File No. 70-9551
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4 ON
FORM U-1/A
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NiSource Inc. New NiSource Inc.
801 East 86th Avenue 801 East 86th Avenue
Merrillville, Indiana 46410-6272 Merrillville, Indiana 46410-6272
(Names of companies filing this statement and addresses of
principal executive offices)
None
(Name of top registered holding company parent of each applicant
or declarant)
Mark T. Maassel
Vice President, Regulatory
& Government Policy
NiSource Inc.
801 East 86th Avenue
Merrillville, Indiana 46410-6272
(Name and address of agent for service)
The Commission is requested to send copies of all notices, orders and
communications to:
Peter V. Fazio, Jr., Esq. William T. Baker, Jr., Esq.
Schiff Hardin & Waite Thelen Reid & Priest LLP
6600 Sears Tower 40 West 57th Street
Chicago, Illinois 60606-6473 New York, New York 10019
William C. Weeden William S. Lamb, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP Joanne C. Rutkowski, Esq.
1440 New York Avenue, NW LeBoeuf, Lamb, Greene & MacRae LLP
Washington, D.C. 20005 125 West 55th Street
New York, New York 10019-5389
<PAGE>
TABLE OF CONTENTS
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS...................................2
A. EXHIBITS.................................................................2
B. FINANCIAL STATEMENTS.....................................................4
<PAGE>
The Application/Declaration in this proceeding was filed on September
20, 1999, as amended by amendments dated October 28, 1999, April 5, 2000 and
April 14, 2000. Item 6 is hereby amended and restated in its entirety to read as
follows:
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
A. EXHIBITS
A-1 Amended and Restated Articles of Incorporation of NiSource dated
as of May 13, 1998, as amended on April 14, 1999 and March 2,
2000. (Incorporated by reference to Exhibit 3 to the NiSource
Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, and Exhibits 3.2 and 3.3 to the NiSource Annual Report on
Form 10-K for the year ended December 31, 1999).
A-2 Amended and Restated By-Laws of NiSource Inc. effective January
29, 2000. (Incorporated by reference to Exhibit 3.4 to the
NiSource Annual Report on Form 10-K for the year ended December
31, 1999).
A-3 Amended and Restated Certificate of Incorporation of Columbia
effective January 16, 1998, as amended on June 1, 1999.
(Incorporated by reference to Exhibit 3-A to Columbia Gas System,
Inc.'s Annual Report on Form 10-K for the year ended December 31,
1995 (File No. 1-1098), and Exhibit 3-D to Columbia's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998 (as
corrected in Exhibit 4-A-3 to Columbia's Registration Statement
on Form S-8, filed with the Commission on June 16, 1999 (File No.
333-80797)), and Exhibit 3-D to Columbia's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999).
A-4 Amended and Restated By-Laws of Columbia dated as of February 22,
2000. (Incorporated by reference to Exhibit 3-D to the Columbia
Annual Report on Form 10-K for the year ended December 31, 1999).
A-5 Certificate of Incorporation of New NiSource. (Filed herewith).
A-6 By-Laws of New NiSource. (Filed herewith).
B-1 Agreement and Plan of Merger between Columbia, NiSource, New
NiSource, Parent Acquisition, Company Acquisition and NiSource
Finance Corp. dated as of February 27, 2000, as amended and
restated as of March 31, 2000. (Incorporated by reference to
Exhibit 2.1 to the NiSource Current Report on Form 8-K dated
March 31, 2000).
B-2 Credit Agreement and related documentation. (To be filed by
amendment).
C Registration Statement of New NiSource and NiSource on Form S-4
(including joint proxy statement of NiSource and Columbia).
(Filed with the Commission on April 3, 2000, File No. 333-33896
and incorporated by reference herein).
C-1 Amendment No. 1 to Registration Statement of New NiSource and
NiSource on Form S-4 (including joint proxy statement of NiSource
2
<PAGE>
and Columbia). (Filed with the Commission on April 24, 2000, File
No. 333-33896 and incorporated by reference herein).
D-1 Application to the FERC under the Federal Power Act. (Paper
format filing - Form SE).
D-2 Order of the FERC. (To be filed by amendment).
D-3 Application to the VSCC. (Included as Exhibit G to Exhibit D-1).
