As filed with the Securities and Exchange Commission on June 16, 1999.
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
COLUMBIA ENERGY GROUP
(Exact name of registrant as specified in its charter)
Delaware No. 13-1594808
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
(Address of principal executive office, including zip code)
Amended and Restated
COLUMBIA ENERGY GROUP
LONG-TERM INCENTIVE PLAN
(Full title of the plan)
----------------
Michael W. O'Donnell
Senior Vice President
and Chief Financial Officer
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
(703) 561-6000
(Name, address and telephone number, including area code, of agent for service)
Copies to:
E. Ellsworth McMeen, III, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019-5389
(212) 424-8000
CALCULATION OF REGISTRATION FEE
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate offering Amount of
to be registered registered* per share price** registration fee
Common Stock,
$.01 par value 4,085,000 shares $61.90625 $252,888,134.20 $70,303
======================== ======================= ======================= ======================= ======================
</TABLE>
* In addition, pursuant to Rule 416(a) under the Securities Act of 1933, this
registration statement also covers any additional securities to be offered or
issued in connection with a stock split, stock dividend or similar transaction.
** Determined on the basis of the average of the high and low sale price of the
common stock as reported in the consolidated reporting system on June 11, 1999,
solely for the purpose of calculating the registration fee pursuant to Rule
457(h) under the Securities Act of 1933.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have heretofore been filed by Columbia
Energy Group (the "Company") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are hereby incorporated by reference in this registration
statement:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1998.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999.
3. The Company's Current Report on Form 8-K, dated June 11, 1999.
4. The description of the Company's Common Stock contained in Item 1 of the
Company's registration statement filed on Form 8-A pursuant to Section 12 of the
Exchange Act and any amendments thereto.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law, the law of the state
of incorporation of the Company, confers broad powers upon Delaware corporations
with respect to indemnification of any person against liabilities incurred by
reason of the fact that such person is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or other business
entity. The provisions of Section 145 are not exclusive of any other rights to
which those seeking indemnification may be entitled under any bylaw, agreement
or otherwise.
The Company's Restated Certificate of Incorporation, as amended, requires
the Company to indemnify its directors and officers and certain other persons
serving at the request of the Company to the fullest extent permitted by
Delaware law and to advance litigation expenses and permits the Company to
maintain director and officer liability insurance. Director and officer
liability insurance has been purchased for all of the Company's directors and
officers and directors and officers of subsidiary companies. Subject to policy
terms and conditions, that insurance indemnifies individual directors and
officers for related costs, damage or charges, including litigation
expenditures, incurred as a result of actual or alleged wrongful acts. The
coverage also
II-1
<PAGE>
reimburses the Company and its subsidiary companies for amounts paid by them to
indemnify covered directors and officers.
The Restated Certificate of Incorporation, as amended, also contains a
provision that eliminates the personal liability of the Company's directors for
monetary damages to the Company and its stockholders for breach of fiduciary
duty as a director of the Company to the fullest extent permitted by the
Delaware General Corporation Law.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Incorporated by
Reference To
Exhibit No. File No. Exhibit
<S> <C> <C> <C>
4-A-1 Restated Certificate of 1-1098 3-D
Incorporation of Columbia Form 10-Q
Energy Group, as for quarter ended
amended and restated June 30, 1998.
effective January 16, 1998.
4-A-2 Certificate of Ownership and Merger, 1-1098 3-C
Merging Columbia Energy Group Form 10-K
into The Columbia Gas System, Inc. for year ended
December 31, 1997.
4-A-3* Amendment to Restated Certificate
of Incorporation, dated June 1,
1999.
4-B By-Laws of Columbia Energy 1-1098 3-E
Group, as amended, Form 10-Q
and restated as of January 16, 1998. for quarter ended
June 30, 1998.
4-C Indenture dated as of November 28, 33-64555 4-S
1995 between The Columbia Gas
System, Inc. and Marine Midland
Bank, N.A., Trustee.
4-D First Supplemental Indenture dated 33-64555 4-T
as of November 28, 1995 between
The Columbia Gas System, Inc. and
Marine Midland Bank, N.A.,
Trustee.
II-2
<PAGE>
4-E Second Supplemental Indenture dated 33-64555 4-U
as of November 28, 1995 between The
Columbia Gas System, Inc. and Marine
Midland Bank, N.A., Trustee.
4-F Third Supplemental Indenture dated as 33-64555 4-V
of November 28, 1995 between The
Columbia Gas System, Inc. and Marine
Midland Bank, N.A., Trustee.
4-G Fourth Supplemental Indenture dated 33-64555 4-W
as of November 28, 1995 between The
Columbia Gas System, Inc. and Marine
Midland Bank, N.A., Trustee.
