Filed by: New NiSource Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Columbia Energy Group
Registration Statement File No: 333-33896
On September 7, 2000, NiSource distributed the "New Direction"
newsletter to its employees. The newsletter included news and
information on NiSource's merger with Columbia. The text of the
newsletter is set forth below.
TEXT OF "NEW DIRECTION" EMPLOYEE NEWSLETTER
SEPTEMBER 7, 2000
NEW DIRECTION September 7, 2000 Vol. 1 No. 12
INSIDE THIS ISSUE
Q & A's about the staffing processes . . . . . . . . . . . . . Pg. 2
Relocation program designed to assist employees . . . . . . . . Pg. 3
Intranet provides employees the latest information . . . . . . Pg. 4
SPOTLIGHT ON CATHY ABBOTT
Pipeline Leader Focused on Commitment and Creativity
----------------------------------------------------
Cathy Abbott brings more than 20 years of experience in the energy
industry to the NiSource leadership team. She expects to utilize that
experience in leading her team to deliver tangible value for NiSource,
its customers and shareholders.
Abbott shared her vision for Pipeline Operations and her business
philosophy with a reporter for NEW DIRECTION. Our questions and her
answers follow.
What aspects of this new role excite you the most?
--------------------------------------------------
I think it's really the people at NiSource. In Project Compass, when
our team members came back, their feedback was, "These folks at
NiSource are just like us. They want the same things that we want."
The recent employee focus groups support the premise that the NiSource
employees and the Columbia employees want very much the same things
for the new NiSource in terms of growth opportunities and culture.
Gary Neale committed that there would be opportunities for talent from
both of the companies, and we've seen that in the leadership
announcements. Project Compass has been a great opportunity for both
NiSource and Columbia employees to get to know each other and to make
a contribution to the new NiSource. I really appreciate the personal
sacrifices people made to travel, to live away from home, to interrupt
vacations and to work long hours to deliver a product that we can now
use to make the merger successful.
What will be the biggest challenges for Pipeline Operations?
------------------------------------------------------------
We have four strategic goals for the transmission segment. They
include: growth through customer focus and leveraging optionality;
providing cost discipline; providing regulatory creativity; and
committing the hearts and minds of the employees to achieving these
goals. And really, with the merger, we're adding a fifth strategic
goal, which is making the merger work. The first premise of our
Project Compass operations group is that we will continue to place a
high priority on safe and reliable service on the pipelines. With
respect to Transcom, which is our fiber-optics venture, our goal is to
complete the Washington, D.C., to New York City leg and evaluate with
NiSource the best way to deliver shareholder value from this new
business opportunity.
How will you define success for Pipeline Operations?
----------------------------------------------------
Externally, we look to measures and rankings such as customer
satisfaction or top-quartile returns or a strong growth profile.
Internally, what I look to is, when I go to a field location, if I can
feel the excitement and commitment of the employees and see the
evidence of their teamwork, or when I go to a customer meeting and
have the customers be effusive with praise about our service and
creativity. I believe that those things will deliver the external
measures of success in our strategic plan.
What from your past experiences will you
draw from to help with this new assignment?
-------------------------------------------
I think the achievements of the entire team here at the transmission
segment, the management and employees, are a lot of what attracted
NiSource to us. It's our top customer service rankings, our
top-quartile returns, and our strong growth. The lesson I think I've
learned personally and that we've learned as a management team is that
you can only achieve and sustain that type of performance by the
employees committing their hearts and minds. As a management team
we've done a lot to focus on learning how to leverage employee skills
and talents, at all levels in the organization, to take on the
competition and to grow the business through customer focus.
How would you define your management style?
-------------------------------------------
It's a very facilitative management style. I really try to look for
people on the management team who can complement what I can do. With
respect to employees, we've worked hard at basically getting out of
the way of employees doing productive work. It's recognizing the
contribution that all employees, particularly front-line employees,
can make, and leveraging the skills and abilities they bring to the
table.
