Filed by: 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 posted the following Questions and
Answers to an intranet site relating to Project Compass which is
accessible to NiSource employees:
QUESTIONS AND ANSWERS POSTED TO PROJECT COMPASS INTRANET SITE
SEPTEMBER 7, 2000
The following questions and answers provide some preliminary
information regarding the merger and its effect on the Columbia Energy
Group Savings Plan. As more detailed information becomes available,
it will be provided to all participants.
Q1. What happens to the Columbia Energy Group shares attributable to
the Columbia match once the merger closes? Will they be con-
verted to cash, NiSource shares, or a combination of both? If
the shares are converted to NiSource shares, will they be "locked
in," or will participants be able to sell the shares and move the
proceeds to other funds once the conversion occurs?
A1. Savings Plan participants will have the opportunity to instruct
Fidelity regarding which consideration (cash and SAILS or
NiSource shares) they wish to receive for the units credited to
their account. However, it should be noted that FMTC (Fidelity),
trustee of the Plan, is the shareholder of record and may be
required by the Employee Retirement Income Security Act (ERISA)
to override participants' instructions if one option does not
constitute "adequate consideration" under ERISA.
Participants who receive NiSource shares for Columbia shares
attributable to the Company match will continue to be restricted
from moving those shares to another fund under the Plan until age
50. Any cash received as merger consideration, regardless of
whether it was received for shares attributable to the Company
match, will be invested in the Fidelity Retirement Money Market
Portfolio and be available for movement into other funds at the
participant's discretion. It has not been determined how the
SAILS will be handled.
Q2. Moving forward, how will the company match be treated? Will it
be in NiSource shares?
A2. After the closing, the Company match will be made in NiSource
shares rather than Columbia shares. Employees over age 50 have
the opportunity to direct the Company match into any of the
investment options available under the Plan.
Q3. What happens if I own Columbia shares outside of the Savings
Plan? Will I have to make two separate decisions?
A3. Yes. You will receive two forms - an instruction form from
Fidelity for the Columbia shares held in the Savings Plan and an
election form from Chase Mellon Shareholder Services or your
broker for the Columbia shares held outside of the Plan. You may
make different elections for each. You must complete both forms
if you wish to elect stock for shares attributable to your
account in the Plan and to elect stock for shares held outside
the Plan. Please note that Fidelity's ability to override your
decision applies only to the shares held in the Savings Plan.
Q4. When will I make the election on my Columbia shares?
A4. In mid-September, all Plan participants who have an account
balance in the Columbia Stock Fund will receive materials from
Fidelity which will provide the deadline, and outline in detail
the procedures for participants to follow to instruct Fidelity.
Chase Mellon Shareholder Services will be providing election
materials to those who hold shares outside the Plan.
The following legend appears elsewhere on the Project Compass intranet
site:
These frequently asked questions contain 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 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 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 territory, fluctuations
in energy-related commodity prices, conversion activity, other
marketing efforts and other uncertainties. These and 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 release of information. 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 the document.
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 for NiSource and Columbia Energy
Group. The final joint proxy statement/prospectus, dated April
2
24, 2000, is available and has been distributed to the companies'
shareholders. Investment and security holders are urged to read
the joint proxy statement/prospectus and other relevant documents
filed with the SEC because they contain important information.
Investors and security holders may 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.
3
