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<SEC-DOCUMENT>0000950120-04-000819.txt : 20041215
<SEC-HEADER>0000950120-04-000819.hdr.sgml : 20041215
<ACCEPTANCE-DATETIME>20041215171550
ACCESSION NUMBER:		0000950120-04-000819
CONFORMED SUBMISSION TYPE:	U-1
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20041215
DATE AS OF CHANGE:		20041215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL FUEL GAS CO
		CENTRAL INDEX KEY:			0000070145
		STANDARD INDUSTRIAL CLASSIFICATION:	NATURAL GAS DISTRIBUTION [4924]
		IRS NUMBER:				131086010
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			0905

	FILING VALUES:
		FORM TYPE:		U-1
		SEC ACT:		1935 Act
		SEC FILE NUMBER:	070-10273
		FILM NUMBER:		041205617

	BUSINESS ADDRESS:	
		STREET 1:		6363 MAIN STREET
		CITY:			WILLIAMSVILLE
		STATE:			NY
		ZIP:			14221-5887
		BUSINESS PHONE:		716-857-7000

	MAIL ADDRESS:	
		STREET 1:		6363 MAIN STREET
		STREET 2:		6363 MAIN STREET
		CITY:			WILLIAMSVILLE
		STATE:			NY
		ZIP:			14221-5887
</SEC-HEADER>
<DOCUMENT>
<TYPE>U-1
<SEQUENCE>1
<FILENAME>dc174892.txt
<DESCRIPTION>FORM U-1
<TEXT>
                         (As filed on December 15, 2004)

                                                              File No. 70-[____]

                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM U-1
                                   DECLARATION
                                    UNDER THE
                   PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
                  --------------------------------------------

                            NATIONAL FUEL GAS COMPANY
                                6363 Main Street
                          Williamsville, New York 14221

                     (Name of company filing this statement
                   and address of principal executive office)
                  ---------------------------------------------

                            NATIONAL FUEL GAS COMPANY

                    (Name of top registered holding company)
                  --------------------------------------------

                               Philip C. Ackerman
          Chairman of the Board, President, and Chief Executive Officer
                            National Fuel Gas Company
                                6363 Main Street
                          Williamsville, New York 14221

                     (Name and address of agent for service)
                  ---------------------------------------------

   The Commission is requested to send copies of all notices, orders and other
             communications in connection with this Declaration to:

       James P. Baetzhold, Esq.                  Andrew F. MacDonald, Esq.
       National Fuel Gas Company                  Thelen Reid & Priest LLP
           6363 Main Street                    701 Pennsylvania Avenue, N.W.
     Williamsville, New York 14221                  Washington, DC 20004


<PAGE>


ITEM 1.  DESCRIPTION OF PROPOSED TRANSACTIONS.

          1.1 Introduction. National Fuel Gas Company ("National" or the
Company"), a New Jersey corporation, is a public-utility holding company
registered under the Public Utility Holding Company Act of 1935, as amended (the
"Act"). Through its direct and indirect subsidiaries, National is engaged in all
phases of the natural gas business, namely: exploration, production, purchasing,
gathering, processing, transportation, storage, retail distribution, and
wholesale and retail marketing. National owns all of the issued and outstanding
common stock of National Fuel Gas Distribution Corporation, a gas-utility
company which distributes natural gas at retail to approximately 732,000
residential, commercial and industrial customers (including transportation-only
customers) in portions of western New York and northwestern Pennsylvania.
National's principal non-utility subsidiaries include National Fuel Gas Supply
Corporation, Empire State Pipeline, Seneca Resources Corporation, National Fuel
Resources, Inc., Highland Forest Resources, Inc., Horizon Energy Development,
Inc., and Horizon LFG, Inc. (formerly Upstate Energy Inc.).

          For the twelve months ended September 30, 2004, National reported
operating revenues of approximately $2.0 billion, of which $1.1 billion (56%)
were attributable to regulated utility gas sales. As of September 30, 2004,
National and its subsidiaries had total assets of approximately $3.7 billion,
including approximately $3.0 billion in net property, plant and equipment.
National is currently authorized under the terms of its Restated Certificate of
Incorporation ("Certificate of Incorporation") (Exhibit A-1 hereto) to issue 200
million shares of common stock, $1 par value ("Common Stock"), of which
83,178,717 were issued and outstanding as of November 30, 2004, and 10 million
shares of preferred stock, $1 par value, of which none have been issued.
National's shares are listed for trading on the New York Stock Exchange
("NYSE").