What's the "end" you're trying to achieve with Pipeline Operations?
-------------------------------------------------------------------
If our customers continue to rank us as top pipelines, if our
shareholders see top-quartile or top-decile returns, as we deliver
growth, and if our employees believe that this is a good place to
work, I think we'll have achieved our goals.
What's the best advice you ever received?
-----------------------------------------
Know who you are and be that person. And, as a leader, your life must
embody your story. That's also my tip for success to other people as
well.
MEET CATHY ABBOTT
Cathy Abbott will be president of Pipeline Operations in the new
NiSource. Her office will continue to be located in Fairfax, Va. She
joined Columbia Energy Group in 1996 as chief executive officer of its
interstate pipeline subsidiaries, Columbia Gas Transmission
Corporation and Columbia Gulf Transmission Company. Prior to joining
Columbia, she was a principal with Gem Energy Consulting, Inc., which
provided consulting services to natural gas, electric and other energy
firms. She previously served as a vice president in both line and
staff roles within Enron Corporation. More than half of her 10-year
career at Enron was devoted to developing Enron's unregulated gas
marketing and derivative product trading capabilities.
Abbott also served as vice president, policy analysis at the
Interstate Natural Gas Association of America. She directed a number
of analytic offices in the U.S. Department of Energy, and served at
the White House Office of Energy Policy and Planning and at the
Environmental Protection Agency.
She earned a bachelor's degree from Swarthmore College in Swarthmore,
Pa., and a master's degree in public policy from the John F. Kennedy
School of Government at Harvard University. A Maryland native, Abbott
is married and the mother of two teenage boys. She enjoys soccer,
hiking and reading.
QUESTIONS AND ANSWERS ABOUT THE STAFFING PROCESSES
Employees have asked many questions about the staffing processes since
the announcement last week that the processes have begun. Project
Compass is committed to answering questions in a timely manner. And
since many employees have similar questions, we are answering some of
the most common ones below.
Answers to additional questions about the staffing processes are
available in the "Employee Transition" section of the Project Compass
intranet site. Questions and answers about other topics, including
general/merger, the new NiSource and employee benefits, are included
under the "Questions?" link on the Project Compass intranet site.
How do I know whether I should fill
out an Employee Data and Interest Form?
---------------------------------------
All Corporate and Business Services functions; Human Resources outside
of Pipeline Operations; Information Technology in the Energy
Distribution company; and Sales and Marketing in Energy Distribution
are using the Project Compass staffing process. You should fill out
the form if:
* You currently work in any of these functions and are
interested in an opportunity at or below manager level
within that function;
* You are interested in pursuing opportunities within any of
these functions; or
* You are unsure whether or not to complete the form.
In short, there is no downside to completing the form. The form
provides employees with the opportunity to highlight their skills and
to indicate interest in areas that are outside the scope of their
current job.
Why are some functions using a business-unit staffing
process instead of the Project Compass staffing process?
--------------------------------------------------------
The functional areas using the business-unit staffing process are
primarily those where functions in the future organization will be
performed at existing locations and the primary changes will be in the
number of positions. Regardless of which staffing process is used,
hiring decisions will be made by management within the business unit
and function.
How do I express interest in a function
that is using a business-unit staffing process?
-----------------------------------------------
The staffing process for the business-unit organizations will be
designed and administered by the business-unit leadership, and will be
communicated through them in the very near future.
If I'm interested in more than one functional area, do I need
to have my supervisor send more than one Employee Assessment Form?
------------------------------------------------------------------
No. One Employee Assessment Form is sufficient. It will go to all
hiring managers in functional areas in which you have expressed
interest.
If my functional category is not shown
on the Staffing Chart, what should I do?
----------------------------------------
Don't panic. Your function may have been outside the scope of Project
Compass, or it may have been an oversight. Call the Employee
Transition Help Line at (219) 647-5595.
PROJECT COMPASS STAFFING PROCESS
REMINDER...Deadline for submitting forms is Sept. 11.