4-H Fifth Supplemental Indenture dated 33-64555 4-X
as of November 28, 1995 between
The Columbia Gas System, Inc. and
Marine Midland Bank, N.A., Trustee.
4-I Sixth Supplemental Indenture dated 33-64555 4-Y
as of November 28, 1995 between
The Columbia Gas System, Inc. and
Marine Midland Bank, N.A., Trustee.
4-J Seventh Supplemental Indenture 33-64555 4-Z
dated as of November 28, 1995
between The Columbia Gas System,
Inc. and Marine Midland Bank, N.A.,
Trustee.
4-K Instrument of Resignation, Appointment 1-1098 4-I
and Acceptance, dated as of March 1, Form 10-K
1999 between Columbia Energy Group for year ended
and Marine Midland Bank, as Resigning December 31, 1998.
Trustee, and The First National Bank of
Chicago, as Successor Trustee.
5* Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
10* Amended and Restated Columbia Energy Group Long-Term Incentive Plan.
23-A* Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included in Exhibit 5).
23-B* Consent of Arthur Andersen LLP, independent public accountants.
</TABLE>
II-3
<PAGE>
_____________________________
* Filed herewith.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b), if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934, that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities
II-4
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Herndon, Commonwealth of Virginia on the 15th
day of June, 1999.
COLUMBIA ENERGY GROUP
By: /s/ Michael W. O'Donnell
----------------------------
Michael W. O'Donnell
Senior Vice President and
Chief Financial Officer
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Oliver G. Richard III Chairman, May 19, 1999
- --------------------------------- Chief Executive Officer and
Oliver G. Richard III President (Principal
Executive Officer)
/s/ Michael W. O'Donnell Senior Vice President and May 19, 1999
- --------------------------------- Chief Financial Officer
Michael W. O'Donnell
/s/ Jeffrey W. Grossman Vice President and Controller May 19, 1999
- --------------------------------- (Principal Accounting
Jeffrey W. Grossman Officer)
/s/ Richard F. Albosta Director May 19, 1999
- ---------------------------------
Richard F. Albosta
/s/ Robert H. Beeby Director May 19, 1999
- ---------------------------------
Robert H. Beeby
/s/ Wilson K. Cadman Director May 19, 1999
- ---------------------------------
Wilson K. Cadman
/s/ James P. Heffernan Director May 19, 1999
- ---------------------------------
James P. Heffernan
II-7
<PAGE>
Signature Title Date
/s/ Karen L. Hendricks Director May 19, 1999
- --------------------------------
Karen L. Hendricks
/s/ Malcolm T. Hopkins Director May 19, 1999
- --------------------------------
Malcolm T. Hopkins
/s/ J. Bennett Johnston Director May 19, 1999
- --------------------------------
J. Bennett Johnston
/s/ Malcolm Jozoff Director May 19, 1999
- --------------------------------
Malcolm Jozoff
/s/ William E. Lavery Director May 19, 1999
- --------------------------------
William E. Lavery
/s/ Gerald E. Mayo Director May 19, 1999
- --------------------------------
Gerald E. Mayo
/s/ Douglas E. Olesen Director May 19, 1999
- --------------------------------
Douglas E. Olesen
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Incorporated by
Reference To
Exhibit No. File No. Exhibit
<S> <C> <C> <C>
4-A-1 Restated Certificate of 1-1098 3-D
Incorporation of Columbia Form 10-Q
Energy Group, as for quarter ended
amended and restated June 30, 1998.
effective January 16, 1998.
4-A-2 Certificate of Ownership and Merger, 1-1098 3-C
Merging Columbia Energy Group Form 10-K
into The Columbia Gas System, Inc. for year ended
December 31, 1997.
4-A-3* Amendment to Restated Certificate
of Incorporation, dated June 1,
1999.
4-B By-Laws of Columbia Energy 1-1098 3-E
Group, as amended, Form 10-Q
and restated as of January 16, 1998. for quarter ended
June 30, 1998.
4-C Indenture dated as of November 28, 33-64555 4-S
1995 between The Columbia Gas
System, Inc. and Marine Midland
Bank, N.A., Trustee.
4-D First Supplemental Indenture dated 33-64555 4-T
as of November 28, 1995 between
The Columbia Gas System, Inc. and
Marine Midland Bank, N.A.,
Trustee.
4-E Second Supplemental Indenture dated 33-64555 4-U
as of November 28, 1995 between The
Columbia Gas System, Inc. and Marine
Midland Bank, N.A., Trustee.
4-F Third Supplemental Indenture dated as 33-64555 4-V
of November 28, 1995 between The
<PAGE>
Columbia Gas System, Inc. and Marine
Midland Bank, N.A., Trustee.
