0000916641-01-501167.txt : 20011008 0000916641-01-501167.hdr.sgml : 20011008 ACCESSION NUMBER: 0000916641-01-501167 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20010919 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LOUIS DREYFUS NATURAL GAS CORP CENTRAL INDEX KEY: 0000912264 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 731098614 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-45331 FILM NUMBER: 1740447 BUSINESS ADDRESS: STREET 1: 14000 QUAIL SPRINGS PKWY STREET 2: STE 600 CITY: OKLAHOMA CITY STATE: OK ZIP: 73134 BUSINESS PHONE: 4057491300 MAIL ADDRESS: STREET 1: 14000 QUAIL SPRINGS PKWY STREET 2: STE 600 CITY: OKLAHOMA CITY STATE: OK ZIP: 73134 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DOMINION RESOURCES INC /VA/ CENTRAL INDEX KEY: 0000715957 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 541229715 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 120 TREDEGAR STREET STREET 2: P O BOX 26532 CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8048192000 MAIL ADDRESS: STREET 1: P O BOX 26532 STREET 2: 120 TREDEGAR STREET CITY: RICHMOND STATE: VA ZIP: 23219 SC 13D 1 dsc13d.txt SCHEDULE 13-D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 Louis Dreyfus Natural Gas Corp. ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share ------------------------------------------------------------------------------- (Title of Class of Securities) 546011 10 7 ------------------------------------------------------------------------------- (CUSIP Number) James F. Stutts, Esq. Vice President and General Counsel Patricia A. Wilkerson Vice President and Corporate Secretary Dominion Resources, Inc. 120 Tredegar Street Richmond, Virginia 23219 (804) 819-2000 ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 9, 2001 ------------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ] 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Dominion Resources, Inc. (54-1229715) -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS BK and WC -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Virginia ------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF SHARES ------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 19,150,000(1) EACH REPORTING ----------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------ 10 WITH SHARED DISPOSITIVE POWER 19,150,000(1) ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 19,150,000(1) ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X] ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 43.6 % ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO ------------------------------------------------------------------------------- (1) Includes 19,150,000 shares of Common Stock that may be deemed to be beneficially owned by Dominion Resources, Inc. pursuant to the Principal Shareholders Agreement described in Item 6 below. ITEM 1. SECURITY AND ISSUER This statement relates to the common stock, par value $0.01 per share (the "Company Common Stock"), of Louis Dreyfus Natural Gas Corp., an Oklahoma corporation (the "Company"). The Company's principal corporate offices are located at 14000 Quail Springs Parkway, Suite 600, Oklahoma City, Oklahoma 73134. ITEM 2. IDENTITY AND BACKGROUND (a) - (c) This statement is being filed by Dominion Resources, Inc., a corporation organized under the laws of Virginia ("Dominion"). Dominion's principal corporate offices are located at 120 Tredegar Street, Richmond, Virginia 23219. Dominion is one of the nation's largest producers of energy. Dominion's 22,000-megawatt generation portfolio is expected to grow to more than 28,000 megawatts by 2005. In addition to its existing 2.8 trillion cubic feet equivalent (Tcfe) of natural gas reserves and 315 billion cubic feet equivalent (Bcfe) of annual production, Dominion also owns and operates 7,600 miles of natural gas transmission pipeline with a delivery capability of 6.3 billion cubic feet per day. Dominion also operates the nation's largest underground natural gas storage system with more than 950 billion cubic feet of storage capacity. Dominion also serves nearly four million retail natural gas and electric customers in five states. Dominion has about 16,000 employees. The names, business addresses and principal occupation or employment (and the name, principal business and address of any corporation or other organization in which such employment is conducted) of each of the persons specified by Instruction C of Schedule 13D are set forth on Schedule I. (d) - (e) Neither Dominion, nor to the knowledge of Dominion, any of the persons specified in Schedule I has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) nor has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) The citizenship of each of the persons specified by Instruction C of the Schedule 13D is set forth on the attached Schedule I. