-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, s4WDk17cezNzgC7t5NjdWtVGNl+/fE935l0UknMfJfNR058rUj4FvD3jmVCyL4Gc pE1300XHHJiL4d7XcN0rOQ== 0000033213-94-000007.txt : 19940325 0000033213-94-000007.hdr.sgml : 19940325 ACCESSION NUMBER: 0000033213-94-000007 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 24 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940324 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITABLE RESOURCES INC /PA/ CENTRAL INDEX KEY: 0000033213 STANDARD INDUSTRIAL CLASSIFICATION: 4923 IRS NUMBER: 250464690 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-03551 FILM NUMBER: 94517551 BUSINESS ADDRESS: STREET 1: 420 BLVD OF THE ALLIES CITY: PITTSBURGH STATE: PA ZIP: 15219 BUSINESS PHONE: 4122613000 MAIL ADDRESS: STREET 1: 420 BOULEVARD OF THE ALLIES CITY: PITTSBURGH STATE: PA ZIP: 15219 FORMER COMPANY: FORMER CONFORMED NAME: EQUITABLE GAS CO DATE OF NAME CHANGE: 19841120 10-K 1 1993 FORM 10-K TO SEC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ COMMISSION FILE NUMBER 1-3551 EQUITABLE RESOURCES, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-0464690 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 420 Boulevard of the Allies 15219 Pittsburgh, Pennsylvania (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (412) 261-3000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock, no par value New York Stock Exchange Philadelphia Stock Exchange 7 1/2% Debentures due July 1, 1999 New York Stock Exchange 9 1/2% Convertible Subordinated Debentures due 2006 New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of voting stock held by non-affiliates of the registrant as of February 28, 1994: $1,245,649,859 The number of shares outstanding of the issuer's classes of common stock as of February 28, 1994: 34,481,657 DOCUMENTS INCORPORATED BY REFERENCE Part III, a portion of Item 10 and Items 11, 12, and 13 are incorporated by reference to the Proxy Statement for the Annual Meeting of Stockholders on May 27, 1994, to be filed with the Commission within 120 days after the close of the Company's fiscal year ended December 31, 1993. Index to Exhibits - Page 62. TABLE OF CONTENTS Part I Page Item 1 Business 1 Item 2 Properties 9 Item 3 Legal Proceedings 11 Item 4 Submission of Matters to a Vote of Security Holders 11 Item 10 Directors and Executive Officers of the Registrant 12 Part II Item 5 Market for Registrant's Common Equity and Related Stockholder Matters 14 Item 6 Selected Financial Data 15 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 8 Financial Statements and Supplementary Data 22 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48 Part III Item 10 Directors and Executive Officers of the Registrant 49 Item 11 Executive Compensation 49 Item 12 Security Ownership of Certain Beneficial Owners and Management 49 Item 13 Certain Relationships and Related Transactions 49 Part IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K 50 Index to Financial Statements and Financial Statement Schedules Covered by Report of Independent Auditors 51 Index to Exhibits 62 Signatures 66 PART I Item 1. Business (a)Equitable Resources, Inc. ("Equitable" or the "Company") was formed under the laws of Pennsylvania by the consolidation and merger in 1925 of two constituent companies, the older of which was organized in 1888. The Company owns all the capital stock of subsidiary companies. Principal subsidiaries are Equitable Resources Energy Company ("Equitable Resources Energy") and Kentucky West Virginia Gas Company ("Kentucky West"). Equitable Resources Energy owns all the capital stock of Equitable Resources Marketing Company ("ERMCO") and Andex Energy, Inc. ("Andex"). Kentucky West owns all the capital stock of Equitrans, Inc. ("Equitrans") and Nora Transmission, Inc. ("Nora"). ERMCO owns all the capital stock of Louisiana Intrastate Gas Company ("LIG"). The Company and all such subsidiaries are referred to as the "Company and its Subsidiaries" or the "Companies." The Companies operate in the Appalachian area and, to a lesser extent, in the Rocky Mountain, Southwest, Louisiana and Gulf Coast offshore areas, the Canadian Rockies and has interests in Colombia, South America. The Companies engage primarily in the exploration for, development, production, purchase, transmission, storage, distribution and marketing of natural gas, the extraction of natural gas liquids, the exploration for, development, production and sale of oil and contract drilling. LIG was acquired by the Company on June 30, 1993 as described in Note L to the consolidated financial statements in Part II. LIG owns a 1,900 mile intrastate pipeline system in Louisiana, four natural gas processing plants and is also engaged in gas marketing. Hershey Oil Corporation ("Hershey") was acquired on July 8, 1993. Hershey owns natural gas and oil reserves and acreage in Alberta, Canada. These subsidiaries are included in the Energy Resource segment. (b)The Company's business is comprised of two business segments, Energy Resources and Utility Services. Financial information by business segment is presented in Note K to the consolidated financial statements contained in Part II. (b) (1)Not applicable. (b) (2)Not applicable. (c) (1)ENERGY RESOURCES. Energy Resources activities are conducted by Equitable Resources Energy Company through its divisions and subsidiaries. Its activities are principally in the Appalachian area where it explores for, develops, produces and markets natural gas and oil, performs contract drilling and well maintenance services, and extracts and markets natural gas liquids. Energy Resources also conducts operations in the Rocky Mountain area including the Canadian Rockies where it explores for, develops and produces oil, and to a lesser extent natural gas. In Louisiana, the segment provides intrastate transportation of gas and extracts and markets natural gas liquids. Item 1. Business (Continued) In the Southwest and Gulf Coast offshore areas, this segment participates in exploration and development of gas and oil projects. Energy Resources also owns an interest in two natural gas liquids plants in Texas. Andex participates in ventures to explore for and develop oil in Colombia, South America. ERMCO operates nationwide as a full-service natural gas marketing and supply company. ERMCO provides a full range of energy services, including monthly "spot" and longer term contracts, peak shaving and transportation arrangements. UTILITY SERVICES. Utility Services activities are conducted by Equitable Gas Company ("Equitable Gas"), a division of the Company, and three wholly-owned subsidiaries: Kentucky West, Equitrans and Nora. Equitable Gas is a natural gas utility, regulated by state public utility commissions in Pennsylvania, West Virginia and Kentucky and is engaged in the purchase, distribution, marketing and transportation of natural gas. The territory served by Equitable Gas embraces principally the city of Pittsburgh and surrounding municipalities in southwestern Pennsylvania, a few municipalities in northern West Virginia and field line sales in eastern Kentucky. Kentucky West, regulated by the Federal Energy Regulatory Commission (FERC), is an open access natural gas pipeline company. Prior to restructuring pursuant to FERC Order 636, Kentucky West purchased gas from the Energy Resource segment and independent producers in Kentucky. Most of Kentucky West's sales were to Equitrans and, to a lesser extent, to industrial customers and other utilities. Kentucky West also transported gas independently marketed by Energy Resources. With the FERC Order 636 restructuring, which was effective July 1, 1993, Kentucky West provides only open-access transportation service. Transportation service is provided to Equitable Gas, Equitrans, Energy Resources and other industrial end-users. Kentucky West's pipelines are not physically connected with those of Equitrans or Equitable Gas and deliveries are made to Columbia Gas Transmission Corporation, a nonaffiliate, which in turn delivers like quantities to Equitrans in West Virginia and Pennsylvania under a Transportation and Exchange Agreement. Equitrans is a FERC regulated open access pipeline company with production, storage and transmission facilities in Pennsylvania and West Virginia. Prior to FERC Order 636 restructuring, Equitrans produced, purchased and sold gas and provided transportation and underground storage services. With the FERC Order 636 restructuring, which was effective September 1, 1993, Equitrans provides transportation and storage services. Equitrans provides transportation service for Equitable Gas Company and nonaffiliates including customers in off-system markets. Storage services are provided for Equitable Gas Company and nine nonaffiliated customers. Nora is a FERC regulated pipeline company which transports Energy Resources' gas produced in Virginia and Kentucky. Utility services, principally gas service, are provided to more than 265,000 customers located mainly in the city of Pittsburgh and its environs. Residential and commercial sales volumes reflect annual variations which are primarily related to weather. In addition, commercial and industrial sales volumes have decreased mainly as the result of customers acquiring gas directly from third parties. However, this gas is transported and delivered by Utility Services. Item 1. Business (Continued) (c) (1) (i)Operating revenues as a percentage of total operating revenues for each of the two business segments during the years 1991 through 1993 are as follows: 1993 1992 1991 Energy Resources: Natural gas - production 10% 10% 8% - marketing 45 32 26 Natural gas liquids 4 3 3 Contract drilling 1 2 2 Oil 3 5 6 Intrastate transportation 1 - - Other 1 1 1 Total Energy Resources 65 53 46 Utility Services: Residential 23 30 34 Commercial 5 7 9 Industrial 1 2 2 Transportation 4 6 7 Marketed gas 1 - - Utilities and Other 1 2 2 Total Utility Services 35 47 54 Total Revenues 100% 100% 100% (c) (1) (ii)Not applicable. (c) (1) (iii)The following pages (4, 5 and 6) summarize gas and oil supply and disposition for the years 1991 through 1993. Item 1. Business (Continued)
1993 Utility Energy Services Resources Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 1,972 53,550 55,522 Purchased: Other producers 51,870 217,985 269,855 Inter-segment purchases 7,468 3,345 (10,813) Total purchases 59,338 221,330 (10,813) 269,855 Total produced and purchased 61,310 274,880 (10,813) 325,377 Deduct: Net increase in gas in storage 6,204 6,204 Extracted natural gas liquids (equivalent gas volumes) 3,005 3,005 System use and unaccounted for 8,259 294 8,553 Total 46,847 271,581 (10,813) 307,615 Gas Sales (MMcf): Residential 29,980 29,980 Commercial 8,235 8,235 Industrial 3,590 (340) 3,250 Utilities 32 32 Production 53,550 (3,719) 49,831 Marketing 4,052 218,031 (5,796) 216,287 Total gas sales 45,889 271,581 (9,855) 307,615 Processed gas extracted 958 (958) Total 46,847 271,581 (10,813) 307,615 Natural Gas Transported (MMcf) 66,272 50,659 (34,628) 82,303 Oil Produced and Sold thousands of bls) 2,112 2,112 Natural Gas Liquids Sold (thousands of gallons) 162,191 162,191 Average Selling Price Gas - Utility Sales (per Mcf) $7.631 - Energy Resource Production $ 2.266 - Energy Resource Marketing $ 2.320 Oil (per barrel) $16.183 Natural Gas Liquids (per gallon) $ .291
Item 1. Business (Continued)
1992 Utility Energy Services Resources Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 2,698 48,243 50,941 Purchased: Pipeline suppliers 5,008 5,008 Other producers 37,967 131,711 169,678 Sub-total 42,975 131,711 174,686 Inter-segment purchases 8,489 2,654 (11,143) Total purchases 51,464 134,365 (11,143) 174,686 Total produced and purchased 54,162 182,608 (11,143) 225,627 Deduct: Net decrease in gas in storage (3,704) (3,704) Extracted natural gas liquids (equivalent gas volumes) 2,061 2,061 System use and unaccounted for 13,180 593 13,773 Total 44,686 179,954 (11,143) 213,497 Gas Sales (MMcf): Residential 30,089 30,089 Commercial 8,097 8,097 Industrial 4,312 (593) 3,719 Utilities 127 127 Production 48,243 (4,491) 43,752 Marketing 131,711 (3,998) 127,713 Total gas sales 42,625 179,954 (9,082) 213,497 Processed gas extracted 2,061 (2,061) Total 44,686 179,954 (11,143) 213,497 Natural Gas Transported (MMcf) 71,166 (35,453) 35,713 Oil Produced and Sold (thousands of bls) 2,406 2,406 Natural Gas Liquids Sold (thousands of gallons) 64,938 64,938 Average Selling Price Gas - Utility Sales (per Mcf) $ 7.431 - Energy Resource Production $ 1.925 - Energy Resource Marketing $ 2.044 Oil (per barrel) $18.066 Natural Gas Liquids (per gallon) $ .327
Item 1. Business (Continued)
1991 Utility Energy Services Resources Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 3,322 40,022 43,344 Purchased: Pipeline suppliers 7,729 7,729 Other producers 34,243 102,456 136,699 Sub-total 41,972 102,456 144,428 Inter-segment purchases 13,038 2,642 (15,680) Total purchases 55,010 105,098 (15,680) 144,428 Total produced and purchased 58,332 145,120 (15,680) 187,772 Deduct: Net increase in gas in storage 3,634 3,634 Extracted natural gas liquids (equivalent gas volumes) 2,039 2,039 System use and unaccounted for 12,187 603 12,790 Total 42,511 142,478 (15,680) 169,309 Gas Sales (MMcf): Residential 28,103 28,103 Commercial 7,720 7,720 Industrial 4,487 (603) 3,884 Utilities 162 162 Production 40,022 (8,060) 31,962 Marketing 102,456 (4,978) 97,478 Total gas sales 40,472 142,478 (13,641) 169,309 Processed gas extracted 2,039 (2,039) Total 42,511 142,478 (15,680) 169,309 Natural Gas Transported (MMcf) 70,897 (29,204) 41,693 Oil Produced and Sold (thousands of bls) 2,006 2,006 Natural Gas Liquids Sold (thousands of gallons) 64,200 64,200 Average Selling Price Gas - Utility Sales (per Mcf) $7.498 - Energy Resource Production $ 1.811 - Energy Resource Marketing $ 1.814 Oil (per barrel) $18.980 Natural Gas Liquids (per gallon) $ .367
Item 1. Business (Continued) During 1993, a total of 325,377,000 Mcf of gas was produced and purchased by the Companies compared with 225,627,000 Mcf in 1992. The increase reflects greater marketing activity, including the consolidation of LIG, and increased production. GAS PURCHASES. Total purchases in 1993 amounted to 269,855,000 Mcf, of which 222,037,000 Mcf was applicable to marketing operations and 47,818,000 Mcf was for system supply, compared with 131,711,000 Mcf for marketing operations and 42,975,000 Mcf for system supply in 1992. Through gas purchase contracts for system supply, the Company controls proved reserves on acreage developed by independent producers. The majority of these contracts cover the productive lives of the wells. NATURAL GAS AND OIL PRODUCTION. Natural gas production by Energy Resources in 1993 of 53,550,000 Mcf increased over the 1992 total of 48,243,000 Mcf. Utility Services production in 1993 of 1,972,000 Mcf decreased from the 1992 total of 2,698,000 Mcf. Production of crude oil in 1993 was 2,112,000 barrels, compared with 2,406,000 barrels in 1992. In 1993, Energy Resources drilled 212 gross wells (152.7 net wells). The primary focus of drilling activity was in Kentucky and Virginia. Drilling in this area was for development of oil in the Big Lime formation and coalbed methane. The Company has been able to develop gas reserves at costs which make it very competitive in marketing its gas to pipeline and commercial buyers. As a result, even in periods of surplus gas supply, the Company has been able to sell gas produced by energy resource operations at a profit. NATURAL GAS AND OIL RESERVES. The Company's estimate of proved developed and undeveloped gas reserves for the Energy Resource segment comprised 822.6 Bcf as of December 31, 1993. These reserves included 759.3 Bcf of proved developed reserves. The Company's oil reserves at December 31, 1993 consisted of 16.5 million barrels of proved developed and undeveloped reserves; proved developed oil reserves amounted to 16.4 million barrels. Substantially all of the gas and approximately one half of the oil reserves are located in the Appalachian area. See Note P to the Consolidated Financial Statements in Part II for details of gas and oil producing activities. STORAGE. Net storage withdrawals for system use during the 1992-93 heating season were 11.0 Bcf, compared with 9.8 Bcf the previous heating season. Net withdrawals of 12.8 Bcf were made during the 1992-93 heating season for storage service customers compared with 13.4 Bcf the previous heating season. SUPPLY OUTLOOK. The Company's near-term utility gas supply is excellent. The long-range gas supply outlook also is very favorable. Annual gas supply is forecasted to exceed demand at least for the next decade. Item 1. Business (Continued) Energy Resources has also been in a favorable supply position and reserves have continued to increase. However, the development or purchase of future supplies will depend largely on energy prices. (c) (1) (iv) Equitable Gas is regulated by the Pennsylvania Public Utility Commission and the Public Service Commissions of West Virginia and Kentucky; LIG is regulated by the Louisiana Public Service Commission; Kentucky West, Equitrans, Nora, LIG and Equitable Resources Energy are regulated by the Federal Energy Regulatory Commission under the Natural Gas Act and the Natural Gas Policy Act. Equitable Gas, Kentucky West, Equitrans, Nora, LIG and Equitable Resources Energy are also subject to regulation by the Department of Transportation under the Natural Gas Pipeline Safety Act of 1968 with respect to safety requirements in the design, construction, operation and maintenance of pipelines and related facilities. (c) (1) (v) and (vi) Approximately 65 percent of annual Utility Service revenue is recorded during the winter heating season from November through March. Significant quantities of purchased gas are placed in underground storage inventory during the off-peak season to accommodate high customer demands during the winter heating season. Funds required to finance this inventory are obtained through short-term loans. Energy Resource's revenues are not subject to seasonal variation to the same degree as Utility Service revenues. (c) (1) (vii)Not applicable. (c) (1) (viii)Not applicable. (c) (1) (ix)Not applicable. (c) (1) (x)Equitable Gas is in competition with others for the purchase of natural gas and Equitable Resources Energy is in competition with others for the acquisition of gas and oil leases. Equitable Gas competes for gas sales with other utilities in its service area, as well as with other fuels and forms of energy and other sources of natural gas available to existing or potential customers. Utility Services has been successful in meeting competition with aggressive marketing which retained load and added new residential, commercial and off-system customers in areas served by two or more energy suppliers. This has been achieved by responding to market requirements with a portfolio of firm and interruptible services at competitive prices. See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Part II regarding FERC Order 636 and its impact on the operations of the Utility Service companies. (c) (1) (xi) Not material. Item 1. Business (Continued) (c) (1) (xii)The Company and its subsidiaries are subject to federal, state and local environmental laws and regulations. Principal concerns are with respect to oil and thermal pollution of waterways, storage and disposal of hazardous wastes and liquids and erosion and sedimentation control in pipeline construction work. For further discussion of environmental matters, see Management's Discussion and Analysis of Financial Condition and Results of Operations and Note N to the consolidated financial statements in Part II. (c) (1) (xiii)The Companies had 2,454 regular employees at the end of 1993. (d) Not material. Item 2. Properties Principal facilities are owned by the Company's business segments with the exception of several office locations and warehouse buildings. The terms of the leases on these facilities expire at various times from 1994 through 2014. All leases contain renewal options for various periods. A minor portion of equipment is also leased. With few exceptions, utility transmission, storage and distribution pipelines are located on or under (1) public highways under franchises or permits from various governmental authorities, or (2) private properties owned in fee, or occupied under perpetual easements or other rights acquired for the most part without examination of underlying land titles. The Company's facilities have adequate capacity, are well maintained and, where necessary, are replaced or expanded to meet operating requirements. UTILITY SERVICES. Equitable Gas owns and operates natural gas distribution properties as well as other general property and equipment in Pennsylvania, West Virginia and Kentucky. Equitrans owns and operates production, underground storage and transmission facilities as well as other general property and equipment in Pennsylvania and West Virginia. Kentucky West owns and operates gathering and transmission properties as well as other general property and equipment in Kentucky. ENERGY RESOURCES. This business segment owns or controls and operates substantially all of the Company's gas and oil production properties, the majority of which are located in the Appalachian area. This segment also owns an intrastate pipeline system and four hydrocarbon extraction plants in Louisiana, hydrocarbon extraction facilities in Kentucky with a 100-mile liquid products pipeline which extends into West Virginia and an interest in two hydrocarbon extraction plants in Texas. This business segment owns or controls acreage of proved developed and undeveloped gas and oil lands located principally in the Appalachian area and, to a lesser extent, in the Rocky Mountain area including the Canadian Rockies, the Southwest and Gulf Coast offshore areas and in Colombia, South America. The acquisition of Canadian properties in 1993 is described in Note L to the consolidated financial statements and significant purchases of oil and gas properties in 1991 are described in Note M to the consolidated financial statements contained in Part II. Information relating to Company estimates of natural gas and oil reserves and future net cash flows is summarized in Note P to the consolidated financial statements in Part II. No report has been filed with any Federal authority or agency reflecting a five percent or more difference from the Company's estimated total reserves. Item 2. Properties (Continued) Gas and Oil Production (Energy Resources): 1993 1992 1991 Gas - MMcf 53,550 48,243 40,022 Oil - Thousands of Barrels 2,112 2,406 2,006 Natural Gas: Average field sales price of natural gas produced during 1993, 1992 and 1991 was $2.27, $1.93 and $1.81 per Mcf, respectively. Average production cost (lifting cost) of natural gas during 1993, 1992 and 1991 was $.458, $.443 and $.460 per Mcf, respectively. Oil: Average sales price of oil produced during 1993, 1992 and 1991 was $16.18, $18.07 and $18.98 per barrel, respectively. Average production cost (lifting cost) of oil during 1993, 1992 and 1991 was $4.30, $3.75 and $3.77 per barrel, respectively. Gas Oil Total productive wells at December 31, 1993: Total gross productive wells 5,838 876 Total net productive wells 4,301 535 Total acreage at December 31, 1993: Total gross productive acres 725,000 Total net productive acres 596,000 Total gross undeveloped acres 3,192,000 Total net undeveloped acres 2,341,000 Number of net productive and dry exploratory wells and number of net productive and dry development wells drilled: 1993 1992 1991 Exploratory wells: Productive 12.0 11.6 12.4 Dry 6.7 6.3 8.6 Development wells: Productive 123.4 134.1 120.4 Dry 10.6 12.0 12.6 As of December 31, 1993, the Company had 4 gross wells (2.16 net wells) in the process of being drilled. Item 3. Legal Proceedings LIG is a party to certain claims involving its gas purchase contracts, including take-or-pay liabilities. As more fully described in Note L to the consolidated financial statements in Part II, the seller, and/or the previous owner of LIG, have provided indemnifications for the Company. There are no other material pending legal proceedings, other than those which are adequately covered by insurance, to which the Company or any of its subsidiaries is a party, or to which any of their property is subject. The Company is claimant as a creditor in Columbia Gas Transmission Company's bankruptcy proceeding as described in Notes B and N to the consolidated financial statements in Part II. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of the Company's security holders during the last quarter of its fiscal year ended December 31, 1993. Item 10. Directors and Executive Officers of the Registrant (b) Identification of executive officers Name and Age Title Business Experience First elected to present position Donald I. Moritz Chairman and Chief December 17, 1993; (66) Executive Officer President and Chief Executive Officer from August 1, 1978. First elected to present position December 17, 1993; Executive Vice President and Chief Operating Officer Frederick H. President and from June 1, 1992; Abrew (56) Chief Operating Officer Executive Vice President from June 1, 1991; Executive Vice President - Utility Services from June 1, 1988. First elected to Senior Vice present position Jeremiah J. Ayres President - February 1, 1991; (61) Environment and Vice President - Technology Corporate Services from March 26, 1987. Augustine A. Senior Vice First elected to Mazzei, Jr. (57) President and present position General Counsel June 1, 1988. First elected to Robert E. Daley Vice President and present position (54) Treasurer May 22, 1986. First elected to present position June 1, 1992; President - Equitable Harry E. Gardner, Vice President - Resources Energy Jr. (56) Energy Resources Company since January 1, 1991; President Equitable Resources Exploration Division from July 1, 1987. Joseph L. Giebel Vice President - First elected to (63) Accounting and present position Administration February 1, 1991; Vice President - Accounting from May 1, 1981. Name and Age Title Business Experience First elected to present position January 1, 1994; Vice President - Utility Services from June 1, John C. Gongas, Vice President - 1992; President of Jr. (49) Utility Group Kentucky West Virginia Gas Company since April 20, 1992; President of Equitrans, Inc. from February 26, 1988. Vice President and First elected to Audrey C. Moeller Corporate present position May (58) Secretary 22, 1986. First elected to present position January 1, 1994; Vice President - Corporate Development from August 1, 1991; Director - Special Projects from October Richard Riazzi Vice President - 1, 1990; President - (39) Energy Group Equitable Resources Marketing Company from February 27, 1989; Vice President - Strategic Planning for Equitable Resources Energy Company from July 1, 1987. Officers are elected annually to serve during the ensuing year or until their successors are chosen and qualified. Except as indicated, the officers listed above were elected on May 21, 1993. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters (a) The Company's common stock is listed on the New York Stock Exchange and the Philadelphia Stock Exchange. The high and low sales prices reflected in the New York Stock Exchange Composite Transactions as reported by The Wall Street Journal and the dividends declared and paid per share are summarized as follows:
1993 1992 High Low Dividend High Low Dividend 1st Quarter 41 1/2 33 $.270 27 3/4 23 1/2 $.257 2nd Quarter 40 3/4 36 7/8 .270* 27 3/4 23 3/8 .257* 3rd Quarter 44 1/4 35 1/4 .270 33 27 1/8 .257 4th Quarter 42 3/4 35 1/4 .285 34 1/8 31 .270 * Actually declared near the end of the preceding quarter.