4-G Fourth Supplemental Indenture dated 33-64555 4-W
as of November 28, 1995 between The
Columbia Gas System, Inc. and Marine
Midland Bank, N.A., Trustee.
4-H Fifth Supplemental Indenture dated 33-64555 4-X
as of November 28, 1995 between
The Columbia Gas System, Inc. and
Marine Midland Bank, N.A., Trustee.
4-I Sixth Supplemental Indenture dated 33-64555 4-Y
as of November 28, 1995 between
The Columbia Gas System, Inc. and
Marine Midland Bank, N.A., Trustee.
4-J Seventh Supplemental Indenture 33-64555 4-Z
dated as of November 28, 1995
between The Columbia Gas System,
Inc. and Marine Midland Bank, N.A.,
Trustee.
4-K Instrument of Resignation, Appointment 1-1098 4-I
and Acceptance, dated as of March 1, Form 10-K
1999 between Columbia Energy Group for year ended
and Marine Midland Bank, as Resigning December 31, 1998.
Trustee, and The First National Bank of
Chicago, as Successor Trustee.
5* Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
10* Amended and Restated Columbia Energy Group Long-Term Incentive Plan.
23-A* Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included in Exhibit 5).
23-B* Consent of Arthur Andersen LLP, independent public accountants.
</TABLE>
* Filed herewith.
CORRECTED CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF COLUMBIA ENERGY GROUP
The Corporation hereby files this Corrected Certificate of Amendment
pursuant to Section 103 of the General Corporation Law of the State of Delaware
correcting the statement regarding the deletion and substitution of text to be
made in the first paragraph of Article IV of the Restated Certificate of
Incorporation, which statement is contained in the second paragraph, FIRST
section of the Certificate of Amendment of Restated Certificate of Incorporation
filed on May 28, 1999 as follows:
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF COLUMBIA ENERGY GROUP
Columbia Energy Group (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, at a meeting duly
held, adopted a resolution proposing and declaring advisable the following
amendment to the Restated Certificate of Incorporation of said corporation:
RESOLVED, that the Board of Directors of the Corporation hereby finds it
advisable that the Restated Certificate of Incorporation of the Corporation be
amended to delete in its entirety the first paragraph of Article IV and to
insert in lieu thereof the following paragraph:
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Two hundred forty million
(240,000,000), of which Forty million (40,000,000) shares, of the par
value of One cent ($.01) each, are to be of a class designated
Preferred Stock and Two hundred million (200,000,000) shares, of the
par value of One cent ($.01) each, are to be of a class designated
Common Stock.
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
an annual meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, said Corporation has caused this certificate to be
signed by Carolyn McKinney Afshar, its Secretary, this 1st day of June, 1999.
//s//Carolyn McKinney Afshar
By: Secretary
EXHIBIT 5
LEBOEUF, LAMB, GREENE & MACRAE
L.L.P.
A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
125 WEST 55TH STREET
NEW YORK, NY 10019-5389
June 15, 1999
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171
Ladies and Gentlemen:
You have requested our opinion as counsel for Columbia Energy Group, a
Delaware corporation (the "Company"), in connection with the registration
statement on Form S-8 (the "Registration Statement"), which the Company proposes
to file with the Securities and Exchange Commission on or shortly after the date
hereof under the Securities Act of 1933 with respect to 4,085,000 additional
shares (the "Common Stock") of its common stock, $.01 par value, to be issued
pursuant to the Company's Amended and Restated Long-Term Incentive Plan (the
"Plan").
In connection with this opinion, we have examined the Registration
Statement and such instruments, certificates, records and documents, and such
matters of law, as we have considered necessary or appropriate for the purposes
hereof. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to the original documents of all documents submitted to us as copies and the
authenticity of the originals of such latter documents. As to any fact material
to our opinion, we have relied upon the aforesaid Registration Statement,
instruments, certificates, records and documents.
Upon the basis of such examination, and subject to the limitations and
qualifications contained in this opinion, we are of the opinion that, upon
issuance, delivery and payment therefor, in accordance with the terms of the
Plan, the Common Stock will be validly issued, fully paid and nonassessable.
<PAGE>
Columbia Energy Group
June 15, 1999
Page 2
This opinion is limited to the corporate laws of the State of Delaware
and the Federal laws of the United States.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
EXHIBIT 23-B
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our report dated
February 11, 1999 included in the Annual Report on Form 10-K of Columbia Energy
Group and subsidiaries for the year ended December 31, 1998 and to all
references to Arthur Andersen LLP included in this Registration Statement.