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION This Schedule 13D is filed as a result of the Principal Shareholders Agreement described in Item 6 of this Schedule 13D. The consideration for the shares of Company Common Stock to be purchased by Dominion pursuant to the Principal Shareholders Agreement is cash and Dominion common stock, no par value (the "Dominion Common Stock") . No other funds were required in connection with entering into the Principal Shareholders Agreement. Dominion expects initially to finance the cash component of the merger described in Item 4 of this Schedule 13D with a bridge loan or short term commercial paper. After the merger, Dominion plans to replace the short term financing with a combination of trust preferred securities and long term debt issued by either Dominion or its wholly owned subsidiary Consolidated Natural Gas Company. ITEM 4. PURPOSE OF THE TRANSACTION On September 9, 2001, Dominion, Consolidated Natural Gas Company, a wholly owned subsidiary of Dominion ("CNG"), and the Company entered into an Agreement and Plan of Merger, which they subsequently amended pursuant to Amendment No. 1 to the Agreement and Plan of Merger dated as of September 17, 2001 (as amended, the "Merger Agreement"). At the effective time (the "Effective Time") of the merger (the "Merger"), pursuant to the Merger Agreement, the Company will be merged with and into a direct wholly owned subsidiary of Dominion (the "Merger Sub")organized solely for purposes of the Merger. Merger Sub will be the surviving corporation (the "Surviving Corporation") in the merger. Following the Merger, the Dominion will contribute all of the outstanding stock of the Surviving Corporation to CNG and it will become wholly owned by CNG. Upon consummation of the Merger, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (as defined in the Merger Agreement), other than shares of Company Common Stock owned by Dominion and its subsidiaries and by the Company, including treasury stock, which shall be cancelled, and shares of Company Common Stock held by shareholders who validly exercise their appraisal rights under Oklahoma law, will be converted into (i) the right to receive $20.00 in cash and (ii) 0.3226 of a share of Dominion Common Stock, subject to adjustment as provided in the Merger Agreement. The certificate of incorporation and bylaws of Merger Sub immediately before the Effective Time of the Merger will be the certificate of incorporation and bylaws of the Surviving Corporation until amended. The directors and officers of Merger Sub at the Effective Time of the Merger will be the directors and officers of the Surviving Corporation. The closing of the Merger will occur promptly after the day on which the last condition to completing the Merger is satisfied or waived, or at such other time as Dominion and the Company may agree. The consummation of the Merger is subject to a number of conditions, including (i) compliance with the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) approval of the Merger Agreement and the transactions contemplated thereby by the holders of a majority of the outstanding shares of Company Common Stock, (iii) the Registration Statement (as defined in the Merger Agreement) becoming effective and (iv) the receipt of tax opinions from legal counsel to the Company and Dominion to the effect that the Merger will qualify as a reorganization under section 368(a) of the Internal Revenue Code of 1986, as amended. Pursuant to the Merger Agreement, the Company must pay, in certain circumstances upon termination of the Merger Agreement, a fee of $70 million in cash (the "Termination Fee") to Dominion. The Company has agreed to pay the Termination Fee if (i) the Merger Agreement is terminated by the Company in order to accept a superior proposal, (ii) the Merger Agreement is terminated by Dominion because: (a) the Company's Board withdraws, modifies or changes in a manner adverse to Dominion its recommendation of the Merger, or (b) the Company breaches its no solicitation obligation in a material respect and Dominion is adversely affected thereby; (iii) the Merger Agreement is terminated: (a) by Dominion because the Company breaches its representations or covenants in the Merger Agreement, (b) by the Company because the Merger did not occur by March 31, 2002, or (c) by the Company or Dominion because the Company's shareholders did not approve the Merger, and (A) there was outstanding another acquisition proposal, (B) Dominion was not in material breach of the Merger Agreement, (C) the Company Shareholders did not approve the Merger, (D) the Company Board did not withdraw, modify or change its recommendation of the Merger, and (E) within twelve months after termination, the Company enters into an agreement which is ultimately consummated or consummates a transaction with the proponent of the acquisition proposal or another party pursuant to a superior acquisition proposal. The preceding summary of the Merger Agreement does not purport to be complete. Reference is made to the full text of the Merger Agreement that is filed as an exhibit to this statement and is incorporated in this Schedule 13D by this reference. In connection with execution of the Merger Agreement, the Company entered into a gas sale agreement (the "Gas Sale Agreement") with Dominion Exploration & Production, a wholly owned subsidiary of Dominion. The Gas Sale Agreement calls for the Company to deliver approximately 48 billion cubic feet ("Bcf")of natural gas at the rate of approximately 4 Bcf per month for twelve months beginning in January 2002 to Dominion Exploration & Production at a weighted average price of approximately $3.03 per million cubic feet. The Gas Sale Agreement will survive any termination of the Merger Agreement. The 48 Bcf of gas subject to this Gas Sale Agreement represents approximately 3% of the Company's estimated proved reserves as of June 30, 2001. Except as set forth in this Item 4 or as provided in the Merger Agreement, the Gas Sale Agreement, the Principal Shareholders Agreement described in Item 6 of this Schedule 13D or as otherwise referred to or described in this Schedule 13D, Dominion has no present plan or proposal which relates to or would result in any of the matters referred to in Items (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) - (b) By reason of its execution of the Principal Shareholders Agreement described in Item 6 of this Schedule 13D and the voting agreement and irrevocable proxy contained therein, Dominion may be deemed to beneficially own 19,150,000 shares of Company Common Stock, or approximately 44% of the Company Common Stock outstanding. Dominion expressly disclaims that it has become a member of a "group" as a result of the execution of the Principal Shareholders Agreement described in Item 6 of this Schedule 13D. (c) Other than the execution of the Principal Shareholders Agreement described in Item 6 of this Schedule 13D, none of Dominion or, to Dominion's knowledge, any of the persons named on the attached Schedule I has effected any transactions in Company Common Stock in the past 60 days. (d) - (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Reference is made to Item 4 above. On September 9, 2001, Dominion and subsidiaries of S.A. Louis Dreyfus et Cie named in the Principal Shareholders Agreement, as hereinafter defined, that own approximately 44% of the outstanding shares of the Company Common Stock (the "Principal Shareholders") entered into the Principal Shareholders Agreement (the "Principal Shareholders Agreement"). The following is a summary of the material terms of the Principal Shareholders Agreement. This summary is qualified in its entirety by reference to the Principal Shareholders Agreement which is attached as an exhibit to this statement and is incorporated in this Schedule 13D by this reference. The Principal Shareholders has agreed to vote: (i) in favor of the approval of the terms of the merger, (ii) against any action, proposal, transaction or agreement that would constitute a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Merger Agreement, (iii) except as otherwise agreed to in writing in advance by Dominion, against the following actions or proposals, (a) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company, (b) a sale, lease or transfer of a significant part of the assets of the Company or any of its subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Company or any of its subsidiaries, (c) any change in the persons who constitute the board of directors, (d) any change in the present capitalization or any amendment of the articles of incorporation or bylaws, (e) any other material change in the corporate structure or business, or (f) any other action or proposal that is intended or would reasonably be expected, to prevent, impede, or materially interfere with, delay or postpone the Merger. The Principal Shareholders also appointed Dominion, or its designee, as proxy to vote their shares at any meeting of the Company shareholders called with respect to the matters described above. If the Company board of directors decides that it has a fiduciary obligation to not recommend to the Company shareholders that they approve the Merger, the Principal Shareholders are only required to vote approximately two- thirds of the shares owned by them (approximately 29% of the outstanding Company Common Stock) in favor of the Merger. The voting agreement terminates if the Merger Agreement terminates for any reason including if the Company terminates the Merger Agreement to accept a superior proposal. The Principal Shareholders Agreement also restricts the ability of the Principal Shareholders to sell the shares they receive in the Merger. The Principal Shareholders may not sell the shares of Dominion Common Stock for 90 days after the Merger is complete. For the next twelve months, the Principal Shareholders can only sell in any month up to ten percent (10%) of the shares they receive in the Merger, unless Dominion agrees to allow them to sell more. Except as provided in the Merger Agreement, the Principal Shareholders Agreement, and as otherwise referred to or described in this Schedule 13D, to Dominion's knowledge, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between Dominion and the Company or any other person with respect to securities of the Company. The preceding summary of the Principal Shareholders Agreement does not purport to be complete. Reference is made to the full text of the Principal Shareholders Agreement that are filed as exhibits to this statement and are incorporated in this Schedule 13D by this reference ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit No. Description 2.1 Agreement and Plan of Merger, dated September 9, 2001 by and among Dominion Resources, Inc., Consolidated Natural Gas Company and Louis Dreyfus Natural Gas Corp. (Exhibit 2.1, Form 8-K filed September 10, 2001 by Dominion Resources, Inc., File No. 1-8489, incorporated by reference). 