceding the date of the election to convert. Any Stock
Credits attributable to dividends paid on Common Stock during
the calendar quarter in which the election is made shall be
credited before making the conversion. Such election may be
made by a Participant, regardless of his or her age, at any
time prior to the end of the Plan Year in which the Participant
ceases to be a Director. An election by a Participant under
this Section 3.3(c) shall be irrevocable.
3.4 Adjustment. If at any time the number of outstanding shares of
Common Stock shall be changed as the result of any stock dividend, subdivision
or reclassification of shares, the number of shares of Common Stock to which
each Participant's Stock Credit account is equivalent shall be changed in the
same proportion as the outstanding number of shares of Common Stock is
changed. In the event the Company shall at any time be consolidated with or
merged into any other corporation and holders of the Company's Common Stock
receive common shares of the resulting or surviving corporation, there shall
be credited to each Participant's Stock Credit account, in place of the shares
then credited thereto, a stock equivalent determined by multiplying
the number of common shares of stock given in exchange for a share of Common
Stock upon such consolidation or merger, by the number of shares of Common
Stock to which the Participant's account is then equivalent. If in such a
consolidation or merger, holders of
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the Company's Common Stock shall receive any consideration other than common
shares of the resulting or surviving corporation, the Plan Administrator, in
its sole discretion, shall determine the appropriate change in Participants'
accounts.
3.5 Installment Amount. In the event a Participant has elected to
receive distribution of his or her account balance in more than one
installment, the amount of each installment shall be determined by multiplying
the current balance in the accounts as determined under Section 3.2, by a
fraction, the numerator of which is one, and the denominator of which is the
number of installments yet to be paid.
3.6 Distribution upon Death. In the event of the death of a Participant,
whether before or after cessation of service as a Director, any Cash Credit
account balance and Stock Credit account to which he or she was entitled,
shall be converted to cash and distributed in a lump sum to such person or
persons or the survivors thereof, including corporations, unincorporated
associates or trusts, as the Participant may have designated. All such
designations shall be made in writing, signed by the Participant and delivered
to the Secretary. A Participant may from time to time revoke or change any
such designation by written notice to the Secretary. If there is no unrevoked
designation on file with the Plan Administrator at the time of the
Participant's death, or if the person or persons designated therein shall have
all predeceased the Participant or otherwise ceased to exist, such
distributions shall be made in accordance with the Participant's will or in
the absence of a will, to the administrator of the Participant's estate. Any
distribution under this Section 3.6 shall be made as soon as practicable
following notification to the Plan Administrator of the Participant's death.
In this case, the Participant's Stock Credit account shall be converted to
cash by multiplying the number of whole and fractional shares of Common Stock
to which the Participant's Stock Credit account is equivalent by the Closing
Price of Common Stock on the last business day during the last month prior to
the date of death.
3.7 Withholding Taxes. The Company shall deduct from all distributions
under the Plan any taxes required to be withheld by federal, state, or local
governments.
ARTICLE IV
4.1 Plan Administrator. The Plan Administrator shall have full power
and authority to administer the Plan including the power to promulgate forms
to be used with regard to the Plan, the power to promulgate rules of Plan
administration, the power to settle any disputes as to rights or benefits
arising from the Plan, and the power to make such decisions or take such
action as the Plan Administrator, in its sole discretion, deems necessary or
advisable to aid in the proper maintenance of the Plan.
ARTICLE V
5.1 Funding. The rights of a Participant to payment of benefits under
the Plan shall be those of an unsecured creditor of the Company. The Company
may provide for payment of amounts payable under the Plan out of the Company's
general assets. Alternatively, the Company may provide, in whole or in part,
for payment of amounts payable under the Plan from the assets of a trust
established for such purpose, and to the extent of such funding, payment of
amounts due under the Plan shall be made from such trust and shall pro tanto
discharge the Company's liability for payment under the Plan. However, no
such trust shall place assets beyond the reach of the creditors, in the event
of insolvency or bankruptcy, of the participating company on whose account
assets are held under such trust.
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ARTICLE VI
6.1 Non-Alienation of Benefits. No benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge; and any attempt to do so shall be void. No
such benefit shall, prior to receipt thereof by the Participant, be in any
manner liable for or subject to the debts, contracts, liabilities,
engagements, or torts of the Participant.
ARTICLE VII
7.1 Delegation of Administrative Duties. Administrative duties imposed
by this Plan may be delegated by the Plan Administrator.
7.2 Governing Law. This Plan shall be governed by the laws of the State
of Delaware.
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