(b)As of December 31, 1993, there were 8,994 shareholders of record of the Company's common stock. (c)(1)The indentures under which the Company's long-term debt is outstanding contain provisions limiting the Company's right to declare or pay dividends and make certain other distributions on, and to purchase any shares of, its common stock. Under the most restrictive of such provisions, $387,755,000 of the Company's consolidated retained earnings at December 31, 1993, was available for declarations or payments of dividends on, or purchases of its common stock. (c)(2)The Company anticipates dividends will continue to be paid on a regular quarterly basis. Item 6. Selected Financial Data
1993 1992 1991 1990 1989 (Thousands Except Per Share Amounts) Operating revenues $1,094,794 $ 812,374 $ 679,631 $ 659,216 $ 511,540 Net income $73,455 $ 60,026 $ 64,168 $ 58,949 $ 50,874 Earnings per share of common stock $2.27 $1.92 $2.05 $1.88 $1.62 Total assets* $1,946,907 $1,468,424 $1,440,593 $1,229,154 $1,187,951 Long-term debt $378,845 $346,693 $346,818 $254,725 $256,665 Cash dividends declared per share of common stock $1.10 $1.04 $1.00 $.91 $.86 * Total assets at December 31, 1989 through 1992 were restated to reflect the adoption of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW Equitable's consolidated net income for 1993 of $73.5 million, or $2.27 per share, was the second highest in the Company's history. The 1993 results represent a 22 percent increase over 1992 net income of $60.0 million, or $1.92 per share, and a 14 percent increase over 1991 net income of $64.2 million, or $2.05 per share. Earnings for all three years include income from regulatory approvals for the recovery of higher wellhead prices for natural gas produced and sold in prior years as more fully described in Note B to the consolidated financial statements. The recovery increased income by approximately $4.7 million for both 1993 and 1992 and $14.9 million for 1991. The increase in net income for 1993 compared to 1992 is due primarily to increases in production and average wellhead prices for natural gas and increased margins from utility service operations. These increases were partially offset by a $5 million increase in 1993 federal income taxes as a result of a one percent increase in the federal corporate income tax rate as more fully described in Note C to the consolidated financial statements. The increase in net income for 1992 compared to 1991, excluding the effect of the direct billing settlements, is the result of increased sales of produced gas and oil, higher average wellhead prices for natural gas and increased retail gas sales reflecting colder weather in 1992. RESULTS OF OPERATIONS This discussion supplements the detailed financial information by business segment presented in Note K to the consolidated financial statements. ENERGY RESOURCES Operating revenues were $743.1 million in 1993 compared with $461.6 million in 1992 and $367.3 million in 1991. The increase in revenues between the periods is due primarily to increases in gas marketing activity, production and average wellhead prices for natural gasand increased production of natural gas liquids in 1993. The increase in marketed natural gas and production of natural gas liquids for 1993 is due primarily to the acquisition of Louisiana Intrastate Gas Company (LIG) on June 30, 1993 as more fully described in Note L to the consolidated financial statements. Increased production of natural gas and oil for 1992 compared to 1991 reflects the full-year impact of 1991 acquisitions. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Energy Resources 1993 1992 1991 Operating Revenues (thousands): Natural Gas: Production . . . . . . . . $121,360 $ 92,864 $ 72,498 Marketing . . . . . . . . . 505,830 269,182 185,901 Oil . . . . . . . . . . . . 34,176 43,469 38,074 Natural Gas Liquids . . . . . 47,121 21,256 23,573 Direct Billing Settlements . 7,815 7,815 24,960 Other . . . . . . . . . . . . 26,762 27,056 22,291 Total Revenues . . . . . $743,064 $461,642 $367,297 Sales Quantities: Natural Gas (MMcf): Production . . . . . . . . 53,550 48,243 40,022 Marketing . . . . . . . . . 218,031 131,711 102,456 Oil (MBls) . . . . . . . . . 2,112 2,406 2,006 Natural Gas Liquids (thousands of gallons) . . . 162,191 64,938 64,200 Gas purchased amounted to $533.7 million in 1993 compared with $277.0 million in 1992 and $193.1 million in 1991. The increased cost in 1993 reflects the increase in volume of marketed natural gas and requirements for the higher production level of natural gas liquids. The increase for 1992 is due to the increase in volume of marketed natural gas. Other operating expenses were $155.2 million in 1993, $143.4 million in 1992 and $127.6 million in 1991. Increases for the respective years are attributed to increased production expenses, depreciation and depletion related to the higher level of natural gas production and the consolidation of LIG in 1993. Operating income, excluding income from direct billing settlements, was $46.4 million in 1993 compared with $33.4 million in 1992 and $21.6 million in 1991. The increase in operating income for 1993 compared to 1992 reflects primarily the increase in average wellhead prices and production of natural gas. The increase for 1992 compared to 1991 is due mainly to increased production of natural gas and oil and higher average wellhead prices for gas. Energy resource operations accounted for more than half of consolidated net income in 1993. This was achieved through the combination of improved wellhead prices for natural gas and increased production realized from recent acquisitions as well as ongoing development activity. Average wellhead prices increased 18 percent in 1993 and reached a level that has not been experienced since 1988. Production was increased by 11 percent in 1993 and represents a 34 percent increase since 1991 when wellhead prices were at their lowest point in more than ten years. Appalachian gas reserves and acreage position remain a firm foundation for the segment's strategy of traditional development and expanding diversification into other areas. The recent acquisition of LIG has enhanced expansion of marketing activities in the Gulf coast area where the Company has been active in natural gas production. LIG will serve as the nucleus for development of a "market hub" with broad access in this area of major production activity as well as interconnections with major pipelines serving substantially all regions of the country. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) In 1994, the segment's $90.5 million capital expenditure program includes $35.3 million for development of Appalachian holdings, $24.6 million for the Rocky Mountain area, $17.2 million for off-shore drilling in the Gulf of Mexico and $2.6 million for participation in exploration in South America. Bolstered by the frigid weather experienced in early 1994, the Company believes the market for natural gas will sustain recent price trends. Market and price trends will continue to be the principal factors for the economic justification of drilling investments under the 1994 program. In addition, $10.8 million in the 1994 capital program is earmarked for other projects, including further development of LIG. The Company is also proceeding with plans to fund and develop storage and interchange facilities which will interconnect with LIG and the Henry Hub. These facilities will establish the capability to provide services necessary for the creation of a separate market hub. UTILITY SERVICES Operating revenues, which are derived principally from the sale and transportation of natural gas, were $397.3 million in 1993 compared with $393.6 million in 1992 and $381.7 million in 1991. The increase in revenues for 1993 compared to 1992 is due to the full-year impact of a retail rate increase for Pennsylvania customers that went into effect in July of 1992, offset by lower retail rates to pass-through decreased purchased gas costs to customers. The increase in revenues for 1992 compared to 1991 is due primarily to increased retail gas sales resulting from colder weather which were offset somewhat by lower off-system sales and transportation. Utility Services 1993 1992 1991 Operating Revenues (thousands): $314,312 $305,310 $291,955 Pipeline Gas Sales . . . . . 12,257 24,186 24,071 Transportation Service . . . 44,760 48,732 48,829 Storage Service . . . . . . . 6,927 5,553 5,935 Marketed Gas Sales . . . . . 10,200 - - Other . . . . . . . . . . . . 8,841 9,847 10,865 Total Revenues . . . . . . $397,297 $393,628 $381,655 Sales Quantities (MMcf): Retail Gas Sales . . . . . . 39,982 38,907 36,688 Pipeline Gas Sales . . . . . 2,814 5,779 5,823 Transportation . . . . . . . 66,272 71,166 70,897 Marketed Gas . . . . . . . . 4,052 - - Heating Degree Days (Normal - 5,968) . . . . . . 5,628 5,629 5,030 Gas purchased amounted to $153.6 million in 1993, $170.6 million in 1992 and $163.4 million in 1991. The decrease in gas costs for 1993 reflects the pass-through of lower costs in rates to retail customers. The increase in 1992 is due primarily to the increase in retail sales volumes. Other operating expenses amounted to $167.4 million in 1993, $149.8 million in 1992 and $148.3 million in 1991. The increase in other operating expenses for 1993 reflects increased labor and employee benefits, increased depreciation, higher taxes other than income, and recording of a reserve for possible refund of interstate billings. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Operating income was $76.3 million in 1993 compared with $73.2 million in 1992 and $70.0 million in 1991. The increase in operating income for 1993 compared to 1992 is due primarily to the full-year impact of the retail rate increase that went into effect in July 1992. The increase in operating income for 1992 compared to 1991 is attributed to higher retail sales. In May 1992, the Federal Energy Regulatory Commission (FERC) issued new regulations, in its Order 636, that significantly altered the manner in which natural gas is sold and transported in interstate commerce. The main feature of the new regulations requires pipelines to unbundle their services and rates by function and permit customers to select one or more of the services offered by the pipeline, i.e., transportation, storage, etc. Under the new structure, local distribution utilities, other marketers and end users will purchase their own gas supply and use pipeline services for handling and transporting the gas. The regulations require pipelines to establish new rates using a straight fixed variable design. Under this method, all fixed costs, including return on investment in facilities, are recovered through a fixed demand or capacity charge based on peak requirements reserved by customers. The vast majority of costs in pipeline rates are fixed costs. The remaining variable costs are recovered in commodity rates based on actual customer usage. The regulations also provide a rate mechanism for pipelines to recover prudently incurred transition costs as they move away from the merchant function. The Company's interstate pipelines, Kentucky West and Equitrans, have successfully implemented their Order 636 restructured tariffs effective July 1, 1993 and September 1, 1993, respectively. All restructuring issues have been resolved for Kentucky West. On September 2, 1993, Equitrans filed a new rate case to address operational and transitional cost recovery issues which were severed from its Order 636 compliance filing by the FERC. On September 30, 1993, the FERC issued an order accepting and suspending certain tariff provisions and rejecting other conditions. The major area of difference was the timing and method of recovering some $60 million of transition costs. While Equitrans continues to recover other costs in restructured rates, it has filed a request for rehearing with the FERC regarding the recovery of transition costs. CAPITAL RESOURCES AND LIQUIDITY Operating Activities Cash required for operations is impacted primarily by the seasonal nature of the Company's utility operations. Gas purchased for storage during the nonheating season is financed with short-term loans which are repaid as gas is withdrawn from storage and sold during the heating season. Short-term loans are also used to provide other working capital requirements during the nonheating season. Investing Activities The Company's business requires major ongoing expenditures for replacements, improvements and additions to utility plant and continuing development and expansion of its energy resources. Such expenditures during 1993 were $339.4 million including approximately $209 million for the purchase of LIG and Hershey Oil Corporation as described in Note L to the consolidated financial statements. A total of $151.2 million has been authorized for the 1994 capital expenditure program, including $90.5 million for energy resources. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Short-term loans are used as interim financing for a portion of capital expenditures. The Company expects to finance its 1994 capital expenditures with cash generated from operations and temporarily with short-term loans. Capital expenditures, including acquisitions, totaled about $865 million during the five- year period ended December 31, 1993, of which 45 percent was financed from operations. Financing Activities The Company believes it has adequate borrowing capacity to meet its financing requirements. Bank loans and commercial paper, supported by available credit, are used to meet short-term financing requirements. Interest rates on these short-term loans ranged from 2.94 percent to 3.78 percent during 1993. At December 31, 1993, $189.9 million of commercial paper and $64.0 million of bank loans were outstanding at an average interest rate of 3.30 percent. Lines of credit currently available to the Company total $325 million which require commitment fees averaging one-tenth of one percent. Adequate lines of credit are expected to continue to be available in the future. On September 29, 1993, the Company issued 3 million shares of common stock at a price of $38.50 per share. Net proceeds of approximately $111.6 million, after underwriters' commissions and other issuance costs, were used to repay a portion of the short- term debt incurred to purchase the stock of LIG. The Company filed a shelf-registration in March 1992 to issue $100 million of medium-term notes to be used primarily to retire short-term loans incurred to finance a portion of acquisitions made in 1991. Given the advantage of short-term interest rates during 1992 and 1993, the Company issued only $24.5 million of the medium-term notes during 1992 and an additional $32 million during 1993. It is anticipated that the remaining $43.5 million of medium-term notes will be issued in the first half of 1994. As more fully described in Note H to the consolidated financial statements, the Company has redeemed $31.6 million of long-term debt during the past two years to further reduce interest costs. These redemptions were temporarily financed with short-term debt. Accounting Developments The Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109) effective January 1, 1993 and elected to restate its financial statements as of January 1, 1988. The Company also adopted SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" (OPEBS) effective January 1, 1993. The effect of adoption of SFAS No. 109 and SFAS No. 106 are more fully described in Notes C and E, respectively, to the consolidated financial statements. The effect of adoption of both standards on net income was the deferral of increased expenses related to rate regulated utility operations. At December 31, 1993, regulatory assets related to deferred income taxes under SFAS No. 109 and accounting for OPEBS under SFAS No. 106 were approximately $76.4 million and $2.9 million, respectively. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Federal Income Tax Provisions In August 1993, the Omnibus Budget Reconciliation Act of 1993 (OBRA) was signed into law. One of the provisions of OBRA was to raise the maximum corporate income tax rate from 34 percent to 35 percent. The effect of this tax rate change increased deferred tax liabilities by approximately $11 million and increased regulatory assets by approximately $6 million. Cash flow has been affected by the Alternative Minimum Tax (AMT) since 1988. Despite the availability of nonconventional fuels tax credit, the Company has incurred an AMT liability in each of the years 1988 through 1993. Although AMT payments can be carried forward indefinitely and applied to income tax liabilities in future periods, they reduce cash generated from operations. At December 31, 1993, the Company has available $69.3 million of AMT credit carryforwards. The collection of revenues from direct billing settlements described in Note B to the consolidated financial statements will improve cash flow with the utilization of carryover credits. Nevertheless, the impact of AMT on cash flow will continue to depend on the future levels of energy prices. AMT is not expected to affect the Company's ability to finance future capital requirements. Under current law, wells drilled after 1992 do not qualify for the nonconventional fuels tax credit. While production from qualified Energy Resources' wells drilled in the Appalachian area will generate tax credits through the year 2002, it is anticipated that the amount of such credits will decline after 1993 as the related reserves are depleted. The credits recorded in 1993, 1992 and 1991 reduced the Company's federal income tax provisions by $20.6 million, $14.1 million and $11.0 million, respectively. Environmental Matters Management does not know of any environmental liabilities that will have a material effect on the Company's financial position or results of operations. The Company has identified situations that require remedial action for which $6.0 million is accrued at December 31, 1993. The portion of amounts expensed through 1993 that have been deferred and included in regulatory assets amounts to $3.1 million. Environmental matters are described in Note N to the consolidated financial statements. Balance Sheet Changes The increase in deferred purchased gas cost is due to the timing of pass-through of gas costs to ratepayers. Changes in deferred purchased gas cost generally do not affect results of operations due to regulatory procedures for purchased gas cost recovery in rates. Gas stored underground--current inventory increased because all inventory is valued at average cost. See Note A to the consolidated financial statements. The increases in accounts receivable, accounts payable and other current liabilities reflect mainly the consolidation of LIG and increased marketing activities. AUDIT COMMITTEE The Audit Committee, composed entirely of outside directors, meets periodically with the Company's independent auditors, its internal auditor and management to review the Company's financial statements and the results of audit activities. The Audit Committee, in turn, reports to the Board of Directors on the results of its review and recommends the selection of independent auditors. Item 8. Financial Statements and Supplementary Data Page Reference Report of Independent Auditors 23 Statements of Consolidated Income for each of the three years in the period ended December 31, 1993 24 Consolidated Balance Sheets December 31, 1993 and 1992 25 & 26 Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 1993 27 Statements of Common Stockholders' Equity for each of the three years in the period ended December 31, 1993 28 Long-term Debt, December 31, 1993 and 1992 29 Notes to Consolidated Financial Statements 30 - 47 REPORT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Equitable Resources, Inc. We have audited the accompanying consolidated balance sheets and statements of long-term debt of Equitable Resources, Inc., and Subsidiaries at December 31, 1993 and 1992, and the related consolidated statements of income, common stockholders' equity and cash flows for each of the three years in the period ended December 31, 1993. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Equitable Resources, Inc., and Subsidiaries at December 31, 1993 and 1992, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As described in Note C and Note E to the consolidated financial statements, the Company changed its method of accounting for income taxes and postretirement benefits in 1993. s/ Ernst & Young ------------------------------- Ernst & Young Pittsburgh, Pennsylvania February 22, 1994 EQUITABLE RESOURCES, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991 (Thousands Except per Share Amounts) Operating Revenues $1,094,794 $812,374 $679,631 Cost of Gas Purchased 644,157 407,055 290,614 Net operating revenues 450,637 405,319 389,017 Operating Expenses: Operation 174,420 161,972 159,214 Maintenance 29,024 26,327 24,441 Depreciation and depletion 76,894 65,940 54,593 Taxes other than income 39,802 36,654 34,192 Total operating expenses 320,140 290,893 272,440 Operating Income 130,497 114,426 116,577 Other Income (Expense) 1,706 1,781 (528) Interest Charges 38,728 37,411 31,945 Income Before Income Taxes 93,475 78,796 84,104 Income Taxes 20,020 18,770 19,936 Net Income $ 73,455 $ 60,026 $ 64,168 Average Common Shares Outstanding 32,359 31,342 31,253 Earnings Per Share of Common Stock $2.27 $1.92 $2.05
See notes to consolidated financial statements Pages 30 to 47, inclusive EQUITABLE RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1993 AND 1992
ASSETS 1993 1992 Restated (Thousands) Property, Plant and Equipment (Successful Efforts Method): Energy resources $1,203,599 $ 814,654 Less accumulated depreciation and depletion 298,370 249,392 Net energy resources 905,229 565,262 Utility services 903,238 852,762 Less accumulated depreciation and depletion 260,043 242,810 Net utility services 643,195 609,952 Net property, plant and equipment 1,548,424 1,175,214 Current Assets: Cash and cash equivalents 15,037 11,590 Accounts receivable (less accumulated provision for doubtful accounts: 1993, $10,106; 1992, $9,503) 171,626 121,568 Unbilled revenues 27,853 19,637 Gas stored underground - current inventory 18,059 12,983 Material and supplies 12,261 10,311 Deferred purchased gas cost 17,148 3,124 Prepaid expenses and other 23,977 21,704 Total current assets 285,961 200,917 Other Assets: Regulatory assets 87,024 68,367 Other 25,498 23,926 Total other assets 112,522 92,293 Total $1,946,907 $1,468,424
See notes to consolidated financial statements Pages 30 to 47, inclusive EQUITABLE RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1993 AND 1992
CAPITALIZATION AND LIABILITIES 1993 1992 Restated (Thousands) Capitalization: Common stockholders' equity $ 728,030 $ 577,557 Long-term debt 378,845 346,693 Total capitalization 1,106,875 924,250 Current Liabilities: Long-term debt payable within one year 1,971 16,445 Short-term loans 253,900 114,000 Accounts payable 143,808 92,127 Accrued taxes 15,358 12,126 Accrued interest 12,338 11,609 Refunds due customers 14,206 11,669 Customer credit balances 7,578 7,900 Other 14,794 4,753 Total current liabilities 463,953 270,629 Deferred and Other Credits: Deferred income taxes 331,140 242,305 Deferred investment tax credits 23,178 24,551 Other 21,761 6,689 Total deferred and other credits 376,079 273,545 Commitments and Contingencies - - Total $1,946,907 $1,468,424
See notes to consolidated financial statements Pages 30 to 47, inclusive EQUITABLE RESOURCES, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1993 1992 1991 (Thousands) Cash Flows from Operating Activities: Net income $ 73,455 $ 60,026 $ 64,168 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion 76,894 65,940 54,593 Deferred income taxes 756 (2,015) 3,974 Other - net 1,319 1,435 1,788 Changes in other assets and liabilities: Accounts receivable and unbilled revenues (22,352) (8,035) (10,683) Gas stored underground (5,076) 3,990 (8,877) Material and supplies (709) (724) 1,976 Deferred purchased gas cost (14,024) 4,915 (2,871) Regulatory assets (18,657) (2,870) (13,269) Accounts payable 18,747 2,821 13,568 Accrued taxes 1,024 1,018 539 Refunds due customers 2,537 4,050 (540) Other - net (4,588) 3,965 8,725 Total adjustments 35,871 74,490 48,923 Net cash provided by operating activities 109,326 134,516 113,091 Cash Flows from Investing Activities: Capital expenditures: Energy resources (including acquisitions) (296,245) (52,923) (189,472) Utility services (43,166) (46,666) (45,717) Proceeds from sale of property 1,270 6,872 910 Net cash used in investing activities (338,141) (92,717) (234,279) Cash Flows from Financing Activities: Issuance of common stock 112,412 1,427 2,959 Purchase of treasury stock (28) (226) (6,018) Dividends paid (35,279) (32,595) (31,254) Proceeds from issuance of long-term debt 31,702 24,359 98,995 Repayments and retirements of long-term debt (16,445) (15,995) (922) Increase (decrease) in short-term loans 139,900 (15,500) 47,500 Net cash provided (used) by financing activities 232,262 (38,530) 111,260 Net Increase (Decrease) in Cash and Cash Equivalents 3,447 3,269 (9,928) Cash and Cash Equivalents at Beginning of Year 11,590 8,321 18,249 Cash and Cash Equivalents at End of Year $ 15,037 $ 11,590 $ 8,321 See notes to consolidated financial statements Pages 30 to 47, inclusive Cash Paid During the Year for: Interest (net of amount capitalized) $ 34,592 $ 31,304 $ 24,605 Income taxes $ 27,547 $ 17,587 $ 20,793
See notes to consolidated financial statements Pages 30 to 47, inclusive EQUITABLE RESOURCES, INC. AND SUBSIDIARIES STATEMENTS OF COMMON STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Common Stock(a) Foreign Common Shares No Retained Currency Stockholders' Outstanding Par Value Earnings Translation Equity (Thousands) Balance, January 1, 1991 31,300 $ 94,701 $433,801 $ - $528,502 Cumulative effect of change in accounting for income taxes (11,889) Balance, January 1, 1991 as restated 31,300 94,701 421,912 516,613 Net income for the year 1991 64,168 Dividends ($1.00 per share) (31,254) Stock issued: Conversion of 9 1/2% debentures 97 1,084 Restricted stock option plan 167 4,073 Treasury stock (253) (6,018) Balance, December 31, 1991 (b) 31,311 93,840 454,826 548,666 Net income for the year 1992 60,026 Dividends ($1.04 per share) (32,595) Stock issued: Conversion of 9 1/2% debentures 23 259 Restricted stock option plan 60 1,427 Treasury stock (8) (226) Balance, December 31, 1992 (b) 31,386 95,300 482,257 577,557 Net income for the year 1993 73,455 Dividends ($1.10 per share) (35,279) Foreign currency translation for the year 1993 (581) Stock issued: New stock issuance 3,000 111,570 Conversion of 9 1/2% debentures 51 564 Restricted stock option plan 29 850 Cash paid in lieu of fractional shares (78) Treasury stock (1) (28) Balance, December 31, 1993 (b)(c)(d) 34,465 $208,178 $520,433 $(581) $728,030 (a) Shares authorized: Common - 80,000,000 shares, Preferred - 3,000,000 shares. (b) Net of treasury stock: 1993 - 622,000 shares ($14,623,000); 1992 - 621,000 shares ($14,595,000); 1991 - 613,000 shares ($14,368,000). (c) A total of 1,154,000 shares of authorized but unissued common stock was reserved for the conversion of the 9 1/2% convertible subordinated debentures, for issuance under the key employee restricted stock option and stock appreciation rights incentive compensation plan and for issuance under the company's dividend reinvestment and stock purchase plan. (d) Retained earnings of $387,755,000 is available for dividends on, or purchase of, common stock pursuant to restrictions imposed by indentures securing long-term debt.
See notes to consolidated financial statements Pages 30 to 47, inclusive EQUITABLE RESOURCES, INC. AND SUBSIDIARIES LONG-TERM DEBT DECEMBER 31, 1993 AND 1992
Annual Debt Maturities After Maturities One Year 1993 1992 1993 1992 (Thousands) First mortgage bonds, series due June 15, 1997, 8% $ - $16,445 $ - $ - 8 1/4% Debentures, due July 1, 1996 (a) - - 75,000 75,000 7 1/2% Debentures, due July 1, 1999 ($75,000 principal amount, net of unamortized original issue discount)(a) - - 69,684 68,968 9 1/2% Convertible subordinated debentures, due January 15, 2006 - - 2,661 3,225 9.9% Debentures, due April 15, 2013 (b) - - 75,000 75,000 Medium-term notes: 7.2% to 9.0% Series A, due 1998 thru 2021 - - 100,000 100,000 5.1% to 7.4% Series B, due 1995 thru 2023 - - 56,500 24,500 Other 1,971 - - - Total $1,971 $16,445 $378,845 $346,693 (a) Not redeemable prior to maturity. (b) Annual sinking fund payments of $3,750,000 are required beginning in 1999. See notes to consolidated financial statements Pages 30 to 47, inclusive
See notes to consolidated financial statements Pages 30 to 47, inclusive A. Summary of Significant Accounting Policies (1)PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of Equitable Resources, Inc. and Subsidiaries (the "Company" or "Companies"). All subsidiaries are 100% owned. (2)PROPERTIES, DEPRECIATION AND DEPLETION: The cost of property additions, replacements and improvements capitalized includes labor, material and overhead. The cost of property retired, plus removal costs less salvage, is charged to accumulated depreciation. Depreciation for financial reporting purposes is provided on the straight-line method at composite rates based on estimated service lives, except for most gas and oil production properties as explained below. Depreciation rates are based on periodic studies. The Company uses the successful efforts method of accounting for exploration and production activities. Under this method, the cost of productive wells and development dry holes, as well as productive acreage, are capitalized and depleted on the unit- of-production method. Capitalized acquisition costs of unproved properties are periodically assessed for impairment of value, and any loss is recognized at the time of impairment. (3)ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION: The Federal Energy Regulatory Commission (FERC) prescribes a formula to be used for computing overhead allowances for funds used during construction (AFC). AFC applicable to equity funds capitalized is included in other income and amounted to $1,022,000 in 1993, $1,297,000 in 1992 and $914,000 in 1991. AFC applicable to borrowed funds, as well as other interest capitalized for the nonregulated companies, is applied as a reduction of interest charges and amounted to $1,841,000 in 1993, $1,267,000 in 1992 and $1,263,000 in 1991 (4)INVENTORIES: Inventories are stated at cost which is below market. Gas stored underground--current inventory at December 31, 1993 of $18,059,000 is stated at cost under the average cost method. The December 31, 1992 balance includes $5,918,000, which is stated at cost under the last-in, first-out method (LIFO). As a result of FERC Order 636, certain gas stored underground has been transferred, at book value (LIFO), to property, plant and equipment. This gas represents cushion gas for the regulated interstate pipeline operations, a portion of which will be necessary to compensate for gas imbalances until replaced in-kind by customers. Material and supplies are stated generally at average cost. (5)INCOME TAXES: The Companies file a consolidated federal income tax return. The current provision for income taxes represents amounts paid or payable. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. Where deferred tax liabilities will be passed through to customers in regulated rates, the Company establishes a corresponding regulatory asset for the increase in future revenues that will result when the temporary differences reverse. Investment tax credits realized in prior years were deferred and are being amortized over the estimated service lives of the related properties where required by ratemaking rules. A. Summary of Significant Accounting Policies (Continued) (6)DEFERRED PURCHASED GAS COST: Where permitted by regulatory authorities under purchased gas adjustment clauses or similar tariff provisions, the Companies defer the difference between purchased gas cost, less refunds, and the billing of such cost and amortize the deferral over subsequent periods in which billings either recover or repay such amounts. (7)REGULATORY ASSETS: Certain costs, which will be passed through to customers under ratemaking rules for regulated operations, are deferred by the Company as regulatory assets. The amounts deferred relate primarily to the accounting for income taxes. (8)CASH FLOWS: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. (9)RECLASSIFICATION: Certain amounts contained in prior year comparative information have been reclassified to conform with the 1993 presentation. B. Direct Billing Settlements In 1990, a subsidiary, Kentucky West Virginia Gas Company, received FERC approval of settlement agreements with all customers, except Columbia Gas Transmission Company, for the direct billing to recover the higher Natural Gas Policy Act (NGPA) prices which the FERC had denied on natural gas produced from energy resource properties between 1978 and 1983. The settlements were individually negotiated and contain differing terms providing for the collection of $100.3 million over periods ranging from four to ten years. The recovery of $85 million of the $89 million settlement with the Equitable Gas division was subject to Pennsylvania Public Utility Commission (PUC) review as described below. The agreements that were fully approved were recorded at present value using a discount rate of 9%. In 1991, the Equitable Gas division received PUC approval to recover $25 million of increased gas costs relating to the FERC settlement, including $4.9 million of additional carrying charges. The PUC also approved the recovery of $7.8 million relating to the settlement in each of the years 1993 and 1992. The amounts approved increased net income reported for the third quarter of 1993 and 1992 by $4.7 million and $14.9 million for the third quarter of 1991. Approximately $49 million from the settlement remains to be recovered in future gas cost filings with the PUC over the next seven years. A final settlement proposal negotiated with Columbia for the recovery of $19 million was approved by the FERC in February 1993. The settlement agreement has been accepted in Columbia's bankruptcy proceeding. However, in view of Columbia's pending reorganization under Chapter 11 of the Bankruptcy Code, the amount of recovery from Columbia remains uncertain and therefore has not been recognized. C. Income Taxes The Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109) effective January 1, 1993 and elected to restate prior period financial statements for the effect of the change. As of January 1, 1988, retained earnings was reduced by approximately $12 million; periodic net income since that date was not restated because the effect of the change in accounting on all periods reported was not material. Application of the new rules increased deferred income tax liabilities at January 1, 1992 by approximately $77 million and created regulatory assets of approximately $65 million. The sources and tax effects of the temporary differences are as follows: December 31, 1993 1992 (Thousands) Deferred tax liabilities (assets): Exploration and development costs expensed for income tax reporting $138,089 $124,254 Tax depreciation in excess of book depreciation . . . . . . 250,032 141,183 Regulatory temporary differences 36,841 28,710 Deferred purchased gas cost . . . 8,413 2,423 Alternative minimum tax . . . . . (69,333) (48,920) Investment tax credit . . . . . . (10,340) (10,121) Other . . . . . . . . . . . . . . (21,829) 4,958 Total (including amounts classified as current liabilities of $733 for 1993 and $182 for 1992) . $331,873 $242,487 As of December 31, 1993 and 1992, $76.4 million and $68.4 million, respectively, of the net deferred tax liabilities are related to rate regulated operations and have been deferred as regulatory assets. Income tax expense is summarized as follows: Years Ended December 31, 1993 1992 1991 (Thousands) Current: Federal . . . . . . . . $15,577 $13,540 $11,770 State . . . . . . . . . 3,687 7,245 4,192 Deferred: Federal . . . . . . . . (2,758) (4,547) 1,254 State . . . . . . . . . 3,514 2,532 2,720 Total . . . . . . . . $20,020 $18,770 $19,936 C. Income Taxes (Continued) Provisions for income taxes are less than amounts computed at the federal statutory rate of 35% for 1993 and 34% for 1992 and 1991 on pretax income. The reasons for the difference are summarized as follows: Years Ended December 31, 1993 1992 1991 (Thousands) Tax at statutory rate . $ 32,716 $ 26,791 $28,595 State income taxes . . . 4,332 6,453 4,562 Increase in federal income tax rate . . . . 5,070 - - Nonconventional fuels tax credit . . . . . . . . (20,600) (14,051) (10,998) Other . . . . . . . . . (1,498) (423) (2,223) Income tax expense . . $ 20,020 $ 18,770 $ 19,936 Effective tax rate . . . 21.4% 23.8% 23.7% In August 1993, the Omnibus Budget Reconciliation Act of 1993 (Act) was signed into law. One of the provisions of the Act was to raise the maximum corporate income tax rate from 34% to 35%. The effect of this tax rate change increased deferred tax liabilities by approximately $11 million and increased regulatory assets by approximately $6 million. The consolidated federal income tax liability of the Companies has been settled through 1990. The Company has available $69.3 million of alternative minimum tax credit carryforward which has no expiration date. In addition, the Company has net operating loss carryforwards for federal income tax purposes of $13.8 million which begin to expire in 2006. The net operating loss carryforwards are the result of the acquisition of Louisiana Intrastate Gas Company as described in Note L. Amortization of deferred investment tax credits amounted to $1,373,000 for 1993, $1,138,000 for 1992 and $850,000 for 1991. D. Employee Pension Benefits The Companies have several trusteed retirement plans covering substantially all employees. The Companies' annual contributions to the plans are based on a 25-year funding level. Plans covering union members generally provide benefits of stated amounts for each year of service. Plans covering salaried employees use a benefit formula which is based upon employee compensation and years of service to determine benefits to be provided. Plan assets consist principally of equity and debt securities. D. Employee Pension Benefits (Continued) The following table sets forth the plans' funded status and amounts recognized in the Company's consolidated balance sheets: December 31, 1993 1992 (Thousands) Actuarial present value of benefit obligations: Vested benefit obligation $132,402 $112,372 Accumulated benefit obligation $135,809 $115,192 Market value of plan assets $159,433 $149,351 Projected benefit obligation 148,265 124,100 Excess of plan assets over projected benefit obligation 11,168 25,251 Unrecognized net asset (3,237) (3,664) Unrecognized net gain (16,732) (27,305) Unrecognized prior service cost 10,403 8,246 Prepaid pension cost recognized in the consolidated balance sheets $ 1,602 $ 2,528 At year-end the discount rate used in determining the actuarial present value of benefit obligations was 7 1/4% for 1993, 8 1/4% for 1992 and 8 1/2% for 1991. The assumed rate of increase in compensation levels was 4 1/2% for 1993 and 5% for 1992 and 1991. The Companies' pension cost, using a 9% average rate of return on plan assets at the beginning of 1993 and 1992 and 8 1/2% for 1991, comprised the following: Years Ended December 31, 1993 1992 1991 (Thousands) Service cost benefits earned during the period $ 2,806 $ 2,345 $ 2,726 Interest cost on projected benefit obligation 10,472 9,917 10,305 Actual return on assets (17,224) (18,214) (27,681) Net amortization and deferral 5,486 7,069 16,946 Net periodic pension cost $ 1,540 $ 1,117 $ 2,296 E. Other Postretirement Benefits In addition to providing pension benefits, the Companies provide certain health care and life insurance benefits for retired employees and their dependents. Substantially all employees are eligible for these benefits upon retirement from the Companies. E. Other Postretirement Benefits (Continued) SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" (OPEBS) requires, among other things, the accrual of retirement health care and life insurance benefits during the years an employee provides services. The new standard requires that the accumulated plan benefit obligation existing at the date of adoption (transition obligation) either be recognized immediately or deferred and amortized over future periods. Historically, the Company recognized the cost of retiree health care and life insurance benefits as paid and has retained the right to modify or discontinue these benefits at any time. However, the Company was required to adopt the new standard effective January 1, 1993 and will amortize the resulting transition obligation over 20 years. In determining the accumulated postretirement benefit obligation at January 1, 1993, the Company used an inflation factor for medical costs beginning at 13% per year, which decreases gradually thereafter to 6% within 15 years and a discount rate of 8 1/4%. At December 31, 1993, the beginning inflation factor was 11% decreasing gradually to 4 3/4% within 17 years and the discount rate was 7 1/4%. The following summarizes the status of the Company's accrued OPEBS: December 31, January 1, 1993 1993 (Thousands) Accumulated postretirement benefit obligation: Retired employees $ 23,078 $ 24,971 Active employees: 8,942 7,361 Fully eligible Other 16,741 13,780 Total obligation 48,761 46,112 Unrecognized net gain 40 -0- Unrecognized transition obligation (43,806) (46,112) Accrued postretirement benefit cost $ 4,995 $ -0- The net periodic cost for postretirement health care and life insurance benefits for 1993 includes the following: 1993 (Thousands) Service cost . . . . . . . . . . . . . . . . . $1,065 Interest cost . . . . . . . . . . . . . . . . 3,936 Amortization of transition obligation . . . . 