2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of September 17, 2001 by and among Dominion Resources, Inc., Consolidated Natural Gas Company and Louis Dreyfus Natural Gas Corp. (filed herewith). 10.1 Principal Shareholders Agreement dated September 9, 2001 by and among Dominion Resources, Inc., Louis Dreyfus Commercial Activities Inc., Louis Dreyfus Natural Gas Holdings Corp. and L.D. Fashions Holdings Corp. (Exhibit 2.2, Form 8-K filed September 12, 2001 by Louis Dreyfus Natural Gas Corp., File No. 1-12480, incorporated by reference). 10.2 Gas Sale Agreement dated September 9, 2001 between Dominion Exploration & Production Inc. and Louis Dreyfus Natural Gas Corp. (Exhibit 10.1, Form 8-K filed September 12, 2001 by Louis Dreyfus Natural Gas Corp., File No. 1-12480, incorporated by reference). SCHEDULE I Information Concerning Executive Officers and Directors of Dominion Resources, Inc. The current executive officers and directors of Dominion are listed below. Dominion's principal executive offices are located at 120 Tredegar Street, Richmond, Virginia 23219. Unless otherwise indicated, the business address listed for each individual not principally employed by Dominion is also the address of the corporation or other organization which principally employs that individual. CORPORATE OFFICERS
NAME PRESENT POSITION WITH DOMINION CITIZENSHIP Thos E. Capps Director, Chairman, President & Chief United States Executive Officer Thomas N. Chewning Executive Vice President, Chief Financial United States Officer Thomas F. Farrell, II Executive Vice President Untied States James P. O'Hanlon Executive Vice President United States Duane C. Radtke Executive Vice President United States Robert E. Rigsby Executive Vice President United States Edgar M. Roach, Jr. Executive Vice President United States James L. Trueheart Group Vice President and Chief Administrative United States Officer Eva Teig Hardy Senior Vice President - External Affairs United States & Corporate Communications G. Scott Hetzer Senior Vice President and Treasurer United States James L. Sanderlin Senior Vice President - Law United States Steven A. Rogers Vice President, Controller and Principal United States Accounting Officer
DIRECTORS
NAME POSITION/PRESENT PRINCIPAL OCCUPATION OR CITIZENSHIP EMPLOYMENT AND BUSINESS ADDRESS William S. Barrack, Jr. Director of Standard Commercial Corporation. United States His address is 781 Weed Street, New Canaan, CT 06840. Thos. E. Capps Chairman, President and Chief Executive Officer United States of Dominion. George A. Davidson, Jr. Director of PNC Financial Services Group, Inc. United States and BFGoodrich Company. His address is 625 Liberty Avenue, Pittsburgh, PA 15222-3199. John W. Harris President of Lincoln Harris, LLC. The address United States of Lincoln Harris, LLC is 100 North Tryon Street, Suite 2600, Charlotte, NC 28202. Benjamin J. Lambert, III Optometrist. The address of his practice is United States 904 North First Street, Richmond, VA 23219. Richard L. Leatherwood Director of CACI International, Inc. His address United States is 3805 Greenway, Baltimore, MD 21218. Margaret A. McKenna President of Lesley University. The address United States of Lesley University is 29 Everett Street, Cambridge, MA 02138-2790. Steven A. Minter Director of The Cleveland Foundation, Goodyear United States Tire & Rubber Company and Key Corp. His address is 1422 Euclid Avenue, Suite 1400, Cleveland, OH 44115. Kenneth A. Randall Director of Oppenheimer Funds, Inc. United States and Prime Retail, Inc. His address is 6 Whittaker's Mill, Williamsburg, VA 23185. Frank S. Royal Physician. The address of his practice is United States East End Medical Building, 1122 North 25th Street, Richmond, VA 23223.
S. Dallas Simmons Chairman, President and Chief Executive Officer United States of Dallas Simmons & Associates. The address of Dallas Simmons & Associates is 314 Burnwick Road, Richmond, VA 23227. Robert H. Spilman President of Spilman Properties, Inc. United States The address of Spilman Properties, Inc. is 3559 Fairystone Park Highway, 2nd Floor, Bassett, VA 24055. David A. Wollard Chairman of the Board of Exempla Healthcare. United States The address of Exempla Healthcare is 600 Grant Street, Suite 600, Denver, CO 80203-3525.
SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DOMINION RESOURCES, INC. By: /s/ Patricia A. Wilkerson -------------------------------- Name: Patricia A. Wilkerson Title: Vice President and Corporate Secretary Dated: September 19, 2001 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION ------- ----------- 2.1 Agreement and Plan of Merger, dated September 9, 2001 by and among Dominion Resources, Inc., Consolidated Natural Gas Company and Louis Dreyfus Natural Gas Corp. (Exhibit 2.1, Form 8-K filed September 10, 2001 by Dominion Resources, Inc., File No. 1-8489, incorporated by reference). 2.2 Agreement No. 1 to Agreement and Plan of Merger, dated as of September 17, 2001 by and among Dominion Resources, Inc., Consolidated Natural Gas Company and Louis Dreyfus Natural Gas Corp. (filed herewith). 10.1 Principal Shareholders Agreement dated September 9, 2001 by and among Dominion Resources, Inc., Louis Dreyfus Commercial Activities Inc., Louis Dreyfus Natural Gas Holdings Corp. and L.D. Fashions Holdings Corp. (Exhibit 2.2, Form 8-K filed September 12, 2001 by Louis Dreyfus Natural Gas Corp., File No. 1-12480, incorporated by reference). 10.2 Gas Sale Agreement dated September 9, 2001 between Dominion Exploration & Production Inc. and Louis Dreyfus Natural Gas Corp. (Exhibit 10.1, Form 8-K filed September 12, 2001 by Louis Dreyfus Natural Gas Corp., File No. 1-12480, incorporated by reference). EX-2.2 3 dex22.txt AMENDMENT NO 1 TO THE AGREEMENT AND PLAN OF MERGER AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER dated as of September 17, 2001, is among DOMINION RESOURCES, INC., a Virginia corporation ("Parent"), CONSOLIDATED NATURAL GAS COMPANY, a Delaware corporation and a direct and wholly owned subsidiary of Parent ("Sub"), and LOUIS DREYFUS NATURAL GAS CORP., an Oklahoma corporation (the "Company"). Parent, Sub and the Company have entered into the Agreement and Plan of Merger dated as of September 9, 2001 (the "Original Agreement") which provides for the merger of the Company with and into Sub. Section 1.1 of the Original Agreement provides that Parent may, at its election, substitute for Sub any direct wholly owned subsidiary of Parent as a constituent corporation to the Merger. Parent has determined to form a new corporation ("Newco") as a direct wholly owned subsidiary of Parent and that Newco rather than Sub shall be the corporation with and into which the Company shall merge. In order to accomplish the intended purpose of the transaction that the Company be acquired by Sub, promptly following the Effective Time of the Merger, Parent will contribute to Sub all of the outstanding capital stock of the Surviving Corporation. Accordingly, the parties have entered into this Amendment. The Original Agreement and this Amendment are referred to collectively as the "Agreement." Capitalized terms used, but not defined, herein have the meaning given to such terms in the Original Agreement. NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows: 1. Article I of the Agreement is hereby deleted and replaced in its entirety by the following: ARTICLE I THE ACQUISITION Section 1.1 Formation of Newco; the Merger; Contribution to Sub. Prior to the Effective Time, Parent shall form a new corporation ("Newco") under the Delaware General Corporation Law ("DGCL"). Newco shall be a direct wholly owned subsidiary of Parent and shall be formed solely for the purpose of engaging in the transactions contemplated hereby, and will engage in no other business activities, will not have any material liabilities and will conduct its operations only as contemplated under this Agreement. Parent shall take all necessary action to cause the Agreement, as amended, to be duly authorized, executed, delivered and performed by Newco. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.3), the Company shall be merged with and into Newco in accordance with this Agreement, and the separate corporate existence of the Company shall thereupon cease. Newco (sometimes hereinafter referred to as the "Surviving Corporation") shall be the surviving corporation in the Merger and shall be a wholly owned subsidiary of Parent. The Merger shall have the effects specified in the DGCL and the Oklahoma General Corporation Act (the "OGCA"). Promptly following the Effective Time Parent shall contribute to Sub all of the outstanding capital stock of the Surviving Corporation and the Surviving Corporation shall become a wholly owned subsidiary of Sub. At the election of Parent, any direct wholly owned subsidiary of Parent may be substituted for Newco as a constituent corporation in the Merger. In such event, the parties hereto agree to execute an appropriate amendment to this Agreement in order to reflect such substitution. Section 1.2 The Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the "Closing") shall take place (i) at the offices of McGuireWoods LLP, One James Center, Richmond, Virginia, at 9:00 a.m., local time, on the first business day immediately following the day on which the last to be fulfilled or waived of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to fulfillment or waiver of those conditions) shall be fulfilled or waived in accordance herewith or (ii) at