          In this Declaration, National is seeking Commission authorization to
amend its Certificate of Incorporation, as described below, as it relates to
voting by National's common stockholders on certain matters, in order to
eliminate an ambiguity in the Certificate of Incorporation and to harmonize the
requirements for shareholder votes under the Certificate of Incorporation with
the requirements under the New Jersey Business Corporation Act (the
"B.C.A."),/1/ and, in connection with such amendment, to solicit proxies from
its shareholders for use at the Company's annual meeting of shareholders
scheduled for February 17, 2005, and any adjournment or adjournments thereof
("Annual Meeting").

          1.2 Amendment to Certificate of Incorporation. The Board of Directors
of the Company has proposed an amendment to Article EIGHTH of the Certificate of
Incorporation to revise the provisions relating to shareholder votes on certain
actions. The purpose of the proposed amendment is to enable National to engage
in relatively routine transactions or transactions that do not affect the rights
or voting power of stockholders, as described below, without incurring the
expense and delay of a stockholders meeting, while preserving the stockholders'
rights to vote on other transactions as described below. The proposed amendment

- ----------
1   New Jersey Statutes ss.14A:1-1 et seq.


                                       2
<PAGE>


must be approved by the affirmative vote of a majority of the votes cast by the
holders of the outstanding shares of Common Stock entitled to vote at the Annual
Meeting. The proposed amendment to Article EIGHTH of the Certificate of
Incorporation is set forth as Appendix D to the Preliminary Proxy Statement
("Proxy Statement") filed by National under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), which is incorporated herein by reference as
Exhibit B. Appendix E to the Proxy Statement shows, with deletions indicated by
strike-throughs and additions by underlining, how Article EIGHTH would change if
the proposed amendment is approved by National's shareholders.

          The proposed amendment would conform the requirements for obtaining
shareholder votes on certain actions, as set forth in Article EIGHTH of the
Certificate of Incorporation, to the requirements of the B.C.A. The actions
affected by the proposed amendment are: (1) amendments to the Certificate of
Incorporation, (2) approval of a plan of merger or consolidation, (3) a sale,
lease, exchange or other disposition of all, or substantially all, the assets of
the Company otherwise than in the usual and regular course of business, and (4)
dissolution. The B.C.A. generally requires shareholder approval of all of these
actions. However, for each of these actions, the B.C.A. provides one or more
exceptions to the requirement of shareholder approval. In contrast, under
Article EIGHTH of the Certificate of Incorporation, only the exceptions relating
to amendments to a certificate of incorporation are currently applicable to the
Company. The proposed amendment would make the remaining exceptions provided
under the B.C.A. applicable to the Company as well. Each of the actions affected
by the proposed amendment is discussed below.

               (a) Amendments to the Certificate of Incorporation. Article
EIGHTH of the Certificate of Incorporation currently requires shareholder
approval for "amendments to the Certificate of Incorporation, including
restatements, where shareholder approval is required or requested." (Emphasis
added.) As previously indicated, the B.C.A. also generally requires shareholder
approval of amendments to a company's certificate of incorporation, but provides
that such shareholder approval is not required for certain types of non-critical
amendments, including, but not limited to, amendments which would change a
company's registered office or registered agent and amendments which would
change a company's authorized shares in connection with transactions such as
share dividends, divisions or combinations. The proposed amendment would simply
delete from Article EIGHTH the ambiguous term "or requested," because it is not
clear whether the term refers to requests made by the Board of Directors,
management, shareholders, or any of them, and no procedures are specified in the
Certificate of Incorporation regarding the form or timing of requests.

               (b) Plan of Merger or Consolidation. Article EIGHTH of the
Certificate of Incorporation further provides that "a plan of merger or
consolidation" approved by the Board of Directors must be approved by
shareholders. The B.C.A., in contrast, requires shareholder approval of
consolidations, in which two or more companies consolidate to form a new
company, and of mergers that change the rights of shareholders or materially
affect shareholder voting power, but permits certain other merger transactions
to proceed without the approval of shareholders of the surviving corporation.