2,306 Periodic cost . . . . . . . . . . . . . . . . $7,307 E. Other Postretirement Benefits (Continued) As of December 31, 1993, $2.9 million of the accrued OPEBS related to rate regulated operations have been deferred as regulatory assets. Rate filings will be made to seek full recovery of the costs accrued under SFAS No. 106 over periods of up to 20 years. An increase of one percent in the assumed medical cost inflation rate would increase the accumulated postretirement benefit obligation by 8% and would increase the periodic cost by 10%. The Company paid current claims for OPEBS of $3,421,000 in 1993. The cost of OPEBS for 1992 and 1991 was recognized as paid and amounted to $2,919,000 and $3,537,000, respectively. F. Common Stock (1) Common Stock Issuance On September 29, 1993, the Company issued 3 million shares of common stock at a price of $38.50 per share. Net proceeds after underwriters' commissions and other issuance costs were approximately $111.6 million. The proceeds were used to repay a portion of the short-term debt incurred to purchase the stock of Louisiana Intrastate Gas Company as described in Note L. (2) Restricted Stock Options and Awards The Equitable Resources, Inc., Key Employee Restricted Stock Option and Stock Appreciation Rights Incentive Compensation Plan is nonqualified and provides for the granting of restricted stock awards or options to purchase common stock of the Company at prices ranging from 75% to 100% of market value on the date of grant. Stock options may be granted with or without stock appreciation units. Options expire five years from the date of grant. Stock awarded under the Plan or purchased through the exercise of options, and the value of certain stock appreciation units, are restricted and subject to risk of forfeiture should an optionee terminate employment prior to specified vesting dates. In 1991, restricted stock awards of 41,625 shares were made to key employees. The Company used treasury shares repurchased from plan participants for these awards. F. Common Stock (Continued) The following schedule summarizes the stock option activity: Years Ended December 31, 1993 1992 1991 Options outstanding January 1 139,725 228,787 286,820 Granted 148,543 - 99,000 Exercised (33,325) (89,062) (152,158) Canceled, forfeited, surrendered or expired (1,875) - (4,875) Options outstanding December 31 253,068 139,725 228,787 Average price of options $18.97 $17.07 $15.14 At December 31: Prices of options outstanding $17.50 $15.20 $15.20 to to to $36.50 $20.13 $21.59 Average option price $29.69 $19.76 $18.71 Shares reserved for issuance 671,349 705,209 794,558 (3)Dividend Reinvestment and Stock Purchase Plan Pursuant to this plan, stockholders can reinvest dividends and make limited additional investments in shares of common stock. Shares issued through the plan have been acquired on the open market. Beginning in 1994, shares issued through the plan may continue to be acquired on the open market or by issuance of previously unissued shares. At December 31, 1993, 241,314 shares of common stock were reserved for issuance under the plan. G. Short-Term Loans Maximum lines of credit available to the Company were $360,000,000 during 1993, $140,000,000 during 1992 and $180,000,000 during 1991. The Company is not required to maintain compensating bank balances. Commitment fees averaging one-tenth of one percent are paid to maintain credit availability. G. Short-Term Loans (Continued) At December 31, 1993, short-term loans consisted of $189,900,000 of commercial paper and $64,000,000 of bank loans; and at December 31, 1992, $79,000,000 and $35,000,000, respectively. The maximum amounts of outstanding short-term loans were $339,000,000 in 1993, $130,500,000 in 1992 and $153,000,000 in 1991. The average daily total of short-term loans outstanding was approximately $174,900,000 during 1993, $107,389,000 during 1992 and $61,535,000 during 1991; weighted average annual interest rates applicable thereto were 3.3% in 1993, 3.8% in 1992 and 5.9% in 1991. H. Long-Term Debt The Company filed a shelf registration in March 1992 to issue $100 million of Medium-Term Notes--Series B to be used primarily to retire short-term loans incurred to temporarily finance a portion of 1991 acquisitions. Through December 31, 1993, the Company issued $56.5 million of Medium-Term Notes. These notes have maturity dates ranging from three to thirty years and a weighted average interest rate of 6.30%. Considering the advantage of lower short-term interest rates, the Company has delayed issuance of the remaining notes. On March 31, 1993, the Company redeemed $16.4 million of First Mortgage Bonds, 8% series due June 15, 1997. The bonds were redeemed at 101.05 percent of the principal amount thereof, plus accrued interest through the date of redemption. On August 3, 1992, the Company redeemed $8.6 million of 9% Debentures due June 15, 1996. The debentures were redeemed at 100.79 percent of the principal amount thereof, plus accrued interest through the date of redemption. On March 2, 1992, the Company redeemed $6.6 million of First Mortgage Bonds, 6 1/4% series due September 1, 1992. The 9 1/2% Convertible Subordinated Debentures are convertible at any time into common stock at a conversion price of $11.06 per share. During 1993, 1992 and 1991, $564,000, $259,000 and $1,084,000 of these debentures were converted into 50,983, 23,399 and 97,983 shares of common stock, respectively. At December 31, 1993, 240,918 shares of common stock were reserved for conversions. Interest expense on long-term debt amounted to $33,161,000 in 1993, $31,899,000 in 1992 and $25,318,000 in 1991. Aggregate maturities of long-term debt will be $1,971,000 in 1994, $24,500,000 in 1995, $75,000,000 in 1996, none in 1997 and $5,000,000 in 1998. I. Fair Value of Financial Instruments The carrying value of cash and cash equivalents as well as short- term loans approximates fair value due to the short maturity of the instruments. I. Fair Value of Financial Instruments (Continued) The estimated fair value of long-term debt, including the portion due within one year, at December 31, 1993 and 1992 would be $433,048,000 and $388,642,000, respectively. The fair value was estimated based on the quoted market prices as well as the discounted values using a current discount rate reflective of the remaining maturity. The Company's 8 1/4% Debentures and 7 1/2% Debentures may not be redeemed prior to maturity. The 9.9% Debentures require payment of premiums for early redemption, exclusive of annual sinking fund requirements. J. Concentrations of Credit Risk Energy resources operating revenues and related accounts receivable are generated primarily from gas marketing activities, the sale of produced natural gas, natural gas liquids and oil and intrastate transportation of gas. The gas marketing activities are nationwide to large volume customers for resale or end use. Produced natural gas is sold primarily to utility and industrial customers located mainly in the Appalachian area. Produced natural gas liquids are sold to refinery customers in Louisiana and Kentucky. Produced oil is sold to refinery customers in the Rocky Mountain and Appalachian areas. The intrastate gas transportation is concentrated in Louisiana. Utility services operating revenues and related accounts receivable are generated through regulated interstate pipeline and natural gas utility sales, transportation and storage services. Interstate natural gas sales, transportation and storage services are to the affiliated utility, Equitable Gas, as well as other utility and end-user customers located in nine mid-Atlantic and northeastern states. Utility sales and transportation services are provided to more than 265,000 residential, commercial and industrial customers located in southwest Pennsylvania and parts of West Virginia and Kentucky. Under state regulations, the utility is required to provide continuous gas service to residential customers during the winter heating season. In this regard, the Company continually reviews the credit worthiness of customers and, when necessary, requests deposits to secure future service. The Company is not aware of any significant credit risks which have not been recognized in provisions for doubtful accounts. K. Financial Information by Business Segment The Company reports its operations in two business segments energy resources and utility services. Energy resource activities comprise exploration, development, production, gathering and marketing of natural gas and oil, intrastate transportation of natural gas, extraction and sale of natural gas liquids and contract drilling. Utility service activities comprise primarily a natural gas utility and three regulated gas pipelines. K. Financial Information by Business Segment (Continued) The following table sets forth financial information for each of the two business segments: Years Ended December 31, 1993 1992 1991 (Thousands) Operating Revenues: Energy Resources $ 743,064 $ 461,642 $ 367,297 Utility Services 397,297 393,628 381,655 Sales between segments (45,567) (42,896) (69,321) Total $1,094,794 $ 812,374 $ 679,631 Operating Income: Energy Resources $ 54,153 $ 41,198 $ 46,605 Utility Services 76,344 73,228 69,972 Total $ 130,497 $ 114,426 $ 116,577 Net Income: Energy Resources $ 38,000 $ 29,502 $ 31,929 Utility Services 35,455 30,524 32,239 Total $ 73,455 $ 60,026 $ 64,168 Identifiable Assets (a): Energy Resources $1,085,407 $ 696,801 $ 695,907 Utility Services 906,920 822,064 801,209 Eliminations (45,420) (50,441) (56,523) Total $1,946,907 $1,468,424 $1,440,593 Depreciation and Depletion: Energy Resources $ 53,423 $ 45,638 $ 36,002 Utility Services 23,471 20,302 18,591 Total $ 76,894 $ 65,940 $ 54,593 Capital Expenditures: Energy Resources (including acquisitions) $ 296,245 $ 52,923 $ 189,472 Utility Services 43,166 46,666 45,717 Total $ 339,411 $ 99,589 $ 235,189 (a) Amounts for 1992 and 1991 have been restated for the effect of adoption of SFAS No. 109 as described in Note C. L. Acquisitions On June 30, 1993, the Company purchased the outstanding common stock of Louisiana Intrastate Gas Company (LIG) for $191 million. LIG owns a 1,900 mile intrastate pipeline system in Louisiana, four natural gas processing plants and is also engaged in gas marketing. The purchase was funded initially with short-term debt, a portion of which was repaid with the proceeds from the issuance of common stock as described in Note F to the consolidated financial statements. Under terms of the purchase agreement, the seller, and/or the previous owner of LIG, have indemnified the Company against losses resulting from claims of liability under gas purchase contracts and substantially all environmental liabilities attributable to operation of LIG prior to June 30, 1993. On July 8, 1993, the Company purchased all of the outstanding stock of Hershey Oil Corporation (Hershey) for approximately $18 million. Hershey's assets consist primarily of approximately 68 billion cubic feet of proved natural gas reserves and 17,000 net undeveloped acres in Alberta, Canada. The acquisitions were accounted for under the purchase method and are included in the energy resource segment. Had the purchases occurred as of the beginning of 1993 and 1992, unaudited proforma consolidated results for the Company would have been: revenues of $1.119 billion and $872 million; net income of $74.0 million and $68.6 million; and earnings per share of $2.29 and $2.19 for the years ended December 31, 1993 and 1992, respectively. M. Purchase of Properties On September 30, 1991, the Company purchased oil and gas properties in the Rocky Mountain area for approximately $64 million. The purchase, which was effective July 1, 1991, includes interests in approximately 400 wells and 438,000 net acres situated primarily in Wyoming, Montana, North Dakota and Utah. On November 25, 1991, the Company purchased gas properties and drilling programs in the Appalachian Basin for approximately $75 million. The purchase, which was effective September 1, 1991, includes properties located in western Virginia consisting of approximately 200 producing wells, 218,000 net acres and 205 miles of gathering and transmission lines which are connected to a major interstate pipeline. In both cases, the entire purchase price was attributed to the properties. N. Commitments and Contingencies Rent expense was $9,834,000 in 1993, $9,333,000 in 1992 and $8,353,000 in 1991. Long-term leases are principally for division operating headquarters and warehouse buildings and computer hardware and have renewal options ranging to 20 years from December 31, 1993. Future minimum rentals for all noncancelable long-term leases at December 31, 1993 are as follows: 1994, $5,448,000; 1995, $4,605,000; 1996, $3,622,000; 1997, $3,137,000; 1998, $2,803,000 and $15,424,000 thereafter for a total of $35,039,000. Utility Services has annual commitments of approximately $43 million for demand charges under existing long-term contracts with pipeline suppliers for periods extending up to 9 years at December 31, 1993. However, substantially all of these costs are recoverable in customer rates. The Company is subject to federal, state and local environmental laws and regulations. These laws and regulations, which are constantly changing, can require expenditures for remediation and may in certain instances result in assessment of fines. The Company has established procedures for on-going evaluation of its operations to identify potential environmental exposures and assure compliance with regulatory policies and procedures. On-going expenditures for compliance with environmental laws and regulations, including investments in plant and facilities to meet environmental requirements, have not been material. Management believes that any such required expenditures will not be significantly different in either their nature or amount in the future. The estimated costs associated with identified situations that require remedial action are accrued. However, certain of these costs are deferred when recoverable by claims against third parties or through regulated rates. Management does not know of any environmental liabilities that will have a material effect on the Company's financial position or results of operations. As described in Note B, the Company has a claim in Columbia Gas Transmission Company's bankruptcy proceeding related to the direct billing settlements. In addition, the Company has various claims against Columbia for abrogation of contracts to purchase gas from the Company. The amount that may be realized, if any, under the claims cannot be estimated in view of Columbia's bankruptcy proceeding. O. Interim Financial Information (Unaudited) The following quarterly summary of operating results reflects variations due primarily to the seasonal nature of the Company's business and the activities of new subsidiaries from the date of acquisition as described in Note L. March June September December 31 30 30 31 (Thousands except per share amounts) 1993 Operating revenues $269,819 $207,782 $272,745 $344,448 Operating income 55,349 13,978 24,787 36,383 Net income 30,795 8,831 8,612 25,217 Earnings per share $.98 $.28 $.27 $.73 1992 Operating revenues $245,208 $161,352 $144,429 $261,385 Operating income 50,351 8,678 14,358 41,039 Net income 26,105 3,626 7,161 23,134 Earnings per share $.83 $.12 $.23 $.74 P. Natural Gas and Oil Producing Activities The supplementary information summarized below presents the results of natural gas and oil activities for the Energy Resource segment in accordance with SFAS No. 69, "Disclosures About Oil and Gas Producing Activities." The information presented excludes data associated with natural gas reserves related to rate regulated operations. These reserves (proved developed) are less than 5% of total Company proved reserves for the years presented. P. Natural Gas and Oil Producing Activities (Continued) (1)Production Costs The following table presents the costs incurred relating to natural gas and oil production activities: 1993 1992 1991 (Thousands) At December 31: Capitalized costs . . . $836,638 $748,325 $718,140 Accumulated depreciation and depletion . . . . 256,508 216,005 187,321 Net capitalized costs . $580,130 $532,320 $530,819 Costs incurred : Property acquisition: Proved properties . . $29,345 $ 663 $119,308 Unproved properties . - - 20,806 Exploration . . . . . . 13,928 13,166 22,924 Development . . . . . . 62,336 46,321 37,498 (2) Results of Operations for Producing Activities The following table presents the results of operations related to natural gas and oil production: 1993 1992 1991 (Thousands) Revenues: Affiliated . . . . . . $ 15,467 $ 8,964 $ 16,407 Nonaffiliated . . . . 140,380 127,369 94,165 Production costs . . . . 33,620 30,385 25,971 Exploration expenses . . 13,559 16,439 17,144 Depreciation and depletion 43,841 40,744 31,863 Income tax expense . . . 5,039 5,221 2,748 Results of operations from producing activities (excluding corporate overhead) . . . . . . . $ 59,788 $ 43,544 $ 32,846 P. Natural Gas and Oil Producing Activities (Continued) (3) Reserve Information (Unaudited) The information presented below represents estimates of proved gas and oil reserves prepared by Company engineers. Proved developed reserves represent only those reserves expected to be recovered from existing wells and support equipment. Proved undeveloped reserves represent proved reserves expected to be recovered from new wells after substantial development costs are incurred. Substantially all reserves are located in the United States. Natural Gas 1993 1992 1991 (Millions of Cubic Feet) Proved developed and undeveloped reserves: Beginning of year 720,032 695,898 620,755 Revision of previous estimates 9,399 25,736 (2,959) Purchase of natural gas in place - net 86,113(a) 434 89,925 Extensions, discoveries and other additions Production (53,550) (48,243) (40,022) End of year 822,583(b) 720,032 695,898 Proved developed reserves: Beginning of year 665,194 621,846 528,573 End of year 759,282(c) 665,194 621,846 (a) Includes 68,000 MMcf purchased in Canada. (b) Includes 70,000 MMcf proved reserves in Canada. (c) Includes 46,000 MMcf proved developed reserves in Canada. P. Natural Gas and Oil Producing Activities (Continued) Oil 1993 1992 1991 (Thousands of Barrels) Proved developed and undeveloped reserves: Beginning of year 20,023 19,427 12,253 Revision of previous estimates (4,876) 951 (309) Purchase (sale) of oil in place - net 418(a) (138) 7,907 Extensions, discoveries and other additions 3,015 2,189 1,582 Production (2,112) (2,406) (2,006) End of year 16,468(b) 20,023 19,427 Proved developed reserves: Beginning of year 18,540 17,072 11,166 End of year 16,442(c) 18,540 17,072 (a) Includes 68,000 barrels purchased in Canada. (b) Includes 65,000 barrels proved reserves in Canada. (c) Includes 39,000 barrels proved developed reserves in Canada. (4) Standard Measure of Discounted Future Cash Flows (Unaudited) Management cautions that the standard measure of discounted future cash flows should not be viewed as an indication of the fair market value of gas and oil producing properties, nor of the future cash flows expected to be generated therefrom. The information presented does not give recognition to future changes in estimated reserves, selling prices or costs and has been discounted at an arbitrary rate of 10%. Estimated future net cash flows from natural gas and oil reserves based on selling prices and costs at year-end price levels are as follows: 1993 1992 1991 (Thousands) Future cash inflows $2,140,151 $2,058,973 $1,835,380 Future production costs (598,707) (551,987) (462,367) Future development costs (24,579) (41,612) (63,243) Future income tax expenses (434,362) (409,970) (351,087) Future net cash flow 1,082,503 1,055,404 958,683 10% annual discount for estimated timing of cash flows (515,023) (507,082) (456,624) Standardized measure of discounted future net cash flows $ 567,480(a) $ 548,322 $ 502,059 (a) Includes $31,267,000 in Canada. Summary of changes in the standardized measure of discounted future net cash flows: 1993 1992 1991 (Thousands) Sales and transfers of gas and oil produced - net $ (122,227) $ (105,948) $ (84,601) Net changes in prices, production and development costs (80,256) 11,370 (141,414) Extensions, discoveries, and improved recovery, less related costs 90,035 77,759 43,188 Development costs incurred 18,482 27,807 25,588 Purchase (sale) of minerals in place - net 62,843 (142) 120,533 Revisions of previous quantity estimates (14,910) 1,709 (4,440) Accretion of discount 69,284 62,548 64,829 Net change in income taxes (8,584) (21,093) 49,691 Other 4,491 (7,747) (9,150) Net increase 19,158 46,263 64,224 Beginning of year 548,322 502,059 437,835 End of year $ 567,480 $ 548,322 $ 502,059 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not Applicable. PART III Item 10. Directors and Executive Officers of the Registrant Information required by Item 10 with respect to directors is incorporated herein by reference to the section describing "Election of Directors" in the Company's definitive proxy statement relating to the annual meeting of stockholders to be held on May 27, 1994, which will be filed with the Commission within 120 days after the close of the Company's fiscal year ended December 31, 1993. Information required by Item 10 with respect to executive officers is included herein after Item 4 at the end of Part I. Item 11. Executive Compensation Information required by Item 11 is incorporated herein by reference to the section describing "Executive Compensation", "Employment Contracts and Change-In-Control Arrangements" and "Pension Plan" in the Company's definitive proxy statement relating to the annual meeting of stockholders to be held on May 27, 1994. Item 12.Security Ownership of Certain Beneficial Owners and Management Information required by Item 12 is incorporated herein by reference to the section describing "Voting Securities and Record Date" in the Company's definitive proxy statement relating to the annual meeting of stockholders to be held on May 27, 1994. Item 13. Certain Relationships and Related Transactions Not applicable. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) 1. Financial statements The financial statements listed in the accompanying index to financial statements and financial statement schedules (page 51) are filed as part of this annual report. 2. Financial statement schedules The financial statement schedules listed in the accompanying index to financial statements and financial statement schedules (page 51) are filed as part of this annual report. 3. Exhibits The exhibits listed on the accompanying index to exhibits (pages 62 through 65) are filed as part of this annual report. (b) Reports on Form 8-K filed during the quarter ended December 31, 1993. None (c) Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with an asterisk (*) in the Index to Exhibits. EQUITABLE RESOURCES, INC. INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES COVERED BY REPORT OF INDEPENDENT AUDITORS (Item 14 (a)) 1. The following consolidated financial statements of Equitable Resources, Inc. and Subsidiaries are included in Item 8: Page Reference Statements of Consolidated Income for each of the three years in the period ended December 31, 1993 24 Consolidated Balance Sheets December 31, 1993 and 1992 25 & 26 Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 1993 27 Statements of Common Stockholders' Equity for each of the three years in the period ended December 31, 1993 28 Long-term Debt, December 31, 1993 and 1992 29 Notes to Consolidated Financial Statements 30 thru 47 2. Schedules for the Years Ended December 31, 1993, 1992 and 1991 included in Part IV: V - Property, Plant and Equipment 52, 53 & 54 VI - Accumulated Depreciation, Depletion and Amortization 55, 56, 57, 58 of Property, Plant and Equipment & 59 VIII- Valuation and Qualifying Accounts and Reserves 60 X - Supplementary Income Statement Information 61 Schedules I, II, III, IV, VII, XI, XII, XIII and XIV are omitted since the subject matter thereof is either not present or is not present in amounts sufficient to require submission of the schedules as permitted by Regulation S-X. The information called for in Schedule IX is set forth in the consolidated balance sheet and notes to consolidated financial statements.
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1993 Column A Column B Column C Column D Column E Column F Balance at Other Changes Balance at Beginning Additions End of Classifications Period at Cost Retirements Add Deduct Period (Thousands) Property, Plant and Equipment (at original cost): Energy Resources: Gas: In service: Natural gas and oil production $ 738,239 $101,158 $ 8,572 $ $ $ 830,825 General 38,386 17,867 1,168 55,085 Total gas plant in service 776,625 119,025 9,740 885,910 Construction work in progress 11,864 141(B) 12,005 Total gas plant 788,489 119,166 9,740 897,915 Gas liquids extraction 26,165 17,738 43,903 Intrastate transmission 263,018 1,237 61,781 Total Energy Resources 814,654 399,922 10,977 1,203,599 Utility Services: Gas: In service: Intangible 6,089 2,529 272 8,346 Production 130,545 1,438 1,163 130,820 Storage 56,320 15,153 164 15,069(A) 86,378 Transmission 126,020 10,548 1,160 135,408 Distribution 445,015 18,944 2,992 460,967 General 55,641 1,376 1,998 55,019 Total gas plant in service 819,630 49,988 7,749 15,069 876,938 Construction work in progress 32,437 (6,822)(B) 25,615 Held for future use 263 10 253 Total gas plant 852,330 43,166 7,759 15,069 902,806 Other 432 432 Total Utility Services 852,762 43,166 7,759 15,069 903,238 Total $1,667,416 $443,088 $18,736 $15,069 $ $2,106,837 Notes: A. Reclassification from gas stored underground--current inventory. See Note A to the consolidated financial statements. B. Net change in construction work in progress. C. There were no other significant and unusual additions, abandonments, or retirements, or any significant and unusual changes in the general character and location of principal plants and other important units.
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1992
Column A Column B Column C Column D Column E Column F Balance at Other Changes Balance at Classifications Beginning Additions Note (A) End of of Period at Cost Retirements Add Deduct Period (Thousands) Property, Plant and Equipment (at original cost): Energy Resources: Gas: In service: Natural gas and oil production $ 711,604 $43,375 $16,740 $ $ $ 738,239 General 35,451 5,046 1,854 257 38,386 Total gas plant in service 747,055 48,421 18,594 257 776,625 Construction work in progress 7,475 4,389(B) 11,864 Total gas plant 754,530 52,810 18,594 257 788,489 Gas liquids extraction 26,058 113 6 26,165 Total Energy Resources 780,588 52,923 18,600 257 814,654 Utility Services: Gas: In service: Intangible 4,584 1,555 50 6,089 Production 127,149 4,015 761 198 56 130,545 Storage 51,886 4,442 8 56,320 Transmission 122,046 4,484 368 56 198 126,020 Distribution 427,679 18,078 742 445,015 General 51,416 6,050 1,825 55,641 Total gas plant in service 784,760 38,624 3,754 254 254 819,630 Construction work in progress 24,293 7,887(B) 257 32,437 Held for future use 269 6 263 Total gas plant 809,322 46,511 3,760 511 254 852,330 Heating and Cooling: In service . 11,916 11,916 Construction work In progress Held for future use 21 21 Total heating and cooling 11,937 11,937 Other 277 155 432 Total Utility Services 821,536 46,666 15,697 511 254 852,762 Total $1,602,124 $99,589 $34,297 $511 $511 $1,667,416 Notes: A. Reclassifications of property resulting from change in function. B. Net change in construction work in progress. C. There were no other significant and unusual additions, abandonments, or retirements, or any significant and unusual changes in the general character and location of principal plants and other important units.
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1991 Column A Column B Column C Column D Column E Column F Balance at Other Changes Balance Beginning Additions (Note A) at End of Classifications of Period at Cost Retirements Add Deduct Period (Thousands) Property, Plant and Equipment (at original cost): Energy Resources: Gas: In service: Natural gas and oil production $ 532,142 $186,225 $ 6,763 $ $ $ 711,604 General 29,963 5,749 261 35,451 Total gas plant in service 562,105 191,974 7,024 747,055 Construction work in progress 10,657 (3,182)(B) 7,475 Total gas plant 572,762 188,792 7,024 754,530 Gas liquids extraction 25,378 680 26,058 Total Energy Resources 598,140 189,472 7,024 780,588 Utility Services: Gas: In service: Intangible 4,557 27 4,584 Production 121,849 5,874 574 127,149 Storage 51,432 543 89 51,886 Transmission 115,257 6,850 61 122,046 Distribution 412,245 17,008 1,574 427,679 General 45,531 6,846 961 51,416 Total gas plant in service 750,871 37,148 3,259 784,760 Construction work in progress 15,918 8,375(B) 24,293 Held for future use 269 269 Total gas plant 767,058 45,523 3,259 809,322 Heating and Cooling: In service . 11,727 221 32 11,916 Construction work in progress 27 (27)(B) Held for future use 21 21 Total heating and cooling 11,775 194 32 11,937 Other 3,124 2,847 277 Total Utility Services 781,957 45,717 6,138 821,536 Total $1,380,097 $235,189 $13,162 $ $ $1,602,124 Notes: A. Reclassifications of property resulting from change in function. B. Net change in construction work in progress. C. There were no other significant and unusual additions, abandonments, or retirements, or any significant and unusual changes in the general character and location of principal plants and other important units.
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLAN AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1993 Column A Column B Column C Column D Column E Column F Additions Other Changes Balance at Charged to Add (Deduct) Balance at Description (Note A) Beginning Costs and Retirements Describe End of of Period Expenses Period (Thousands) Energy Resources: Gas Plant: Depreciation: Portion classified by functions of property: Natural gas and oil production $216,395 $42,951 $ 2,338 $ $257,008 General 16,712 4,084 972 19,824 Total depreciation and depletion on gas plant 233,107 47,035 3,310 276,832 Gas liquids extraction 16,285 1,590 17,875 Intrastate transmission 4,918 1,255 3,663 Total Energy Resources 249,392 53,543 4,565 298,370 Utility Services: Gas plant: Depreciation: Portion classified by functions of property: Intangible plant 3,018 1,209 407 3,820 Production plant 59,723 3,403 1,160 61,966 Storage plant 18,940 1,274 156 (207) 19,851 Transmission plant 42,153 3,237 1,126 207 44,471 Distribution plant 96,538 11,655 3,808 104,385 General plant 20,673 4,804 1,998 23,479 Total depreciation 241,045 25,582 8,655 257,972 Retirement work in progress (632) (217)(B) (415) Amortization and storage land and land rights 1,566 95 8 1,653 Amortization and depletion of producing natural gas land and land rights 458 4 12 10 460 Held for future use Total depreciation and depletion on gas plant 242,437 25,681 8,458 10 259,670 Heating and Cooling Other physical property 373 373 Total Utility Services 242,810 25,681 8,458 10 260,043 Total $492,202 $79,224 $13,023(C) $ 10 $558,413
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLAN AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1992 Column A Column B Column C Column D Column E Column F Balance At Additions Beginning Charged To Other Changes Balance at Description (Note A) of Period Costs and Retirements Add (Deduct) End of Expenses Describe Period (Thousands) Energy Resources: Gas Plant: Depreciation: Portion classified by functions of property: Natural gas and oil production $187,606 $40,834 $12,045 $ $216,395 General 14,299 3,695 1,282 16,712 Total depreciation and depletion on gas plant 201,905 44,529 13,327 233,107 Gas liquids extraction 15,181 1,109 5 16,285 Total Energy Resources 217,086 45,638 13,332 249,392 Utility Services: Gas plant: Depreciation: Portion classified by functions of property: Intangible plant 2,148 920 50 3,018 Production plant 57,408 3,146 913 82 59,723 Storage plant 17,919 1,022 8 7 18,940 Transmission plant 39,603 2,990 351 (89) 42,153 Distribution plant 88,730 10,143 2,173 (162) 96,538 General plant 18,103 4,032 1,624 162 20,673 Total depreciation 223,911 22,253 5,119 241,045 Retirement work in progress (1,531) (899)(B) (632) Amortization and storage land and land rights 1,484 82 1,566 Amortization and depletion of producing natural gas land and land rights 452 6 458 Held for future use 5 5 Total depreciation and depletion on gas plant 224,316 22,346 4,225 242,437 Heating and Cooling 4,381 4,381 Other physical property 218 155 373 Total Utility Services 228,915 22,501 8,606 242,810 Total $446,001 $68,139 $21,938(C) $ $492,202
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLAN AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 1991 Column A Column B Column C Column D Column E Column F Balance At Additions Other Changes Beginning Charged to Add (Deduct) Balance at Description (Note A) of Period Costs and Retirements Describe End of Expenses Period (Thousands) Energy Resources: Gas Plant: Depreciation: Portion classified by functions of property: Natural gas and oil production $160,806 $31,926 $ 5,126 $ $187,606 General 11,539 3,006 246 14,299 Total depreciation and depletion on gas plant 172,345 34,932 5,372 201,905 Gas liquids extraction 14,112 1,069 15,181 Total Energy Resources 186,457 36,001 5,372 217,086 Utility Services: Gas plant: Depreciation: Portion classified by functions of property: Intangible plant 1,208 940 2,148 Production plant 55,414 2,971 993 16 57,408 Storage plant 17,029 977 87 17,919 Transmission plant 36,818 2,839 54 39,603 Distribution plant 81,012 9,515 1,781 (16) 88,730 General plant 15,521 3,357 775 18,103 Total depreciation 207,002 20,599 3,690 223,911 Retirement work in progress (1,434) 97(B) (1,531) Amortization and storage land and land rights 1,407 77 1,484 Amortization and depletion of producing natural gas land and land rights 444 8 452 Held for future use Total depreciation and depletion on gas plant 207,419 20,684 3,787 224,316 Heating and Cooling 4,710 (297) 32 4,381 Other physical property 3,069 (6) 2,845 218 Total Utility Services 215,198 20,381 6,664 228,915 Total $401,655 $56,382 $12,036(C) $ $446,001
EQUITABLE RESOURCES, INC. NOTES TO SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 1993 (Thousands) A. Includes $1,859 depreciation of automotive equipment charged to transportation clearing account and then distributed principally to various operating expenses and construction accounts. B. Net change in retirement work in progress. C. Retirements shown in Schedule V, Property, Plant and Equipment are reconciled with the amounts shown in Column D of this schedule as deductions from accumulated retirement reserves, as follows: Retirements or sales as shown in Schedule V $18,736 Add - Cost of removal 798 $19,534 Deduct: Salvage 1,276 Retirements not charged to reserve 5,235 Retirements, renewals and replacements as shown in Column D of this schedule $13,023 1992 (Thousands) A. Includes $2,022 depreciation of automotive equipment charged to transportation clearing account and then distributed principally to various operating expenses and construction accounts. B. Net change in retirement work in progress. C. Retirements shown in Schedule V, Property, Plant and Equipment are reconciled with the amounts shown in Column D of this schedule as deductions from accumulated retirement reserves, as follows: Retirements or sales as shown in Schedule V $34,297 Add - Cost of removal 243 $34,540 Deduct: Salvage 2,311 Retirements not charged to reserve 10,291 Retirements, renewals and replacements as shown in Column D of this schedule $21,938 EQUITABLE RESOURCES, INC. AND SUBSIDIARIES NOTES TO SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 1991 (Thousands) A. Includes $1,791 depreciation of automotive equipment charged to transportation clearing account and then distributed principally to various operating expenses and construction accounts. B. Net change in retirement work in progress. C. Retirements shown in Schedule V, Property, Plant and Equipment are reconciled with the amounts shown in Column D of this schedule as deductions from accumulated retirement reserves, as follows: Retirements or sales as shown in Schedule V $13,162 Add - Cost of removal 726 $13,888 Deduct: Salvage 914 Retirements not charged to reserve 938 Retirements, renewals and replacements as shown in Column D of this schedule $12,036 EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE THREE YEARS ENDED DECEMBER 31, 1993 Column A Column B Column C Column D Column E Balance At Additions Charged Balance Beginning To Costs At End Description Of Period and Expenses Deductions Of Period (Thousands) 1993 Accumulated Provision for Doubtful Accounts $9,503 $9,352 $8,749(A) $10,106 1992 Accumulated Provision for Doubtful Accounts $8,722 $8,998 $8,217(A) $9,503 1991 Accumulated Provision for Doubtful Accounts $7,531 $8,534 $7,343(A) $8,722 Note: (A) Customer accounts written off, less recoveries. EQUITABLE RESOURCES, INC. AND SUBSIDIARIES SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE THREE YEARS ENDED DECEMBER 31, 1993 Column A Column B Charged to Item Costs and Expenses 1993 1992 1991 (Thousands) 1. Maintenance and repairs $29,024 $26,327 $24,441 2. Depreciation and amortization of intangible assets (Note A) (Note A) (Note A) 3. Taxes other than payroll and income taxes: Pennsylvania gross receipts $14,837 $12,233 $13,268 State severance taxes 8,970 8,581 6,853 Other 10,707 10,978 9,225 Total $34,514 $31,792 $29,346 4. Royalties (Note B) $14,978 $15,736 $13,780 5. Advertising costs (Note A) (Note A) (Note A) Notes: (A) Not material in amount. (B) Substantially all royalties are reflected as a reduction of gas and oil revenues in the financial statements. EXHIBITS DESCRIPTION METHOD OF FILING 2.01 (a) Stock Purchase Agreement Filed as Exhibit 2.1 (a) dated May 5, 1993 among to Form 8-K Dated June 30, Arkla, Inc., Arkla Finance 1993 Corporation and Equitable Pipeline Company for the purchase of Louisiana Intrastate Gas Company 2.01 (b) Schedule 4.1.11 to the Filed as Exhibit 2.1 (b) Stock Purchase Agreement to Form 8-K Dated June 30, pertaining to outstanding 1993 litigation claims 2.01 (c) Schedule 4.1.15 to the Filed as Exhibit 2.1 (c) Stock Purchase Agreement to Form 8-K Dated June 30, pertaining to environmental 1993 matters 2.01 (d) Letter Agreement Dated June Filed as Exhibit 2.1 (d) 30, 1993 amending the Stock to Form 8-K Dated June 30, Purchase Agreement 1993 3.01 Restated Articles of Filed herewith at page 68 Incorporation of the Company dated May 21, 1993 (effective May 27, 1993) 3.02 By-Laws of the Company Filed herewith at page 77 (amended through December 17, 1993 4.01 (a) Indenture dated as of April Filed as Exhibit 4.01 1, 1983 between the Company (Revised) to Post- and Pittsburgh National Effective Amendment No. 1 Bank relating to Debt to Registration Statement Securities (Registration No. 2-80575) 4.01 (b) Instrument appointing Refiled herewith at page Bankers Trust Company as 96 pursuant to Rule 24 of successor trustee to SEC's Rules of Practice Pittsburgh National Bank 4.01 (c) Resolution adopted June 26, Refiled herewith at page 1986 by the Finance 106 pursuant to Rule 24 of Committee of the Board of SEC's Rules of Practice Directors of the Company establishing the term of the $75,000,000 of debentures, 8 1/4% Series due July 1, 1996 4.01 (d) Resolutions adopted June Refiled herewith at page 22, 1987 by the Finance 109 pursuant to Rule 24 of Committee of the Board of SEC's Rules of Practice Directors of the Company establishing the terms of the 75,000 units (debentures with warrants) issued July 1, 1987 4.01 (e) Resolution adopted April 6, Refiled herewith at page 1988 by the Ad Hoc Finance 118 pursuant to Rule 24 of Committee of the Board of SEC's Rules of Practice Directors of the Company establishing the terms and provisions of the 9.9% Debentures issued April 14, 1988 4.01 (f) Supplemental indenture Filed as Exhibit 4.3 to dated March 15, 1991 with Form S-3 (Registration Bankers Trust Company Statement 33-39505) filed eliminating limitations on August 21, 1991 liens and additional funded debt 4.01 (g) Resolution adopted August Filed as Exhibit 4.05 to 19, 1991 by the Ad Hoc Form 10-K for the year Finance Committee of the ended December 31, 1991 Board of Directors of the Company Addenda Nos. 1 thru 27, establishing the terms and provisions of the Series A Medium-Term Notes EXHIBITS DESCRIPTION METHOD OF FILING 4.01 (h) Resolutions adopted July 6, Filed as Exhibit 4.05 to 1992 and February 19, 1993 Form 10-K for the year by the Ad Hoc Finance ended December 31, 1992 Committee of the Board of Directors of the Company and Addenda Nos. 1 thru 8, establishing the terms and provisions of the Series B Medium-Term Notes *10.01 Equitable Resources, Inc. Filed as Exhibit 10.07 to Key Employee Restricted Form 10-K for the year Stock Option and Stock ended December 31, 1989 Appreciation Rights Incentive Compensation Plan (as amended through March 17, 1989) *10.02(a) Employment Agreement dated Refiled herewith at page as of March 18, 1988 with 126 pursuant to Rule 24 of Frederick H. Abrew SEC's Rules of Practice *10.02(b) Amendment effective June 1, Refiled herewith at page 1989 to Employment 153 pursuant to Rule 24 of Agreement with Frederick H. SEC's Rules of Practice Abrew *10.03(a) Employment Agreement dated Refiled herewith at page as of March 18, 1988 with 154 pursuant to Rule 24 of Augustine A. Mazzei, Jr. SEC's Rules of Practice *10.03(b) Amendment effective June 1, Refiled herewith at page 1989 to Employment 181 pursuant to Rule 24 of Agreement with Augustine A. SEC's Rules of Practice Mazzei, Jr. *10.04(a) Agreement dated December Filed as Exhibit 10.16 to 15, 1989 with Barbara B. Form 10-K for the year Sullivan for deferred ended December 31, 1989 payment of 1990 director fees *10.04(b) Agreement dated December Filed as Exhibit 10.16 to 21, 1990 with Barbara B. Form 10-K for the year Sullivan for deferred ended December 31, 1990 payment of 1991 director fees *10.04(c) Agreement dated December Filed as Exhibit 10.16 to 13, 1991 with Barbara B. Form 10-K for the year Sullivan for deferred ended December 31, 1991 payment of 1992 director fees *10.04(d) Agreement dated December Filed herewith at page 182 28, 1993 with Barbara B. Sullivan for deferred payment of 1994 director fees * 10.05 Supplemental Executive Filed herewith at page 187 Retirement Plan (as amended and restated through December 17, 1993) *10.06 Retirement Program for the Filed as Exhibit 10.19 to Board of Directors of Form 10-K for the year Equitable Resources, Inc. ended December 31, 1989 (as amended through August 1, 1989) *10.07 Supplemental Pension Plan Filed herewith at page 197 (as amended and restated through December 17, 1993) *10.08 Policy to Grant Filed as Exhibit 10.21 to Supplemental Deferred Form 10-K for the year Compensation Benefits in ended December 31, 1989 Selected Instances to a Select Group of Management or Highly Compensated Employees (as amended and restated through August 1, 1989) EXHIBITS DESCRIPTION METHOD OF FILING *10.09(a) Equitable Resources, Inc. Filed as Exhibit 10.22 to and Subsidiaries Short-Term Form 10-K for the year Incentive Compensation Plan ended December 31, 1987 dated January 18, 1988 *10.09(b) Amendment dated February Filed as Exhibit 10.22 to 17, 1993 to Equitable Form 10-K for the year Resources, Inc. and ended December 31, 1992 Subsidiaries Short-Term Incentive Compensation Plan *10.10(a) Agreement dated December Refiled herewith at page 31, 1987 with Malcolm M. 206 pursuant to Rule 24 of Prine for deferred payment SEC's Rules of Practice of 1988 director fees *10.10(b) Agreement dated December Refiled herewith at page 30, 1988 with Malcolm M. 211 pursuant to Rule 24 of Prine for deferred payment SEC's Rules of Practice of 1989 director fees *10.11(a) Agreement dated September Refiled herewith at page 30, 1986 with Daniel M. 216 pursuant to Rule 24 of Rooney for deferred payment SEC's Rules of Practice of 1986 and 1987 director fees *10.11(b) Agreement dated December Refiled herewith at page 21, 1987 with Daniel M. 221 pursuant to Rule 24 of Rooney for deferred payment SEC's Rules of Practice of 1988 director fees *10.11(c) Agreement dated December Refiled herewith at page 30, 1988 with Daniel M. 226 pursuant to Rule 24 of Rooney for deferred payment SEC's Rules of Practice of 1989 director fees *10.11(d) Agreement dated December Filed as Exhibit 10.27 to 15, 1989 with Daniel M. Form 10-K for the year Rooney for deferred payment ended December 31, 1989 of 1990 director fees *10.11(e) Agreement dated December Filed as Exhibit 10.27 to 21, 1990 with Daniel M. Form 10-K for the year Rooney for deferred payment ended December 31, 1990 of 1991 director fees *10.11(f) Agreement dated December Filed as Exhibit 10.27 to 13, 1991 with Daniel M. Form 10-K for the year Rooney for deferred payment ended December 31, 1991 of 1992 director fees *10.11(g) Agreement dated December Filed as Exhibit 10.27 to 18, 1992 with Daniel M. Form 10-k for the year Rooney for deferred payment ended December 31, 1992 of 1993 director fees *10.11(h) Agreement dated December Filed herewith at page 231 14, 1993 with Daniel M. Rooney for deferred payment of 1994 director fees 10.12 Trust Agreement with Filed as Exhibit 10.28 to Pittsburgh National Bank to Form 10-K for the year act as Trustee for ended December 31, 1989 Supplemental Pension Plan, Supplemental Deferred Compensation Benefits, Retirement Program for Board of Directors, and Supplemental Executive Retirement Plan EXHIBITS DESCRIPTION METHOD OF FILING 11.01 Statement re Computation of Filed herewith at page 236 Earnings Per Share 21 Schedule of Subsidiaries Filed herewith at page 237 23.01 Consent of Independent Filed herewith at page 238 Auditors 99.01 Equitable Resources, Inc. Filed herewith at page 239 Employees Savings Plan Form 11-K Annual Report The Company agrees to furnish to the Commission, upon request, copies of instruments with respect to long-term debt which have not previously been filed. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. EQUITABLE RESOURCES, INC. (Registrant) By: s/ Donald I. Moritz (Donald I. Moritz) Chairman and Chief Executive Officer Date: March 18, 1994 Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Chairman and Chief Executive Officer and Director s/ Donald I. Moritz (Principal Executive Officer) March 18, 1994 Donald I. Moritz Vice President and Treasurer s/ Robert E. Daley (Chief Financial Officer) March 18, 1994 Robert E. Daley Vice President - Accounting and Administration s/ Joseph L. Giebel (Chief Accounting Officer) March 18, 1994 Joseph L. Giebel President and Chief Operating Officer s/ Frederick H. Abrew and Director March 18, 1994 Frederick H. Abrew Director March 18, 1994 Clifford L. Alexander, Jr. s/ Merle E. Gilliand Director March 18, 1994 Merle E. Gilliand SIGNATURES (Continued) s/ E. Lawrence Keyes, Jr. Director March 18, 1994 E. Lawrence Keyes, Jr. s/ Thomas A. McConomy Director March 18, 1994 Thomas A. McConomy Director March 18, 1994 Malcolm M. Prine s/ Daniel M. Rooney Director March 18, 1994 Daniel M. Rooney Director March 18, 1994 David S. Shapira s/ Barbara Boyle Sullivan Director March 18, 1994 Barbara Boyle Sullivan EX-3.