such other time, date or place as Parent and the Company may agree in writing. The date on which the Closing occurs is hereinafter referred to as the "Closing Date." Section 1.3 Effective Time. If all the conditions to the Merger set forth in Article VII shall have been fulfilled or waived in accordance herewith and this Agreement shall not have been terminated as provided in Article VIII, on the Closing Date, certificates of merger (the "Certificates of Merger") meeting the requirements of Section 251 of the DGCL and Section 1082 of the OGCA shall be properly executed and filed with the Secretary of State of the State of Delaware and the Secretary of State of the State of Oklahoma, respectively. The Merger shall become effective upon the filing of the Certificates of Merger with the Secretaries of State of the State of Delaware and Oklahoma in accordance with the DGCL and the OGCA, or at such later time that the parties hereto shall have agreed upon and designated in such filing as the effective time of the Merger (the "Effective Time"). Section 1.4 Certificate of Incorporation. The certificate of incorporation of Newco in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation, until duly amended in accordance with applicable law. Section 1.5 Bylaws. The bylaws of Newco in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation, until duly amended in accordance with applicable law. Section 1.6 Board of Directors and Officers. The board of directors of the Surviving Corporation shall consist of the board of directors of Newco, as it existed immediately prior to the Effective Time. The officers of Newco immediately prior to the Effective Time shall be the officers of the Surviving Corporation. 2. Section 2.1 of the Agreement is hereby deleted and replaced in its entirety by the following: Section 2.1 Effect On Capital Stock. At the Effective Time, the Merger shall have the following effects on the capital stock of the Company and Newco, without any action on the part of the holder of any capital stock of the Company or Newco: (a) Conversion of the Company Shares. Subject to the provisions of this Section 2.1 and Section 2.3, each share of common stock, $0.01 par value, of the Company (each a "Company Share" and collectively the "Company Shares") issued and outstanding immediately prior to the Effective Time (but not including any Dissenting Shares (as defined below) and any Company Shares that are owned by (i) Parent, Newco or any other direct or indirect Subsidiary of Parent or (ii) by the Company (the "Excluded Company Shares")) shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive (i) $20.00 in cash (the "Cash Consideration"), (ii) 0.3226 (the "Exchange Ratio") of a Parent Common Share (the "Share Consideration" and, together with the Cash Consideration, the "Merger Consideration") and (iii), in the event the Effective Time does not occur on or before the record date for the regular quarterly dividend on Parent Common Shares payable in December 2001 (the "December 2001 Dividend") and/or March 2002 (the "March 2002 Dividend"), as the case may be, and such failure was not the result of a failure by the Company to perform or observe in any material respect any of its obligations under this Agreement, an amount in cash equal to the December 2001 Dividend and/or the March 2002 Dividend, as the case may be, payable in respect of a Parent Common Share multiplied by the Exchange Ratio (which sum shall be part of the Cash Consideration). "Parent Common Share" shall mean the common shares, no par value, of Parent. (b) Cancellation of Excluded Company Shares. Each Excluded Company Share issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, no longer be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist. (c) Newco. At the Effective Time, each share of common stock, no par value, of Newco issued and outstanding immediately prior to the Effective Time shall remain outstanding as shares of common stock of the Surviving Corporation, and the Surviving Corporation shall continue as a wholly owned subsidiary of Parent. 3. The term "Newco" is substituted for the term "Sub" in each place where such term appears in Sections 7.2(b) and 7.3(b). 4. Section 8.4 of the Agreement is hereby deleted and replaced in its entirety by the following: Section 8.4. Termination by Parent. This Agreement may be terminated at any time prior to the Effective Time, by action of the board of directors of Parent after consultation with its legal advisors, if: (i) the board of directors of the Company shall have withdrawn, modified or changed, in a manner adverse to Parent, the board's approval or recommendation of the Merger or recommended approval of a Company Acquisition Proposal, or resolved to do any of the foregoing; (ii) the Company shall have breached Section 6.1 in any material respect, and Parent shall have been adversely affected thereby; or (iii) (A) there has been a breach by the Company of any representation, warranty covenant or agreement set forth in this Agreement or if any representation or warranty of