          Specifically, the B.C.A. provides that the approval of the
shareholders of the surviving corporation in a merger is not required to
authorize the merger (unless the corporation's certificate of incorporation
otherwise provides) if the following four conditions are met: (1) the plan of
merger does not make an amendment of the certificate of incorporation of the
surviving corporation which


                                       3
<PAGE>


is required by the provisions of the B.C.A. to be approved by the shareholders,
(2) each shareholder of the surviving corporation whose shares were outstanding
immediately before the effective date of the merger will hold the same number of
shares, with identical designations, preferences, limitations, and rights,
immediately after, (3) the number of voting shares outstanding immediately after
merger, plus the number of voting shares issuable on conversion of other
securities or on exercise of rights and warrants issued pursuant to the merger,
will not exceed by more than 40% the total number of voting shares of the
surviving corporation outstanding immediately before the merger, and (4) the
number of participating shares outstanding immediately after the merger, plus
the number of participating shares issuable on conversion of other securities or
on exercise of rights and warrants issued pursuant to the merger, will not
exceed by more than 40% the total number of participating shares of the
surviving corporation outstanding immediately before merger. The proposed
amendment to Article EIGHTH of the Certificate of Incorporation would make these
statutory exceptions applicable to the Company and thereby eliminate the cost of
soliciting shareholder approvals in cases where it is not otherwise required by
law./2/

               (c) Sale of All or Substantially All Assets. The third action for
which shareholder approval is required under Article EIGHTH of the Certificate
of Incorporation is "a sale, lease, exchange or other disposition of all, or
substantially all, the assets of the corporation otherwise than in the usual and
regular course of business." The Company's shareholders will continue to have
the right to vote on the sale of substantially all the Company's assets to a
third party. However, the B.C.A. provides that a parent corporation may
transfer, without shareholder approval, any or all of its assets to any
corporation all of the outstanding shares of which are owned, directly or
indirectly, by the parent corporation, unless the parent corporation's
certificate of incorporation otherwise requires. The proposed amendment would
permit National to transfer all or substantially all of its assets to any wholly
owned subsidiary without shareholder approval. National has no present plans,
agreements or commitments to transfer any significant portion of its assets to
any other corporation (affiliated or unaffiliated) and is not requesting
authorization herein to engage in any such transaction.

               (d) Dissolution. The fourth action for which shareholder approval
is required under Article EIGHTH of the Certificate of Incorporation is
dissolution of the Company. In contrast, under the B.C.A., a corporate officer
may dissolve a corporation without shareholder approval in the following
circumstances: (1) the corporation has no assets, (2) the corporation has ceased
doing business and does not intend to recommence doing business, (3) the
corporation has not made any distributions of cash or property to its


- ----------
2    It should be noted that the proposed amendment to Article EIGHTH of the
Certificate of Incorporation would not change the applicability to National of
the requirements of the NYSE regarding shareholder votes in connection with
certain transactions, including mergers, even where National would be the
surviving corporation. For example, the NYSE currently requires shareholder
approval prior to the issuance of common stock in a merger transaction if (1)
the common stock has, or will have upon issuance, voting power equal to or in
excess of 20% of the voting power outstanding before the issuance of such stock,
or (2) the number of shares of common stock to be issued is, or will be upon
issuance, equal to or in excess of 20% of the number of shares of common stock
outstanding before the issuance of the common stock. Thus, National would be
required by the NYSE to obtain shareholder approval of a merger, even though it
is the surviving corporation and even though the four conditions of the B.C.A.
noted in the text are met, if the number of shares of Common Stock to be issued
by National would equal or exceed 20% of the number of shares outstanding before
the merger.


                                       4
<PAGE>


shareholders within the last 24 months and does not intend to make any
distribution following its dissolution, and (4) the officer has given 30 days
prior written notice of his intention to dissolve the corporation by mail or
personal service to all known directors and shareholders at their last known
address and no director or shareholder has objected to the proposed dissolution.
The proposed amendment would permit an officer of the Company to dissolve the
Company without shareholder approval in these limited circumstances. However,
National is not requesting authorization herein to engage in any transaction
that would constitute or result in a dissolution of the Company.

