SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
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Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_]Confidential, for Use of the
[_]Preliminary Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[X]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Columbia Energy Group
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[_]$500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
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[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
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Notes:
This issue of powerhouse contains certain forward-looking statements within the
meaning of the federal securities laws; these forward-looking statements are
subject to various risks and uncertainties. The factors that could cause actual
results to differ materially from the projections, forecasts, estimates and
expectations discussed herein may include factors that are beyond the companies'
(Columbia and NiSource) ability to control or estimate precisely, such as
estimates of future market conditions, the behavior of other market participants
and the actions of the Federal and State regulators. Other factors include, but
are not limited to, actions in the financial markets, weather conditions,
economic conditions in the two companies' service territories, fluctuations in
energy-related commodity prices, conversion activity, other marketing efforts
and other uncertainties. Other risk factors are detailed from time to time in
the two companies' SEC reports. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this publication. The companies do not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this publication.
NiSource and the new holding company will be filing a registration statement,
which will contain a joint proxy statement/prospectus of NiSource and Columbia
Energy, and other documents with the Securities and Exchange Commission.
Investors and security holders are urged to read the joint proxy
statement/prospectus and any other relevant documents filed with the SEC when
they become available because they will contain important information. Investors
and security holders will be able to receive the joint proxy
statement/prospectus and other documents free of charge at the SEC's web site,
www.sec.gov, from NiSource Investor Relations at 801 East 86th Avenue,
Merrillville, Indiana 46410 or from Columbia Investor Relations at 13880 Dulles
Corner Lane, Herndon, Virginia 20171. Information concerning the identity of the
participants in the solicitation of proxies by Columbia Energy Group and
NiSource Inc. boards of directors and their direct or indirect interests, by
security holdings or otherwise, may be obtained from the Secretary of Columbia
Energy Group or the Secretary of NiSource Inc., as the case may be, at the
addresses listed above.
COMPANIES NAME TRANSITION LEADERS
Columbia and NiSource have named two representatives from each company to lead a
merger transition team, as called for in the definitive merger agreement the two
companies announced Feb. 28.
Columbia's two representatives, appointed by Columbia Energy Group CEO Rick
Richard, are Mike O'Donnell, Columbia Energy Group chief financial officer, and
Dennis McFarland, chief financial officer of Columbia's largest utility,
Columbia Gas of Ohio.
They join Steve Adik, chief financial officer of NiSource, and Jim Abcouwer,
senior vice president of NiSource and president of EnergyUSA, NiSource's
unregulated company, who were appointed by Gary Neale, CEO of NiSource Inc.
Richard pointed out that Columbia's O'Donnell and NiSource's Adik hold the same
key finance positions and that McFarland led Columbia's successful leveraged
procurement initiative.
"Together, Mike and Dennis provide the transition team with great insight into
Columbia's operating companies," Richard said.
"Gary Neale and I will be discussing the makeup of the rest of the transition
team shortly," Richard said. "Working with the four team leaders, we'll be able
to set the structure and get started."
The merger, subject to the approval of shareholders and certain state and
federal regulators, is expected to be completed by the end of 2000.
MORE INFORMATION ON THE MERGER
As expected, Columbia employees have raised many questions about the NiSource
transaction, including what happens next, how the transition process will work,
and what employees should do in the meantime. Here is some additional
information we hope will answer these questions.
NOW THAT THE COMPANIES HAVE ANNOUNCED THEIR MERGER AGREEMENT, WHAT HAPPENS NEXT?
The companies will move quickly to line up the necessary approvals so that the
transaction can close in a timely manner. They also will be creating transition
teams so that we can combine our companies as quickly and seamlessly as
possible.
WHEN IS THE TRANSACTION EXPECTED TO BE COMPLETED?
By the end of 2000.
WHAT APPROVALS ARE NEEDED BEFORE THE TRANSACTION IS COMPLETED?
The transaction is subject to the approval of the shareholders of both
companies. However, if NiSource's shareholders do not approve the transaction,
it would still go forward but under different terms. We expect the shareholder
votes to be held in several months and are in the process of preparing detailed
filings that will be mailed to all shareholders.
The transaction is also subject to the review of certain state and federal
regulators. Filings will be made with these regulators as this process moves
forward.
IS THERE ANY REASONABLE CHANCE THIS TRANSACTION COULD FALL APART?
We expect this merger to be completed, although we cannot assure you of that.