Arthur Andersen LLP
New York, New York
June 15, 1999
AMENDED AND RESTATED
COLUMBIA ENERGY GROUP
LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of the Columbia Energy Group Long-Term Incentive Plan
(the "Plan") is to provide incentives to specified individuals to
continuously add value to Columbia Energy Group (the "Corporation"). Plan
participants consist of: (i) those officers and key employees of the
Corporation and its subsidiary companies (the "Employees") who, in the
opinion of the Compensation Committee of the Board of Directors of the
Corporation (the "Committee"), are making or are in a position to make
substantial contributions to the Corporation by their ability and efforts;
and (ii) members of the Board of Directors of the Corporation who are not
employees ("Outside Directors"). The Corporation also believes that the
Plan will facilitate attracting, retaining and motivating Employees and
directors of high caliber and potential.
2. Effective Date. This Plan was initially effective February 21, 1996, and as
amended and restated, is to be effective February 1, 1999, subject to
shareholder and regulatory approvals.
3. Administration. The Plan shall be administered by the Committee. As applied
to Employees, the Committee shall have full and final authority in its
discretion to conclusively interpret the provisions of the Plan and to
decide all questions of fact arising in its application; to determine the
individuals to whom awards shall be made under the Plan; to determine the
type of award to be made to such Employees and the amount, size and terms
of each such award; to determine the time when awards will be granted to
Employees; and to make all other determinations necessary or advisable for
the administration of this Plan.
The Committee shall have no discretion with respect to the amount, price
and timing of awards to Outside Directors. In this regard, the portions of
the Plan applicable to Outside Directors are intended to be self-governing
and to operate automatically. With respect to ministerial matters regarding
the portions of the Plan applicable to Outside Directors, the Plan will be
administered by the Committee.
4. Shares Subject to Plan. The shares that may be issued under the Plan
pursuant to Paragraph 7 shall not exceed in the aggregate 8,585,000 shares
of the Corporation's common stock. Such shares may be authorized and
unissued shares or treasury shares. The maximum number of shares that may
be awarded pursuant to the contingent or restricted stock award provisions
of Paragraphs 10 and 11 and forms of awards not specifically identified in
the Plan but permitted pursuant to Paragraph 7 shall be five percent of the
total shares authorized for issuance after February 1, 1999 under the Plan,
or an amount not to exceed 204,250. Except as otherwise provided herein,
any shares subject to an option or right which for any reason expires or is
terminated unexercised as to such shares shall again be available under the
Plan.
5. Participants. Persons eligible to participate shall be limited to (1) with
regard to any awards permitted pursuant to Paragraph 7, the Employees; and
(2) with regard to stock options permitted pursuant to Paragraph 8, the
Outside Directors.
6. Outside Directors. Outside Directors shall be eligible under this Plan only
for nonqualified stock option awards. Such stock option awards shall be
made if the Corporation's Total Shareholder Return (defined as market
appreciation and dividends declared in a year) for a fiscal year exceeds
the median of the Total Shareholder Return for the group of peer companies
utilized for comparison purposes in the Corporation's Annual Proxy
Statement. If the Corporation's Total Shareholder Return falls in the third
quartile of the peer group, then options shall be granted to each Outside
Director to purchase 3,000 shares of common stock. If the Corporation's
Total Shareholder Return falls in the fourth quartile of the peer group,
then options shall be granted to each Outside Director to purchase 6,000
shares of common stock. No stock option awards shall be made to Outside
Directors if Total Shareholder Return is at or below the median of the
group for a fiscal year.
Effective May 19, 1999, stock option awards for Outside Directors, if any,
shall be granted effective as of the grant date for employees' stock option
awards made annually by the Committee (normally in February), or if such a
meeting is not held or awards are not made, then 90 days after the close of
the Corporation's fiscal year for Total Shareholder Return performance for
the preceding fiscal year. Grants to Outside Directors shall vest one-third
upon the date of the grant, two-thirds upon the first anniversary of the
grant, and 100 percent upon the second anniversary of the grant. The option
period shall not end later than ten years after the date of the grant of
the option.
Additional terms of stock option awards to Outside Director shall be
governed by Paragraph 8, as may be supplemented by Paragraphs 12(b) and
13-24.
7. Awards under the Plan. Subject to the limitations provided under Paragraph
6 for awards to Outside Directors, awards under the Plan may be in the form
of stock options (both nonqualified stock options and incentive stock
options under Section 422 of the Internal Revenue Code or any amendment
thereof or substitute therefor), contingent stock, restricted stock and
stock appreciation rights, or such other forms as the Committee may in its
discretion deem appropriate but in any event which are consistent with the
Plan's purpose, including any combination of the above. The maximum number
of shares that may be awarded to any one person during the life of the Plan
shall be 20 percent of the total shares authorized for issuance under the
Plan.