(I) 2 RESTATED ARTICLES EFFECTIVE 5/27/93 RESTATED ARTICLES OF EQUITABLE RESOURCES, INC. (As Amended Through May 27, 1993) The following is a Composite Copy of the Articles of Equitable Resources, Inc., as restated effective August 7, 1981, and as amended effective June 23, 1982, January 13, 1984, October 1, 1984, June 12, 1987, and May 27, 1993. First: The name of the Company is EQUITABLE RESOURCES, INC. Second: The location and post office address of its current registered office in the Commonwealth of Pennsylvania is 420 Boulevard of the Allies, City of Pittsburgh, 15219, County of Allegheny. Third: The purposes for which the Company is incorporated under the Business Corporation Law of the Commonwealth of Pennsylvania are to engage in, and to do any lawful act concerning, any or all lawful business for which corporations may be incorporated under said Business Corporation Law, including but not limited to: A. the supply of heat, light and power to the public by any means; B. the production, purchase, generation, manufacture, transmission, transportation, storage, distribution and supplying of natural or artificial gas, steam or air conditioning, electricity, or any combination thereof to or for the public; and C. manufacturing, processing, owning, using and dealing in personal property of every class and description, engaging in research and development, the furnishing of services, and acquiring, owning, using and disposing of real property of every nature whatsoever. Fourth: The term of the Company's existence shall be perpetual. Fifth: The aggregate number of shares which the Company shall have authority to issue shall be: (a)3,000,000shares of Preferred Stock, without par value; and (b)80,000,000shares of Common Stock, without par value. The designations, preferences, qualifications, limitations, restrictions, and the special or relative rights in respect of the Preferred Stock and of the Common Stock of the Company, and a statement of the authority hereby vested in the Board of Directors of the Company to fix and determine the designations, preferences, qualifications, limitations, restrictions, and special or relative rights in respect of all series of the Preferred Stock shall be as follows: Division A THE PREFERRED STOCK 1.1 Preferred Stock. The Preferred Stock may be divided into and issued in series. The Board of Directors is hereby expressly authorized, at any time or from time to time, to divide any or all of the shares of the Preferred Stock into series, and in the resolution or resolutions establishing a particular series, before issuance of any of the shares thereof, to fix and determine the designation and the relative rights and preferences of the series so established, to the fullest extent now or hereafter permitted by the laws of the Commonwealth of Pennsylvania, including, but not limited to, the variations between different series in the following respects: (a)the distinctive serial designation of such series; (b)the annual dividend rate for such series, and the date or dates from which dividends shall commence to accrue; (c)the redemption price or prices, if any, for shares of such series and the terms and conditions on which such shares may be redeemed; (d)the provisions for a sinking, purchase or similar fund, if any, for the redemption or purchase of shares of such series; (e)the preferential amount or amounts payable upon shares of such series in the event of the voluntary or involuntary liquidation of the Company; (f)the voting rights, if any, of shares of such series; (g)the terms and conditions, if any, upon which shares of such series may be converted and the class or classes or series of securities of the Company into which such shares may be converted; (h)the relative seniority, parity or junior rank of such series with respect to other series of Preferred Stock then or thereafter to be issued; and (i)such other terms, limitations and relative rights and preferences, if any, of shares of such series as the Board of Directors may, at the time of such resolutions, lawfully fix and determine under the laws of the Commonwealth of Pennsylvania. Division B PROVISIONS APPLICABLE TO BOTH THE PREFERRED STOCK AND THE COMMON STOCK 2.1 Voting Rights. Except as provided in this Section 2.1, the holders of the Common Stock shall have exclusive voting rights for the election of Directors and for all other purposes and shall be entitled to one vote for each share held. The holders of the Preferred Stock shall have no voting rights except as may be provided with respect to any particular series of the Preferred Stock by the Board of Directors pursuant to Subdivision 1.1 of Division A hereof. On any matter on which the holders of the Preferred Stock shall be entitled to vote, they shall be entitled to vote as established by the Board of Directors pursuant to Subdivision 1.1 of Division A hereof. In all elections for Directors, every stockholder entitled to vote shall have the right, in person or by proxy, to multiply the number of votes to which such stockholder may be entitled by the number of Directors for the election of whom he is entitled to vote at such meeting, and such stockholder may cast the whole number of such votes for one candidate or may distribute them among any two or more can-didates. The candidates receiving the highest number of votes up to the number of Directors to be elected shall be elected. The foregoing provisions of this paragraph shall not be changed with respect to any class of stock unless the holders of record of not less than two-thirds of the number of shares of such class of stock then outstanding shall consent thereto in writing or by voting therefor in person or by proxy at the meeting of stockholders at which any such change is considered. 2.2 Pre-emptive Rights. Upon any issue for money or other consideration of any stock of the Company that may be authorized from time to time, no holder of stock, irrespective of the kind of such stock, shall have any pre-emptive or other right to subscribe for, purchase, or receive any proportionate or other share of the stock so issued, but the Board of Directors may dispose of all or any portion of such stock as and when it may determine, free of any such rights, whether by offering the same to stock-holders or by sale or other disposition as said Board may deem advisable; provided, however, that if the Board of Directors shall determine to offer any new or additional shares of Common Stock, or any security convertible into Common Stock, for money, other than (i) by a public offering of all of such shares or offering of all of such shares to or through underwriters or investment bankers who shall have agreed promptly to make a public offering of such shares, or (ii) pursuant to any employee compensation, incentive or other benefit program adopted by the Board of Directors, the same shall first be offered pro rata to the holders of the then outstanding shares of Common Stock of the Company at a price not less favorable than the price at which the Board of Directors issues and disposes of such stock or securities to other than such holders of Common Stock before deducting reasonable commissions or compensation that may be paid by the Company in connection with the sale of any such stock and securities; and provided, further, that the time within which such pre-emptive rights shall be exercised may be limited by the Board of Directors to such time as the said Board may deem proper, not less, however, than ten days after mailing of notice that such stock rights are available and may be exercised. The foregoing provisions of this Subdivision 2.2 shall not be changed unless the holders of record of not less than two-thirds of the number of shares of the Common Stock then outstanding shall consent thereto in writing or by voting therefor in person or by proxy at the meeting of stockholders at which any such change is considered. 2.3 Amendments to By-Laws. The Board of Directors may make, amend and repeal the By-Laws with respect to those matters which are not, by statute, reserved exclusively to the shareholders, subject always to the power of the shareholders to change such action as provided herein. No By-Law may be made, amended or repealed by the shareholders unless such action is approved by the affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of directors, voting together as a single class, unless such action has been previously approved by a two-thirds vote of the whole Board of Directors, in which event (unless otherwise expressly provided in the Articles or the By- Laws) the affirmative vote of not less than a majority of the votes which all shareholders are entitled to cast thereon shall be required. 2.4 Amendments to Articles. Subject to the voting rights given to any particular series of the Preferred Stock by the Board of Directors pursuant to Subdivision 1.1 of Division A hereof, and except as may be specifically provided to the contrary in any other provision in the Articles with respect to amendment or repeal of such provision, the affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of directors, voting together as a single class, shall be required to amend the Articles of the Company or repeal any provision thereof, unless such action has been previously approved by a two-thirds vote of the whole Board of Directors, in which event (unless otherwise expressly provided in the Articles) the affirmative vote of not less than a majority of the votes which all shareholders are entitled to cast thereon shall be required. 2.5 General. The Company may issue and dispose of any of its authorized shares for such consideration as may be fixed by the Board of Directors subject to the laws then applicable and to the provisions of Subdivision 2.2 of this Division B. Division C BOARD OF DIRECTORS; CLASSIFICATION; REMOVAL; VACANCIES 3.1 The business and affairs of the Company shall be managed by a Board of Directors comprised as follows: (a)The Board of Directors shall consist of not less than 5 nor more than 12 persons, the exact number to be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority vote of the directors then in office. (b)Directors of the Company shall be classified with respect to the time for which they shall severally hold office by dividing them into three classes: Class 1; Class 2; and Class 3, as nearly equal in number as possible. At the special meeting of shareholders at which the amendment adding this Division C shall be adopted, the then current directors shall be assigned to the three classes in accordance with resolutions adopted by the Board of Directors. Class 1 directors shall not be elected at such special meeting but shall continue to hold office until the annual meeting of shareholders in 1984. Class 2 directors shall be elected by shareholders at such special meeting to extended terms of office, to serve until the annual meeting in 1985. Class 3 directors shall be elected by share-holders at such special meeting to extended terms of office, to serve until the annual meeting in 1986. Each class of directors to be elected at such special meeting shall be elected in a separate election. At each succeeding annual meeting of shareholders, the class of directors then being elected shall be elected to hold office for a term of three years. Each director shall hold office for the term for which elected and until his or her successor shall have been elected and qualified. (c)Any director, any class of directors or the entire Board of Directors may be removed from office by shareholder vote at any time, without assigning any cause, but only if shareholders entitled to cast at least 80% of the votes which all shareholders would be entitled to cast at an annual election of directors or of such class of directors shall vote in favor of such removal; provided, however, that no individual director shall be removed without cause (unless the entire Board of Directors or any class of directors be removed) in case the votes cast against such removal would be sufficient, if voted cumulatively for such director, to elect him or her to the class of directors of which he or she is a member. (d)Vacancies in the Board of Directors, including vacancies resulting from an increase in the number of directors, shall be filled only by a majority vote of the remaining directors then in office, though less than a quorum, except that vacancies resulting from removal from office by a vote of the shareholders may be filled by the shareholders at the same meeting at which such removal occurs. All directors elected to fill vacancies shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. (e)Whenever the holders of any class or series of preferred stock shall have the right, voting separately as a class, to elect one or more directors of the Company, none of the foregoing pro-visions of this Section 3.1 shall apply with respect to the director or directors elected by such holders of preferred stock. 3.2 Notwithstanding any other provisions of law, the Articles or the By-Laws of the Company, the affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of directors, voting together as a single class, shall be required to amend, alter, change or repeal, or adopt any provision inconsistent with, this Division C, unless such action has been previously approved by a two- thirds vote of the whole Board of Directors. 3.3 No Director shall be personally liable for monetary damages as such (except to the extent otherwise provided by law) for any action taken, or any failure to take any action, unless such Director has breached or failed to perform the duties of his or her office under Title 42, Chapter 83, Subchapter F of the Pennsylvania Consolidated Statutes (or any successor statute relating to Directors' standard of care and justifiable reliance); and the breach or failure to perform constitutes self- dealing, willful misconduct or recklessness. If the Pennsylvania Consolidated Statutes are amended after May 22, 1987, the date this section received shareholder approval, to further eliminate or limit the personal liability of Directors, then a Director shall not be liable, in addition to the circumstances set forth in this section, to the fullest extent permitted by the Pennsylvania Consolidated Statutes, as so amended. The provisions of this section shall not apply to any actions filed prior to January 27, 1987 nor to any breach of performance of duty, or any failure of performance of duty, by any Director occurring prior to January 27, 1987. Division D PROCEDURES RELATING TO CERTAIN BUSINESS COMBINATIONS 4.1 Votes Required; Exceptions. (a)The affirmative vote of the holders of not less than 80% of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of directors (the "Voting Stock"), voting together as a single class, shall be required for the approval or authorization of any "Business Combination" (as hereinafter defined) involving a "Related Person" (as hereinafter defined); provided, however, that the 80% voting requirement shall not be applicable if: (1) The "Continuing Directors" (as hereinafter defined) of the Company by a two-thirds vote have expressly approved such Business Combination either in advance of or subsequent to such Related Person's having become a Related Person; or (2) both the following conditions are satisfied: (A)the aggregate amount of the cash and the "Fair Market Value" (as hereinafter defined) of the property, securities and "Other Consideration" (as hereinafter defined) to be received per share by holders of capital stock of the Company in the Business Combination, other than the Related Person, is not less than the "Highest Equivalent Price" (as hereinafter defined) of such shares of capital stock; and (B)a proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934, as amended, whether or not the Company is then subject to such requirements, shall have been mailed to all shareholders of the Company. The proxy or information statement shall contain at the front thereof, in a prominent place, the position of the Continuing Directors as to the advisability (or inadvisability) of the Business Combination and, if deemed advisable by a majority of the Continuing Directors, the opinion of an investment banking firm selected by the Continuing Directors as to the fairness of the terms of the Business Combination, from the point of view of the holders of the outstanding shares of capital stock of the Company other than any Related Person. (b)Such 80% vote shall in any such instance be required notwithstanding the fact that no vote may be required or that a lesser percentage may be specified by law or in any agreement with any national securities exchange or otherwise. 4.2 Definitions. For purposes of this Division D: (a)A "Person" shall mean any individual, partnership, corporation or other entity. As used herein, the pronouns "which" and "it" in relation to Persons which are individuals shall be construed to mean "who" or "whom", "he" or "she", and "him" or "her", as appropriate. (b)The terms "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on November 10, 1983 (the term "registrant" in said Rule 12b-2 meaning in this case the Company). (c)The term "Beneficial Owner" (and variations thereof) shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on November 10, 1983; provided, however, that notwithstanding any provision of Rule 13d-3 to the contrary, an entity shall be deemed to be the Beneficial Owner of any share of capital stock of the Company that such entity has the right to acquire at any time pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise. (d)The term "Voting Stock" shall have the meaning set forth at the beginning of Section 4.1(a) of this Division D. (e)The term "Subsidiary" of any Person shall mean any corporation of which a majority of the capital stock entitled to vote for the election of directors is Beneficially Owned by such Person directly or indirectly though other Subsidiaries of such Person. (f)The term "Substantial Part" of the assets of any person shall mean more than 10% of the Fair Market Value, as determined by a two-thirds vote of the Continuing Directors, of the total consolidated assets of such Person and its Subsidiaries as of the end of its most recent fiscal year ended prior to the time the determination is being made. (g)The term "Other Consideration" shall include, without limitation, shares of Common Stock or other capital stock of the Company retained by the holders of such shares in the event of a Business Combination in which the Company is the surviving corporation. (h)The term "Continuing Director" shall mean a director of the Company who is unaffiliated with any Related Person and either (1) was a director of the Company immediately prior to the time the Related Person involved in a Business Combination became a Related Person or (2) is a successor to a Continuing Director and is recommended to succeed a continuing Director by a majority of the then Continuing Directors. Where this Division D contains provisions for a determination, recommendation or approval by the Continuing Directors, if there is at any particular relevant time no Continuing Director in office, then such provision shall be deemed to be satisfied if the Board, by a two-thirds vote of the whole Board of Directors, makes or gives such determination, recommendation or approval. (i)The term "Business Combination" shall mean (1) any merger, consolidation or share exchange of the Company or a Subsidiary of the Company with a Related Person, in each case without regard to which entity is the surviving entity; (2) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of all or any Substantial Part of the assets of the Company (including without limitation any voting securities of a Subsidiary of the Company) or a Subsidiary of the Company to or with a Related Person (whether in one transaction or series of transactions), or of all or any Substantial Part of the assets of a Related Person to the Company or a Subsidiary of the Company; (3) the issuance, transfer or delivery of any securities of the Company or a Subsidiary of the Company by the Company or any of its Subsidiaries to a Related Person, or of any securities of a Related Person to the Company or a Subsidiary of the Company (other than an issuance or transfer of securities which is effected on a pro rata basis to all shareholders of the Company or of the Related Person, as the case may be); (4) any recapitalization, reorganization or reclassification of securities (including any reverse stock split) or other transaction that would have the effect, directly or indirectly, of increasing the voting power of a Related Person; (5) the adoption of any plan or proposal for the liquidation or dissolution of the Company proposed by or on behalf of a Related Person; or (6) any agreement, plan, contract or other arrangement providing for any of the transactions described in this definition of Business Combination. (j)The term "Related Person" at any particular time shall mean any Person if such Person, its Affiliates, its Associates, and all Persons of which it is an Affiliate or Associate Beneficially Own in the aggregate 10% or more of the outstanding Voting Stock of the Company, and any Affiliate or Associate of any such Person, and any Person of which such Person is an Affiliate or Associate. With respect to any particular Business Combination, the term "Related Person" means the Related Person involved in such Business Combination, any Affiliate or Associate of such Related Person, and any Person of which such Related Person is an Affiliate or Associate. Where in this Division D any reference is made to a transaction involving, or ownership of securities by, a Related Person, it shall mean and include one or more transactions involving different Persons all included within the definition of "Related Person", or ownership of securities by any or all of such Persons. Each Person who is an Affiliate or Associate of a Related Person shall be deemed to have become a Related Person at the earliest time any of such Persons becomes a Related Person. (k)The term "highest Equivalent Price" with respect to shares of capital stock of the Company of any class or series shall mean the following: (1) with respect to shares of Common Stock, the highest price that can be determined to have been paid at any time by a Related Person for any shares of Common Stock; and (2) with respect to any class or series of shares of capital stock other than Common Stock, the higher of the following: (A)if any shares of such class or series are Beneficially Owned by a Related Person, the highest price that can be determined to have been paid at any time by a Related Person for such shares; or (B)the amount determined by the Continuing Directors, on whatever basis they believe is appropriate, to be the per share price equivalent of the highest price that can be determined to have been paid at any time by a Related Person for any shares of any other class or series of capital stock of the Company. In determining the Highest Equivalent Price, all purchases by a Related Person shall be taken into account regardless of whether the shares were purchased before or after the Related Person became a Related Person. Also, the Highest Equivalent Price shall include any brokerage commissions, transfer taxes, soliciting dealers' fees and other expenses paid by the Related Person with respect to the shares of capital stock of the Company acquired by the Related Person. In the case of any Business Combination with a Related Person, the Continuing Directors by a two-thirds vote shall determine the Highest Equivalent Price for each class and series of capital stock of the Company. (l)The term "Fair Market Value" shall mean (1) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the New York Stock Exchange's consolidated transaction reporting system, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Continuing Directors; and (2) in the case of property other than stock or cash, the fair market value of such property on the date in question as determined by a two-thirds vote of the Continuing Directors. 4.3 Miscellaneous. (a)The Continuing Directors, by a two-thirds vote, are authorized to determine for purposes of this Division D on the basis of information known to them after reasonable inquiry: (1) whether a Person is a Related Person, (2) the number of shares of Voting Stock Beneficially Owned by any Person, (3) whether a Person is an Affiliate or Associate of another, (4) whether certain assets constitute a Substantial Part of the assets of any Person, (5) the amounts of prices paid, market prices, and other factors relative to fixing the Highest Equivalent Price of shares of capital stock of the Company and (6) the Fair Market Value of property, securities and Other Consideration received in a Business Combination. Any such determination made in good faith shall be binding and conclusive on all parties. (b)Nothing contained in this Division D shall be construed to relieve any Related Person from any fiduciary obligation imposed by law. (c)The fact that any Business Combination complies with the conditions set forth in Subsection (a)(2) of Section 4.1 of this Division D shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the shareholders of the Company, nor shall such compliance limit, prohibit or otherwise restrict in any manner the Board of Directors, or any member thereof, with respect to evaluations of or actions and responses taken with respect to such Business Combination. (d)Notwithstanding any other provisions of law, the Articles or the By-Laws of the Company, the affirmative vote of the holders of not less than 80% of the voting power of the Voting Stock of the Company, voting together as a single class, shall be required to amend, alter, change or repeal, or adopt any provision inconsistent with, this Division D. Sixth: Henceforth, these Articles of the Company shall not include any prior documents. EX-3.(II) 3 BY LAWS AMENDED THROUGH 12/17/93 EQUITABLE RESOURCES, INC. BY-LAWS (Amended through December 17, 1993) ARTICLE I MEETINGS OF SHAREHOLDERS Section 1.01 All meetings of the shareholders shall be held at the principal office of the Company or such other places, either within or without the Commonwealth of Pennsylva- nia, as the Board of Directors may from time to time determine. Section 1.02 An annual meeting of shareholders shall be held in each calendar year at such time and place as the Board of Directors shall determine. If the annual meeting shall not be called and held during such calendar year, any shareholder may call such meeting at any time thereafter. Section 1.03 At each such annual meeting, the class of Directors then being elected shall be elected to hold office for a term of three (3) years, and until their successors shall have been elected and qualified. All elections of Directors shall be conducted by three (3) Judges of Election, who need not be shareholders, appointed by the Board of Directors. If any such appointees are not present, the vacancy shall be filled by the presiding officer of the meeting. The Chairman of the Company shall preside and the Secretary shall take the minutes at all meetings of the shareholders. In the absence of the Chair- man, the President shall preside. In the absence of both, the presiding officer shall be designated by the Board of Directors or, if not so designated, by the shareholders of the Company, and if the Secretary is unable to do so, the presiding officer shall designate any person to take the minutes of the meeting. Section 1.04 The presence, in person or by proxy, of the holders of a majority of the voting power of all shareholders shall constitute a quorum except as otherwise provided by law or by the Restated Articles of the Company. If a meeting is not organ-ized because a quorum is not present, the shareholders present may adjourn the meeting to such time and place as they may determine, except that any meeting at which Directors are to be elected shall be adjourned only from day to day, or for such longer periods not exceeding fifteen (15) days each, as may be directed by a majority of the voting stock present. Section 1.05 Shareholders entitled to vote on any matter shall be entitled to one (1) vote for each share of capital stock standing in their respective names upon the books of the Company to be voted by the shareholder in person or by his or her duly authorized proxy or attorney. The validity of every unrevoked proxy shall cease eleven (11) months after the date of its exe-cution unless some other definite period of validity shall be expressly provided therein, but in no event shall a proxy, unless coupled with an interest, be voted on after three (3) years from the date of its execution. All questions shall be decided by the vote of shareholders entitled to cast at least a majority of the votes which all shareholders present and voting (excluding abstentions) are entitled to cast on the matter, unless otherwise expressly provided by law or by the Restated Articles of the Company. Section 1.06 Special meetings of shareholders may be called by the Board of Directors, by the Chairman, by the Presi- dent, or by the holders of at least one-fifth (1/5) of all the shares outstanding and entitled to vote thereat. Section 1.07 Notice of the annual meeting and of all special meetings of shareholders shall be given by sending a written or printed notice thereof by mail, specifying the place, day, and hour of the meeting and, in the case of a special meeting of shareholders, the general nature of the business to be trans-acted, to each shareholder at the address appearing on the books of the Company, or the address supplied by such shareholder to the Company for the purpose of notice, at least five (5) days before the day named for the meeting, unless such shareholders shall waive notice or be in attendance at the meeting. ARTICLE II GENERAL PROVISIONS Section 2.01 The principal office of the Company shall be in the City of Pittsburgh, Pennsylvania, and shall be kept open during business hours every day except Saturdays, Sundays, and legal holidays, unless otherwise ordered by the Board of Directors, the Chairman or the President. Section 2.02 The Company shall have a corporate seal which shall contain within a circle the following words: "Equi- table Resources, Inc., Pittsburgh, Pennsylvania" and in an inner circle the words "Corporate Seal." Section 2.03 The fiscal year of the Company shall begin with January 1 and end with December 31 of the same calen- dar year. Section 2.04 The Board of Directors shall fix a time, not more than seventy (70) days prior to the date of any meeting of shareholders, or the date fixed for the payment of any divi- dend or distribution, or the date for any allotment of rights, or the date when any change or conversion or exchange of shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of, or to vote at, any such meeting, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect of any such change, conversion, or exchange of shares. ARTICLE III BOARD OF DIRECTORS Section 3.01 Regular meetings of the Board of Direc- tors shall be held at least six (6) times each year, immediately after the annual meeting of shareholders and at such other times and places as the Board of Directors shall from time to time designate by resolution of the Board. Notice need not be given of regular meetings of the Board held at the times and places fixed by resolution of the Board. If the Board shall fail to designate the specific time and place of any regular meeting, such regular meeting shall be held at such time and place as designated by the Chairman or the President and, in such case, oral, telegraphic or written notice shall be duly served or sent or mailed by the Secretary to each Director not less than five (5) days before the meeting. Section 3.02 Special meetings may be held at any time upon the call of the Chairman or the President at such time and place as he may deem necessary, or by the Secretary at the request of any two (2) members of the Board, by oral, telegraphic or written notice duly served or sent or mailed to each Director not less than twenty-four (24) hours before the meeting. Section 3.03 Fifty percent (50%) of the Directors at the time in office shall constitute a quorum for the transaction of business. Vacancies in the Board of Directors, including vacancies resulting from an increase in the number of Directors, shall be filled only by a majority vote of the remaining Direc- tors then in office, though less than a quorum, except that vacancies resulting from removal from office by a vote of the shareholders may be filled by the shareholders at the same meeting at which such removal occurs. All Directors elected to fill vacancies shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which they have been elected expires. Section 3.04 One (1) or more Directors may par- ticipate in a meeting of the Board or of a committee of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and all Directors so participating shall be deemed present at the meeting. Section 3.05 The full Board of Directors shall consist of not less than five (5) nor more than twelve (12) persons, the exact number to be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority vote of the Directors then in office. Section 3.06 The Board of Directors may elect one (1) of its members (who shall not be an officer of the Company during his tenure) as its Chairman, if the By-Laws of the Company do not then provide for the election of a Chairman of the Board who shall be the Chief Executive Officer of the Company. A Chairman so elected shall confer with the President as to the content of agendas for such meetings and shall consult with the President as to matters affecting or relating to the Board of Directors. The Chairman so elected shall serve until the first meeting of the Board following the next annual meeting of the shareholders. The Board shall also fix the annual rate of compensation to be paid to the Chairman in addition to compensation paid to all non- officer members of the Board. The Chairman, or in the absence of the Chairman, the President, shall preside at all meetings of the Board, preserve order, and regulate debate according to the usual parliamentary rules. In the absence of the Chairman or the President, a Chairman pro tem may be appointed by the Board. Section 3.07 Only persons who are nominated in accor- dance with the following procedures shall be eligible for elec- tion as directors. Nomination for election to the Board of Directors of the Company at a meeting of shareholders may be made by the Board of Directors or by any shareholder of the Company entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section 3.07. Such nomi-nations, other than those made by or on behalf of the Board of Directors, shall be made by notice in writing delivered or mailed by first class United States mail, postage prepaid, to the Secretary, and received not less than 60 days nor more than 90 days prior to such meeting; provided, however, that if less than 70 days' notice or prior public disclosure of the date of the meeting is given to shareholders, such nomination shall have been mailed or delivered to the Secretary not later than the close of business on the 10th day following the day on which the notice of the meeting was mailed or such public dis- closure was made, whichever occurs first. Such notice shall set forth (a) as to each proposed nominee (i) the name, age, business address and, if known, residence address of each such nominee, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of stock of the Company which are beneficially owned by each such nominee, and (iv) any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to be named as a nominee and to serve as a director if elected); and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the Company's books, of such shareholder and (ii) the class and number of shares of the Company which are beneficially owned by such share- holder. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a director of the Company. The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defec- tive nomination shall be disregarded. Section 3.08 The age limit for Directors of this Company shall be seventy-two (72) and they shall not be eligible for election or re-election after reaching their seventy-second (72nd) birthday; provided, this qualification and limitation shall not apply to Directors holding office on June 12, 1972, the date this By-Law was adopted by the shareholders. No person who is an employee or officer of the Company, except the Chief Executive Officer, shall be eligible to serve as a Director of the Company after he has retired from service as an employee or officer. Section 3.09 No Director shall be personally liable for monetary damages as such (except to the extent otherwise provided by law) for any action taken, or any failure to take any action, unless such Director has breached or failed to perform the duties of his or her office under Title 42, Chapter 83, Subchapter F of the Pennsylvania Consolidated Statutes (or any successor statute relating to Directors' standard of care and justifiable reliance); and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. If the Pennsylvania Consolidated Statutes are amended after May 22, 1987, the date this section received shareholder approval, to further eliminate or limit the personal liability of Directors, then a Director shall not be liable, in addition to the circumstances set forth in this section, to the fullest extent permitted by the Pennsylvania Consolidated Statutes, as so amended. The provisions of this section shall not apply to any actions filed prior to January 27, 1987, nor to any breach of performance of duty, or any failure of performance of duty, by any Director occurring prior to January 27, 1987. ARTICLE IV INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 4.01 Directors, officers, agents, and employ- ees of the Company shall be indemnified as of right to the fullest extent not prohibited by law in connection with any actual or threatened action, suit or proceeding, civil, criminal, admin-istrative, investigative or other (whether brought by or in the right of the Company or otherwise) arising out of their service to the Company or to another enterprise at the request of the Company. The Company may purchase and maintain insurance to protect itself and any such Director, officer, agent or employee against any liability asserted against and incurred by him or her in respect of such service, whether or not the Company would have the power to indemnify him or her against such liability by law or under the provisions of this section. The provisions of this section shall be applicable to persons who have ceased to be Directors, officers, agents, and employees and shall inure to the benefit of the heirs, executors, and administrators of persons entitled to indemnity hereunder. Indemnification under this section shall include the right to be paid expenses incurred in advance of the final disposition of any action, suit or proceeding for which indem- nification is provided, upon receipt of an undertaking by or on behalf of the indemnified person to repay such amount if it ultimately shall be determined that he or she is not entitled to be indemnified by the Company. The indemnification rights granted herein are not intended to be exclusive of any other rights to which those seeking indemnification may be entitled and the Company may enter into contractual agreements with any Director, officer, agent or employee to provide such individual with indemnification rights as set forth in such agreement or agreements, which rights shall be in addition to the rights set forth in this section. The provisions of this section shall be applicable to actions, suits or proceedings commenced after the adoption hereof, whether arising from acts or omissions occurring before or after the adoption hereof. ARTICLE V STANDING COMMITTEES Section 5.01 The Board of Directors shall have authority to appoint an Executive Committee, a Finance Committee, an Audit Committee, and such other committees as it deems ad- visable, each to consist of two (2) or more Directors, and from time to time to define the duties and fix the number of members of each committee. In the absence or disqualification of any member of any such committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not con-stituting a quorum, may unanimously appoint another Director or Directors to act at the meeting in the place of any such absent or disqualified member or members. ARTICLE VI OFFICERS Section 6.01 The officers of the Company shall be chosen by the Board of Directors and shall be a Chairman, a President, a Secretary, and a Treasurer. The Board of Directors may also choose such Vice Presidents, including one (1) or more Executive Vice Presidents and Senior Vice Presidents, and one (1) or more Assistant Secretaries and Assistant Treasurers as it may determine. Section 6.02 The Board of Directors shall, at the first meeting of the Board after its election, elect the prin- cipal officers of the Company, and may elect additional officers at that or any subsequent meeting. All officers elected by the Board of Directors shall hold office at the pleasure of the Board. Section 6.03 At the discretion of the Board of Directors, any two (2) of the offices mentioned in Section 6.01 hereof may be held by the same person except the offices of Chairman and President; Chairman and Secretary; and President and Secretary. Section 6.04 The salaries of all officers of the Company, other than Assistant Secretaries and Assistant Treasur- ers, shall be fixed by the Board of Directors. Section 6.05 The officers of the Company shall hold office until the next annual meeting of the Board and until their successors are chosen and qualify in their stead or until their earlier resignation or removal. Any officer or agent may be removed by the Board of Directors whenever in its judgment the best interests of the Company will be served thereby. Such removal, however, shall be without prejudice to the contract rights of the person so removed. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors. CHAIRMAN Section 6.06 The Chairman shall be the Chief Execu- tive Officer of the Company; shall preside at all meetings of the share-holders and at all meetings of the Board of Directors; shall have general and active management of the business of the Company; and shall see that all orders and resolutions of the Board of Directors are carried into effect. PRESIDENT Section 6.07 At the request of the Chairman, or in his absence or disability, the President shall have and exercise all the powers and authority of the Chairman. In addition to any specific powers conferred upon the President by these By-Laws, he shall have and exercise such further powers and duties as from time to time may be conferred upon or assigned to him by the Board of Directors or the Chair- man. SECRETARY Section 6.08 The Secretary shall attend all meetings of the shareholders and Board of Directors; shall record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for all committees of the Board, if so designated by the Board. The Secretary shall keep in safe custody the seal of the Company and when authorized by the Board of Directors, affix the seal of the Company to any instrument requiring it and, when so affixed, it shall be at- tested by the signature of the Secretary or by the signature of the Treasurer or an Assistant Secretary. The Secretary shall have custody of all contracts, leases, assignments, and all other valuable instruments unless the Board of Directors or the Presi- dent shall otherwise direct. The Secretary shall give, or cause to be given, notice of all annual meetings of the shareholders and any other meetings of the shareholders and, when required, notice of the meetings of the Board of Directors; and, in gen- eral, shall perform all duties incident to the office of a secretary of a corporation, and such other duties as may be prescribed by the Board of Directors, the Chairman, or the President. Section 6.09 The Board of Directors may elect one (1) or more Assistant Secretaries who shall perform the duties of the Secretary in the event of the Secretary's absence or inability to act, as well as such other duties as the Board of Directors, the Chairman, the President, or the Secretary may from time to time designate. TREASURER Section 6.10 The Treasurer shall have charge of all moneys and securities belonging to the Company subject to the direction and control of the Board of Directors. The Treasurer shall deposit all moneys received by the Company in the name and to the credit of the Company in such bank or other place or places of deposit as the Board of Directors shall designate; and for that purpose the Treasurer shall have power to endorse for collection or payment all checks or other negotiable instruments drawn payable to the Treasurer's order or to the order of the Company. The Treasurer shall disburse the moneys of the Company upon properly drawn checks which shall bear the signature of the Treasurer or of any Assistant Treasurer or of the Cashier (who shall be appointed by the Assistant Treasurer with the approval of the Treasurer). All checks shall be covered by vouchers which shall be certified by the Controller or the Auditor of Disburse- ments or such other employee of the Company (other than the Cashier) as may be designated by the Treasurer from time to time. The Treasurer may create, from time to time, such special imprest funds as may, in the Treasurer's discretion, be deemed advisable and necessary, and may open accounts with such bank or banks as may be deemed advisable for the deposit therein of such special imprest funds, and may authorize disbursements therefrom by checks drawn against such accounts by the Treasurer, any Assis- tant Treasurer, or such other employee of the Company as may be designated by the Treasurer from time to time. The Treasurer shall perform such other duties as may be assigned from time to time by the Board of Directors, the Chairman, or the President. Section 6.11 No notes or similar obligations shall be made except jointly by the Chairman, the President or an Execu- tive Vice President and a Senior Vice President or the Treasurer or an Assistant Treasurer, except as otherwise authorized by the Board of Directors. Section 6.12 The Board of Directors may elect one (1) or more Assistant Treasurers who shall perform the duties of the Treasurer in the event of the Treasurer's absence or inability to act, as well as such other duties as the Board of Directors, the Chairman, the President, or the Treasurer may from time to time designate. VICE PRESIDENTS Section 6.13 Vice Presidents shall perform such duties as may be assigned to them from time to time by the Board of Directors, the Chairman or the President as their positions are established or changed. During the absence or inability of the Chairman or the President to serve, an Executive Vice Presi- dent or Senior Vice President so designated by the Board of Directors shall have all the powers and perform the duties of the President. GENERAL Section 6.14 Fidelity bond coverage shall be obtained on such officers and employees of the Company, and of such type and in such amounts as may, in the discretion of the Board of Directors, be deemed proper and advisable. ARTICLE VII CERTIFICATES OF STOCK Section 7.01 The shares of the capital stock of the Company shall be represented by certificates of stock signed by the Chairman, the President or a Vice President, and counter- signed by the Secretary or an Assistant Secretary or the Treasur- er or an Assistant Treasurer, and sealed with the corporate seal of the Company. Said certificates shall be in such form as the Board of Directors may from time to time prescribe. The Board of Directors may from time to time appoint an incorporated company or companies to act as Transfer Agent and Registrar of the stock certificates of the Company, and in the case of the appointment of such Transfer Agent, the officers of the Company shall sign and seal stock certificates in blank and place them with the transfer books in the custody and control of such Transfer Agent. If any stock cer-tificate is signed by a Transfer Agent or Registrar, the signature of any such officer and the corporate seal upon any such certificate may be a facsimile, engraved or printed. Section 7.02 New certificates for shares of stock may be issued to replace certificates lost, stolen, destroyed or mutilated upon such terms and conditions as the Board may from time to time determine. ARTICLE VIII AMENDMENTS Section 8.01 (a) The Board of Directors may make, amend, and repeal the By-Laws with respect to those matters which are not, by statute, reserved exclusively to the shareholders, subject always to the power of the shareholders to change such action as provided herein. No By-Law may be made, amended or repealed by the shareholders unless such action is approved by the affirmative vote of the holders of not less than eighty percent (80%) of the voting power of the then outstanding shares of capital stock of the Company entitled to vote in an annual election of Directors, voting together as a single class, unless such action has been previously approved by a two-thirds vote of the whole Board of Directors, in which event (unless otherwise expressly provided in the Articles or the By-Laws) the affirma- tive vote of not less than a majority of the votes which all shareholders are entitled to cast thereupon shall be required. (b) Unless otherwise provided by a By-Law, by the Restated Articles or by law, any By-Law may be amended, altered or repealed, and new By-Laws may be adopted, by vote of a majori- ty of the Directors present at any regular or special meeting duly convened, but only if notice of the specific sections to be amended, altered, repealed or added is included in the notice of meeting. No provision of the By-Laws shall vest any property or contract right in any shareholder. ARTICLE IX PENNSYLVANIA CORPORATION LAW Section 9.01 Subchapter G--Control Share Acquisi- tions--and Subchapter H--Disgorgement by Certain Controlling Shareholders Following Attempts to Acquire Control--of Title 15, Chapter 25, of the Pennsylvania Consolidated Statutes, shall not be applicable to the Company. (Amended through December 17, 1993) EX-4.01 4 BANKERS TRUST AS SUCCESSOR TRUSTEE Exhibit 4.01 (b) INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE entered into as of the 1st day of February, 1985, among EQUITABLE RESOURCES, INC., a Pennsylvania corporation, formerly known as Equitable Gas Company (the "Issuer"), PITTSBURGH NATIONAL BANK ("PNB"), and BANKERS TRUST COMPANY, a New York banking corporation ("Bankers"). W I T N E S S E T H WHEREAS, the Issuer and PNB entered into an Indenture dated as of April 1, 1983 (the "Indenture") providing for the issuance from time to time of the Issuer's unsecured debentures, notes or other evidences of indebtedness (defined in the Indenture as "Securities"), to be issued in one or more series as provided in the Indenture; WHEREAS, there has been issued under the Indenture $50,000,000 aggregate principal amount of the Issuer's Debentures, 12-1/8% Series Due April 1, 2008 (the "Debentures"), all of which are outstanding at the date hereof and which are the only Securities outstanding under the Indenture; WHEREAS, PNB has been acting as Trustee under the Indenture: WHEREAS, Section 610 (b) of the Indenture provides that the Trustee may resign at any time and be discharged of the trust created by the Indenture by giving written notice thereof to the Issuer and by mailing notice of its resignation to the holders of Debentures; WHEREAS, Section 610 (e) of the Indenture further provides for the appointment by the Issuer of a successor Trustee in the event of the Trustee's resignation; WHEREAS, the Issuer has, by action of its Board of Directors, determined to appoint Bankers as successor Trustee under the Indenture; and WHEREAS, Bankers is qualified to act as successor Trustee under the Indenture and is willing to accept such appointment as successor Trustee on the terms and conditions set forth herein and under the Indenture. NOW, THEREFORE, pursuant to the provisions of the Indenture, in consideration of the covenants herein contained and intending to be legally bound hereby, the Issuer, PNB and Bankers agree as follows: 1. PNB hereby resigns as Trustee under the Indenture. 