SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): January 23, 1996
CONSOLIDATED NATURAL GAS COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1-3196 13-0596475
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
CNG Tower
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3199
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (412) 227-1000
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None
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(Former name or former address, if changed since last report.)
Page 1 of 77 Pages
Exhibit Index on Page 8
Item 5. Other Events.
On January 23, 1996, the Board of Directors of Con-
solidated Natural Gas Company (the "Company") declared a divi-
dend distribution of one Right for each outstanding share of
Common Stock, $2.75 par value, of the Company (the "Common
Stock") to stockholders of record at the close of business on
February 28, 1996 (the "Record Date"). The Rights are to be
issued pursuant to a shareholder rights plan which was approved
by the Board of Directors on November 13, 1995. Each Right
entitles the registered holder to purchase from the Company
one-half of one share of Common Stock at a price of $175 per
share (the "Purchase Price"), being $87.50 per half share, sub-
ject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Society National Bank, as Rights Agent
(the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten days following
the date (the "Shares Acquisition Date") of the public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of Common Stock or other
voting securities ("Voting Stock") that have 10% or more of the
voting power of the outstanding shares of Voting Stock or
(ii) ten days following the commencement or announcement of an
intention to make a tender offer or exchange offer the consum-
mation of which would result in such person acquiring, or
obtaining the right to acquire, beneficial ownership of Voting
Stock having 10% or more of the voting power of the outstanding
shares of Voting Stock (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Company's Common Stock certificates out-
standing as of the Record Date, by such Common Stock certifi-
cate. The Rights Agreement provides that, until the Distribu-
tion Date, the Rights will be transferred with and only with
the Company's Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common
Stock certificates issued after the Record Date upon transfer
or new issuance of the Company's Common Stock will contain a
notation incorporating the Rights Agreement by reference.
Page 2 of 77 Pages
Until the Distribution Date (or earlier redemption or expira-
tion of the Rights), the surrender for transfer of any of the
Company's Common Stock certificates outstanding as of the
Record Date will also constitute the transfer of the Rights
associated with the Common Stock represented by such certifi-
cate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certifi-
cates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on Feb-
ruary 28, 2006, unless earlier redeemed or exchanged by the
Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Per-
son at any time following the Distribution Date, each holder of
a Right will thereafter have the right to receive, upon exer-
cise, Common Stock (or, in certain circumstances, cash, prop-
erty or other securities of the Company) having a value equal
to two times the Purchase Price of the Right then in effect.
Notwithstanding any of the foregoing, following the occurrence
of such event set forth in this paragraph, all Rights that are,
or (under certain circumstances specified in the Rights Agree-
ment) were, beneficially owned by any Acquiring Person will be
null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction, or (ii) 50% or more of
the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right
to receive, upon exercise, Common Stock of the acquiring com-
pany having a value equal to two times the Purchase Price of
the Right then in effect.
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares
of Common Stock (or other securities, as the case may be) issu-
able upon exercise of the Rights are subject to adjustment from
Page 3 of 77 Pages
time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification
of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for or
purchase shares of the Common Stock or convertible securities
at less than the then Current Market Price of the Common Stock
or (iii) upon the distribution to holders of the Common Stock
of evidences of indebtedness or assets (excluding regular peri-
odic cash dividends or dividends payable in the Common Stock)
or of subscription rights or warrants (other than those
referred to above). Prior to the Distribution Date, the Board
of Directors of the Company may make such equitable adjustments
as it deems appropriate in the circumstances in lieu of any
adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Pur-
chase Price will be required until the earlier of (i) three
years from the date of the event giving rise to such adjustment
or (ii) the time at which cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No frac-
tional shares of Common Stock will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market
price of the Common Stock on the last trading date prior to the
date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 P.M. New York City time on
the tenth day following the Shares Acquisition Date, the Com-
pany may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). Under cer-
tain circumstances set forth in the Rights Agreement, the deci-
sion to redeem shall require the concurrence of a majority of
the Independent Directors. Immediately upon the action of the
Board of Directors of the Company electing to redeem the Rights
with, if required, the concurrence of the Independent Direc-
tors, the Company shall make announcement thereof, and upon
such action, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive
the Redemption Price.
At any time after the occurrence of the event set
forth under the heading "Exercise of Rights for Common Stock of
the Company" above, the Board of Directors may exchange the
Rights (other than Rights owned by an Acquiring Person, which
have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, and/or other securities, cash or
Page 4 of 77 Pages
other assets deemed to have the same value as one share of Com-
mon Stock, per Right, subject to adjustment.
Until a Right is exercised or exchanged for Common
Stock, the holder thereof, as such, will have no rights as a
stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution
of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock or other consideration of the Com-
pany or for the stock of the Acquiring Person as set forth
above, or are exchanged as provided in the preceding paragraph.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company without the
consent of the holders of the Rights prior to the Distribution
Date. Thereafter, the provisions of the Rights Agreement may
be amended by the Board of Directors in order to cure any ambi-
guity, defect or inconsistency, or to make changes which do not
adversely affect the interests of holders of Rights (excluding
the interest of any Acquiring Person); provided, however, that
no supplement or amendment may be made on or after the Distri-
bution Date which changes those provisions relating to the
principal economic terms of the Rights. The Board of Directors
may also, with the concurrence of a majority of the Independent
Directors, extend the redemption period for up to an additional
20 days.
The term "Independent Directors" means any member of
the Board of Directors of the Company who was a member of the
Board prior to the date of the Rights Agreement, and any person
who is subsequently elected to the Board if such person is rec-
ommended or approved by a majority of the Independent Direc-
tors, but shall not include an Acquiring Person or any repre-
sentative thereof.
A copy of the Rights Agreement is filed herewith as
Exhibit 1. The foregoing description of the Rights does not
purport to be complete and is qualified in its entirety by ref-
erence to such Exhibit, which is hereby incorporated herein by
reference.
Page 5 of 77 Pages
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed
herewith and incorporated herein by reference:
Exhibit Number
1 Rights Agreement, dated as of January 23, 1996,
between Consolidated Natural Gas Company and
Society National Bank, as Rights Agent.
2 Press Release dated November 13, 1995.
3 Press Release dated January 23, 1996.
Page 6 of 77 Pages
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
Dated: January 23, 1996 By: /s/ David M. Westfall
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Name: David M. Westfall
Title: Senior Vice President,
Finance
Page 7 of 77 Pages
EXHIBIT INDEX
Number Description Page
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99.1 Rights Agreement, dated as of Janu- 9
ary 23, 1996, between Consolidated
Natural Gas Company and Society
National Bank, as Rights Agent.
99.2 Press Release dated November 13, 74
1995.
99.3 Press Release dated January 23, 76
1996.
Page 8 of 77 Pages