CLARIFICATION...You can indicate interest in as many functional
areas as you wish.
QUESTIONS...Call the Employee Transition Help Line -
(219) 647-5595.
RELOCATION PROGRAM DESIGNED TO ASSIST EMPLOYEES
Employees who are considering opportunities within the new NiSource
that will require them to move their households now have more
information to help them make these important decisions. The Project
Compass Employee Transition Team has developed a new, common
Relocation Program to cover employees of both NiSource and Columbia
whose work location requires a move as a result of the merger.
Full-time employees who are authorized by Human Resources will be
eligible to receive relocation benefits for up to one year from the
transfer/hire date. To qualify for relocation assistance under
Internal Revenue Service guidelines, the employee's new work location
must be at least 50 miles further from the present residence than the
current work location. In other words, the commute must increase by at
least 50 miles.
Although the program is the same for all companies, relocation
assistance is provided by different outside vendors at NiSource and
Columbia. Employees currently employed by a NiSource company will
continue to use Corporate Transfer Service as the vendor supplying the
relocation assistance. Employees currently employed by a Columbia
Energy Group company will continue to use Summit Relocation as the
vendor supplying the relocation assistance.
The full Relocation Program is available on the Project Compass
intranet site under the "Employee Transition" section. Highlights for
exempt employees include:
* A lump sum relocation allowance to cover househunting, temporary
living, return trips and the final move. This offers the employee
flexibility in managing expenses, without requiring submission of
receipts or waiting for reimbursement of personal expenses.
* Reimbursement of penalty for breaking a current lease.
* A miscellaneous moving allowance.
* Home sale assistance and marketing assistance.
* A "safety net" (appraised value offer) should the employee's home
not sell within a reasonable period of time.
* Opportunities for an equity bridge loan, home sale bonus and
closing costs.
* Assistance in finding quality, established real estate brokers to
help the employee find a new home.
* Movement of household goods.
* Spousal career assistance.
Non-exempt employees who are asked to relocate during the
NiSource/Columbia merger will be offered a choice of relocation
incentives. See the Relocation Program for details.
INTRANET PROVIDES EMPLOYEES THE LATEST INFORMATION
Project Compass site is updated frequently
The Project Compass intranet site is the place to turn for answers to
your questions about the integration of NiSource and Columbia. The
site is updated several times a week as new information becomes
available.
The site, accessible through all intranets across NiSource and
Columbia, features information about Project Compass and the new
NiSource. It also provides a one-stop access point for important
information related to the staffing processes. Click on the "Employee
Transition" button to view the latest information about the staffing
processes and related issues.
A new banner at the top of the Project Compass home page draws
attention to and provides an instant link to updated information. The
"What's New" button also provides links to the newest information. The
most recent additions are identified within pages with a bright yellow
and red icon saying "New" or "Update!"
The "Employee Transition" section includes information about and links
to the Employee Data and Interest Form and the Employee Assessment
Form that are integral to the Project Compass staffing process.
Information about individual business units' staffing processes will
be provided as it becomes available.
Supervisors are asked to print and share any information related to
Project Compass and the employee transition processes with employees
who do not have access to the intranet or who are not often at a
computer.
The following is included to conform with federal regulations:
This publication 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' 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 these stories.
In addition to other documents filed with the Securities and
Exchange Commission by the two companies, NiSource and the new
holding company have filed a registration statement, which
contains a joint proxy statement/prospectus for NiSource Inc.
and Columbia Energy Group. The final joint proxy
statement/prospectus, dated April 24, 2000, is available and has
been distributed to the companies' shareholders. 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 can 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
at its web site, www.nisource.com, or from Columbia Investor
Relations at 13880 Dulles Corner Lane, Herndon, Virginia 20171 or
at its web site, www.columbiaenergygroup.com.
Questions, Comments?
New Direction is published by Project Compass for all NiSource
and Columbia employees. We welcome your comments and questions.
Give us a call at 877-236-2242 or e-mail us at
[email protected].