          1.3 The Proxy Solicitation. National requests an order pursuant to
Rule 62(d) authorizing it to solicit proxies from its shareholders for the
approval of the proposed amendment to the Certificate of Incorporation. Such
proxies are being solicited by National's Board of Directors for use at the
Annual Meeting, which is scheduled for February 17, 2005. In order to allow for
timely receipt of proxies for the Annual Meeting, National intends to file the
definitive proxy materials with the Commission under Section 14 of the 1934 Act
on January 6, 2005, and commence the solicitation immediately thereafter.
Accordingly, National is requesting that the Commission's notice of the proposed
transaction be issued not later than January 6, 2005, and that such notice
include an order authorizing commencement of the solicitation.

          The costs of solicitation will be paid by National. (See Item 2
below.) In addition to the use of the mails, proxies may be solicited on behalf
of the directors personally, or by telephone or telecopy, by employees of
National and its subsidiaries with no special compensation to these employees.
Morrow & Co., Inc., has been retained to assist in the solicitation of proxies.

ITEM 2.  FEES, COMMISSIONS AND EXPENSES.

          It is estimated that the expenses to be incurred by National in
connection with the proposed transactions are as follows:

<TABLE>
<S>                                                                <C>
          Printing and mailing of proxy material                   $60,000

          Expenses associated with the Annual
          Meeting of Shareholders                                  $20,000

          Fees and expenses of The Bank of New York
          (transfer agent and registrar)                           $17,500

          Morrow & Co., Inc. (proxy solicitation services fee)     $62,000

          Legal fees (including New Jersey counsel)                $12,000

          Miscellaneous out-of-pocket expenses                     $ 2,000
                                                                  ________
                 Total                                            $173,500

</TABLE>


                                       5
<PAGE>


ITEM 3.  APPLICABLE STATUTORY PROVISIONS.

          3.1 General. Sections 6(a)(2), 7 and 12(e) of the Act and Rules 54,
62(d) and 65 are deemed applicable to the amendment of the Certificate of
Incorporation and the solicitation of proxies for use at the Company's Annual
Meeting in 2005.

          3.2 Rule 54 Analysis.Rule 54 provides that, in determining whether to
approve any transaction by a registered holding company that is unrelated to any
"exempt wholesale generator" ("EWG") or "foreign utility company" ("FUCO"), the
Commission shall not consider the effect of the capitalization or earnings of
any EWG or FUCO on the holding company system if the requirements of Rule 53(a),
(b) and (c) are met. National is currently in compliance with all requirements
of Rule 53(a). Specifically, National's "aggregate investment" (as defined in
Rule 53(a)(1)) in all EWGs and FUCOs is $153.4 million as of September 30, 2004,
or 22% of National's "consolidated retained earnings" (also as defined in Rule
53(a)(1)) as of September 30, 2004 ($712.0 million). National is in compliance
with and will continue to comply with the requirements of Rule 53(a)(2), (a)(3)
and (a)(4). Further, none of the conditions or circumstances described in Rule
53(b) has occurred or is continuing. Accordingly, Rule 53(c) is by its terms
inapplicable.

ITEM 4.  REGULATORY APPROVAL.

                  No State commission and no Federal commission, other than the
Commission, has jurisdiction over any of the proposed transactions.

ITEM 5.  PROCEDURE.

          National requests that the Commission issue a notice under Rule 23
with respect to the filing of this Declaration as soon as practicable after the
proxy statement with respect to the solicitation has been declared effective
under the 1934 Act, and that such notice include an order authorizing
commencement of the solicitation. National further requests that the
Commission's order approving the proposed transaction be issued as soon as the
rules allow, and that there should not be a 30-day waiting period between
issuance of the Commission's order and the date on which the order is to become
effective. National hereby waives a recommended decision by a hearing officer or
any other responsible officer of the Commission and consents to the assistance
of the Division of Investment Management in the preparation of the Commission's
decision and/or order, unless the Division opposes the matters proposed herein.

ITEM 6.  EXHIBITS AND FINANCIAL STATEMENTS.

          The following exhibits and financial statements are made a part of
this Declaration:

          (a)  Exhibits

               A-1  Certificate of Incorporation of Incorporation (incorporated
                    by reference to Exhibit 3.1, Annual Report of National on
                    Form 10-K for fiscal year ended September 30, 1998 in File
                    No. 1-3880).