8. Stock Options. Options shall be evidenced by stock option agreements in
such form, not inconsistent with this Plan, as the Committee shall approve
from time to time, which agreements shall contain in substance the
following terms and conditions.
(a) Option Price. The purchase price per share of stock deliverable upon
the exercise of an incentive stock option shall be 100 percent of the
fair market value of the stock on the day the option is granted, as
determined by the Committee. The purchase price per share of stock
deliverable upon the exercise of a nonqualified stock option shall be
100 percent of the fair market value of the stock on the day the
option is granted, as determined by the Committee. "Fair market value"
for awards to Outside Directors shall be the average of the high and
low sales prices per share of the Corporation's common stock on The
New York Stock Exchange as reported in The Wall Street Journal for
such date. The option agreement for nonqualified options shall provide
for a reduction of the purchase price by dividends paid on a share of
common stock of the Corporation as long as the option is outstanding
and not exercised, but in no event shall this price be less than the
par value of such stock. Except in accordance with equitable
adjustments as provided in Paragraph 19 and without regard to dividend
equivalents, options shall not be repriced.
(b) Exercise of Option. Each stock option agreement shall state the period
or periods of time, as may be determined by the Committee, within
which the option may be exercised by the participant, in whole or in
part, provided that the option period shall not end later than ten
years after the date of the grant of the option. The Committee shall
have the power to permit in its discretion an acceleration of the
previously determined exercise terms under such circumstances and upon
such terms and conditions as deemed appropriate by the Committee.
(c) Payment for Shares. Stock purchased pursuant to an option agreement
shall be paid for in full at the time of purchase, either in the form
of cash, common stock of the Corporation at fair market value, or in a
combination thereof, as the Committee may determine.
(d) Rights upon Termination of Employment or Board Service. In the event
that an optionee ceases to be employed by the Corporation or its
subsidiaries or ceases to serve as an Outside Director of the
Corporation for any cause other than death, disability, retirement, or
a Change in Control as defined in Paragraph 12(b), the optionee shall
have the right to exercise the option during its term within a period
of three months after such termination to the extent that the option
was exercisable at the date of such termination, or during such other
period and subject to such terms as may be determined by the
Committee. In the event that an optionee terminates employment or
service due to death prior to termination of his option without having
fully exercised his option, all unvested options shall vest as of the
date of death, and the optionee's successor may have the right to
exercise the option during its term within a period of 24 months after
the date of death, or during such other period and subject to such
terms as may be determined by the Committee. In the event that an
optionee is terminated due to a Change in Control prior to termination
of his option without having fully exercised his option, the optionee
or his successor may have the right to exercise the option during its
term within a period of 24 months after the date of such termination
due to a Change in Control or during such other period and subject to
such terms as may be determined by the Committee. In the event that an
optionee is terminated due to retirement or disability prior to
termination of his option without having fully exercised his option,
the optionee or his successor may have the right to exercise the
option during its term within a period of 36 months after the date of
such termination due to disability or retirement or during such other
period and subject to such terms as may be determined by the
Committee, and any unvested options will continue to vest in
accordance with the previously determined vesting schedule during the
exercise period following such termination due to retirement or
disability.
(e) Individual Limitations.
(i) Notwithstanding anything herein to the contrary, the aggregate
fair market value (determined as of the time the option is
granted) of incentive stock options for any Employee which may
become first exercisable in any calendar year shall not exceed
$100,000.
(ii) Notwithstanding anything herein to the contrary, no incentive
stock option shall be granted to any individual if, at the time
the option is to be granted, the individual owns stock possessing
more than ten percent of the total combined voting power of all
classes of stock of the Corporation unless at the time such
option is granted the option price is at least 110 percent of the
fair market value of the stock subject to option and such option
by its terms is not exercisable after the expiration of five
years from the date such option is granted.
(f) Other Terms. Each incentive stock option agreement shall contain such
other terms, conditions and provisions as the Committee may determine
to be necessary or desirable in order to qualify such option as a
tax-favored option within the meaning of Section 422 of the Internal
Revenue Code, or any amendment thereof, substitute therefor, or
regulation thereunder. Subject to the limitations of Paragraph 20, and
without limiting any other provisions hereof, the Committee shall have
the power without further approval to amend the terms of any option
for Employees.
9. Stock Appreciation Rights. Stock appreciation rights ("SARs") shall be
evidenced by SAR agreements in such form as the Committee shall approve
from time to time, which agreements shall contain in substance the
following terms and conditions:
(a) Award. A SAR may be granted in connection with an option and shall
entitle the grantee, subject to such terms and conditions determined
by the Committee, to receive, upon surrender of the option, all or a
portion of the excess of (i) the fair market value of a specified
number of shares of common stock of the Corporation at the time of the
surrender, as determined by the Committee, over (ii) 100 percent of
the fair market value of the stock at the time the option was granted
less any dividends paid while the option was outstanding but
unexercised.