2. The Issuer hereby accepts the resignation of PNB as Trustee under the Indenture. Pursuant to the authority vested in it by Section 610 (e) of the Indenture, the Issuer hereby appoints Bankers as successor Trustee under the Indenture, with all the estate, properties, rights, powers, trusts, duties and obligations heretofore vested in PNB as Trustee under the Indenture. The Issuer also hereby designates, pursuant to Section 1002 of the Indenture, the corporate trust office of Bankers, presently located at Four Albany Street, New York, New York 10015, as the office or agency of the Issuer in the Borough of Manhattan, the City of New York, New York where (a) the Debentures outstanding under the Indenture may be presented or surrendered for payment, (b) the Debentures may be presented for registration of transfer or exchange, and (c) notices and demands to or upon the Issuer in respect of the Indenture or the Debentures may be served. The Issuer also hereby confirms its prior designation, pursuant to Section 1002 of the Indenture and Section 5.1 of the Board Resolution establishing certain terms and provisions of the Debentures, of the corporate trust office of PNB, presently located at Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania 15222 as the office or agency of the Issuer in the City of Pittsburgh, Pennsylvania for the aforesaid purposes. PNB's resignation as Trustee, Bankers' succession as Trustee and the designation of the office described in the second preceding sentence shall each be effective at the close of business on the date of this instrument. 3. The Issuer represents and warrants to Bankers that: (a) it is validly organized and existing under the laws of the state of its incorporation and has the power and authority to carry out its business as now conducted; (b) the Debentures were validly and lawfully issued; (c) it has performed or fulfilled each covenant, agreement and condition on its part to be performed or fulfilled under the Indenture; (d) it has no knowledge of the existence of any default, or Event of Default (as defined in the Indenture), or any event which upon notice or passage of time or both would become an Event of Default under the Indenture: and (e) it has not appointed any paying agents under the Indenture other than PNB. 4. PNB represents and warrants to the Issuer and to Bankers that: (a) it has made, or promptly will make, available to Bankers, originals of all documents relating to the trust created by the Indenture and all information in the possession of its corporate trust department relating to the administration of the trust and will furnish to Bankers any of such documents or information as Bankers may select: (b) based on information known to the Trustee, no default, or Event of Default (as defined in the Indenture), or any event which upon notice or passage of time or both would become an Event of Default under the Indenture exists; and (c) it has lawfully and fully discharged its duties as Trustee under the Indenture. 5. Bankers represents and warrants to the Issuer that it is qualified and eligible to act as Trustee under the Indenture, including under the provisions of Sections 608 and 609 thereof. 6. Bankers hereby accepts the appointment as successor Trustee under the Indenture and the trust created thereby, and assumes all rights, powers, duties and obligations of the Trustee under the Indenture. Bankers will execute said trust and exercise and perform said rights, powers, duties and obligations upon the terms and conditions set forth in the Indenture. 7. Bankers hereby accepts the designation of its corporate trust office as the office or agency of the Issuer in the Borough of Manhattan, the City of New York, New York for the purposes specified in paragraph 2. 8. PNB hereby acknowledges receipt of all compensation and other amounts due it under the Indenture and hereby confirms, assigns, transfers and sets over to Bankers, as successor Trustee under the Indenture, upon the trust expressed in the Indenture, any and all moneys and all the rights, powers, trusts, duties and obligations which PNB now holds as Trustee under and by virtue of the Indenture. 9. Bankers shall, on behalf of the Company and PNB and at the expense of the Company, mail a notice, in the form of Annex A hereto, of the resignation and succession effected hereby to the holders of the Debentures within 10 days of the date hereof. 10. Except as affected hereby, the Indenture is hereby confirmed and shall remain in full force and effect. 11. The Issuer and PNB hereby agree, upon the request of Bankers, to execute, acknowledge and deliver such further instruments of conveyance and assurance and do such other things as may be required for more fully and certainly vesting and confirming in Bankers all of the properties, rights, powers, duties and obligations of Bankers as successor Trustee under the Indenture 12. Terms not otherwise defined in this Agreement are used as defined in the Indenture. 13. This Agreement and the rights of the Parties hereunder shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania. 14. This agreement may be executed and acknowledged in one or more counterparts, and by the different Parties hereunto separate counterparts, each of which shall be deemed an original, and all such counterparts shall together constitute but one and the same instrument. This Agreement shall become effective upon the execution of counterparts hereof by all parties hereto whether or not all such parties have executed the same counterpart. WITNESS the due execution hereof as of the date first above written. [CORPORATE SEAL] ATTEST: EQUITABLE RESOURCES, INC. By Secretary John C. Bertges, Senior Vice President - Financial and Administrative (CORPORATE SEAL) ATTEST: PITTSBURGH NATIONAL BANK Authorized Officer By Joseph A. Richardson, Jr. Senior Vice President and Secretary (CORPORATE SEAL) ATTEST: BANKERS TRUST COMPANY Assistant Secretary Vice President ANNEX A NOTICE OF RESIGNATION OF TRUSTEE AND APPOINTMENT OF SUCCESSOR TRUSTEE To the Holders of EQUITABLE GAS COMPANY (now EQUITABLE RESOURCES, INC.) DEBENTURES, 12-1/8% SERIES DUE APRIL 1, 2008 (the "Debentures") NOTICE IS HEREBY GIVEN that, pursuant to Section 610 of the Indenture dated as of April 1, 1983 (the "Indenture") under which the above mentioned Debentures were issued, the undersigned PITTSBURGH NATIONAL BANK has resigned as Trustee under the Indenture, and EQUITABLE RESOURCES, INC., formerly Equitable Gas Company (the "Company"), has appointed BANKERS TRUST COMPANY as successor Trustee under the Indenture. Bankers Trust Company has, pursuant to Section 611 of the Indenture, accepted such appointment. The address of the corporate trust office of the successor Trustee is Four Albany Street, New York, New York 10015. The Company has also designated said office as the office or agency of the Company in the Borough of Manhattan, the City of New York, New York where (a) the Debentures may be presented or surrendered for payment, (b) the Debentures may be presented for registration of transfer or exchange and (c) notices and demands to or upon the Company in respect of the Debentures or the Indenture may be served. Such resignation and succession and the designation of such office are all effective at the close of business on the date of this Notice. Pittsburgh National Bank remains the office or agency of the Company for such purposes in the City of Pittsburgh, Pennsylvania. Debentures being sent for payment or registration of transfer or exchange should be sent to one of the following addresses: By Mail By Hand Corporate Trust Office Corporate Trust Office Pittsburgh National Bank Pittsburgh National Bank Fifth Avenue and Wood Street Fifth Avenue and Wood Street Pittsburgh, PA 15222 Pittsburgh, PA 15222 Bankers Trust Company Bankers Trust Company Corporate Trust and Agency Group Corporate Trust and Agency Group Securities Processing Service Securities Processing Service Division Division P. O. Box 2579 123 Washington Street Church Street Station First Floor New York, NY 10008 New York, NY 10006 Dated: February 1, 1985 EQUITABLE RESOURCES, INC. PITTSBURGH NATIONAL BANK BANKERS TRUST COMPANY COMMONWEALTH OF PENNSYLVANIA ) ) ss: COUNTY OF ALLEGHENY ) On this 1st day of February, 1985, before me, the undersigned officer, personally appeared JOHN C. BERTGES, who acknowledged himself to be Vice President - Financial and Administrative of Equitable Resources, Inc., a corporation, and that he as such Vice President, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation by himself as President. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public My Commission Expires COMMONWEALTH OF PENNSYLVANIA ) ) ss: COUNTY OF ALLEGHENY ) On this 1st day of February, 1985, before me, the undersigned officer, personally appeared JOSEPH A. RICHARDSON, JR., who acknowledged himself to be Senior Vice President and Secretary of Pittsburgh National Bank, a national banking association, and that he as such Senior Vice President and Secretary, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of said banking association by himself as Vice President and Secretary. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public My Commission Expires: STATE OF NEW YORK ) ) ss: COUNTY OF NEW YORK ) On this 1st day of February, 1985, before me, the undersigned officer, personally appeared T.J. Moskio who acknowledged himself to be Vice President of Bankers Trust Company, a New York banking association, and that he as such Vice President, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of said banking association by himself as Vice President. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public By Commission Expires: EX-4.1C 5 RESOLUTION ADOPTED 6/26/86 - 8 1/4% SERIES Exhibit 4.01 (c) Resolution Adopted June 26, 1986 by the Finance Committee of the Board of Directors of the Company Establishing the Terms of the $75 Million of Debentures, 8-1/4 % Series Due July 1, 1996 RESOLVED, That in accordance with Section 301 of the Indenture dated as of April 1, 1983 (the "Indenture") from Equitable Resources, Inc. (the "Company") to Bankers Trust Company, as trustee (the "Trustee"), there is hereby established for authentication and delivery by the Trustee the second series of Securities (such series being referred to herein as the "Debentures") of the Company to be issued under the Indenture, having the following terms and provisions in addition to the terms and provisions established by the Indenture: 1.1 Title. The title of the Debentures shall be "Debentures, 8-1/4 % Series Due July 1, 1996". 2.1 Principal Amount. The aggregate principal amount of the Debentures which may be authenticated and delivered under the Indenture (except for Debentures authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debentures pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture) shall be limited to $75,000,000. 3.1 Maturity. The principal of the Debentures shall be payable on July 1, 1996. 4.1 Interest Rate. The Debentures shall bear interest at the rate of 8-1/4% per annum until the principal thereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at the same rate per annum on any overdue principal and on any overdue installment of interest. 4.2 Interest Accrual. Interest on the Debentures shall accrue from the date of the original issue of any of the Debentures or from the most recent Interest Payment Date (as specified in Section 4.3 below) to which interest has been paid or duly provided for. 4.3 Interest Payment Dates. The Interest Payment Dates on which interest on the Debentures shall be paid or duly provided for shall be semi-annually on January 1 and July 1 in each year, commencing January 1, 1987. 4.4 Regular Record Dates. The Regular Record Dates for the interest on the Debentures so payable on any Interest Payment Date (as specified in Section 4.3 above) shall be December 15 or June 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 5.1 Place of Payment. Principal of the Debentures shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City of New York, New York. Unless otherwise designated by the Company in a written notice to the Trustee, such office or agency in the Borough of Manhattan for the above purpose shall be the Corporate Trust Office of the Trustee. Interest on the Debentures shall be payable by check mailed to the registered address of the holder of record on the Regular Record Date for such interest payment or may be made in any other manner not unacceptable to the Trustee. 6.1 Redemption. The Debentures shall not be subject to redemption, in whole or in part, prior to their stated maturity. 7.1 Denominations. As contemplated by the Indenture, the Debentures shall be issuable in denominations of $1,000 and any integral multiple thereof. 8.1 Convertibility. The Debentures shall not be convertible into shares of capital stock or other securities of the Company. 9.1 Repayment. Except as provided in Section 10.1 hereof, the Company shall have no obligation to repay the Debentures (at the option of Holders or otherwise) prior to the Maturity of the Debentures (as specified in Section 3.1 above). 10.1 Acceleration. The principal amount of the Debentures (and not a portion thereof) shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502 of the Indenture. 11.1 Section 403 of Indenture. Section 403 of the Indenture shall apply to the Debentures. 12.1 Other Provisions. The Debentures shall have no other terms than as set forth in this Board Resolution and the Indenture or as may be set forth in any indenture or indentures supplemental to the Indenture. Capitalized terms used in this Board Resolution have the meanings set forth in the Indenture unless otherwise indicated or the context indicates otherwise. EX-4.1D 6 RESOLUTIONS ADOPTED 6/22/87 UNITS ISSUED 7/1/87 Exhibit 4.01 (d) Resolutions Adopted June 22, 1987 by the Finance Committee of the Board of Directors of the Company Approving the Issue and Sale of $75,000,000 Debentures, 7-1/2% Series Due July 1, 1999, With 1,500,000 Common Stock Purchase Warrants RESOLVED, That this Committee hereby authorizes and approves the issue and sale by the Company of 75,000 Units (the "Units"), each Unit consisting of $1,000 principal amount of a Debenture, 7-1/2% Series due July 1, 1999 (collectively, the "Debentures") and 20 Common Stock Purchase Warrants (collectively, the "Warrants"), each such Warrant being exercisable to purchase one share of the Common Stock, without par value, of the Company (the "Common Stock"); RESOLVED FURTHER, That the Debentures and Warrants comprising the Units shall have the terms and provisions (i) set forth in the attached Board Resolution establishing the terms and provisions of the Debentures and hereby adopted by this Committee, and (ii) as hereinafter set forth; RESOLVED FURTHER, That the initial Exercise Price of each Warrant shall be $57.50 per share, to be evidenced by Warrant Certificates to be countersigned and delivered by Mellon Bank, N.A., as Warrant Agent (the "Warrant Agent") under a Warrant Agreement to be dated June 23, 1987 (the "Warrant Agreement") between the Company and the Warrant Agent, and expiring at 5:00 p.m., prevailing local time in New York, New York on July 1, 1992, with the number of Warrants and the Exercise Price to be subject to adjustment as provided in the Warrant Agreement; RESOLVED FURTHER, That the Debentures and the Warrants comprising each Unit shall not be separately transferable until October 1, 1987 or such earlier date as may be determined on behalf of the Company by the President, the Executive Vice President or the Vice President and Treasurer, with the consent of the Representative of the Underwriters, all as more fully set forth in the Warrant Agreement and the Board Resolution; RESOLVED FURTHER, That the Underwriting Agreement dated June 23, 1987 between the Company and The First Boston Corporation ("First Boston"), on behalf of itself and as Representative of the several Underwriters named on Schedule A thereto, presented to this meeting (the "Underwriting Agreement") be and the same hereby is approved, and that the proper officers of the Company be and thereby they are authorized and directed to execute and deliver, on behalf of the Company, the Underwriting Agreement, substantially in the form presented to this meeting, with such changes therein as the officers executing the same may approve; RESOLVED FURTHER, That the Company shall issue and sell for cash to the several Underwriters named in the Underwriting Agreement the Units at the purchase price of $985.00 per Unit specified in the Underwriting Agreement, and that the proper officers of the Company be, and each of them hereby is, authorized and directed to cause the Units, in the amounts agreed to be purchased by each Underwriter, to be delivered to First Boston for the several accounts of such Underwriters against payment to the Company of the purchase price therefor, all in accordance with the provisions of the Underwriting Agreement; RESOLVED FURTHER, That the form of Warrant Agreement presented to this meeting between the Company and the Warrant Agent, providing for the appointment of the Warrant Agent and for certain terms and provisions of the Warrants, be and the same hereby is approved, and that the proper officers of the Company be and hereby they are authorized and directed to execute and deliver, on behalf of the Company, the Warrant Agreement substantially in the form presented to this meeting, with such changes therein as the officers executing the same may approve; RESOLVED FURTHER, That the authority of the Company's Transfer Agent and Registrar with respect to the issuance, transfer, countersignature and registration of shares of the Company's Common Stock be and hereby it is extended to cover the authorized but unissued shares of Common Stock issuable upon exercise of Warrants, and that the proper officers of the Company be and hereby they are authorized and directed to issue such orders and instructions to the Company's Transfer Agent and Registrar as they or any of them shall deem necessary or advisable in connection with the foregoing; RESOLVED FURTHER, That the actions of the officers of the Company in causing to be filed with the Securities and Exchange Commission (the "SEC") on April 7, 1987 a Registration Statement (Form S-3, Registration Number 33-13232), including a Preliminary Prospectus dated April 7, 1987, relating to 75,000 Units and 1.575 million shares of Common Stock be, and hereby it is, in all respects ratified, confirmed and approved, and that the proper officers of the Company be, and each of them hereby is, authorized and empowered, for and on behalf of the Company, to prepare or cause to be prepared and to execute and file with the SEC Amendment No. 1, including a Final Prospectus, to the Registration Statement, and to use such Amendment and such Final Prospectus in connection with the offering and sale of Units; RESOLVED FURTHER, That the forms of Debentures and Warrants (proofs of May 8, 1987 and May 7, 1987, respectively) presented to this meeting be and the same hereby are approved, and that the proper officers of the Company be and hereby they are authorized and directed to execute and deliver, on behalf of the Company, the Debentures and Warrants in substantially the forms presented to this meeting, with the blanks appropriately filled, and with such changes therein as the officers executing the same may approve; RESOLVED FURTHER, That the Debentures shall, as provided in the Indenture, be signed in the name and on behalf of the Company by the facsimile signature of the President of the Company under its corporate seal (which may be printed, engraved or otherwise reproduced on the Debentures, by facsimile or otherwise), attested by the facsimile signature of the Secretary of the Company, and that the facsimile signatures of Donald I. Moritz and Audrey C. Moeller, as President and Secretary of the Company, respectively, be and hereby they are adopted and approved for such purpose; RESOLVED FURTHER, That the action of the proper officers of the Company, in causing to be filed with the New York Stock Exchange an application for the listing thereon, subject to official notice of issuance, of $75,000,000 principal amount of 7-1/2% Debentures due July 1, 1999 and 1,500,000 shares of authorized but unissued shares of common stock issuable upon exercise of common stock warrants sold in conjunction with the Debentures due July 1, 1999, is hereby ratified, confirmed and approved and each of them is hereby authorized to make such changes therein and to take such steps as may be necessary or desirable to conform to applicable requirements for listing of such Debentures and shares of common stock; RESOLVED FURTHER, That the form presented to this meeting of the proposed Indemnity Agreement between the Company and The New York Stock Exchange, relating to the listing on said Exchange of the Debentures executed by facsimile signature as aforesaid, be and the same hereby is approved, and that the proper officers of the Company be and hereby they are authorized and directed to execute and deliver, on behalf of the Company, such Indemnity Agreement substantially in the form presented to this meeting, with such changes therein as the officers executing the same may approve; RESOLVED FURTHER, That the action of the proper officers of the Company in causing to be filed with the Philadelphia Stock Exchange an application for the listing thereon, subject to official notice of issuance, of 1,500,000 shares of authorized but unissued shares of common stock is hereby ratified, confirmed and approved. On motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED,That in accordance with Section 301 of the Indenture dated as of April 1, 1983 (the "Indenture") from the Company to Bankers Trust Company, as trustee (the "Trustee"), there is hereby established for authentication and delivery by the Trustee the third series of Securities (such series being referred to herein as the "Debentures") of the Company to be issued under the Indenture, having the following terms and provisions in addition to the terms and provisions established by the Indenture: 1.1 Title. The Title of the Debentures shall be "Debentures, 7-1/2% Series Due July 1, l999". 2.1 Principal Amount. The aggregate principal amount of the Debentures which may be authenticated and delivered under the Indenture (except for Debentures authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debentures pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture) shall be limited to $75,000,000. 3.1 Maturity. The principal of the Debentures shall be payable on July 1, 1999. 4.1 Interest Rate. The Debentures shall bear interest at the rate of 7-1/2% per annum until the principal thereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at the same rate per annum on any overdue principal and premium and on any overdue installment of interest. 4.2 Interest Accrual. Interest on the Debentures shall accrue from the date of the original issue of any of the Debentures or from the most recent Interest Payment Date (as specified in Section 4.3 below) to which interest has been paid or duly provided for. 4.3 Interest PaYment Dates. The Interest Payment Dates on which interest on the Debentures shall be paid or duly provided for shall be semiannually on January 1 and July 1 in each year, commencing January 1, 1988. 4 Regular Record Dates. The Regular Record Dates for the interest on the Debentures so payable on any Interest Payment Date (as specified in Section 4.3 above) shall be the December 15 or June 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 5.1 Place of Payment. Principal of the Debentures shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City of New York, New York. Unless otherwise designated by the Company in a written notice to the Trustee, such office or agency in the Borough of Manhattan for the above purpose shall be the Corporate Trust Office of the Trustee. Interest on the Debentures shall be payable by check mailed to the registered address of the holder of record on the Regular Record Date for such interest payment. 6.1 Redemption. The Debentures shall not be redeemable, in whole or in part, prior to maturity. 7.1 Denominations. As contemplated by the Indenture, the Debentures shall be issuable in denominations of $1,000 and any integral multiple thereof. 8.1 Convertibility. The Debentures shall not be convertible into shares of capital stock or other securities of the Company. 9.1 Repayment. Except as provided in Section 10.1 hereof, the Company shall have no obligation to repay the Debentures (at the option of Holders or otherwise) prior to the Maturity of the Debentures (as specified in Section 3.1 above). 10.1 Acceleration. In the event of a declaration of acceleration of the maturity of the Debentures pursuant to Section 502 of the Indenture, only an amount of principal equal to the accreted value of the Debentures may be declared to be due and payable. The accreted value of the Debentures shall be equal to the issue price of the Debentures as established for the purchasers upon original issue, increased by the amount of original issue discount which such purchasers would have been required to include in gross income to the time of such declaration of acceleration, in each case as determined for purposes of federal income taxes under the provisions of the Internal Revenue Code as in effect on the date of original issuance of the Debentures. In determining the issue price and original issue discount of the Debentures, the Trustee shall be entitled to rely on a certificate of a firm of independent certified public accountants who shall be satisfactory to the Trustee (and who may be accountants to the Company). 11.1 Section 403 of the Indenture. Section 403 of the Indenture shall apply to the Debentures. 12.1 Transfers. Until October 1, 1987 or such earlier date (the "Termination Date") as may be determined by the Company with the consent of The First Boston Corporation, the Debentures may not be transferred without the simultaneous transfer of 20 of the Company's Common Stock Purchase Warrants (the "Warrants") to the same registered holder for each $1,000 principal amount of Debentures so transferred. 13.1 Other Provisions. The Debentures shall have no other terms than as set forth in this Board Resolution and the Indenture or as may be set forth in any indenture or indentures supplemental to the Indenture. Capitalized terms used in this Board Resolution have the meanings set forth in the Indenture unless otherwise indicated or the context indicates otherwise. EX-4.1E 7 RESOLUTION ADOPTED 4/6/88 - 9.9% DEBENTURES Exhibit 4.01 (e) EQUITABLE RESOURCES, INC. Excerpt from the Minutes of a Meeting of The Finance Committee of The Board of Directors Held April 6, 1988 In connection with the contemporaneous adoption by the Finance Committee of the Board Resolution establishing the terms and provisions of the Company's Debentures, 9.90% Series Due April 15, 2013 (the "Debentures"), and so as to provide for the issue and sale of the Debentures, the Committee, on motion duly made and seconded, unanimously adopted the following resolutions: RESOLVED, that the Purchase Agreement among the Company and The First Boston Corporation and Morgan Stanley & Co. Incorporated (the "Underwriters"), dated April 6, 1988 (the "Purchase Agreement"), presented to this meeting be and the same hereby is approved, and that the proper officers of the Company be and hereby they are authorized and directed to execute and deliver, on behalf of the Company, the Purchase Agreement substantially in the form presented to this meeting, with such changes therein as the officers executing the same may approve; FURTHER RESOLVED, that the Company shall issue and sell for cash to the Underwriters $75,000,000 aggregate principal amount of the Debentures at the purchase price of 96.525% of the principal amount thereof specified in the Purchase Agreement, and that the proper officers of the Company be, and each of them hereby is, authorized and directed to cause the Debentures in definitive form, in the amount agreed to be purchased by each Underwriter, to be delivered to such Underwriter against payment to the Company of the purchase price therefor, all in accordance with the provisions of the Purchase Agreement; and FURTHER RESOLVED, that the action of the officers of the Company in causing to be prepared and filed with the Securities and Exchange Commission (the "SEC") a Preliminary Prospectus Supplement dated April 4, 1988 (the "Preliminary Prospectus Supplement"), including therein a Prospectus dated August 26, 1986 (the "Prospectus") relating to $75,000,000 aggregate principal amount of the Debentures, and the use of such Preliminary Prospectus Supplement and Prospectus in connection with the marketing and offering of the Debentures be, and hereby it is, in all respects ratified, confirmed and approved; and FURTHER RESOLVED, that the proper officers of the Company be, and each of them hereby is, authorized and empowered, for and on behalf the Company, to cause to be prepared and filed with the SEC a final Prospectus Supplement (the "Prospectus Supplement"), including therein the Prospectus, and to use such Prospectus Supplement and Prospectus in connection with the offering and sale of the Debentures; and FURTHER RESOLVED, that the form (proof of April 5, 1988) presented to this meeting of the Debentures be, and the same hereby is, approved, and that the proper officers of the Company be, and hereby are, authorized and directed to execute and deliver, on behalf of the Company, the Debentures in substantially the form presented to this meeting, with the blanks therein appropriately filled and with such changes therein as the officers executing the same may approve. EQUITABLE RESOURCES, INC. BOARD RESOLUTION Resolution of the Finance Committee, a duly authorized Committee appointed by the Board of Directors, Establishing Certain Terms and Provisions of the Fourth Series of Securities to be Issued under the Indenture dated as of April 1, 1983 from Equitable Resources, Inc. to Bankers Trust Company, as Trustee RESOLVED, that, in accordance with Section 301 of the Indenture dated as of April 1, 1983 (the "Indenture") from Equitable Resources, Inc. (the "Company") to Bankers Trust Company, as successor trustee (the "Trustee"), there is hereby established for authentication and delivery by the Trustee the fourth series of Securities (such series being referred to herein as the "Debentures") of the Company to be issued under the Indenture, having the following terms and provisions in addition to the terms and provisions established by the Indenture: 1.1 Title. The title of the Debentures shall be "Debentures, 9.90% Series Due April 15, 2013". 2.1 Principal Amount. The aggregate principal amount of the Debentures which may be authenticated and delivered under the Indenture (except for Debentures authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debentures pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture) shall be limited to $75,000,000. 3.1 Maturity. The principal of the Debentures shall be payable on April 15, 2013. 4.1 Interest Rate. The Debenture shall bear interest at the rate of 9.90% per annum until the principal thereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at the same rate per annum on any overdue principal and premium and on any overdue installment of interest. 4.2 Interest Accrual. Interest on the Debentures shall accrue from the date of the original issue of any of the Debentures or from the most recent Interest Payment Date (as specified in Section 4.3 below) to which interest has been paid or duly provided for. 4.3 Interest Payment Dates. The Interest Payment Dates on which interest on the Debentures shall be paid or duly provided for shall be semiannually on April 15 and October 15 in each year, commencing October 15, 1988. 4.4 Regular Record Dates. The Regular Record Dates for the interest on the Debentures so payable on any Interest Payment Date (as specified in Section 4.3 above) shall be the March 31 or September 30 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 5.1 Place of Payment. Principal of (and premium, if any, on) the Debentures shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City of New York, New York. Unless otherwise designated by the Company in a written notice to the Trustee, such office or agency in the Borough of Manhattan for the above purpose shall be the Corporate Trust Office of the Trustee. Interest on the Debentures shall be payable by check mailed to the registered address of the holder of record on the Regular Record Date for such interest payment. 6.1 Redemption. The Company may, at its option, redeem the Debentures on or after April 15, 1998, as a whole at any time or in part from time to time, otherwise than through operation of the sinking fund, at the Redemption Prices (expressed as percentages of the principal amount) set forth in the table below, in each case together with accrued interest to the Redemption Date: If Redeemed If Redeemed During the During the Twelve-Month Twelve-Month Period Beginning Redemption Period Beginning Redemption April 15, Price April 15, Price 1998 103.65% 2006 100.73% 1999 103.29 2007 100.37 2000 102.92 2008 100.00 2001 102.56 2009 100.00 2002 102.19 2010 100.00 2003 101.83 2011 100.00 2004 101.46 2012 100.00 2005 101.10 7.1 Sinking Fund. The Company will pay to the Trustee on or before April 15 in each of the years 1999 through 2012, inclusive, an amount sufficient to redeem not less than $3,750,000 principal amount of Debentures, as a mandatory sinking fund, at the sinking fund redemption price of 100% of the principal amount, and the Company may, at its option, also pay to the Trustee on or before such date in each of such years an amount sufficient to redeem not more than an additional $7,500,000 principal amount of Debentures at such sinking fund redemption price. The right to make such additional optional sinking fund payment shall not be cumulative. The cash amount of any mandatory sinking fund payment shall be subject to reduction as provided in Section 1202 of the Indenture. Each sinking fund payment shall be applied to the redemption of Debentures as provided in Section 1203 of the Indenture. 8.1 Denominations. As contemplated by the Indenture, the Debentures shall be issuable in denominations of $1,000 and any integral multiple thereof. 9.1 Convertibility. The Debentures shall not be convertible into shares of capital stock or other securities of the Company. 10.1 Repayment. Except as provided in Sections 7.1 and 11.1 hereof, the Company shall have no obligation to repay the Debentures (at the option of Holders or otherwise) prior to the Maturity of the Debentures (as specified in Section 3.1 above). 11.1 Acceleration. The principal amount of the Debentures (and not a portion thereof) shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502 of the Indenture. 12.1 Section 403 of Indenture. Section 403 of the Indenture shall apply to the Debentures. 13.1 Other Provisions. The Debentures shall have no other terms than as set forth in this Board Resolution and the Indenture or as may be set forth in any indenture or indentures supplemental to the Indenture. Capitalized terms used in this Board Resolution have the meanings set forth in the Indenture unless otherwise indicated or the context indicates otherwise. EX-10.2A 8 EMPLOYMENT AGREEMENT - F H ABREW Exhibit 10.02 (a) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT dated as of the 18th day of March 1988, between Equitable Resources, Inc., a Pennsylvania corporation, with its principal executive offices at 420 Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (the Company"), and Frederick H. Abrew, an individual and resident of Venetia, Pennsylvania (the "Executive"). WHEREAS, the Executive is and has been employed by the Company and is currently Vice President - Utility Services of the Company; and WHEREAS, the Company wishes to assure itself of the services of Executive for the period provided in this Agreement and the Executive is willing to serve in the employ of the Company on a full time basis for said period and upon the other terms and conditions hereinafter provided; NOW, THEREFORE, in consideration of the mutual covenants herein contained and intending to be legally bound, the Company and the Executive hereby amend and restate their agreement relating to the Executive's employment with the Company as follows: 1. Position and Duties. (a) The Company hereby agrees to, and hereby does, continue to employ the Executive, for the term of this Agreement, to render services to the Company as Vice President - Utility Services of the Company and in connection therewith to perform such duties as the Executive is now performing and such other duties, commensurate with such position, as the Executive may reasonably be directed to perform by the President and Chief Executive Officer of the Company provided, however, that without the prior written consent of the Executive there shall be no geographic change from Pittsburgh, Pennsylvania or its environs or transfer of the office or place of performance of the Executive's service or duties. Except to the extent that the President and Chief Executive Officer of the Company delegates the duties and assigns the positions described below with respect to subsidiaries of the Company to such other person or persons as the President and Chief Executive Officer of the Company, in his discretion, shall determine, the Executive will continue to serve as the vice president of such of the subsidiaries of the Company and in connection therewith to perform such duties as the Executive is now performing and such other duties, commensurate with such position as vice president of such subsidiaries, as the Executive may reasonably be directed to perform by the President and Chief Executive Officer of the Company. The Executive shall have the right to devote a reasonable amount of time and effort to industry, community or charity organizations, and, subject to the provisions of Section 7 and Section 8 hereof, the Executive may serve as a director of other companies with the consent of the President and Chief Executive Officer of the Company and of the Board which consent in either case shall not be unreasonably withheld. (b) The Executive hereby accepts such employment and agrees faithfully to perform to the best of his ability the duties described in Section 1(a). 2. Term. Subject to Section 4 hereof, the term of the employment of the Executive under this Agreement shall commence on the day this Agreement shall have been executed by both parties hereto (the "Effective Date") and shall terminate on the last day of the calendar month in which occurs the earlier of (i) the Executive's 65th birthday or (ii) unless further extended as hereinafter set forth, the date which is 36 calendar months after the Effective Date. Commencing on the last day of the first full calendar month after the Effective Date and on the last day of each succeeding calendar month, the term of this Agreement shall be automatically extended without further action by either party (but not beyond the Executive's 65th birthday) for one additional calendar month unless one party notifies the other in writing that such party does not wish to extend the term of this Agreement. In the event that such notice shall have been delivered, the term hereof shall no longer be subject to automatic extension and the term hereof shall expire on the date which is 36 calendar months after the last day of the month in which such written notice is received. (The last day of the calendar month in which the term hereof, as extended from time to time, shall end is hereinafter referred to as the "Expiration Date"). 