the Company shall have become untrue, in either case such that the conditions set forth in Section 7.3(a) will not be satisfied at the Closing Date and (B) such breach is not curable, or, if curable, is not cured within 30 days after written notice of such breach is given by Parent to the Company; provided that the right to terminate this Agreement pursuant to this clause (iii) shall not be available to Parent if it, at such time, is in material breach of any representation, warranty, covenant or agreement set forth in this Agreement such that the conditions set forth in Section 7.2(a) will not be satisfied at the Closing Date. 5. Section 8.5(a) of the Agreement is hereby deleted and replaced in its entirety by the following: Section 8.5. Effect of Termination. (a) If this Agreement is terminated (i) by the Company or Parent pursuant to clause (i) or (ii) of Section 8.2 or clause (iii) of section 8.4 and (A) (1) in the case of a termination pursuant to clause (i) of Section 8.2 or clause (iii) of Section 8.4, such termination results from the breach by the Company in a material respect of any of its material agreements or covenants set forth in this Agreement and at the time of such breach, any person shall have made a Company Acquisition Proposal that had become public and then remained pending or shall have publicly announced and not withdrawn an intention (whether or not conditional) to make a Company Acquisition Proposal, or (2) in the case of a termination pursuant to clause (ii) of Section 8.2, at the time of the Shareholders' Meeting, any person shall have made a Company Acquisition Proposal that had become public and then remained pending or shall have publicly announced and not withdrawn an intention (whether or not conditional) to make a Company Acquisition Proposal, (B) Parent was not in material breach of this Agreement, (C) the condition set forth in Section 7.1(a) was not satisfied at the time of such termination, (D) the board of directors at no time withdrew, modified or changed, in any manner adverse to Parent, the board's approval or recommendation of the Merger or recommended approval of a Company Acquisition Proposal, or resolved to do any of the foregoing and (E) within 12 months after such termination the Company shall consummate or enter into a definitive agreement which is ultimately consummated with the proponent of such Company Acquisition Proposal or with another party pursuant to a proposal which is superior to such proposal, (ii) by the Company pursuant to clause (i) of Section 8.3 or (iii) by Parent pursuant to clause (i) or (ii) of Section 8.4; then, the Company shall pay Parent $70 million (the "Termination Amount") upon termination of this Agreement. All payments shall be made in cash by wire transfer to an account designated by Parent on (1) in the case of clause 8.5(a)(ii) the date of termination of this Agreement, (2) in the case of clause 8.5(a)(iii), the date which is the third business day following the date of termination of this Agreement if this Agreement is terminated by Parent, and (3) in the case of clause 8.5(a)(i), the date on which the Company Acquisition Proposal referred to in clause (E) thereof is consummated. The Company acknowledges that the agreements contained in this Section 8.5(a) are an integral part of the transactions contemplated by this Agreement and constitute liquidated damages and not a penalty, and that, without these agreements, Parent would not enter into this Agreement; accordingly, if the Company fails promptly to pay any amount due pursuant to this Section 8.5(a), and, in order to obtain such payment, Parent commences a suit which results in a judgment against the Company for the payment set forth in this Section 8.5(a), the Company shall pay to Parent its costs and expenses (including attorneys' fees) in connection with such suit, together with interest on such amount from the date payment was required to be made until the date such payment is actually made at the annual prime lending rate of Citigroup, N.A. in effect from time to time from the date such payment was required to be made, plus one percent (1%). 6. Except as amended by this Amendment, the Original Agreement remains in full force and effect and all of the representations and warranties made in the Original Agreement are true and correct as of the date of the Original Agreement as if the Amendment had been in effect on such date. IN WITNESS WHEREOF, the parties have executed this Agreement and caused the same to be duly delivered on their behalf on the day and year first written above. DOMINION RESOURCES, INC. By: /s/ Thos. E. Capps ____________________________________ Name: Thos. E. Capps Title: Chairman, President and Chief Executive Officer CONSOLIDATED NATURAL GAS COMPANY By: /s/ Thos. E. Capps ____________________________________ Name: Thos. E. Capps Title: Chairman, President and Chief Executive Officer LOUIS DREYFUS NATURAL GAS CORP. By: /s/ Mark E. Monroe ____________________________________ Name: Mark E. Monroe Title: President and Chief Executive Officer