WHAT SHOULD I DO NOW?
It is in all of our best interests for each of us to continue to do our job to
the best of our ability. In fact, as part of our agreement with NiSource,
Columbia is obligated to continue to operate its business as usual. That means
we all must continue to provide the superior service that our customers have
come to expect from us and fulfill all of our contracts and other arrangements
with our suppliers and business partners.
Quite simply, you shouldn't do anything differently now than you would have
before the NiSource agreement was reached. If you have any questions about this,
please contact your supervisor or the legal department in Herndon.
ARE WE PERMITTED TO ENTER INTO NEW CONTRACTS WITH CUSTOMERS OR SUPPLIERS? WHAT
ABOUT ROUTINE TRANSACTIONS?
Under our agreement with NiSource, we are permitted to continue to do all of the
routine things we do in the normal course of business. In fact, we are obligated
to do so. However, there are certain limits on the amount of money the company
can spend on major capital projects, acquisitions, etc. But these kinds of
projects normally would have to be approved by senior management and/or the
Board of Directors anyway, and they are aware of the limits imposed by the
agreement.
ARE WE PERMITTED TO CONTACT OUR COUNTERPARTS AT NISOURCE? TO WHOM SHOULD WE
ADDRESS QUESTIONS ABOUT THEIR COMPANY AND THEIR PLANS FOR US?
As a general rule, at this stage it is inappropriate for Columbia employees to
interact with NiSource employees. We will continue to act as separate companies
until the merger is consummated later in the year. In the meantime, we are
assembling transition teams at both companies who will be responsible for making
sure the integration process goes as smoothly as possible.
HOW WOULD PLANNED MERGER AFFECT EMPLOYEE BENEFITS?
Following is information from Corporate Benefits on questions related to the
planned NiSource-Columbia merger announced Feb. 28:
The actual closing of the transaction - the point at which NiSource and Columbia
officially merge - won't take effect until all conditions necessary to closing,
such as shareholder and regulatory approvals, are satisfied. Columbia and
NiSource have said they anticipate the transaction can be completed by the end
of the year.
NiSource has agreed that for three years after the merger, it will continue to
provide benefits under employee benefit plans that are no less favorable than
the greater of those currently provided by Columbia or those provided by
NiSource during such three-year period.
So what does this mean?
We will continue with our plans to offer Retirement Choice and the Voluntary
Incentive Retirement Program (VIRP) for eligible employees. Under Retirement
Choice, eligible employees will have the opportunity to choose the retirement
option that best fits their individual needs. The announced merger does not
change Columbia's fundamental reason for offering employees Retirement Choice.
We recognize that employees have different definitions of retirement and
different plans to get there. By offering employees Retirement Choice, we are
recognizing these differences by giving you the opportunity to decide what type
of retirement option best fits your individual needs. This choice is now more
important than ever.
Additionally, while we cannot guarantee what will happen to the Retirement Plan
in the future, we can tell you that any vested benefits you've accrued up to the
date of the merger or date of any subsequent plan amendment/termination are
protected under federal law and cannot be reduced.
Certain rights and features of the Retirement Plan, including the right to a
lump sum distribution, will always be available for your accrued and vested
benefits prior to any plan change providing you've met the current plan's
applicable eligibility requirements.
With regard to the Savings Plan, employees are always 100% vested in their
Savings Plan account (including the Company match) and their accounts cannot be
reduced as a result of a merger. (This excludes any investment losses that an
employee may experience as a result of the performance of the funds in which
they have chosen to invest.)
We cannot tell you at this time how the Columbia Stock Fund in the Savings Plan
will be handled. As these details are worked out, we'll let you know.
While we can't say exactly what will happen to the Health & Welfare plans
long-term, as stated previously, we know that for three years following the
closing of the merger, Columbia's employees will continue to be provided
benefits under the employee benefits plan that are no less favorable than
Columbia's current plans or, if greater, NiSource's employee benefits plans.
Regardless of what happens, if you leave the company, you can elect to continue
your health care benefits (such as medical and dental) for up to 18 months by
paying the full cost. Additionally, if you have Group Universal Life Insurance
for yourself and your spouse and leave the company, you can continue that
coverage by paying the premiums.
There will be a great deal of information to communicate throughout the
transition. As we get more information, we will share it with you. Stay tuned
for more in upcoming powerhouse issues and other communications.