3. Compensation. In consideration of the Executive's Agreements contained herein and as compensation to the Executive for the performance of the services required hereunder, the Company shall pay or grant to him the following salary and other compensation and benefits: (a) a base salary, payable in equal installments not less frequently than monthly, at such annual rate, not less than $120,000 per year, as is determined from time to time by the Board or an appropriate committee thereof, provided, however, that the Executive's base salary shall be periodically reviewed by the Board and shall be increased if the Board determines that an increase is appropriate on the basis of the types of factors it generally takes into account in increasing the salaries of executive officers of the Company; (b) an annual incentive compensation payment equal to the amount, if any, payable to the Executive under the terms and conditions of the Company's Short-Term Incentive Compensation Plan as in effect for each annual period during the term of this Agreement; (c) such other awards under the Company's Key Employee Restricted Stock Option and Stock Appreciation Rights Incentive Compensation Plan (the "Option Plan") or under any other stock option, incentive compensation or other compensation plan, program or arrangement, now existing or hereafter adopted as applicable to executive officers of the Company, as the Board, or an appropriate committee thereof administering such plan, program or arrangement, may determine appropriate in light of the duties and responsibilities of the Executive in respect to other executive officers; (d) participation on the same terms and conditions as all other employees in all employee benefit plans, whether or not qualified within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as may be amended from time to time (the "Code"), as may be now or hereafter sponsored or maintained for all employees of the Company and participation on the same terms and conditions as other executive officers in such other plan, program or arrangement as may be now or hereafter sponsored or maintained for executive officers of the Company; (e) reimbursement for reasonable travel and other expenses incurred by Executive in performing his obligations hereunder pursuant to the terms and conditions of the Company's policy in respect thereto; and (f) reasonable vacations, absences on account of temporary illness and fringe benefits customarily enjoyed by employees or officers of the Company under the terms and conditions of the Company's policy in respect thereto. Nothing contained in this Agreement shall prevent the Board from amending or otherwise altering the Short-Term Incentive Plan, the Option Plan or any other plan, program or arrangement so long as such amendment or alteration (i) is accomplished pursuant to the terms thereof as in effect on the Effective Date or on the date such is adopted, if later, and (ii) equitably affects all employees, executive or otherwise, previously covered thereunder. 4. Termination of Employment. This Agreement shall terminate upon the Expiration Date or upon the death of the Executive. The Company may terminate this Agreement prior to the Expiration Date and the Executive's employment hereunder for "Disability" or "Cause" and the Executive may terminate the Agreement prior to the Expiration Date and his employment hereunder pursuant to his "Resignation for Good Reason" or "Retirement for Good Reason" as such terms are hereinafter defined. Termination of this Agreement for any reason not set forth above shall not be deemed a permitted termination and shall be deemed a breach of this Agreement. In the event of any termination of this Agreement prior to the Expiration Date, whether a permitted termination or otherwise, the provisions of Section 5 of this Agreement shall determine the amount, if any, of any compensation thereafter due the Executive in respect to such termination. As used in this Agreement, the following terms shall have the meanings set forth: (a) Disability. The Executive shall be entitled to leaves of absence from the Company in accordance with the Company's policy generally applicable to executives for illness or other temporary disabilities for a period or periods not exceeding an aggregate of six months in any calendar year, and his compensation and status as an employee hereunder shall continue during any such period or periods. If, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from his duties with the Company on a full-time basis for six consecutive months, and within thirty days after written notice of termination is given by the Company, the Executive shall not have returned to the full-time daily performance of his duties, the Executive shall be deemed to have experienced a Disability and the Company may terminate the Executive's employment. (b) Cause. Termination by the Company of employment for "Cause" shall mean termination upon: (i) the willful and continued failure by the Executive to substantially perform his duties with the Company (other than (A) any such failure resulting from his incapacity due to physical or mental illness, or (B) any such actual or anticipated failure resulting from his Resignation for Good Reason or Retirement for Good Reason), after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties, and which failure has not been cured within thirty days after such written demand; or (ii) the willful and continued engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Executive of the Noncompetition clause in Section 7 hereof or the Confidentiality clause in Section 8 hereof. For purposes of this Subsection (b), no act, or failure to act, on the Executive's part shall be considered "willful" unless done, or omitted to be done, by the Executive in bad faith and without reasonable belief that such action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive was guilty of conduct set forth above in clauses (i), (ii) or (iii) of the first sentence of this Subsection (b) and specifying the particulars thereof in detail. (c) Retirement for Good Reason. For purposes of this Agreement "Retirement for Good Reason" shall mean the Executive's election to retire under the terms of the Company's Pension Plan for Salaried Employees as a result of the occurrence of one of the events referred to in Subsection (e) below. (d) Resignation for Good Reason. For purposes of this Agreement, "Resignation for Good Reason" shall mean the Executive's election to resign as a result of the occurrence of one of the events referred to in Subsection (e) below. (e) Good Reason. For purposes of this Agreement, "Good Reason" shall, absent the Executive's express written consent to the contrary, mean: (i) removal of the Executive as Vice President - Utility Services of the Company, (by reason other than death, Disability or Cause), or any other material breach by the Company of its obligations contained in this Agreement; (ii) the assignment to the Executive of any duties inconsistent with his status as Vice President - Utility Services of the Company or a substantial alteration in the nature or status of the Executive's responsibilities which renders the Executive's position to be of less dignity, responsibility or scope; (iii) a reduction by the Company in the Executive's annual base salary as in effect on the date hereof or as the same may be increased from time to time, except for proportional across-the-board salary reductions similarly affecting all executives of the Company and all executives of any person in control of the Company, provided, however, that in no event shall the Executive's salary be reduced below $120,000 per year without the Executive's consent; (iv) the failure to grant the Executive an annual salary increase reasonably necessary to maintain such salary as reasonably comparable to salaries of senior executives holding positions equivalent to the Executive's in the industry in which the Company's then principal business activity is conducted; (v) the relocation of the Company's principal executive offices to a location outside the Pittsburgh, Pennsylvania Metropolitan Area or the Company's requiring the Executive to be based anywhere other than the Company's principal executive offices except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations (vi) the failure by the Company to continue in effect any compensation plan, program or arrangement in which the Executive participates, unless an equitable arrangement reasonably acceptable to the Executive (embodied in an ongoing substitute or alternative plan, program or arrangement) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein; (vii) any material reduction by the Company of the benefits enjoyed by the Executive under any of the Company's pension, retirement, profit sharing, savings, life insurance, medical, health-and-accident, disability or other employee benefit plans, programs or arrangements, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefits, or the failure by the Company to provide the Executive with the number of paid vacation days to which he is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy, provided that this paragraph (vii) shall not apply to any proportional across-the-board reduction or action similarly affecting all executives of the Company and all executives of any person in control of the Company; (viii) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section ll(b)(ii) hereof; or (ix) any purported termination of the Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (f) below and, if applicable, Subsection (b) above, and for purposes of this Agreement, no such purported termination shall be effective. (f) Notice of Termination. Any purported termination by the Company or Resignation for Good Reason or Retirement for Good Reason by the Executive shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination, resignation or retirement provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination, resignation or retirement under the provision so indicated. (g) Date of Termination, Etc. "Date of Termination" shall mean (i) if the Executive's employment is terminated for Disability, thirty days after Notice of Termination is given (provided that the Executive shall not have returned to the performance of the Executive's duties on a full- time daily basis during such thirty-day period), and (ii) if the Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which shall not be less than thirty days nor more than sixty days, from the date such Notice of Termination is given); provided that if within thirty days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined by mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected). Any party giving notice of a dispute shall pursue the resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue to pay the Executive his full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base salary) and continue the Executive as a participant in all compensation, employee benefit and insurance plans, programs and arrangements in which the Executive was participating when the notice giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Subsection (g). 5. Compensation Upon Termination. (a) Death. If the Executive's employment hereunder terminates by reason of his death, the Company shall be obligated to pay to his surviving widow, or to his legal representatives if he leaves no surviving widow or if his surviving widow dies prior to fulfillment of the Company's obligations, (i) the Executive's then current base salary for a six-month period commencing on the first day of the month following the Executive's death, or until the Expiration Date, whichever shall be the first to occur, and (ii) any benefits to which the Executive is entitled under any insurance policies on the life of the Executive, under the Company's insurance programs and other employee benefit plans, programs and arrangements then in effect and under the Company's Pension Plan for Salaried Employees. (b) Disability. If the Executive's employment hereunder terminates by reason of his Disability, the Company shall pay to the Executive, in monthly installments, such amount as shall aggregate 70% of the Executive's then current base salary for the lesser of a six-month period or until such time as the Executive has reached the age at which he would be entitled to retire under the Company's retirement policies and the Pension Plan for Salaried Employees. Benefits otherwise receivable by the Executive pursuant to this Subsection (b) shall be reduced to the extent other benefits are received by the Executive pursuant to any disability income or income protection plan, policy or arrangement, the premiums for which or benefits under which are paid by the Company. If the Executive dies prior to the date on which such additional amounts would have ceased to be payable under this Subsection (b), the amount that would have been payable by the Company had he lived shall continue to be paid by the Company to his surviving widow, for a period of 12 months following the Executive's death, at the same times and rates as it would have been payable to him. (c) Cause. If the Executive's employment hereunder is terminated by the Company for Cause, the Company shall pay to the Executive his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and the Company shall have no further obligations to the Executive under this Agreement. (d) Voluntary Resignation or Retirement. In the event the Executive retires or resigns other than pursuant to his Retirement for Good Reason or Resignation for Good Reason, the Company shall pay to the Executive his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and, except as provided in Section 6, the Company shall have no further obligations to the Executive under this Agreement. (e) Other. If the Executive's employment hereunder is terminated (1) by the Company other than for Cause or Disability or (2) by the Executive pursuant to his Retirement for Good Reason or Resignation for Good Reason, then the Executive shall be entitled to the benefits provided below: (i) the Company shall pay the Executive his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given; (ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as severance pay to the Executive, not later than the fifteenth day following the Date of Termination, a lump sum severance payment equal to the Executive's full base salary for the then remaining term of this Agreement (without regard to the date of such Notice of Termination) at the rate then in effect, discounted to present value at a discount rate of 7% per annum applied to each future payment from the time it would have become payable; (iii) in lieu of shares of common stock issuable upon exercise of outstanding options ("Options"), if any, or any stock appreciation rights ("SAR"), if any, whether or not such Options or SARs are vested or then exercisable pursuant to their respective terms, granted to the Executive under the Company's stock option or stock appreciation rights plans or otherwise (which Options and SARs shall be cancelled upon the making of the payment referred to below), the Executive shall receive, not later than the fifteenth day following the Date of Termination, an amount in cash equal to the product of (i) the difference (to the extent that such difference is a positive number) obtained by subtracting the per share exercise price of each Option and each SAR held by the Executive, whether or not then fully exercisable, from the closing price of the Common Stock (the "Closing Price") as reported on the New York Stock Exchange on the Date of Termination (or if not traded on the Date of Termination, the closing price on the next preceding business day on which the Common Stock traded), and (ii) the number of shares of Common Stock covered by each such Option or SAR; (iv) the Company shall also pay to the Executive all legal fees and expenses incurred by the Executive in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder; (v) for a period of time remaining until the Expiration Date, the Company shall arrange to provide the Executive with and shall pay the cost or premiums when due for life, disability and health-and-accident insurance benefits substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination; (vi) The payments under this Subsection (e) are intended by the parties to be due and payable under the circumstances of a termination for the reasons set forth above whether or not such circumstances are preceded by a change in control of the Company. Notwithstanding the intentions of the parties, in the event that it is asserted by any governmental agency, in any tax audit, administrative proceeding or otherwise, that any payments provided under this Subsection (e) (the "Severance Payments") are or will be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code and/or that a federal income tax deduction for amounts paid as Severance Payments will not be allowed to the Company for any year by reason of Section 280G of the Code, the Executive may contest or refute such assertion with respect to the Excise Tax in any appropriate forum (the "Executive's Contest") and the Company shall diligently and vigorously contest or refute such assertion with respect to the disallowance of such deduction in all administrative proceedings and in the federal district court or the Tax Court, whichever shall have jurisdiction (the "Company's Contest"). The Executive's Contest and the Company's Contest shall be conducted and presented separately unless the Executive, in his discretion but with the consent of the Company, joins in the Company's Contest. In any event, the Executive shall be entitled to retain attorneys and other experts deemed necessary or appropriate by the Executive to the proper presentation of the Executive's Contest and shall not be compelled by the Company to compromise, settle or otherwise terminate the Executive's Contest without his written consent thereto. The Company and the Executive shall cooperate one with the other and each shall provide to the other copies of all documents relevant to or useful in connection the Executive's Contest or the Company's Contest as may reasonably be requested by the other. The Executive shall attend any hearing, deposition or other proceeding at which his attendance in person is material to the Company's Contest. The Company shall cause the appropriate authorized officer or officers of the Company to attend any hearing, deposition or other matter at which the Company's appearance is requested by any party; and (vii) The payments provided for in this Subsection (e), shall be made not later than the fifteenth day following the Date of Termination, provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive payable on the fifth day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). (f) The Executive shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 5 be reduced by any compensation earned by the Executive as the result of employment by another employer, or otherwise. Benefits otherwise receivable by the Executive pursuant to Section 5(e)(v) above shall be reduced to the extent comparable benefits are actually received by the Executive during the period of time remaining until the Expiration Date from the plan or plans of any subsequent employer or from any program maintained by any governmental body not requiring contribution by the Executive, and any such benefits actually received by the Executive shall be reported to the Company. (g) In addition to all other amounts payable to the Executive under this Section 5, the Executive shall be entitled to receive all benefits payable to him under the Company's Pension Plan for Salaried Employees, the Employee Savings Plan, and any other plan, program or arrangement relating to retirement, profit sharing, or other benefits including, without limitation, any employee stock ownership plan or any plan established as a supplement to any of the aforenamed plans. No amount payable to the Executive under Subsection 5(e) shall be considered for any benefit calculation or other purpose under the Company's Pension Plan for Salaried Employees. 6. Retirement Under Circumstances Not Constituting Retirement For Good Reason. Nothing contained in this Agreement shall be deemed to limit the Executive's ability to retire under the Company's retirement policies and Pension Plan for Salaried Employees under circumstances not constituting Retirement for Good Reason and to receive all benefits payable to him under the Company's Pension Plan for Salaried Employees, the Company's Employee Savings Plan and any other plan, program or arrangement relating to retirement. 7. Non Competition. During the term of this Agreement and for one year thereafter, the Executive shall refrain from competing with the Company or any subsidiary of the Company except with the Company's prior written consent. The phrase "refrain from competing with the Company or any subsidiary of the Company" shall mean that the Executive will not engage, directly or indirectly (including, by way of example only, as a principal, partner, venturer, employee or agent) nor have any direct or indirect interest in any enterprise (a "Competing Enterprise") which competes with the Company or any subsidiary thereof by engaging in the production, transmission, storage or distribution of natural gas or natural gas liquids or the ownership or operation of a central plant heating system in the Company's distribution area or in substantial and direct competition with any other business operation actively conducted by the Company or its subsidiaries at the date of termination. It is agreed that the foregoing provisions shall not restrict the Executive from either (i) subject to the provisions of Subsection 8(a) hereof, being a director of or having any investments or other interests in an enterprise which is not a competing enterprise or (ii) having any investments in any competing enterprise the stock of which is listed on a national securities exchange or traded publicly over-the-counter so long as such investment does not give the Executive more than one percent (1%) of the voting stock of such company. 8. Confidentiality. The Executive agrees: (a) To keep secret all confidential matters of the Company and its subsidiaries and affiliates specifically indicated to be such by the Company or established as such by written Company policy, and not to disclose them to any one outside the Company or its subsidiaries and affiliates, either during or after his employment with the Company, except with the Company's prior written consent or as required by law; and (b) To deliver promptly to the Company on termination of employment of the Executive by the Company all memoranda, notes, records, reports and other documents (and all copies thereof) with respect to any such confidential matters and other proprietary information (such as customers lists, suppliers lists, etc.) which the Executive may then possess or have under his control. 9. Arbitration. Any disputes hereunder shall be settled by arbitration in Pittsburgh, Pennsylvania under the auspices of, and in accordance with the rules of, the American Arbitration Association, and the decision in such arbitration shall be final and conclusive on the parties and judgment upon such decision may be entered in any court having jurisdiction thereof. 10. Notices. All notices and other communications which are required or may be given under this Agreement shall be in writing and shall be delivered personally or by registered or certified mail addressed to the party concerned at the following addresses: If to the Company: Equitable Resources, Inc. 420 Boulevard of Allies Pittsburgh, PA 15219 If to the Executive: Frederick H. Abrew 338 Bower Hill Road Venetia, PA 15367 or to such other address as shall be designated by notice in writing to the other party in accordance herewith. Notices and other communications hereunder shall be deemed effectively given when personally delivered, or, if mailed, 48 hours after deposit in the United States mail. 11. Miscellaneous. (a) This Agreement supersedes all prior agreements, arrangements and undertakings, written or oral, relating to the subject matter hereof. (b) (i) This Arrangement shall inure to the benefit of the Executive's heirs, representatives or estate to the extent stated herein. (ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as defined in the preamble to this Agreement and any successor to its business or assets which executes and delivers the agreement provided for in this Subsection 11(b)(ii) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (c) This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provisions hereof shall in no manner affect the right at a later time to enforce such provisions thereafter. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant contained in this Agreement. (d) In the event any one or more of the covenants, terms or provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity of the remaining covenants, terms and provisions contained herein shall be in no way affected, prejudiced or disturbed thereby. (e) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder, except as provided in Paragraph ll(b) above. Without limiting the foregoing, the Executive's right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than a transfer by his will or by the laws of descent or distribution, and in the event of any attempted assignment or transfer contrary to this Subsection 11(e) the Company shall have no liability to pay any amount so attempted to be assigned or transferred. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. By By Secretary Donald I. Moritz, President and Chief Executive Officer WITNESS: By By EX-10.2B 9 AMENDMENT TO AGREEMENT - ABREW - 6/1/89 Exhibit l0.02 (b) June 26, 1989 Mr. Frederick H. Abrew Executive Vice President - Utility Services Equitable Gas Company 420 Boulevard of the Allies Pittsburgh, Pennsylvania 15219 Re: Employment Agreement dated as of March 18, 1988 Dear Mr. Abrew: This is to advise you that, pursuant to a recommendation by the Compensation Committee of the Board of Directors that executive employment contracts be amended to reflect a recent change in the Company's executive retirement policy, Section 2 of your Employment Agreement dated as of March 18, 1988 shall be amended effective June 1, 1989 by deleting the phrase "(i) the Executive's sixty-fifth (65th) birthday" and substituting therefore "(i) the date of the Executive's retirement in accordance with the provisions of the Company's retirement policy as set forth in its Management Manual." All other terms and conditions of the Employment Agreement shall remain unaltered by this Amendment. Please indicate your acceptance of this amendment by signing below. Very truly yours, EQUITABLE RESOURCES, INC. By President and Chief Executive Officer APPROVED AND ACCEPTED Frederick H. Abrew EX-10.3A 10 EMPLOYMENT AGREEMENT - A A MAZZEI JR Exhibit 10.03 (a) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT dated as of the 18th day of March 1988, between Equitable Resources, Inc., a Pennsylvania corporation, with its principal executive offices at 420 Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (the Company"), and Augustine A. Mazzei, Jr., an individual and resident of Monroeville, Pennsylvania (the "Executive"). WHEREAS, the Executive is and has been employed by the Company and is currently Vice President and General Counsel of the Company; WHEREAS, the Company and the Executive had entered an agreement concerning the employment of the Executive by the Company, and has amended, restated and supplemented such employment agreement (such agreement as amended, restated and supplemented is hereinafter referred to as the "Prior Agreement"); WHEREAS, the Company and the Executive desire to amend and restate the Prior Agreement, and to restate said agreement as amended in its entirety; NOW, THEREFORE, in consideration of the mutual covenants herein contained and intending to be legally bound, the Company and the Executive hereby amend and restate their agreement relating to the Executive's employment with the Company as follows: 1. Position and Duties. (a) The Company hereby agrees to, and hereby does, continue to employ the Executive, for the term of this Agreement, to render services to the Company as Vice President and General Counsel of the Company and in connection therewith to perform such duties as the Executive is now performing and such other duties, commensurate with such position, as the Executive may reasonably be directed to perform by the President and Chief Executive Officer of the Company provided, however, that without the prior written consent of the Executive there shall be no geographic change from Pittsburgh, Pennsylvania or its environs or transfer of the office or place of performance of the Executive's service or duties. Except to the extent that the President and Chief Executive Officer of the Company delegates the duties and assigns the positions described below with respect to subsidiaries of the Company to such other person or persons as the President and Chief Executive Officer of the Company, in his discretion, shall determine, the Executive will continue to serve as the vice president and general counsel of such of the subsidiaries of the Company and in connection therewith to perform such duties as the Executive is now performing and such other duties, commensurate with such position as vice president and general counsel of such subsidiaries, as the Executive may reasonably be directed to perform by the President and Chief Executive Officer of the Company. The Executive shall have the right to devote a reasonable amount of time and effort to industry, community or charity organizations, and, subject to the provisions of Section 7 and Section 8 hereof, the Executive may serve as a director of other companies with the consent of the President and Chief Executive Officer of the Company and of the Board which consent in either case shall not be unreasonably withheld. (b) The Executive hereby accepts such employment and agrees faithfully to perform to the best of his ability the duties described in Section l(a). 2. Term. Subject to Section 4 hereof, the term of the employment of the Executive under this Agreement shall commence on the day this Agreement shall have been executed by both parties hereto (the "Effective Date") and shall terminate on the last day of the calendar month in which occurs the earlier of (i) the Executive's 65th birthday or (ii) unless further extended as hereinafter set forth, the date which is 36 calendar months after the Effective Date. Commencing on the last day of the first full calendar month after the Effective Date and on the last day of each succeeding calendar month, the term of this Agreement shall be automatically extended without further action by either party (but not beyond the Executive's 65th birthday) for one additional calendar month unless one party notifies the other in writing that such party does not wish to extend the term of this Agreement. In the event that such notice shall have been delivered, the term hereof shall no longer be subject to automatic extension and the term hereof shall expire on the date which is 36 calendar months after the last day of the month in which such written notice is received. (The last day of the calendar month in which the term hereof, as extended from time to time, shall end is hereinafter referred to as the "Expiration Date"). 3. Compensation. In consideration of the Executive's Agreements contained herein and as compensation to the Executive for the performance of the services required hereunder, the Company shall pay or grant to him the following salary and other compensation and benefits: (a) a base salary, payable in equal installments not less frequently than monthly, at such annual rate, not less than $125,000 per year, as is determined from time to time by the Board or an appropriate committee thereof, provided, however, that the Executive's base salary shall be periodically reviewed by the Board and shall be increased if the Board determines that an increase is appropriate on the basis of the types of factors it generally takes into account in increasing the salaries of executive officers of the Company; (b) an annual incentive compensation payment equal to the amount, if any, payable to the Executive under the terms and conditions of the Company's Short-Term Incentive Compensation Plan as in effect for each annual period during the term of this Agreement; (c) such other awards under the Company's Key Employee Restricted Stock Option and Stock Appreciation Rights Incentive Compensation Plan (the "Option Plan") or under any other stock option, incentive compensation or other compensation plan, program or arrangement, now existing or hereafter adopted as applicable to executive officers of the Company, as the Board, or an appropriate committee thereof administering such plan, program or arrangement, may determine appropriate in light of the duties and responsibilities of the Executive in respect to other executive officers; (d) participation on the same terms and conditions as all other employees in all employee benefit plans, whether or not qualified within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as may be amended from time to time (the "Code"), as may be now or hereafter sponsored or maintained for all employees of the Company and participation on the same terms and conditions as other executive officers in such other plan, program or arrangement as may be now or hereafter sponsored or maintained for executive officers of the Company; (e) reimbursement for reasonable travel and other expenses incurred by Executive in performing his obligations hereunder pursuant to the terms and conditions of the Company's policy in respect thereto; and (f) reasonable vacations, absences on account of temporary illness and fringe benefits customarily enjoyed by employees or officers of the Company under the terms and conditions of the Company's policy in respect thereto. Nothing contained in this Agreement shall prevent the Board from amending or otherwise altering the Short-Term Incentive Plan, the Option Plan or any other plan, program or arrangement so long as such amendment or alteration (i) is accomplished pursuant to the terms thereof as in effect on the Effective Date or on the date such is adopted, if later, and (ii) equitably affects all employees, executive or otherwise, previously covered thereunder. 4. Termination of Employment. This Agreement shall terminate upon the Expiration Date or upon the death of the Executive. The Company may terminate this Agreement prior to the Expiration Date and the Executive's employment hereunder for "Disability" or "Cause" and the Executive may terminate the Agreement prior to the Expiration Date and his employment hereunder pursuant to his "Resignation for Good Reason" or "Retirement for Good Reason" as such terms are hereinafter defined. Termination of this Agreement for any reason not set forth above shall not be deemed a permitted termination and shall be deemed a breach of this Agreement. In the event of any termination of this Agreement prior to the Expiration Date, whether a permitted termination or otherwise, the provisions of Section 5 of this Agreement shall determine the amount, if any, of any compensation thereafter due the Executive in respect to such termination. As used in this Agreement, the following terms shall have the meanings set forth: (a) Disability. The Executive shall be entitled to leaves of absence from the Company in accordance with the Company's policy generally applicable to executives for illness or other temporary disabilities for a period or periods not exceeding an aggregate of six months in any calendar year, and his compensation and status as an employee hereunder shall continue during any such period or periods. If, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from his duties with the Company on a full-time basis for six consecutive months, and within thirty days after written notice of termination is given by the Company, the Executive shall not have returned to the full-time daily performance of his duties, the Executive shall be deemed to have experienced a Disability and the Company may terminate the Executive's employment. (b) Cause. Termination by the Company of employment for "Cause" shall mean termination upon: (i) the willful and continued failure by the Executive to substantially perform his duties with the Company (other than (A) any such failure resulting from his incapacity due to physical or mental illness or (B) any such actual or anticipated failure resulting from his Resignation for Good Reason or Retirement for Good Reason), after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties, and which failure has not been cured within thirty days after such written demand; or (ii) the willful and continued engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Executive of the Noncompetition clause in Section 7 hereof or the Confidentiality clause in Section 8 hereof. For purposes of this Subsection (b), no act, or failure to act, on the Executive's part shall be considered "willful" unless done, or omitted to be done, by the Executive in bad faith and without reasonable belief that such action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for that purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Executive was guilty of conduct set forth above in clauses (i), (ii) or (iii) of the first sentence of this Subsection (b) and specifying the particulars thereof in detail. (c) Retirement for Good Reason. For purposes of this Agreement "Retirement for Good Reason" shall mean the Executive's election to retire under the terms of the Company's Pension Plan for Salaried Employees as a result of the occurrence of one of the events referred to in Subsection (e) below. (d) Resignation for Good Reason. For purposes of this Agreement, "Resignation for Good Reason" shall mean the Executive's election to resign as a result of the occurrence of one of the events referred to in Subsection (e) below. (e) Good Reason. For purposes of this Agreement, "Good Reason" shall, absent the Executive's express written consent to the contrary, mean: (i) removal of the Executive as Vice President and General Counsel of the Company, (by reason other than death, Disability or Cause), or any other material breach by the Company of its obligations contained in this Agreement; (ii) the assignment to the Executive of any duties inconsistent with his status as Vice President and General Counsel of the Company or a substantial alteration in the nature or status of the Executive's responsibilities which renders the Executive's position to be of less dignity, responsibility or scope; (iii) a reduction by the Company in the Executive's annual base salary as in effect on the date hereof or as the same may be increased from time to time, except for proportional across-the-board salary reductions similarly affecting all executives of the Company and all executives of any person in control of the Company, provided, however, that in no event shall the Executive's salary be reduced below $125,000 per year without the Executive's consent; (iv) the failure to grant the Executive an annual salary increase reasonably necessary to maintain such salary as reasonably comparable to salaries of senior executives holding positions equivalent to the Executive's in the industry in which the Company's then principal business activity is conducted; (v) the relocation of the Company's principal executive offices to a location outside the Pittsburgh, Pennsylvania Metropolitan Area or the Company's requiring the Executive to be based anywhere other than the Company's principal executive offices except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations; (vi) the failure by the Company to continue in effect any compensation plan, program or arrangement in which the Executive participates, unless an equitable arrangement reasonably acceptable to the Executive (embodied in an ongoing substitute or alternative plan, program or arrangement) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein; (vii) any material reduction by the Company of the benefits enjoyed by the Executive under any of the Company's pension, retirement, profit sharing, savings, life insurance, medical, health-and-accident, disability or other employee benefit plans, programs or arrangements, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefits, or the failure by the Company to provide the Executive with the number of paid vacation days to which he is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy, provided that this paragraph (vii) shall not apply to any proportional across-the-board reduction or action similarly affecting all executives of the Company and all executives of any person in control of the Company; (viii) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 11(b)(ii) hereof; or (ix) any purported termination of the Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Subsection (f) below and, if applicable, Subsection (b) above, and for purposes of this Agreement, no such purported termination shall be effective. (f) Notice of Termination. Any purported termination by the Company or Resignation for Good Reason or Retirement for Good Reason by the Executive shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination, resignation or retirement provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination, resignation or retirement under the provision so indicated. (g) Date of Termination, Etc. "Date of Termination" shall mean (i) if the Executive's employment is terminated for Disability, thirty days after Notice of Termination is given (provided that the Executive shall not have returned to the performance of the Executive's duties on a full- time daily basis during such thirty-day period), and (ii) if the Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which shall not be less than thirty days nor more than sixty days, from the date such Notice of Termination is given); provided that if within thirty days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined by mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected). Any party giving notice of a dispute shall pursue the resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue to pay the Executive his full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base salary) and continue the Executive as a participant in all compensation, employee benefit and insurance plans, programs and arrangements in which the Executive was participating when the notice giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Subsection (g). 