                                       6
<PAGE>


               A-2  Bylaws of National, as amended on December 9, 2004
                    (incorporated by reference to Exhibit 3(ii), Current Report
                    of National on Form 8-K dated December 9, 2004 in File No.
                    1-3880).

               A-3  Form of Proposed Amendment to Certificate of Incorporation
                    of Incorporation (included as Appendix D to the Proxy
                    Statement) (Exhibit B hereto).

               B    Notice of Annual Meeting, Proxy Statement and Proxy Card of
                    National filed on December 13, 2004 (incorporated by
                    reference to Schedule 14A/Preliminary Proxy Statement in
                    File No. 1-3880).

               C    Not Applicable.

               D    Not Applicable.

               E    Not Applicable.

               F-1  Opinion of counsel (to be filed by amendment). F-2 Opinion
                    of special New Jersey counsel (to be filed by amendment).

               G    Proposed form of Federal Register Notice.

          (b)  Financial Statements

               FS-1 Consolidated Balance Sheets of National and subsidiaries as
                    of September 30, 2004. (Incorporated by reference to the
                    Annual Report on Form 10-K of National for the fiscal year
                    ended September 30, 2004.) (File No. 1-3880.)

               FS-2 Consolidated Statements of Income and Retained Earnings of
                    National and subsidiaries for the fiscal year ended
                    September 30, 2004. (Incorporated by reference to the Annual
                    Report on Form 10-K of National for the fiscal year ended
                    September 30, 2004.) (File No. 1-3880.)

ITEM 7.  INFORMATION AS TO ENVIRONMENTAL EFFECTS.

          The proposed transaction outlined herein does not involve a major
action which will significantly adversely affect the quality of the U.S.
environment. No federal agency has prepared or is preparing an environmental
impact statement with respect to the matters contemplated in this Declaration.



                                       7
<PAGE>


                                   SIGNATURE

          Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Declaration to be signed
on its behalf by the undersigned thereunto duly authorized.


                                            NATIONAL FUEL GAS COMPANY


                                            By: /s/ P. C. Ackerman
                                                ------------------
                                            Name:   P. C. Ackerman
                                            Title:  Chairman of the Board of
                                                    Directors, President, and
                                                    Chief Executive Officer


Date: December 15, 2004


                                       8


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>e182396.txt
<DESCRIPTION>EX. G - PROPOSED FORM OF NOTICE
<TEXT>

                                                                       Exhibit G

                    PROPOSED FORM OF FEDERAL REGISTER NOTICE


SECURITIES AND EXCHANGE COMMISSION

(Release No. 35-_____)

Filings under the Public Utility Holding Company Act of 1935, as amended ("Act")

January __, 2005

     Notice is hereby given that the following filing(s) has/have been made with
the Commission pursuant to provisions of the Act and rules promulgated
thereunder. All interested persons are referred to the application(s) and/or
declaration(s) for complete statements of the proposed transaction(s) summarized
below. The application(s) and/or declaration(s) and any amendments thereto
is/are available for public inspection through the Commission's Office of Public
Reference.

     Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by
February __, 2005 to the Secretary, Securities and Exchange Commission, 450 5th
Street, N.W., Washington, D.C. 20549, and serve a copy on the relevant
applicant(s) and/or declarant(s) at the address(es) as specified below. Proof of
service (by affidavit or, in case of an attorney at law, by certificate) should
be filed with the request. Any request for hearing shall identify specifically
the issues of fact or law that are disputed. A person who so requests will be
notified of any hearing, if ordered, and will receive a copy of any notice or
order issued in the matter. After February __, 2005, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted to
become effective.

                                  * * * * * *

NATIONAL FUEL GAS COMPANY       (70-[___])
- -------------------------

     Notice of Proposed Amendment to Certificate of Incorporation.
     -------------------------------------------------------------

     National Fuel Gas Company ("National"), a registered holding company whose
principal executive offices are at 6363 Main Street, Williamsville, New York
14221, has filed a declaration under Sections 6(a), 7 and 12(e) of the Act and
Rules 54, 62(d) and 65 thereunder. National is seeking Commission authorization
to amend its Restated Certificate of Incorporation ("Certificate of
Incorporation") in certain respects described below and to solicit proxies from
its shareholders for use at National's annual meeting of shareholders scheduled
for February 17, 2005, and any adjournment or adjournments thereof ("Annual
Meeting").