(b) Term. SARs shall be granted for a period of not more than ten years,
and shall be exercisable in whole or in part, at such time or times
and subject to such other terms and conditions as shall be prescribed
by the Committee at the time of grant, subject to the following:
(i) In the event that a grantee ceases to be employed by the
Corporation or its subsidiaries or ceases to serve as an Outside
Director of the Corporation for any cause other than death,
disability, retirement, or a Change in Control, as defined in
Paragraph 12(b), the grantee shall have the right to exercise the
SAR during its term within a period of three months after such
termination to the extent that the SAR was exercisable at the
date of such termination, or during such other period and subject
to such terms as may be determined by the Committee. In the event
that a grantee terminates employment or service due to death
prior to termination of his SAR without having fully exercised
his SAR, such SAR shall vest as of the date of death, and the
grantee's successor shall have the right to exercise the SAR
during its term within a period of 24 months after the date of
death, or during such other period and subject to such terms as
may be determined by the Committee. In the event that a grantee
is terminated due to a Change in Control prior to termination of
his SAR without having fully exercised his SAR, the grantee or
his successor shall have the right to exercise the SAR during its
term within a period of 24 months after the date of such
termination due to a Change in Control or during such other
period and subject to such terms as may be determined by the
Committee. In the event that a grantee is terminated due to
retirement or disability prior to termination of his SAR without
having fully exercised his SAR, the grantee or his successor
shall have the right to exercise the SAR during its term within a
period of 36 months after the date of such termination due to
disability or retirement or during such other period and subject
to such terms as may be determined by the Committee, and any
unvested SARs will continue to vest in accordance with the
previously determined vesting schedule during the exercise period
following such termination due to retirement or disability. The
Committee in its sole discretion may reserve the right to
accelerate previously determined exercise terms, within the terms
of the Plan, under such circumstances and upon such terms and
conditions as it deems appropriate.
(c) Payment. Upon exercise of a SAR, payment shall be made in the form of
common stock of the Corporation (at fair market value on the date of
exercise), cash, or a combination thereof, as the Committee may
determine.
10. Contingent Stock Awards. Contingent stock awards under the Plan shall be
evidenced by contingent stock agreements in such form and not inconsistent
with this Plan as the Committee shall approve from time to time, which
agreements shall contain in substance the following terms and conditions:
(a) Award. The Committee shall determine the amount of a contingent stock
award to be granted to an Employee based on the expected impact the
Employee can have on the financial well-being of the Corporation and
other factors deemed by the Committee to be appropriate.
(b) Restriction Period. Contingent stock awards made pursuant to this Plan
shall be subject to such terms, conditions, and restrictions,
including without limitation, substantial risks of forfeiture and/or
attainment of performance objectives, and for such period or periods
as shall be determined by the Committee at the time of grant. The
Committee shall have the power to permit, in its discretion, an
acceleration of the expiration of the applicable restriction period
with respect to any part or all of the award to any participant.
(c) Lapse of Restrictions. The agreement shall specify the terms and
conditions upon which any restrictions on the right to receive shares
representing contingent stock awarded under the Plan shall lapse, as
determined by the Committee. Upon the lapse of such restrictions,
shares of common stock shall be issued to the participant or his legal
representative.
(d) Termination Prior to Lapse of Restrictions. In the event of a
participant's termination of employment for any reason prior to the
lapse of restrictions applicable to a contingent stock award made to
such participant and unless otherwise provided for herein by this Plan
or as provided for in the contingent stock agreement, all rights to
shares as to which there still remain unlapsed restrictions shall be
forfeited by such participant to the Corporation without payment or
any consideration by the Corporation, and neither the participant nor
any successors, heirs, assigns or personal representatives of such
participant shall thereafter have any further rights or interest in
such shares.
11. Restricted Stock Award. Restricted stock awards under the Plan shall be
evidenced by restricted stock agreements in such form, and not inconsistent
with this Plan, as the Committee shall approve from time to time, which
agreements shall contain in substance the following terms and conditions:
(a) Award. The Committee shall determine the amount of a restricted stock
award to be granted to an Employee based on the past or expected
impact the Employee has had or can have on the financial well-being of
the Corporation and other factors deemed by the Committee to be
appropriate.
(b) Restriction Period. Restricted stock awards made pursuant to this Plan
shall be subject to such terms, conditions, and restrictions,
including without limitation, substantial risks of forfeiture and/or
attainment of performance objectives, and for such period or periods
as shall be determined by the Committee at the time of grant. The
Committee shall have the power to permit, in its discretion, an
acceleration of the expiration of the applicable restriction period
with respect to any part or all of the award to any participant. Upon
issuance of a restricted stock award, shares will be issued in the
name of the recipient. During the restriction period, recipients shall
have the rights of a shareholder for all such shares of restricted
stock, including the right to vote and the right to receive dividends
thereon as paid.