5. Compensation Upon Termination. (a) Death. If the Executive's employment hereunder terminates by reason of his death, the Company shall be obligated to pay to his surviving widow, or to his legal representatives if he leaves no surviving widow or if his surviving widow dies prior to fulfillment of the Company's obligations, (i) the Executive's then current base salary for a six-month period commencing on the first day of the month following the Executive's death, or until the Expiration Date, whichever shall be the first to occur, and (ii) any benefits to which the Executive is entitled under any insurance policies on the life of the Executive, under the Company's insurance programs and other employee benefit plans, programs and arrangements then in effect and under the Company's Pension Plan for Salaried Employees. (b) Disability. If the Executive's employment hereunder terminates by reason of his Disability, the Company shall pay to the Executive, in monthly installments, such amount as shall aggregate 70% of the Executive's then current base salary for the lesser of a six-month period or until such time as the Executive has reached the age at which he would be entitled to retire under the Company's retirement policies and the Pension Plan for Salaried Employees. Benefits otherwise receivable by the Executive pursuant to this Subsection (b) shall be reduced to the extent other benefits are received by the Executive pursuant to any disability income or income protection plan, policy or arrangement, the premiums for which or benefits under which are paid by the Company. If the Executive dies prior to the date on which such additional amounts would have ceased to be payable under this Subsection (b), the amount that would have been payable by the Company had he lived shall continue to be paid by the Company to his surviving widow, for a period of 12 months following the Executive's death, at the same times and rates as it would have been payable to him. (c) Cause. If the Executive's employment hereunder is terminated by the Company for Cause, the Company shall pay to the Executive his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and the Company shall have no further obligations to the Executive under this Agreement. (d) Voluntary Resignation or Retirement. In the event the Executive retires or resigns other than pursuant to his Retirement for Good Reason or Resignation for Good Reason, the Company shall pay to the Executive his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given and, except as provided in Section 6, the Company shall have no further obligations to the Executive under this Agreement. (e) Other. If the Executive's employment hereunder is terminated (1) by the Company other than for Cause or Disability or (2) by the Executive pursuant to his Retirement for Good Reason or Resignation for Good Reason, then the Executive shall be entitled to the benefits provided below: (i) the Company shall pay the Executive his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given; (ii) in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay as severance pay to the Executive, not later than the fifteenth day following the Date of Termination, a lump sum severance payment equal to the Executive's full base salary for the then remaining term of this Agreement (without regard to the date of such Notice of Termination) at the rate then in effect, discounted to present value at a discount rate of 7% per annum applied to each future payment from the time it would have become payable; (iii) in lieu of shares of common stock issuable upon exercise of outstanding options ("Options"), if any, or any stock appreciation rights ("SAR"), if any, whether or not such Options or SARs are vested or then exercisable pursuant to their respective terms, granted to the Executive under the Company's stock option or stock appreciation rights plans or otherwise (which Options and SARs shall be cancelled upon the making of the payment referred to below), the Executive shall receive, not later than the fifteenth day following the Date of Termination, an amount in cash equal to the product of (i) the difference (to the extent that such difference is a positive number) obtained by subtracting the per share exercise price of each Option and each SAR held by the Executive, whether or not then fully exercisable, from the closing price of the Common Stock (the "Closing Price") as reported on the New York Stock Exchange on the Date of Termination (or if not traded on the Date of Termination, the closing price on the next preceding business day on which the Common Stock traded), and (ii) the number of shares of Common Stock covered by each such Option or SAR; (iv) the Company shall also pay to the Executive all legal fees and expenses incurred by the Executive in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder; (v) for a period of time remaining until the Expiration Date, the Company shall arrange to provide the Executive with and shall pay the cost or premiums when due for life, disability and health-and-accident insurance benefits substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination; (vi) The payments under this Subsection (e) are intended by the parties to be due and payable under the circumstances of a termination for the reasons set forth above whether or not such circumstances are preceded by a change in control of the Company. Notwithstanding the intentions of the parties, in the event that it is asserted by any governmental agency, in any tax audit, administrative proceeding or otherwise, that any payments provided under this Subsection (e) (the "Severance Payments") are or will be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Code and/or that a federal income tax deduction for amounts paid as Severance Payments will not be allowed to the Company for any year by reason of Section 280G of the Code, the Executive may contest or refute such assertion with respect to the Excise Tax in any appropriate forum (the "Executive's Contest") and the Company shall diligently and vigorously contest or refute such assertion with respect to the disallowance of such deduction administrative proceedings and in the federal district court or the Tax Court, whichever shall have jurisdiction (the "Company's Contest"). The Executive's Contest and the Company's Contest shall be conducted and presented separately unless the Executive, in his discretion but with the consent of the Company, joins in the Company's Contest. In any event, the Executive shall be entitled to retain attorneys and other experts deemed necessary or appropriate by the Executive to the proper presentation of the Executive's Contest and shall not be compelled by the Company to compromise, settle or otherwise terminate the Executive's Contest without his written consent thereto. The Company and the Executive shall cooperate one with the other and each shall provide to the other copies of all documents relevant to or useful in connection with either the Executive's Contest or the Company's Contest as may reasonably be requested by the other. The Executive shall attend any hearing, deposition or other proceeding at which his attendance in person is material to the Company's Contest. The Company shall cause the appropriate authorized officer or officers of the Company to attend any hearing, deposition or other matter at which the Company's appearance is requested by any party; and (vii) The payments provided for in this Subsection (e), shall be made not later than the fifteenth day following the Date of Termination, provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive payable on the fifth day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). (f) The Executive shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 5 be reduced by any compensation earned by the Executive as the result of employment by another employer, or otherwise. Benefits otherwise receivable by the Executive pursuant to Section 5(e)(v) above shall be reduced to the extent comparable benefits are actually received by the Executive during the period of time remaining until the Expiration Date from the plan or plans of any subsequent employer or from any program maintained by any governmental body not requiring contribution by the Executive, and any such benefits actually received by the Executive shall be reported to the Company. (g) In addition to all other amounts payable to the Executive under this Section 5, the Executive shall be entitled to receive all benefits payable to him under the Company's Pension Plan for Salaried Employees, the Employee Savings Plan, and any other plan, program or arrangement relating to retirement, profit sharing, or other benefits including, without limitation, any employee stock ownership plan or any plan established as a supplement to any of the aforenamed plans. No amount payable to the Executive under Subsection 5(e) shall be considered for any benefit calculation or other purpose under the Company's Pension Plan for Salaried Employees. 6. Retirement Under Circumstances Not Constituting Retirement For Good Reason. Nothing contained in this Agreement shall be deemed to limit the Executive's ability to retire under the Company's retirement policies and Pension Plan for Salaried Employees under circumstances not constituting Retirement for Good Reason and to receive all benefits payable to him under the Company's Pension Plan for Salaried Employees, the Company's Employee Savings Plan and any other plan, program or arrangement relating to retirement. 7. Non Competition. During the term of this Agreement and for one year thereafter, the Executive shall refrain from competing with the Company or any subsidiary of the Company except with the Company's prior written consent. The phrase "refrain from competing with the Company or any subsidiary of the Company" shall mean that the Executive will not engage, directly or indirectly (including, by way of example only, as a principal, partner, venturer, employee or agent) nor have any direct or indirect interest in any enterprise (a "Competing Enterprise") which competes with the Company or any subsidiary thereof by engaging in the production, transmission, storage or distribution of natural gas or natural gas liquids or the ownership or operation of a central plant heating system in the Company's distribution area or in substantial and direct competition with any other business operation actively conducted by the Company or its subsidiaries at the date of termination. It is agreed that the foregoing provisions shall not restrict the Executive from either (i) subject to the provisions of Subsection 8(a) hereof, being a director of or having any investments or other interests in an enterprise which is not a competing enterprise or (ii) having any investments in any competing enterprise the stock of which is listed on a national securities exchange or traded publicly over-the-counter so long as such investment does not give the Executive more than one percent (1%) of the voting stock of such company. 8. Confidentiality. The Executive agrees: (a) To keep secret all confidential matters of the Company and its subsidiaries and affiliates specifically indicated to be such by the Company or established as such by written Company policy, and not to disclose them to any one outside the Company or its subsidiaries and affiliates, either during or after his employment with the Company, except with the Company's prior written consent or as required by law; and (b) To deliver promptly to the Company on termination of employment of the Executive by the Company all memoranda, notes, records, reports and other documents (and all copies thereof) with respect to any such confidential matters and other proprietary information (such as customers lists, suppliers lists, etc.) which the Executive may then possess or have under his control. 9. Arbitration. Any disputes hereunder shall be settled by arbitration in Pittsburgh, Pennsylvania under the auspices of, and in accordance with the rules of, the American Arbitration Association, and the decision in such arbitration shall be final and conclusive on the parties and judgment upon such decision may be entered in any court having jurisdiction thereof. 10. Notices. All notices and other communications which are required or may be given under this Agreement shall be in writing and shall be delivered personally or by registered or certified mail addressed to the party concerned at the following addresses: If to the Company: Equitable Resources, Inc. 420 Boulevard of Allies Pittsburgh, PA 15219 If to the Executive: Mr. Augustine A. Mazzei, Jr. 105 Briar Crest Drive Monroeville, PA 15146 or to such other address as shall be designated by notice in writing to the other party in accordance herewith. Notices and other communications hereunder shall be deemed effectively given when personally delivered, or, if mailed, 48 hours after deposit in the United States mail. 11. Miscellaneous. (a) This Agreement supersedes all prior agreements, arrangements and undertakings, written or oral, relating to the subject matter hereof. (b) (i) This Arrangement shall inure to the benefit of the Executive's heirs, representatives or estate to the extent stated herein. (ii) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as defined in the preamble to this Agreement and any successor to its business or assets which executes and delivers the agreement provided for in this Subsection 11(b)(ii) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (c) This Agreement may be amended, modified, superseded, cancelled, renewed or extended and the terms or covenants hereof may be waived, only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provisions hereof shall in no manner affect the right at a later time to enforce such provisions thereafter. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant contained in this Agreement. (d) In the event any one or more of the covenants, terms or provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity of the remaining covenants, terms and provisions contained herein shall be in no way affected, prejudiced or disturbed thereby. (e) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder, except as provided in Paragraph 11(b) above. Without limiting the foregoing, the Executive's right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than a transfer by his will or by the laws of descent or distribution, and in the event of any attempted assignment or transfer contrary to this Subsection 11(e) the Company shall have no liability to pay any amount so attempted to be assigned or transferred. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. By By Secretary Donald I. Moritz, President and Chief Executive Officer WITNESS: By By EX-10.3B 11 AMENDMENT TO AGREEMENT - A A MAZZEI - 6/1/89 Exhibit 10.03 (b) June 26, 1989 Mr. Augustine A. Mazzei, Jr. Senior Vice President and General Counsel Equitable Resources, Inc. 420 Boulevard of the Allies Pittsburgh, Pennsylvania 15219 Re: Employment Agreement dated as of March 18, 1988 Dear Mr. Mazzei: This is to advise you that, pursuant to a recommendation by the Compensation Committee of the Board of Directors that executive employment contracts be amended to reflect a recent change in the Company's executive retirement policy, Section 2 of your Employment Agreement dated as of March 18, 1988 shall be amended effective June 1, 1989 by deleting the phrase "(i) the Executive's sixty-fifth (65th) birthday" and substituting therefor "(i) the date of the Executive's retirement in accordance with the provisions of the Company's retirement policy as set forth in its Management Manual." All other terms and conditions of the Employment Agreement shall remain unaltered by this Amendment. Please indicate your acceptance of this amendment by signing below. Very truly yours, EQUITABLE RESOURCES, INC. President and Chief Executive Officer APPROVED AND ACCEPTED Augustine A. Mazzei EX-10.4D 12 SULLIVAN - DEFERRED DIRECTOR FEES 1994 Exhibit 10.04 (d) EQUITABLE RESOURCES, INC. Board of Directors Deferred Compensation Agreement THIS AGREEMENT, made and executed this 28th day of December, 1993, by and between Equitable Resources, Inc., herein designated as "Equitable", and Barbara B. Sullivan, herein designated as the "Participant." WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship. NOW, THEREFORE, the parties hereby agree as follows: Section 1 - Account 1.1) Effective January 1, 1994, the Participant herein elects to defer, under the terms of this Agreement, all compensa- tion earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1994. 1.2) Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3) Interest shall be credited to the Account monthly. The rate of interest shall be the same as the yield for 30-day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1) All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equita- ble to the Participant on 1996 (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. Unless a date specific is selected by the Participant, the distribution will be made within sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable; provided, however, that nothing contained in this Section 2.1 shall negate the provisions of Section 2.3 below. 2.2) In the event of the death of the Participant, such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these, last designated by the Partici- pant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board of Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3) For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the abso- lute discretion of the Committee. Upon approval from the Commit- tee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distri- bution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application of this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1) Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his/her designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2) The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned, transferred, pledged or encumbered except by will or by the laws of descent and distribution. 3.3) If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4) Nothing contained herein shall be construed as confer- ring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5) This Agreement shall be binding upon and inure to the benefit of Equitable, its successors and assigns and the Partici- pant and his/her heirs, executors, administrators and legal representatives. 3.6) Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any benefits of the Participant as provided in Section 2. Equitable may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of the Participant, or his/her beneficiaries, to the receipt of payment of benefits to the extent of any compensation deferred before the time of the amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7) This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. Section 4 - Committee 4.1) The Committee's interpretation and construction of the Agreement, and the actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his/her own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Participant has hereunto set his/her hand as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. s/ Audrey C. Moeller s/ D. I. Moritz Vice President and Chairman and Corporate Secretary Chief Executive Officer WITNESS: (Participant) s/ Janice A. Haas s/ Barbara Sullivan EX-10.05 13 SUPLEMENTAL EXECUTIVE RETIREMENT PLAN Exhibit 10.05 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN EQUITABLE RESOURCES, INC. Effective Date: January 1, 1989 As Amended and Restated Through December 17, 1993 I. EFFECTIVE DATE OF PLAN 1.1. Effective Date. The effective date of the Plan is January 1, 1989. II. DEFINITIONS 2.1 Affiliated Company: Any company which is wholly- owned or less than wholly-owned but is controlled by the Company, and any other organization so designated by the Company. 2.2 Beneficiary: The spouse or other beneficiary entitled to a benefit under the applicable Qualified Plan in the event of the death of a participant in such Qualified Plan. 2.3 Company: Equitable Resources, Inc., or any corporation which succeeds to the position of Equitable Resources, Inc. 2.4 Internal Revenue Code: The Internal Revenue Code, as amended, or as it may be amended from time to time, and any regulations issued thereunder. 2.5 Participant: All salaried employees of the Company or Affiliated Company who participate in a Qualified Plan, who are deemed part of a select group of management or highly compensated employees, and who are chosen to participate in the Plan by the Company's Employee Pension Committee. A Participant may be also referred to as "a Member" herein. 2.6 Plan: The Equitable Resources, Inc. Supplemental Executive Retirement Plan as set forth herein, and as may be hereafter amended. 2.7 Qualified Plan: Any defined benefit pension plan of the Company or an Affiliated Company which is qualified under Section 401 of the Internal Revenue Code. 2.8 Capitalized terms not defined herein shall have the meaning given to such terms in the Retirement Plan for Non-Union Employees of Equitable Resources, Inc., Equitable Resources Energy Company, Equitrans, Inc. and Equitable Resources Marketing Company, as amended and restated. III. PLAN BENEFIT 3.1 The monthly benefit payable to a Participant shall be an amount not less than zero equal to (a) reduced by (b) and (c) as follows: (a) The amount of retirement benefit that would have been payable to the Participant under any Qualified Plan in which he participates if that Qualified Plan (1) had provided a retirement benefit without regard to any applicable maximum benefit limitations under Section 415 of the Internal Revenue Code or any limitation as to the maximum amount of annual compensation which may be taken into account under Section 401(a)(17) of the Internal Revenue Code or any limitation on the maximum number of years of a Participant's service for which an unrestricted amount of benefit accruals may be taken into account under Section 401(1) of the Internal Revenue Code; and (2) had included payments made under the Company's Short-Term Incentive Compensation Plan in its definition of Compensation. reduced by (b) The amount of retirement benefit payable to the Participant under any Qualified Plan in which he participates taking into account any applicable maximum benefit limitations under Sections 415, 401(a)(17) and 401(1) of the Internal Revenue Code; and (c) The amount of retirement benefit payable to the Participant under the Company's Supplemental Pension Plan. IV. FORM OF PAYMENT OF BENEFITS 4.1 Normal Form: The normal form of retirement benefit shall be a single life annuity, payable monthly, for the life of the Member. If a Member dies prior to the receipt of the full actuarial value of such annuity determined at the time of retirement, the remaining value of the annuity shall be paid in a lump sum to the Member's beneficiary or to the Member's estate if the beneficiary should predecease the Member. 4.2 Qualified Joint and Survivor Annuity: If a Member is married on the later of his applicable Retirement Date or the date his retirement benefit payments commence under the Plan, his retirement benefit payment shall be in the form of a Qualified Joint and Survivor Annuity which is the Actuarial Equivalent of the normal form of retirement benefit payment. A Member who would receive the Qualified Joint Survivor Annuity as provided herein may elect to receive his retirement benefit in the normal form or in one of the following survivorship optional forms and any such election shall be an affirmative election not to receive his benefit in the Qualified Joint and Survivor Annuity form; provided, however, that any such election shall be made prior to the commencement of a Member's services with the Company for which benefits are to be provided under this Plan; and provided that any such election (other than an election to make the spouse a Joint Annuitant pursuant to Section 4.3 to receive a monthly benefit after the death of the Member equal to 75% or 100% of the pension paid to the Member) made after December 31, 1984 shall be effective only if the Member obtains his spouse's consent thereto. 4.3 Survivorship Options: A Member may elect in the manner hereinafter provided to have the value of his retirement benefit payment apply to the payment of a reduced pension to him during his life, and after his death to his designated surviving Joint Annuitant in an amount equal to 100% of, or 75% of, or 50% of, or 25% of such reduced pension. The reduced pensions to be paid to the Member and to the surviving Joint Annuitant shall be determined on the basis of actuarial values selected by the Committee according to the ages of the Member and of the Member's designated Joint Annuitant at the time the Member retires. In order for an effective election of an optional form of benefit to be made hereunder, the following requirements must be met. The present value of benefit payments to be made to the Member determined as of the date benefit payments will commence must exceed fifty percent (50%) of the present value of all payments to be made under the option, except where the designated Joint Annuitant is the Member's spouse. The Member must furnish all information requested by the Committee at the times and in the form and manner required by it, including specific designation of the percentage of the benefit payable to the Member under the option which is to be paid to the Joint Annuitant. A Member may designate only one Joint Annuitant with respect to his election of an option. Any election shall be made prior to the commencement of a Member's services with the Company for which benefits are to be provided under this Plan. 4.4 Pre-retirement Spouse's Benefit: (a) Death On or After Age Fifty-Five or Completion of Twenty-Five Years: Effective on and after March 1, 1985, if a Member who is married on the date of this death and who has attained age fifty-five or completed twenty-five years of Continuous Service dies while actively employed by the Company, his spouse shall receive a benefit, payable in the form of a single life annuity, in an amount equal to fifty percent (50%) of the Member's Accrued Benefit determined as of the first day of the calendar month in which he died but without reduction for age due to benefit commencement prior to the date such Member would have attained age sixty-five, if applicable. (b) Eligibility for Alternative Benefits: Effective on and after August 23, 1984, if a Member who is credited with at least one hour of service (or one hour of paid leave) on or after August 23, 1984, is legally married on the date of his death (a "Qualified Spouse") and who has ten (10) or more years of Continuous Service and a nonforfeitable right to a benefit under the Plan, and who dies prior to said benefit's annuity starting date, his Qualified Spouse shall receive the Survivor's Benefit provided herein in an amount determined in paragraph (c). (c) Amount: The amount of the Survivor's Benefit payable in the form of a life annuity to the surviving Qualified Spouse of Members satisfying (b) shall equal (1) or (2) whichever applies: (1) Death on or After Age Fifty-Five or Completion of Twenty-Five Years of Service: An amount computed in accordance with Section 4.4(a) without regard to whether the Member dies while actively employed by the Company. (2) Death Before Age Fifty-Five or Completion of Twenty-Five Years of Service: An amount equal to the survivor's portion of the Qualified Joint and Survivor Annuity which the Member would have received computed as if he had terminated employment with the Company on the date of his death with a Deferred Vested Benefit, survived to age Fifty-Five (55) and made an election under a Qualified Plan for immediate commencement of benefit payments subject to the reduction, if any, provided in such Qualified Plan for early commencement of benefit payments, commenced receipt of his Deferred Vested Benefit in the form of said Qualified Joint and Survivor Annuity on the first day of the next month and then died the next day. 4.5 Commencement and Termination of Benefit: Retirement benefits shall commence on the Member's Retirement Date. The Survivor Annuity payable to a spouse and the Survivor Annuity payable to the Member's designated Joint Annuitant shall commence on the first day of the month next succeeding the month in which the Member's death occurs. The pre-retirement spouse's benefit payable under Section 4.4 above shall commence on the first day of the month next succeeding the month in which the Member would have attained age fifty-five (55) or the month which he died, whichever is the later to occur. All benefit payments shall cease with payment due immediately preceding the date of death of the last person entitled to benefits under the form of benefit payment being made. Notwithstanding the foregoing, in the event no effective election of a date for commencement of benefits is made by a Member, the payment of benefits hereunder shall commence within thirty (30)days after the close of the Plan Year in which occurs the latest of: (a) attainment of the Member's Normal Retirement Date or if the Member is not an employee his sixty-fifth (65) birthday; (b) the Member's termination of employment with the Company; provided, however, the retirement benefit payments under the Plan shall commence no later than April 1 of the calendar year following the calendar year in which the Member retires. At the first day of the month succeeding the month in which such Member's sixty-fifth (65) birthday occurred, in the event the whereabouts of a Member whose only entitlement is to a Deferred Vested Benefit are not known, a reasonable effort will be made by the Committee to locate such Member. In the event the Member cannot be located, the Member's benefit payments shall be held by the Plan until the earlier of the time the whereabouts of the Member are made known to the Committee by the Member or his lawful agent or seven (7) years subsequent to his Normal Retirement Date, after which such Member shall be presumed dead and any other benefit which becomes payable by reason of such death under the rules of the Plan relating to form of benefit payment shall be paid thereafter. 4.6 Payments in the Event of Incapacity: In the event it is determined that a Member, retired Member or other person entitled to benefits under the Plan, in the judgement of the Committee, is unable to care for his affairs because of illness, accident, or incapacity (either mental or physical), or for any other reason, the Committee shall cause any payment of a benefit or refund of contributions to be paid in the form of a life annuity, payable monthly to a duly appointed guardian, committee, or other legal representative of such person, or, if there is no such legal representative, to his spouse or child or such other object of natural bounty as the Committee may determined, or to such person, persons or institutions as, in the judgement of the Committee, are then maintaining or have custody of such Member, retired Member or other person entitled to benefits. 4.7 Nonforfeitability of Benefits: Except as provided by the Plan, all Member retirement benefits in pay status and all benefits after attainment of the Normal Retirement Age shall be nonforfeitable except in the event of death, which shall result in a forfeiture of all such Member's benefits. These provisions shall have no application to any survivorship annuities, including the Qualified Joint and Survivor Annuity which may be payable by reason of the operation of the rules of this Plan, which benefits shall terminate by reason of the death of the survivor annuitant. All benefits provided by the Plan are personal in nature and shall be payable only to and during the life of the applicable recipient and no other person shall inure to any right therein. For purposes of this Section, "Normal Retirement Age" shall mean the date on which the Member attains age sixty-five (65). 4.8 Special Rule for Small Payments: If a benefit otherwise payable under this Plan is ten dollars ($10.00) or less per month, it shall be paid annually in a lump sum equal to its commuted value. Where the present value of any benefit otherwise payable under the Plan, including without limiting the foregoing, any pre-retirement surviving spouse's benefit, does not exceed $3,500 (and payment of the benefit has not commenced) the Committee shall direct the Trustee to distribute the entire present value in one lump sum payment. As used herein, "present value" shall mean the value of a benefit determined as of the date of distribution utilizing an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on Plan termination. 4.9 No Participant shall be permitted to elect a form of benefit payment hereunder which differs from the form of benefit payment the Participant receives under any qualified Plan. 4.10 A Participant may request at any time to be granted his entire benefit under this Plan in a lump sum form (whether or not he has commenced receiving an annuity under the Plan). An election of a lump sum payment of benefits hereunder must be approved by the Compensation Committee of the Board of Directors at its sole discretion. However, if the Internal Revenue Service determines at any time that a Participant has constructively received, for any reason and under any rationale, the total value of his benefit payable under this Plan, the Participant shall have an absolute right to elect to receive his benefit in a lump sum form without any action required by the Compensation Committee of the Board of Directors. V. DEATH BENEFITS 5.1 The monthly death benefit payable to the Beneficiary of a Participant, if any, shall be determined in accordance with Section 3.1 above assuming that the term "Beneficiary" has been substituted for the term "Participant" each place it appears. 5.2 Any death benefit payable to the Beneficiary of a Participant under Section 5.1 shall be paid to the Beneficiary in the form of a monthly annuity for the life of the Beneficiary. VI. COST OF THE PLAN 6.1 The entire cost of benefits and administrative expenses for this Plan shall be paid for by the Company as incurred. No contributions by Participants will be permitted or required. VII. ADMINISTRATION 7.1 This Plan shall be administered by the Administrator appointed under the Qualified Plan. In addition, the terms of the Qualified Plan shall govern in situations not specifically provided for herein, but only to the extent such terms are not inconsistent with the provisions and intent of this Plan. VIII. GENERAL PROVISIONS 8.1 This Plan is intended to be a plan maintained by the Company for the purpose of providing deferred compensation to a select group of management or highly compensated employees. 8.2 This Plan is purely voluntary on the part of the Company. The Company expects and intends to continue the Plan indefinitely, but necessarily reserves the right to amend, alter, suspend or terminate the Plan in whole or in part, at any time. 8.3 All rights of a Participant or a Beneficiary under this Plan shall be mere unsecured creditors' rights against the Company, with no rights to the assets of the Company (or any trust in which assets are held for purposes of this Plan) superior to that of any other general unsecured creditor. 8.4 Participant's rights payable under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance. Such rights may not be subject to the debts, contracts, liabilities, engagements or torts of the Participants or the Participant's beneficiaries. EX-10.07 14 SUPPLEMENTAL PENSION PLAN Exhibit 10.07 SUPPLEMENTAL PENSION PLAN EQUITABLE RESOURCES, INC. Effective Date: January 1, 1984 As Amended and Restated Through December 17, 1993 I. EFFECTIVE DATE OF PLAN 1.1. Effective Date. The effective date of the Plan is January 1, 1984. II. DEFINITIONS 2.1 Affiliated Company: Any company which is wholly- owned or less than wholly-owned but is controlled by the Company, and any other organization so designated by the Company. 2.2 Beneficiary: The spouse or other beneficiary entitled to a benefit under the applicable Qualified Plan in the event of the death of a participant in such Qualified Plan. 2.3 Company: Equitable Resources, Inc., or any corporation which succeeds to the position of Equitable Resources, Inc. 2.4 Internal Revenue Code: The Internal Revenue Code, as amended, or as it may be amended from time to time, and any regulations issued thereunder. 2.5 Participant: All salaried employees of the Company or Affiliated Company who participate in a Qualified Plan. A Participant may be also referred to as "a Member" herein. 2.6 Plan: The Equitable Resources, Inc. Supplemental Pension Plan as set forth herein, and as may be hereafter amended. 2.7 Qualified Plan: Any defined benefit pension plan of the Company or an Affiliated Company which is qualified under Section 401 of the Internal Revenue Code. 2.8 Capitalized terms not defined herein shall have the meaning given to such terms in the Retirement Plan for Non-Union Employees of Equitable Resources, Inc., Equitable Resources Energy Company, Equitrans, Inc. and Equitable Resources Marketing Company, as amended and restated. III. PLAN BENEFIT 3.1 The monthly benefit payable to a Participant shall be an amount not less than zero equal to (a) reduced by (b) as follows: (a) The amount of retirement benefit that would have been payable to the Participant under any Qualified Plan in which he participates if that Qualified Plan had provided a retirement benefit without regard to any applicable maximum benefit limitations under Section 415 of the Internal Revenue Code; reduced by (b) The amount of retirement benefit payable to the Participant under any Qualified Plan in which he participates taking into account any applicable maximum benefit limitations under Section 415 of the Internal Revenue Code. (c) No benefit may be paid under this Plan which is payable under any Supplemental Executive Retirement Plan maintained by the Company. IV. FORM OF PAYMENT OF BENEFITS 4.1 Normal Form: The normal form of retirement benefit shall be a single life annuity, payable monthly, for the life of the Member. If a Member dies prior to the receipt of the full actuarial value of such annuity determined at the time of retirement, the remaining value of the annuity shall be paid in a lump sum to the Member's beneficiary or to the Member's estate if the beneficiary should predecease the Member. 4.2 Qualified Joint and Survivor Annuity: If a Member is married on the later of his applicable Retirement Date or the date his retirement benefit payments commence under the Plan, his retirement benefit payment shall be in the form of a Qualified Joint and Survivor Annuity which is the Actuarial Equivalent of the normal form of retirement benefit payment. A Member who would receive the Qualified Joint Survivor Annuity as provided herein may elect to receive his retirement benefit in the normal form or in one of the following survivorship optional forms and any such election shall be an affirmative election not to receive his benefit in the Qualified Joint and Survivor Annuity form; provided, however, that any such election shall be made prior to the commencement of a Member's services with the Company for which benefits are to be provided under this Plan; and provided that any such election (other than an election to make the spouse a Joint Annuitant pursuant to Section 4.3 to receive a monthly benefit after the death of the Member equal to 75% or 100% of the pension paid to the Member) made after December 31, 1984 shall be effective only if the Member obtains his spouse's consent thereto. 4.3 Survivorship Options: A Member may elect in the manner hereinafter provided to have the value of his retirement benefit payment apply to the payment of a reduced pension to him during his life, and after his death to his designated surviving Joint Annuitant in an amount equal to 100% of, or 75% of, or 50% of, or 25% of such reduced pension. The reduced pensions to be paid to the Member and to the surviving Joint Annuitant shall be determined on the basis of actuarial values selected by the Committee according to the ages of the Member and of the Member's designated Joint Annuitant at the time the Member retires. In order for an effective election of an optional form of benefit to be made hereunder, the following requirements must be met. The present value of benefit payments to be made to the Member determined as of the date benefit payments will commence must exceed fifty percent (50%) of the present value of all payments to be made under the option, except where the designated Joint Annuitant is the Member's spouse. The Member must furnish all information requested by the Committee at the times and in the form and manner required by it, including specific designation of the percentage of the benefit payable to the Member under the option which is to be paid to the Joint Annuitant. A Member may designate only one Joint Annuitant with respect to his election of an option. Any election shall be made prior to the commencement of a Member's services with the Company for which benefits are to be provided under this Plan. 4.4 Pre-retirement Spouse's Benefit: (a) Death On or After Age Fifty-five: If a Member who is married on the date of his death and who has attained age fifty-five dies while actively employed by the Company, his spouse shall receive the survivor portion of the Qualified Joint and Survivor Annuity determined as if the Member had retired upon the first day of the calendar month in which he died and elected the immediate commencement of his benefit payments. (b) Death On or After Age Fifty-Five or Completion of Twenty-Five Years: Effective on and after March 1, 1985, if a Member who is married on the date of this death and who has attained age fifty-five or completed twenty-five years of Continuous Service dies while actively employed by the Company, his spouse shall receive a benefit, payable in the form of a single life annuity, in an amount equal to fifty percent (50%) of the Member's Accrued Benefit determined as of the first day of the calendar month in which he died but without reduction for age due to benefit commencement prior to the date such Member would have attained age sixty-five, if applicable. (c) Eligibility for Alternative Benefits: Effective on and after August 23, 1984, if a Member who is credited with at least one hour of service (or one hour of paid leave) on or after August 23, 1984, is legally married on the date of his death (a "Qualified Spouse") and who has ten (10) or more years of Continuous Service and a nonforfeitable right to a benefit under the Plan, and who dies prior to said benefit's annuity starting date, his Qualified Spouse shall receive the Survivor's Benefit provided herein in an amount determined in paragraph (d). (d) Amount: The amount of the Survivor's Benefit payable in the form of a life annuity to the surviving Qualified Spouse of Members satisfying (c) shall equal (1) or (2) whichever applies: (1) Death on or After Age Fifty-Five or Completion of Twenty-Five Years of Service: An amount computed in accordance with Section 4.4(b) without regard to whether the Member dies while actively employed by the Company. (2) Death Before Age Fifty-Five or Completion of Twenty-Five Years of Service: An amount equal to the survivor's portion of the Qualified Joint and Survivor Annuity which the Member would have received computed as if he had terminated employment with the Company on the date of his death with a Deferred Vested Benefit, survived to age Fifty-Five (55) and made an election under a Qualified Plan for immediate commencement of benefit payments subject to the reduction, if any, provided in such Qualified Plan for early commencement of benefit payments, commenced receipt of his Deferred Vested Benefit in the form of said Qualified Joint and Survivor Annuity on the first day of the next month and then died the next day. 4.5 Commencement and Termination of Benefit: Retirement benefits shall commence on the Member's Retirement Date. The Survivor Annuity payable to a spouse and the Survivor Annuity payable to the Member's designated Joint Annuitant shall commence on the first day of the month next succeeding the month in which the Member's death occurs. The pre-retirement spouse's benefit payable under Section 4.4 above shall commence on the first day of the month next succeeding the month in which the Member would have attained age fifty-five (55) or the month which he died, whichever is the later to occur. All benefit payments shall cease with payment due immediately preceding the date of death of the last person entitled to benefits under the form of benefit payment being made. Notwithstanding the foregoing, in the event no effective election of a date for commencement of benefits is made by a Member, the payment of benefits hereunder shall commence within thirty (30)days after the close of the Plan Year in which occurs the latest of: (a) attainment of the Member's Normal Retirement Date or if the Member is not an employee his sixty-fifth (65) birthday; or (b) the Member's termination of employment with the Company; provided, however, the retirement benefit payments under the Plan shall commence no later than April 1 of the calendar year following the calendar year in which the Member retires. At the first day of the month succeeding the month in which such Member's sixty-fifth (65) birthday occurred, in the event the whereabouts of a Member whose only entitlement is to a Deferred Vested Benefit are not known, a reasonable effort will be made by the Committee to locate such Member. In the event the Member cannot be located, the Member's benefit payments shall be held by the Plan until the earlier of the time the whereabouts of the Member are made known to the Committee by the Member or his lawful agent or seven (7) years subsequent to his Normal Retirement Date, after which such Member shall be presumed dead and any other benefit which becomes payable by reason of such death under the rules of the Plan relating to form of benefit payment shall be paid thereafter. 4.6 Payments in the Event of Incapacity: In the event it is determined that a Member, retired Member or other person entitled to benefits under the Plan, in the judgement of the Committee, is unable to care for his affairs because of illness, accident, or incapacity (either mental or physical), or for any other reason, the Committee shall cause any payment of a benefit or refund of contributions to be paid in the form of a life annuity, payable monthly to a duly appointed guardian, committee, or other legal representative of such person, or, if there is no such legal representative, to his spouse or child or such other object of natural bounty as the Committee may determine, or to such person, persons or institutions as, in the judgement of the Committee, are then maintaining or have custody of such Member, retired Member or other person entitled to benefits. 4.7 Nonforfeitability of Benefits: Except as provided by the Plan, all Member retirement benefits in pay status and all benefits after attainment of the Normal Retirement Age shall be nonforfeitable except in the event of death, which shall result in a forfeiture of all such Member's benefits. These provisions shall have no application to any survivorship annuities, including the Qualified Joint and Survivor Annuity which may be payable by reason of the operation of the rules of this Plan, which benefits shall terminate by reason of the death of the survivor annuitant. All benefits provided by the Plan are personal in nature and shall be payable only to and during the life of the applicable recipient and no other person shall inure to any right therein. For purposes of this Section, "Normal Retirement Age" shall mean the date on which the Member attains age sixty-five (65). 4.8 Special Rule for Small Payments: If a benefit otherwise payable under this Plan is ten dollars ($10.00) or less per month, it shall be paid annually in a lump sum equal to its commuted value. Effective on or after January 1, 1985, where the present value of any benefit otherwise payable under the Plan, including without limiting the foregoing, any pre-retirement surviving spouse's benefit, does not exceed $3,500 (and payment of the benefit has not commenced) the Committee shall direct the Trustee to distribute the entire present value in one lump sum payment. As used herein, "present value" shall mean the value of a benefit determined as of the date of distribution utilizing an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on Plan termination. 4.9 No Participant shall be permitted to elect a form of benefit payment hereunder which differs from the form of benefit payment the Participant receives under any qualified Plan. 4.10 A Participant may request at any time to be granted his entire benefit under this Plan in a lump sum form (whether or not he has commenced receiving an annuity under the Plan). An election of a lump sum payment of benefits hereunder must be approved by the Compensation Committee of the Board of Directors at its sole discretion. However, if the Internal Revenue Service determines at any time that a Participant has constructively received, for any reason and under any rationale, the total value of his benefit payable under this Plan, the Participant shall have an absolute right to elect to receive his benefit in a lump sum form without any action required by the Compensation Committee of the Board of Directors. V. DEATH BENEFITS 5.1 The monthly death benefit payable to the Beneficiary of a Participant, if any, shall be determined in accordance with Section 3.1 above assuming that the term "Beneficiary" has been substituted for the term "Participant" each place it appears. 