     Through its direct and indirect subsidiaries, National is engaged in all
phases of the natural gas business, namely: exploration, production, purchasing,
gathering, processing, transportation, storage, retail distribution, and


<PAGE>


wholesale and retail marketing. National owns all of the issued and outstanding
common stock of National Fuel Gas Distribution Corporation, a gas-utility
company which distributes natural gas at retail to approximately 732,000
residential, commercial and industrial customers (including transportation-only
customers) in portions of western New York and northwestern Pennsylvania.
National's principal non-utility subsidiaries include National Fuel Gas Supply
Corporation, Empire State Pipeline, Seneca Resources Corporation, National Fuel
Resources, Inc., Highland Forest Resources, Inc., Horizon Energy Development,
Inc., and Horizon LFG, Inc. (formerly Upstate Energy Inc.).

     National states that its Board of Directors has proposed an amendment to
Article EIGHTH of the Certificate of Incorporation to revise the provisions
relating to shareholder votes on certain actions. The proposed amendment would
conform the requirements for obtaining shareholder votes on certain actions, as
set forth in Article EIGHTH of the Certificate of Incorporation, to the
requirements of the New Jersey Business Corporation Act (the "B.C.A.") (New
Jersey Statutes ss.14A:1-1 et seq.). The actions affected by the proposed
amendment are as follows:

     (a) Amendments to the Certificate of Incorporation. Article EIGHTH of the
Certificate of Incorporation currently requires shareholder approval for
"amendments to the Certificate of Incorporation, including restatements, where
shareholder approval is required or requested." (Emphasis added.) The B.C.A.
also generally requires shareholder approval of amendments to a company's
certificate of incorporation, but provides that such shareholder approval is not
required for certain types of non-critical amendments, including, but not
limited to, amendments which would change a company's registered office or
registered agent and amendments which would change a company's authorized shares
in connection with transactions such as share dividends, divisions or
combinations. The proposed amendment would simply delete from Article EIGHTH the
ambiguous term "or requested," because it is not clear whether the term refers
to requests made by the Board of Directors, management, shareholders, or any of
them, and no procedures are specified in the Certificate of Incorporation
regarding the form or timing of requests.

     (b) Plan of Merger or Consolidation. Article EIGHTH of the Certificate of
Incorporation further provides that "a plan of merger or consolidation" approved
by the Board of Directors must be approved by shareholders. The B.C.A., in
contrast, requires shareholder approval of consolidations, in which two or more
companies consolidate to form a new company, and of mergers that change the
rights of shareholders or materially affect shareholder voting power, but
permits certain other merger transactions to proceed without the approval of
shareholders of the surviving corporation.

     Specifically, the B.C.A. provides that the approval of the shareholders of
the surviving corporation in a merger is not required to authorize the merger
(unless the corporation's certificate of incorporation otherwise provides) if
the following four conditions are met: (1) the plan of merger does not make an
amendment of the certificate of incorporation of the surviving corporation which
is required by the provisions of the B.C.A. to be approved by the shareholders,
(2) each shareholder of the surviving corporation whose shares were outstanding
immediately before the effective date of the merger will hold the same number of
shares, with identical designations, preferences, limitations, and rights,


                                       2
<PAGE>


immediately after, (3) the number of voting shares outstanding immediately after
merger, plus the number of voting shares issuable on conversion of other
securities or on exercise of rights and warrants issued pursuant to the merger,
will not exceed by more than 40% the total number of voting shares of the
surviving corporation outstanding immediately before the merger, and (4) the
number of participating shares outstanding immediately after the merger, plus
the number of participating shares issuable on conversion of other securities or
on exercise of rights and warrants issued pursuant to the merger, will not
exceed by more than 40% the total number of participating shares of the
surviving corporation outstanding immediately before merger. National states
that the proposed amendment to Article EIGHTH of the Certificate of
Incorporation would make these statutory exceptions applicable to the company
and thereby eliminate the cost of soliciting shareholder approvals in cases
where it is not otherwise required by law./1/