(c) Restrictive Legend and Stock Power. Each certificate evidencing stock
subject to restricted stock awards shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
award. Any attempt to dispose of stock in contravention of such terms,
conditions and restrictions shall be ineffective. The Committee may
adopt rules which provide that the certificates evidencing such shares
may be held in custody by a bank or other institution, or that the
Corporation may itself hold such shares in custody, until the
restrictions thereon shall have lapsed and may require as a condition
of any award that the recipient shall have delivered a stock power
endorsed in blank relating to the stock covered by such award.
(d) Lapse of Restrictions. The restricted stock agreement shall specify
the terms and conditions upon which any restrictions on the right to
receive shares representing restricted stock awarded under the Plan
shall lapse, as determined by the Committee. Upon the lapse of such
restrictions, shares of common stock which have not been delivered to
the participant or his legal representative shall be delivered to such
participant or his legal representative.
(e) Termination Prior to Lapse of Restrictions. In the event of a
participant's termination of employment for any reason prior to the
lapse of restrictions applicable to a restricted stock award made to
such participant and unless otherwise provided for herein by this Plan
or as provided for in the restricted stock agreement, all rights to
shares as to which there still remain unlapsed restrictions shall be
forfeited by such participant to the Corporation without payment or
any consideration by the Corporation, and neither the participant nor
any successors, heirs, assigns or personal representatives of such
participant shall thereafter have any further rights or interest in
such shares.
12. Other Provisions Relating to Contingent and Restricted Stock Awards and
Stock Options. Notwithstanding any other provision to the contrary in
Paragraphs 6, 8, 10 or 11 or elsewhere in this Plan, the following
additional provisions shall apply to contingent and restricted stock awards
and stock option awards (except that Paragraph 12(a) shall only apply to
contingent and restricted stock awards):
(a) Effect of Salary Continuation on Termination Prior to Lapse of
Restrictions. If a recipient of a contingent or restricted stock award
has his employment terminated and his salary continued through an
employment agreement, severance program or any other comparable
arrangement, then any contingencies and restrictions which are
satisfied or which could have been satisfied during the period for
which the recipient's salary is to be continued, irrespective of form,
will be deemed to have been satisfied, and such shares of contingent
and/or restricted stock will be issued and delivered to the recipient
or his legal representative no later than the expiration of the salary
continuation program.
(b) Change in Control. Upon a "Change in Control" as defined below, all
options (including any accompanying SARs), contingent stock awards and
restricted stock awards will automatically vest as of that date, and
all restrictions or contingencies will be deemed to have been
satisfied. The term "Change in Control" means the occurrence of any of
the following events:
(i) the acquisition by any party or parties of the beneficial
ownership of 25 percent or more of the voting shares of the
Corporation;
(ii) the occurrence of a transaction requiring shareholders' approval
for the acquisition of the Corporation through purchase or
exchange of stock or assets, or by merger, or otherwise; or
(iii)the election during a period of 24 months, or less, of 30
percent or more of the members of the Board, without the approval
of a majority of the Board as constituted at the beginning of the
period.
13. General Restrictions. The Plan and each award under the Plan shall be
subject to the requirement that, if at any time the Committee shall
determine that (i) the listing, registration or qualification of the shares
of common stock subject or related thereto upon any securities exchange or
under any state or federal law, (ii) the consent or approval of any
government regulatory body, or (iii) an agreement by the recipient of an
award with respect to the disposition of shares of common stock, is
necessary or desirable as a condition of, or in connection with the Plan or
the granting of such award or the issue or purchase of shares of common
stock thereunder, the Plan will not be effective and/or the award may not
be consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
14. Rights of a Shareholder. The recipient of any award under the Plan shall
have no rights as a shareholder with respect thereto unless and until
certificates for shares of common stock are issued to him, except for the
rights provided for in Paragraph 11 of this Plan as it pertains to
restricted stock awards.
15. Rights to Terminate Employment. Nothing in the Plan or in any agreement
entered into pursuant to the Plan shall confer upon any participant the
right to continue in the employment or Board service of the Corporation or
its subsidiary companies or affect any right which the Corporation or its
subsidiary companies may have to terminate the employment or Board service
of such participant.
16. Withholding of Taxes. Whenever the Corporation proposes or is required to
issue or transfer shares of common stock under the Plan, the Corporation
shall have the right to require the recipient to remit to the Corporation
an amount sufficient to satisfy any federal, state and/or local withholding
tax requirements prior to the delivery of any certificate or certificates
for such shares. Whenever under the Plan payments are to be made in cash,
such payments shall be net of an amount sufficient to satisfy any federal,
state and/or local withholding tax requirements.