5.2 Any death benefit payable to the Beneficiary of a Participant under Section 5.1 shall be paid to the Beneficiary in the form of a monthly annuity for the life of the Beneficiary. VI. COST OF THE PLAN 6.1 The entire cost of benefits and administrative expenses for this Plan shall be paid for by the Company as incurred. No contributions by Participants will be permitted or required. VII. ADMINISTRATION 7.1 This Plan shall be administered by the Administrator appointed under the Qualified Plan. In addition, the terms of the Qualified Plan shall govern in situations not specifically provided for herein, but only to the extent such terms are not inconsistent with the provisions and intent of this Plan. VIII.GENERAL PROVISIONS 8.1 This Plan is intended to be an "excess benefit plan" as that term is used in Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended. 8.2 This Plan is purely voluntary on the part of the Company. The Company expects and intends to continue the Plan indefinitely, but necessarily reserves the right to amend, alter, suspend or terminate the Plan in whole or in part, at any time. 8.3 All rights of a Participant or a Beneficiary under this Plan shall be mere unsecured creditors' rights against the Company, with no rights to the assets of the Company (or any trust in which assets are held for purposes of this Plan) superior to that of any other general unsecured creditor. 8.4 Participant's rights payable under the Plan are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance. Such rights may not be subject to the debts, contracts, liabilities, engagements or torts of the Participants or the Participant's beneficiaries. EX-10.1A 15 PRINE DEFERRED DIRECTOR FEES 1988 Exhibit 10.10 (a) EQUITABLE RESOURCES, INC. Board of Directors Deferred Compensation Agreement THIS AGREEMENT made and executed this 31st day of December, 1987, by and between Equitable Resources, Inc., herein designated as "Equitable", and Malcolm M. Prine, herein designated as the "Participant"; WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and; WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship; NOW, THEREFORE, the parties hereby agree as follows: Section 1 - Account 1.1 Effective January 1, 1988, the Participant herein elects to defer, under the terms of this Agreement, all compensation earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1988 . 1.2 Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3 Interest shall be credited to the Account monthly. The rate of interest shall be the same as the yield for 30-day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1 All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equitable to the Participant on (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. 2.2 In the event of the death of the Participant such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these last designated by the Participant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3 For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the absolute discretion of the Committee. Upon approval from the Committee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distribution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application on this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1 Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2 The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned, transferred, pledged or encumbered except by will or by the laws of the descent and distribution. 3.3 If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4 Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5 This Agreement shall be binding upon and inure to the benefit of Equitable its successors and assigns and the Participant and his heirs, executors, administrators and legal representatives. 3.6 Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any benefits of the Participants as provided in Section 2. Equitable may also amend the provisions of this Plan at any time; provided, however that no amendment shall affect the rights of the Participant or his beneficiaries to the receipt of payment of benefits to the extent of any compensation deferred before the time of the amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7 This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. Section 4 - Committee 4.1 The Committee's interpretation and construction of the Agreement, and actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Participant has hereunto set his hand as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. By Vice President and President and Chief Corporate Secretary Executive Officer WITNESS: (Participant) EX-10.1B 16 PRINE DEFERRED DIRECTOR FEES 1989 Exhibit 10.10 (b) EQUITABLE RESOURCES, INC. Board of Directors Deferred Compensation Agreement THIS AGREEMENT, made and executed this 30th day of December, l988, by and between Equitable Resources, Inc., herein designated as "Equitable", and Malcolm M. Prine, herein designated as the "Participant"; WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship; NOW, THEREFORE, the parties hereby agree as follows: Section l - Account l.l Effective January l, 1989, the Participant herein elects to defer, under the terms of this Agreement, all compensation earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1989. 1.2 Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3 Interest shall be credited to the Account monthly. The rate of interest shall be the same as the yield for 30-day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1 All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equitable to the Participant on (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. 2.2 In the event of the death of the Participant, such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these, last designated by the Participant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board of Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3 For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the absolute discretion of the Committee. Upon approval from the Committee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distribution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application of this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1 Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2 The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned, transferred, pledged or encumbered except by will or by the laws of the descent and distribution. 3.3 If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4 Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5 This Agreement shall be binding upon and inure to the benefit of Equitable, its successors and assigns and the Participant and his heirs, executors, administrators and legal representatives. 3.6 Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any benefits of the Participants as provided in Section 2. Equitable may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of the Participant, or his beneficiaries to the receipt of payment of benefits to the extent of any compensation deferred before the time of the amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7 This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. Section 4 - Committee 4.1 The Committee's interpretation and construction of the Agreement, and actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Participant has hereunto set his hand as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. Vice President and By President and Chief Corporate Secretary Executive Officer WITNESS: (Participant) EX-10.A 17 ROONEY DEFERRED DIRECTOR FEES 1986 1987 Exhibit 10.11 (a) EQUITABLE RESOURCES, INC. Board of Directors Deferred Compensation Agreement THIS AGREEMENT, made and executed this 30th day of September, 1986, by and between Equitable Resources, Inc., herein designated as "Equitable", and Daniel M. Rooney herein designated as the "Participant"; WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship; NOW, THEREFORE, the parties hereby agree as follows: Section 1 - Account 1.1 Effective October 1, 1986, the Participant hereto elects to defer, under the terms of this Agreement, all compensation earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1986-87. 1.2 Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3 Interest shall be credited to the Account monthly. The rate of interest shall be the same as the yield for 30-day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1 All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equitable to the Participant on (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. 2.2 In the event of the death of the Participant, such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these, last designated by the Participant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board of Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3 For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the absolute discretion of the Committee. Upon approval from the Committee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distribution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application of this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1 Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2 The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned. transferred, pledged or encumbered except by will or by the laws of the descent and distribution. 3. 3 If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4 Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5 This Agreement shall be binding upon and inure to the benefit of Equitable, its successors and assigns and the Participant and his heirs, executors, administrators and legal representatives. 3.6 Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any benefits of the Participants as provided in Section 2. Equitable may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of the Participant, or his beneficiaries to the receipt of payment of benefits to the extent of any compensation deferred before the time of this amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7 This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. Section 4 - Committee 4.1 The Committee's interpretation and construction of the Agreement, and actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Participant has hereunto set his hand as of the date first above written . ATTEST: EQUITABLE RESOURCES, INC. VICE PRESIDENT AND PRESIDENT AND CHIEF CORPORATE SECRETARY EXECUTIVE OFFICER WITNESS: (Participant) EX-10.B 18 ROONEY DEFERRED PAYMENT DIRECTOR FEES 1988 Exhibit 10.11 (b) EQUITABLE RESOURCES, INC . Board of Directors Deferred Compensation Agreement THIS AGREEMENT, made and executed this 21st day of December, l987, by and between Equitable Resources, Inc., herein designated herein designated as "Equitable", and Daniel M. Rooney, herein designated as the "Participant"; WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship; NOW, THEREFORE, the parties hereby agree as follows: Section 1 - Account 1.1 Effective January 1, 1988, the Participant herein elects to defer, under the terms of this Agreement, all compensation earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1988. 1.2 Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3 Interest shall be credited to the Account monthly. The rate of interest shall be the same as the yield for 30-day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1 All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equitable to the Participant on (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. 2.2 In the event of the death of the Participant, such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these, last designated by the Participant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board of Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3 For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the absolute discretion of the Committee. Upon approval from the Committee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distribution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application of this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1 Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2 The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned, transferred, pledged or encumbered except by will or by the laws of the descent and distribution. 3.3 If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4 Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5 This Agreement shall be binding upon and inure the benefit of Equitable, its successors and assigns and the Participant and his heirs, executors, administrators and legal representatives. 3.6 Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any benefits of the Participants as provided in Section 2 Equitable may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of the Participant, or his beneficiaries to the receipt of payment of benefits to the extent of any compensation deferred before the time of the amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7 This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. Section 4 - Committee 4.1 The Committee's interpretation and construction of the Agreement, and actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Participant has hereunto set his hand as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. By Vice President and President and Chief Corporate Secretary Executive Officer WITNESS: (Participant) EX-10.1C 19 ROONEY DEFERRED DIRECTOR FEES 1989 Exhibit 10.11 (c) EQUITABLE RESOURCES, INC. Board of Directors Deferred Compensation Agreement THIS AGREEMENT, made and executed this 30th day of December, 1988 , by and between Equitable Resources, Inc., herein designated as "Equitable", and Daniel M. Rooney, herein designated as the "Participant"; WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship; NOW, THEREFORE, the parties hereby agree as follows: Section 1 - Account 1.1 Effective January 1, 1989, the Participant herein elects to defer, under the terms of this Agreement, all compensation earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1989. 1.2 Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3 Interest shall be credited to the Account monthly. The rate of interest shall be the same as the yield for 30-day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1 All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equitable to the Participant on (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. 2.2 In the event of the death of the Participant, such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these, last designated by the Participant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board of Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3 For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the absolute discretion of the Committee. Upon approval from the Committee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distribution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application of this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1 Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2 The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned, transferred, pledged or encumbered except by will or by the laws of the descent and distribution. 3.3 If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4 Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5 This Agreement shall be binding upon and inure to the benefit of Equitable, its successors and assigns and the Participant and his heirs, executors, administrators and legal representatives. 3.6 Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any benefits of the Participants as provided in Section 2. Equitable may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of the Participant, or his beneficiaries to the receipt of payment of benefits to the extent of any compensation deferred before the time of the amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7 This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania. Section 4 - Committee 4.1 The Committee's interpretation and construction of the Agreement, and actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Participant has hereunto set his hand as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. Vice President and President and Corporate Secretary Chief Executive Officer WITNESS: (Participant) EX-10.1H 20 ROONEY DEFERRED DIRECTOR FEES 1994 Exhibit 10.11 (h) EQUITABLE RESOURCES, INC. Board of Directors Deferred Compensation Agreement THIS AGREEMENT, made and executed this 14th day of December, 1993, by and between Equitable Resources, Inc., herein designated as "Equitable", and Daniel M. Rooney, herein designat- ed as the "Participant." WITNESSETH: WHEREAS, the Participant is currently a member of the Board of Directors of Equitable as a Director or an Advisory Director; and WHEREAS, Equitable and the Participant desire to defer all of the fees arising from the above-stated relationship. NOW, THEREFORE, the parties hereby agree as follows: Section 1 - Account 1.1) Effective January 1, 1994, the Participant herein elects to defer, under the terms of this Agreement, all compensa- tion earned for his/her service as a Director or an Advisory Director of Equitable for the calendar year 1994. 1.2) Equitable shall establish a bookkeeping account, hereinafter referred to as the "Account", and shall credit to the Account the amounts of the deferred fees. 1.3) Interest shall be credited to the Account month- ly. The rate of interest shall be the same as the yield for 30- day Treasury Bills applicable to the first day of such month. Section 2 - Payment 2.1) All amounts credited to the Account on the Participant's behalf shall be payable in one lump sum by Equita- ble to the Participant on (date selected by the Participant) but in no event later than sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable. Unless a date specific is selected by the Partici- pant, the distribution will be made within sixty (60) days after the Participant ceases to be a Director or an Advisory Director of Equitable; provided, however, that nothing contained in this Section 2.1 shall negate the provisions of Section 2.3 below. 2.2) In the event of the death of the Participant, such payment shall be made to the Participant's beneficiary. For purposes of the Agreement, "beneficiary" means any person(s) or trust(s) or combination of these, last designated by the Partici- pant to receive benefits provided under this Agreement. Such designation shall be in writing filed with the Compensation Committee of the Board of Directors (the "Committee") and shall be revocable at any time through written instrument similarly filed without consent of any beneficiary. In the absence of any designation, the beneficiary shall be the Participant's spouse, if surviving, otherwise, all amounts payable hereunder shall be delivered by Equitable to the executors and administrators of the Participant's estate for administration as a part thereof. 2.3) For financial reasons, the Participant may apply to the Committee for withdrawal from the Agreement prior to the Payment Date. Such early withdrawal shall lie within the abso- lute discretion of the Committee. Upon approval from the Commit- tee, and within fifteen (15) days thereafter, the Participant will be deemed to have withdrawn from the Agreement and a distri- bution, in the amount necessary, will be made in a one-time payment. Amounts still payable to the Participant after the application of this Paragraph 2.3 shall be distributed pursuant to the foregoing Paragraphs of this Section 2. Section 3 - Miscellaneous Provisions 3.1) Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a fiduciary relationship between Equitable and the Participant, his/her designated beneficiary or any other person. Any fees deferred under the provisions of this Agreement shall continue for all purposes to be a part of the general funds of Equitable. To the extent that any person acquires a right to receive payment from Equitable under this Agreement, such right shall be no greater than the right of any unsecured general creditor of Equitable. 3.2) The right of the Participant or any other person to the payment of deferred fees under this Agreement shall not be assigned, transferred, pledged or encumbered except by will or by the laws of descent and distribution. 3.3) If the Committee shall find that any person to whom any payment is payable under this Agreement is unable to care for his/her affairs because of illness or accident, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, child, a parent, or a brother or sister, or to any person deemed by the Committee to have incurred expense for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Equitable under this Agreement. 3.4) Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the service of Equitable as a member of the Board of Directors. 3.5) This Agreement shall be binding upon and inure to the benefit of Equitable, its successors and assigns and the Participant and his/her heirs, executors, administrators and legal representatives. 3.6) Equitable may terminate this Plan at any time. Upon such termination, the Committee shall dispose of any bene- fits of the Participant as provided in Section 2. Equitable may also amend the provisions of this Plan at any time; provided, however, that no amendment shall affect the rights of the Participant, or his/her beneficiaries, to the receipt of payment of benefits to the extent of any compensation deferred before the time of the amendment. This Agreement shall terminate when the payment due under this Agreement is made. 3.7) This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylva- nia. Section 4 - Committee 4.1) The Committee's interpretation and construction of the Agreement, and the actions thereunder, including the amount or recipient of the payment to be made therefrom, shall be binding and conclusive on all persons for all purposes. The Committee members shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his/her own willful misconduct or lack of good faith. IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by its duly authorized officers and the Partici- pant has hereunto set his/her hand as of the date first above written. ATTEST: EQUITABLE RESOURCES, INC. s/ Audrey C. Moeller s/ D. I. Moritz Vice President and President and Corporate Secretary Chief Executive Officer WITNESS: (Participant) s/ Marianne Espey s/ Daniel M. Rooney Marianne Espey Daniel M. Rooney EX-11 21 COMPUTATION OF EARNINGS PER SHARE Exhibit 11.01 EQUITABLE RESOURCES, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 1993 1992 1991 Earnings: Net income . . . . . . . . . . . . . $73,455 $60,026 $64,168 Interest net of applicable income taxes on 9 1/2% convertible subordinated debentures . . . . . 89 208 229 Adjusted earnings . . . . . . . . $73,544 $60,234 $64,397 Shares: Average common shares outstanding . 32,359 31,342 31,253 Dilutive effect of conversion of 9 1/2% convertible subordinated debentures 257 305 339 Dilutive effect of stock options outstanding . . . . . . . . 1 61 70 Total . . . . . . . . . . . . . 32,677 31,708 31,662 Primary Earnings Per Share . . . . . . $2.27 $1.92 $2.05 Fully Diluted Earnings Per Share . . . $2.25 $1.90 $2.03 EX-21 22 SUBSIDIARIES Exhibit 21 EQUITABLE RESOURCES, INC. Subsidiaries of the Registrant December 31, 1993 Percentage of Voting State of Securities Name of Subsidiary Incorporation Owned by Immediate Parent Company Equitable Resources, Inc. (also d/b/a Equitable Gas Company) Pennsylvania EQT Capital Corporation Delaware 100 Equitable Gas-Energy Company Pennsylvania 100 Kentucky West Virginia Gas Company West Virginia 100 Equitrans, Inc. Delaware 100 ET Storage Company Pennsylvania 100 Nora Transmission Company Delaware 100 EREC Capital Corporation Delaware 100 Equitable Resources Energy Company West Virginia 100 Equitable Resources Marketing Company Delaware 100 Equitable Storage Company Delaware 100 Equitable Pipeline Company Delaware 100 Louisiana Intrastate Gas Company LLC Delaware 100 LIG, Inc. Delaware 100 LIG Liquids Company LLC Delaware 100 LIG Chemical Company Louisiana 100 Tuscaloosa Pipeline Company Louisiana 100 Equitable Resources (Canada) Limited Alberta, Canada 100 Hershey Oil Corporation California 100 Andex Energy, Inc. Delaware 100 ERI Realty, Inc. Pennsylvania 100 Equitable Argentina Note: All subsidiaries are included in the consolidated financial statements of the Registrant. See Note A to Financial Statements, Page 29. EX-23 23 CONSENT OF AUDITORS Exhibit 23.01 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference of our report dated February 22, 1994, with respect to the consolidated financial statements and schedules of Equitable Resources, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 1993 in the Prospectus part of the following Registration Statements: Registration Statement No. 33-52151 on Form S-8 pertaining to the 1994 Equitable Resources, Inc. Long- Term Incentive Plan; Registration Statement No. 33-52137 on Form S-8 pertaining to the 1994 Equitable Resources, Inc. Non- Employee Directors' Stock Incentive Plan; Post-Effective Amendment No. 2 to Registration Statement No. 2-69010 on Form S-8 pertaining to the Equitable Resources, Inc. Key Employee Restricted Stock Option and Stock Appreciation Rights Incentive Compensation Plan; Post-Effective Amendment No. 1 to Registration Statement No. 33-00252 on Form S-8 pertaining to the Equitable Resources, Inc. Employee Savings Plan; Post-Effective Amendment No. 1 to Registration Statement No. 33-10508 on Form S-8 pertaining to the Equitable Resources, Inc. Key Employee Restricted Stock Option and Stock Appreciation Rights Incentive Compensation Plan. We also consent to the incorporation by reference in the Registration Statement No. 33-46207 on Form S-3 pertaining to the registration of $100,000,000 Medium Term Notes, Series B of Equitable Resources, Inc. and in the related Prospectus of our report dated February 22, 1994, with respect to the consolidated financial statements and schedules of Equitable Resources, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 1993. We also consent to the incorporation by reference of our report dated March 4, 1994 with respect to the financial statements and schedules of the Equitable Resources, Inc. Employee Savings Plan included in the Annual Report (Form 11-K) for the year ended October 31, 1993, included in Exhibit 99.01 to this Annual Report (Form 10-K) into Post-Effective Amendment No. 1 to Registration Statement No. 33-00252 on Form S-8 pertaining to the Equitable Resources, Inc. Employee Savings Plan. By ___________________________ Ernst & Young Pittsburgh, Pennsylvania March 21, 1994 EX-99.01 24 FORM 11-K FOR YEAR END OCTOBER 31, 1993 Exhibit 99.01 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [X]ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended October 31, 1993 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 1-3551 EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN (Full title of the Plan and address of the Plan, if different from that of the issuer named below) EQUITABLE RESOURCES, INC. 420 Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (Name of issuer of the securities held pursuant to the plan and the address of principal executive office) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Administrative Committee of the Plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN (Name of Plan) By s/ Joseph L. Giebel Joseph L. Giebel Member of Administrative Committee March 4, 1994 REPORT OF INDEPENDENT AUDITORS Administrative Committee Equitable Resources, Inc. Employee Savings Plan We have audited the accompanying statements of plan equity of the Equitable Resources, Inc. Employee Savings Plan (the Plan) as of October 31, 1993 and 1992, and the related statements of income and changes in plan equity for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the plan equity of the Equitable Resources, Inc. Employee Savings Plan as of October 31, 1993 and 1992, and the income and changes in plan equity for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment as of October 31, 1993, and transactions or series of transactions in excess of 5% of the current value of plan assets for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1993 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1993 basic financial statements taken as a whole. s/ Ernst & Young Ernst & Young Pittsburgh, Pennsylvania March 4, 1994
EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN STATEMENT OF PLAN EQUITY OCTOBER 31, 1993 Fixed Employer Aggressive Common Life Income Balanced Stock Stock Stock Bond Insurance Clearing Combined Fund Fund Fund Fund Fund Fund Fund Account Funds Investments: Equitable Resources, Inc. Common Stock, at market $ $ $4,923,135 $ $ $ $ $ $4,923,135 Fixed Income Fund 3,840,103 3,840,103 Balanced Fund 4,839,462 4,839,462 Aggressive Stock Fund 1,741,574 1,741,574 Common Stock Fund 1,938,484 1,938,484 Bond Fund 1,913,017 1,913,017 Short-term investments 22 334,977 334,999 Total ______ investments 3,840,103 4,839,462 4,923,135 1,741,574 1,938,484 1,913,017 22 334,977 19,530,774 ___________ Receivables: Contributions 23,456 9,783 4,994 8,211 12,619 1,452 60,515 Participant loans 663,931 663,931 Interest 808 14 106 8 10 3 949 Total receivables 688,195 9,797 5,100 8,219 12,629 1,455 725,395 Transfers due from (to) funds 68,751 (12,288) 107,979 69,207 72,963 22,137 6,228 (334,977) Total assets 4,597,049 4,836,971 5,036,214 1,819,000 2,024,076 1,936,609 6,250 20,256,169 Payables: Participants 128,132 102,940 64,620 8,950 8,807 42,748 356,197 Others 27 6,250 6,277 Total payables 128,159 102,940 64,620 8,950 8,807 42,748 6,250 362,474 Plan equity $4,468,890$4,734,031 $4,971,594 $1,810,050 $2,015,269 $1,893,861 $ $ $19,893,695 See accompanying notes.
EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN STATEMENT OF PLAN EQUITY OCTOBER 31, 1992 Fixed Employer Aggressive Common Life Income Balanced Stock Stock Stock Bond Insurance Clearing Combined Fund Fund Fund Fund Fund Fund Fund Account Funds Investments: Equitable Resources, Inc. Common Stock, at market $ $ $3,849,823 $ $ $ $ $ $3,849,823 Fixed Income Fund 2,818,617 2,818,617 Balanced Fund 4,143,836 4,143,836 Aggressive Stock Fund 1,158,765 1,158,765 Common Stock Fund 1,163,764 1,163,764 Bond Fund 1,381,015 1,381,015 Short-term investments 13,681 194,380 208,061 Total ______ investments 2,818,617 4,143,836 3,849,823 1,158,765 1,163,764 1,381,015 13,681 194,380 14,723,881 ___________ Receivables: Participant loans 518,042 518,042 Interest 488 15 3 12 18 26 562 Total receivables 518,530 15 3 12 18 26 518,604 Transfers due from (to) funds (104,503) (128,892) 253,381 (23,524) 82,147 117,174 (1,403) (194,380) Total assets 3,232,644 4,014,944 4,103,219 1,135,244 1,245,923 1,498,207 12,304 15,242,485 Payables: Participants 59,476 55,023 171,120 5,335 12,991 303,945 Others 12,304 12,304 Total payables 59,476 55,023 171,120 5,335 12,991 12,304 316,249 Plan equity $3,173,168 $3,959,921 $3,932,099 $1,129,909 $1,232,932 $1,498,207 $ $ $14,926,236 See accompanying notes.
EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY YEAR ENDED OCTOBER 31, 1993 Fixed Employer Aggressive Common Life Income Balanced Stock Stock Stock Bond Insurance Combined Fund Fund Fund Fund Fund Fund Fund Funds Additions to plan equity attributed to: Investment income: Interest and dividends $ 2,261 $1,680 $132,137 $872 $1,064 $480 $ $138,494 Interest on participant loans 52,557 52,557 Total investment income 54,818 1,680 132,137 872 1,064 480 191,051 Gain realized on sale or distribution of Equitable Resources, Inc. Common Stock 130,345 130,345 Unrealized appreciation of investment in Equitable Resources, Inc. Common Stock 732,815 732,815 Unrealized appreciation in value of investment 241,751 713,069 376,015 412,637 181,411 1,924,883 Contributions 493,957 612,647 339,519 319,420 358,549 196,744 36,238 2,357,074 Participant rollovers 200,102 62,170 11,344 43,550 37,040 14,586 368,792 Total additions 990,628 1,389,566 1,346,160 739,857 809,290 393,221 36,238 5,704,960 Deductions from plan equity atributed to: Withdrawals by participants 239,795 127,477 179,058 13,035 14,068 42,779 616,212 Purchase of life insurance 36,238 36,238 Expenses 10,798 36,341 11 11,624 12,387 13,890 85,051 Total deductions 250,593 163,818 179,069 24,659 26,455 56,669 36,238 737,501 Transfers from (to) funds 555,687 (451,638) (127,596) (35,057) (498) 59,102 Net increase in plan equity 1,295,722 774,110 1,039,495 680,141 782,337 395,654 4,967,459 Plan equity: At beginning of year 3,173,168 3,959,921 3,932,099 1,129,909 1,232,932 1,498,207 14,926,236 At end of year $4,468,890$4,734,031 $4,971,594 $1,810,050 $2,015,269 $1,893,861 $ $19,893,695 See accompanying notes.
EQUITABLE RESOURCES, INC. EMPLOYEE SAVINGS PLAN STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY YEAR ENDED OCTOBER 31, 1992 Fixed Employer Aggressive Common Life Income Balanced Stock Stock Stock Bond Insurance Combined Fund Fund Fund Fund Fund Fund Fund Funds Additions to plan equity attributed to: Investment income: Interest and dividends $3,172 $2,070 $125,959 $864 $1,034 $454 $317 $133,870 Interest on participant loans 40,098 40,098 Total investment income 43,270 2,070 125,959 864 1,034 454 317 173,968 Gain realized on sale or distribution of Equitable Resources, Inc. Common Stock 196,116 196,116 Unrealized appreciation of investment in Equitable Resources, Inc. Common Stock 447,506 447,506 Unrealized appreciation (depreciation) in value of investment 314,175 160,179 (115,614) (56,034) 99,916 402,622 Contributions 418,696 542,020 219,290 239,396 234,422 103,844 51,898 1,809,566 Participant rollovers 25,314 25,904 12,632 4,680 14,532 3 83,065 Total additions 801,455 730,173 1,001,503 129,326 193,954 204,217 52,215 3,112,843 Deductions from plan equity atributed to: Withdrawals by participants 734,199 305,879 481,616 7,638 5,329 50,850 1,585,511 Purchase of life insurance 41,341 41,341 Expenses 13,693 33,005 7,522 7,512 7,449 69,181 Total deductions 747,892 338,884 481,616 15,160 12,841 58,299 41,341 1,696,033 Transfers from (to) funds (3,383,582) 552,539 98,379 601,597 790,443 1,352,289 (11,665) Net increase (decrease) in plan equity (3,330,019) 943,828 618,266 715,763 971,556 1,498,207 (791) 1,416,810 Plan equity: At beginning of year 6,503,187 3,016,093 3,313,833 414,146 261,376 791 13,509,426 At end of year $3,173,168 $3,959,921 $3,932,099 $1,129,909 $1,232,932 $1,498,207 $ $14,926,236 See accompanying notes.
1. Description of the Plan The following description of the Equitable Resources, Inc. Employee Savings Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General The Plan is a defined contribution profit sharing and savings plan, with a 401(k) salary reduction feature, implemented on September 1, 1985 by Equitable Resources, Inc. and certain subsidiaries (the Company or Companies). All regular, full-time, non-union employees of the Companies who complete a certain service requirement are eligible to participate. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions The Companies make contributions to the Plan equal to the amount by which participants agree to reduce their salaries (Contract Contributions). These contributions are considered to be Company (as opposed to employee) contributions to the Plan. In addition, the Companies may, at their discretion, contribute an additional amount to the Plan (Discretionary Contributions). All contributions are allocated to individual participant accounts. The Company made a Discretionary Contribution to the Plan for the Plan year ended October 31, 1993. The amount of the contribution was $162,173 and was allocated based upon each participant's contribution during the calendar year 1992 up to a maximum of six percent. Discretionary Contributions were invested in the same manner as participant's Contract Contributions. As a result of the purchase of Louisiana Intrastate Gas Corporation (LIG) by Equitable Resources, Inc., employees of LIG became participants in the Plan in July 1993. As part of the purchase of LIG, the Company agreed to continue, through December 1993, discretionary contributions matching contributions made by LIG employees up to a maximum of six percent of gross earnings. For the period July 1, 1993 to October 31, 1993, such discretionary contributions were $112,225. Rollover Contributions Participants are allowed to make rollover contributions (contributions transferred to the Plan from other qualified retirement plans), subject to certain requirements. 1. Description of Plan (Continued) Vesting Participants are 100% vested in the value of Contract Contributions made, and any rollover contributions. If employment is terminated for any reason other than retirement, death, or total and permanent disability, a participant is entitled to receive the vested value of any Discretionary Contributions, as determined in accordance with the following schedule: Years of Continuous Service Vested Interest Less than five years 0% Five years or more 100% Amounts forfeited by participants upon termination will be used to reduce the amount of future Discretionary Contributions to the Plan. Upon retirement, death, total and permanent disability or termination of the Plan, a participant is entitled to receive the full value of any Discretionary Contributions, regardless of years of continuous service. Withdrawals by Participants Payments to participants are made in one of two ways: a single cash payment or distribution of stock (mandatory for participants who are terminated for a reason other than retirement, death or disability) or equal periodic payments over the lesser of: a) the life expectancy of the participant and beneficiary or b) twenty (20) years. Loans to Participants A participant may borrow money from the Plan in amounts up to 50 percent of the value of the participant's account, plus the vested portion of Discretionary Contributions, subject to certain limitations. All loans are at a rate consistent with rates charged by commercial lenders for similar loans. One half of the participant's nonforfeitable interest in the Plan at the time of the loan is pledged as collateral. As of October 31, 1993 and 1992, collateral for participant loans amounted to $2,372,188 and $1,767,495, respectively. 1. Description of the Plan (Continued) Investment of Contributions Contributions are initially deposited with Pittsburgh National Bank (Trustee), and are invested in a short-term fund until allocated. The Plan authorizes the participants to direct the Trustee to invest their accounts in various combinations of the investment funds described below: a) The Fixed Income Fund - comprised of a single type of fixed income investment where the principal and interest are fixed. The Company entered into an ongoing contract with Equitable Life Assurance Society (Equitable Life) to provide this and other investment vehicles and manage the respective funds. b) The Balanced Fund - invests in various types of securities: primarily common stocks, securities convertible into common stocks, publicly traded bonds, and short-term money market investments. The Company's contract with Equitable Life provides this investment vehicle and fund management. c) The Employer Stock Fund - invests in the Common Stock of the Company. This fund is managed by the Plan trustee. d) The Aggressive Stock Fund - invests primarily in common stocks of medium and smaller sized companies and also in securities not generally defined as growth stocks, but with unusual value or potential. The Company's contract with Equitable Life provides this investment vehicle and fund management. e) The Common Stock Fund - invests primarily in common stocks and other equity-type securities. The Company's contract with Equitable Life provides this investment vehicle and fund management. f) The Bond Fund - invests primarily in publicly-traded fixed income securities, such as bonds, debentures and notes. The Company's contract with Equitable Life provides this investment vehicle and fund management. g) The Life Insurance Fund - comprised solely of life insurance contracts issued on the lives of participants. This option is subject to a limitation that no more than 25% of the contributions allocated to a participant may be allocated to the purchase of insurance. The Company's contract with Equitable Life provides this investment vehicle and fund management. 2. Summary of Significant Accounting Policies Investments Short-term investments are valued at cost, which approximates market. The fixed income fund contract is valued at face value, which approximates market. Other investments are valued at market. 3. Investments Investments at October 31, 1993 and 1992 are comprised of:
1993 1992 Fair Fair Market Original Market Original Shares Value Cost Shares Value Cost Equitable Resources, Inc., Common Stock 124,987 $ 4,923,135 $ 2,667,541 119,681 $ 3,849,823 $ 2,332,777 Fixed Income Fund* - 3,840,103 3,840,103 - 2,818,617 2,818,617 Balanced Fund* - 4,839,462 4,839,462 - 4,143,836 4,143,836 Aggressive Stock Fund* - 1,741,574 1,741,574 - 1,158,765 1,158,765 Common Stock Fund* - 1,938,484 1,938,484 - 1,163,764 1,163,764 Bond Fund* - 1,913,017 1,913,017 - 1,381,015 1,381,015 Short-Term investment - 334,999 334,999 - 208,061 208,061 Total $19,530,774 $17,275,180 $14,723,881 $13,206,835 The interest rate for the Fixed Income Fund was 6.75% for the 1993 fiscal year and 8.00% for the 1992 fiscal year. *Securities investments are provided by contract through a pooled investment account; fair market value is used as original cost.
4. Gain Realized on Sale/Distribution of Stock During the year ended October 31, 1993, 8,680 shares of Equitable Resources, Inc. Common Stock with a market value of $304,717 were sold at an average price of $35.11 per share. The cost of the shares sold was $175,959 ($20.27 per share) calculated using the "average cost" method. In addition, 109 shares of Equitable Resources, Inc. Common Stock with a market value of $3,815 were distributed during the year ended October 31, 1993. The cost of the shares distributed was $2,228. During the year ended October 31, 1992, 18,801 shares of Equitable Resources, Inc. Common Stock with a market value of $470,079 were sold at an average price of $25.00 per share. The cost of the shares sold was $321,882 ($17.12 per share) calculated using the "average cost" method. In addition, 4,237 shares of Equitable Resources, Inc. Common Stock with a market value of $128,416 were distributed during the year ended October 31, 1992. The cost of the shares distributed was $80,497. 5. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, the interests of all affected participants will become fully vested. 6. Income Tax Status of Plan The Internal Revenue Service has determined that the Plan is qualified under Section 401(a) of the Internal Revenue Code and exempt under Section 501(a) of the Code. Future amendments will be made to the Plan as necessary so that the Plan remains qualified and tax exempt under the Code. 7. Federal Income Tax Status - Employee Contributions by the employer to the Plan (including those resulting from salary reduction) and all dividends and interest earned on such contributions are not taxable to the participant for federal income tax purposes until distributed. The tax consequences, to participants, of a distribution from the Plan are dependent upon the circumstances existing at the time of distribution. Delinquent and unpaid loans are considered distributions from the Plan. In general, a participant is subject to federal income tax on a distribution in the year received. Special rules applicable to lump sum distributions may result in deferral of taxation in whole or in part. SUPPLEMENTARY INFORMATION
EQUITABLE RESOURCES, INC. Schedule 1 EMPLOYEE SAVINGS PLAN ASSETS HELD FOR INVESTMENT October 31, 1993 Current Identity of Issue Description of Investment Cost Value Equitable Resources, Inc.1 124,987 shares common stock $2,667,541 $4,923,135 The Equitable Life Assurance Society Fixed Income Contract 6.75% per annum(2) $3,840,103(3) $3,840,103(3) The Equitable Life Assurance Society Retirement Investment Accounts, Pooled Separate Account No. 10, "Balanced Account" 56,701 units $4,839,462(3) $4,839,462(3) The Equitable Life Assurance Society Retirement Investment Accounts, Pooled Separate Account No. 3, "Aggressive Stock Account" 12,845 units $1,741,574(3) $1,741,574(3) The Equitable Life Assurance Society Retirement Investment Accounts, Pooled Separate Account No. 4, "Common Stock Account" 5,552 units $1,938,484(3) $1,938,484(3) The Equitable Life Assurance Society Retirement Investment Accounts, Pooled Separate Account No 13, "Bond Account" 44,213 units $1,913,017(3) $1,913,017(3) ____________________ 1Party in interest to the Plan. 2Rate in effect for Plan year ended October 31, 1993. 3Fair market value is used as original cost.
EQUITABLE RESOURCES, INC. Schedule 2 EMPLOYEE SAVINGS PLAN TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS Year Ended October 31, 1993 Party Description Number Total Number Total Original Net Gain Involved of Investment of Purchases Of Sales Cost or (Loss) Purchases Sales Proceeds Series Transactions: * Short-term investments 250 $6,099,629 139 $5,962,970 $5,962,970 None * Fixed income mutual funds 15 $1,136,435 3 $115,451 $115,451 None * The above transactions were carried out by the Trustee, Pittsburgh National Bank.
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