     (c) Sale of All or Substantially All Assets. The third action for which
shareholder approval is required under Article EIGHTH of the Certificate of
Incorporation is "a sale, lease, exchange or other disposition of all, or
substantially all, the assets of the corporation otherwise than in the usual and
regular course of business." National's shareholders will continue to have the
right to vote on the sale of substantially all the company's assets to a third
party. However, the B.C.A. provides that a parent corporation may transfer,
without shareholder approval, any or all of its assets to any corporation all of
the outstanding shares of which are owned, directly or indirectly, by the parent
corporation, unless the parent corporation's certificate of incorporation
otherwise requires. The proposed amendment would permit National to transfer all
or substantially all of its assets to any wholly owned subsidiary without
shareholder approval. National states that it has no present plans, agreements
or commitments to transfer any significant portion of its assets to any other
corporation (affiliated or unaffiliated) and is not requesting authorization
herein to engage in any such transaction.

     (d) Dissolution. The fourth action for which shareholder approval is
required under Article EIGHTH of the Certificate of Incorporation is dissolution
of the company. In contrast, under the B.C.A., a corporate officer may dissolve
a corporation without shareholder approval in the following circumstances: (1)
the corporation has no assets, (2) the corporation has ceased doing business and
does not intend to recommence doing business, (3) the corporation has not made
any distributions of cash or property to its shareholders within the last 24
months and does not intend to make any distribution following its dissolution,
and (4) the officer has given 30 days prior written notice of his intention to


- ----------
1    National notes that the proposed amendment to Article EIGHTH of the
Certificate of Incorporation would not change the applicability to National of
the requirements of the New York Stock Exchange ("NYSE") regarding shareholder
votes in connection with certain transactions, including mergers, even where
National would be the surviving corporation. For example, the NYSE currently
requires shareholder approval prior to the issuance of common stock in a merger
transaction if (1) the common stock has, or will have upon issuance, voting
power equal to or in excess of 20% of the voting power outstanding before the
issuance of such stock, or (2) the number of shares of common stock to be issued
is, or will be upon issuance, equal to or in excess of 20% of the number of
shares of common stock outstanding before the issuance of the common stock.
Thus, National would be required by the NYSE to obtain shareholder approval of a
merger, even though it is the surviving corporation and even though the four
conditions of the B.C.A. noted above are met, if the number of shares of common
stock to be issued by National would equal or exceed 20% of the number of shares
outstanding before the merger.


                                        3
<PAGE>


dissolve the corporation by mail or personal service to all known directors and
shareholders at their last known address and no director or shareholder has
objected to the proposed dissolution. The proposed amendment would permit an
officer of National to dissolve the company without shareholder approval in
these limited circumstances. However, National states that it is not requesting
authorization herein to engage in any transaction that would constitute or
result in a dissolution of the company.

     National has requested an order pursuant to Rule 62(d) authorizing it to
solicit proxies from its shareholders for the approval of the proposed amendment
to the Certificate of Incorporation at the Annual Meeting. National has filed
preliminary proxy materials under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), which include the text of the proposed amendment and
an explanation of its purpose. In order to maintain its schedule for timely
receipt of proxies for the Annual Meeting, National intends to file the
definitive proxy materials with the Commission under Section 14 of the 1934 Act
on January 6, 2005, and commence the solicitation immediately thereafter.
Accordingly, National has requested that the Commission authorize the
solicitation as part of its notice of filing of the declaration. National states
that the proposed amendment must be approved by the affirmative vote of a
majority of the votes cast by the holders of the outstanding shares of common
stock entitled to vote at the Annual Meeting. National estimates that the
expenses of the solicitation, which will be paid by National, will be $173,500.

     National further states that no state commission and no federal commission,
other than this Commission, has jurisdiction over the proposed transaction.

     It appears that the declaration, to the extent that it relates to the
proposed solicitation of proxies, should be permitted to become effective
forthwith pursuant to Rule 62.

     IT IS ORDERED, THEREFORE, that the declaration, to the extent that it
relates to the proposed solicitation of proxies be, and it hereby is, permitted
to become effective forthwith pursuant to Rule 62, and subject to the terms and
conditions prescribed in Rule 24 under the Act. For the Commission, by the
Division of Investment Management, pursuant to delegated authority.


                                       4


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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