17. Nonassignability.
Except as provided in Paragraph 17(b), no award or benefit under the
Plan shall be assignable or transferable by the recipient thereof,
except by will or by the laws of descent and distribution. Also,
except as provided in Paragraph 17(b), during the life of the
recipient, such award shall be exercisable only by such person or by
such person's guardian or legal representative.
Each nonqualified stock option granted to an Employee to the extent so
provided in such Employee's individual option agreement by the
Committee, in its sole and absolute discretion, and each stock option
granted to an Outside Director shall be transferable by gift to any
member of the recipient's immediate family or to a trust for the
benefit of such an immediate family member, and if so shall be
exercisable solely by the transferee in the case of such transfer by
gift.
18. Non-Uniform Determinations. The Committee's determinations under the Plan
(including, without limitation, determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and
provisions of such awards and the agreements evidencing same, and the
establishment of values and performance targets) need not be uniform and
may be made by the Committee selectively among persons who receive, or are
eligible to receive, awards under the Plan, whether or not such persons are
similarly situated.
19. Adjustments. In the event of any change in the outstanding common stock of
the Corporation by reason of a stock dividend, recapitalization, merger,
consolidation, split-up, combination, exchange of shares or the like, the
Committee shall adjust the number of shares of common stock which may be
issued under the Plan and shall provide for an equitable adjustment of any
outstanding award or shares issuable pursuant to an outstanding award under
this Plan.
20. Amendment. Subject to U.S. Securities and Exchange Commission approval, if
required, the Board of Directors of the Corporation may amend the Plan at
any time, except that without shareholder approval, the Board may not (i)
materially increase the benefits accruing to participants, (ii) materially
increase the maximum number of shares which may be issued under the Plan
(other than equitable adjustment pursuant to Paragraph 19 hereof), (iii)
materially modify the Plan's eligibility requirements, or (iv) change the
basis on which awards are granted to Outside Directors. The termination or
any modification or amendment of the Plan shall not, without the consent of
a participant, affect a participant's rights under an award previously
granted. Notwithstanding the foregoing, however, the Corporation reserves
the right to terminate the Plan in whole or in part, at any time and for
any reason, provided that full and equitable compensation is made to
participants with respect to awards previously granted.
21. Effect on Other Plan. Participation in this Plan shall not affect a
participant's eligibility to participate in any other benefit or incentive
plan of the Corporation, and any awards made pursuant to this Plan shall
not be used in determining the benefits provided under any other plan of
the Corporation unless specifically provided.
22. Duration of the Plan. The Plan shall remain in effect until all awards
under the Plan have been satisfied by the issuance of shares or the payment
of cash, but no award shall be granted more than ten years after the date
the Plan is adopted by the Corporation.
23. Funding of the Plan. This Plan shall be unfunded. The Corporation shall not
be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any award under this Plan,
and payment of awards shall be on the same basis as the claims of the
Corporation's general creditors. In no event shall interest be paid or
accrued on any award, including unpaid installments of awards.
24. Governing Law. The laws of the State of Delaware shall govern, control and
determine all questions arising with respect to the Plan and the
interpretation and validity of its respective provisions.
Approved by the Board of Directors of Columbia Energy Group at a
meeting held on February 21, 1996 and approved by the shareholders of
Columbia Energy Group on April 26, 1996. Amended as of August 20, 1997
by the Board of Directors to amend Paragraph 17. Amended as of January
16, 1998 to reflect the name change of the Corporation to "Columbia
Energy Group." Amended May 20, 1998 to provide equitable adjustments
in the number of shares subject to the Plan (Paragraph 4) as a result
of a 3-for-2 stock split in the form of a dividend issued on June 15,
1998. Amended by the Board of Directors on November 18, 1998 to add
300,000 shares authorized for awards under the Plan. Amended and
restated by the Board of Directors on November 18, 1998 to prohibit
repricing of options, reduce contingent and restricted stock and other
types of awards not specifically identified to five percent, add
3,785,000 shares authorized for awards under the Plan, revise vesting
and exercise provisions to prevent forfeitures of options and SARs for
termination due to death, retirement or disability, and remove
references to and requirements of the old Section 16 rules, effective
February 1, 1999, subject to the approval of the Corporation's
shareholders. Amended by the Board of Directors on February 17, 1999
to change the date of Outside Directors' awards to coincide with the
date of employees' awards, effective May 19, 1999, subject to the
approval of the Corporation's shareholders.
(CORPORATE SEAL)
__________________________
Secretary