D-4 Order of the VSCC. (To be filed by amendment).
D-5 Application to the PPUC. (Included as Exhibit G to Exhibit D-1).
D-6 Order of the PPUC. (To be filed by amendment).
D-7 Application to the KPSC (To be filed by amendment).
D-8 Order of the KPSC. (To be filed by amendment).
D-9 Application to the MPUC. (Filed herewith).
D-10 Order of the MPUC. (To be filed by amendment).
D-11 Application to the NHPUC (Filed herewith).
D-12 Order of the NHPUC. (To be filed by amendment).
D-13 Application to the FCC. (To be filed by amendment).
D-14 Order of the FCC. (To be filed by amendment).
E-1 Map of service territories of subsidiaries of NiSource and
Columbia and common pipelines. (To be filed by amendment).
E-2 Corporate Organization Chart of companies after merger. (To be
filed by amendment).
E-2(a) Merger Structure Diagram. (To be filed by amendment).
E-2(b) Alternative Merger Structure Diagram. (To be filed by amendment).
F Opinions of Counsel. (To be filed by amendment).
G-1 Annual Report of NiSource on Form 10-K for the year ended
December 31, 1999. (Filed with the Commission on March 30, 2000,
File No. 1-9776 and incorporated by reference herein).
G-2 Annual Report of Columbia on Form 10-K for the year ended
December 31, 1999. (Filed with the Commission on March 2, 2000,
File No. 1-1098 and incorporated by reference herein), as amended
by the Amended Annual Report on Form 10-K/A (Filed with the
Commission on March 3, 2000, File No. 1-1098 and incorporated by
reference herein).
G-3 Form U5S of Columbia for the year ended December 31, 1999. (To be
filed by amendment).
G-4 Opinion of Credit Suisse First Boston Corporation. (Included as
Annex III to Exhibit C).
3
<PAGE>
G-5 Opinion of Morgan Stanley & Co. Incorporated. (Included as Annex
IV to Exhibit C-1).
G-6 Opinion of Salomon Smith Barney Inc. (Included as Annex V to
Exhibit C-1).
H Proposed Form of Notice. (To be filed by amendment).
I Electric Divestiture Study of Northern Indiana. (To be filed by
amendment).
B. FINANCIAL STATEMENTS
FS-1 New NiSource Unaudited Pro Forma Combined Condensed Consolidated
Balance Sheet as of December 31, 1999. (Included in Exhibit C).
FS-2 New NiSource Unaudited Pro Forma Combined Condensed Consolidated
Statement of Income from Continuing Operations for the twelve
months ended December 31, 1999. (Included in Exhibit C).
FS-3 Notes to New NiSource Unaudited Pro Forma Condensed Consolidated
Financial Statements. (Included in Exhibit C).
FS-4 NiSource Consolidated Balance Sheet as of December 31, 1999.
(Included in Exhibit G-1).
FS-5 NiSource Consolidated Statement of Income for the twelve months
ended December 31, 1999. (Included in Exhibit G-1).
FS-6 Columbia Consolidated Balance Sheet as of December 31, 1999.
(Included in Exhibit G-2).
FS-7 Columbia Consolidated Statement of Income for the twelve months
ended December 31, 1999. (Included in Exhibit G-2).
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, each of the undersigned companies has duly
caused this Amendment filed herein to be signed on its behalf by the undersigned
thereunto duly authorized.
NISOURCE INC.
/s/ Gary L. Neale
---------------------------------------
Name: Gary L. Neale
Title: Chairman, President and
Chief Executive Officer
NEW NISOURCE INC.
/s/ Gary L. Neale
---------------------------------------
Name: Gary L. Neale
Title: Chairman, President and
Chief Executive Officer
Date: April 28, 2000
5
EXHIBIT A-5
CERTIFICATE OF INCORPORATION
OF
NEW NISOURCE INC.
FIRST. The name of the corporation is New NiSource Inc.
SECOND. The address of the corporation's registered office in the
State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is Corporation Service
Company.
THIRD. The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware, as amended.
FOURTH. The total number of shares of stock which the corporation
shall have authority to issue is One Hundred (100) shares of Common Stock of
$.01 par value per share.
Any and all right, title, interest and claim in or to any
dividends declared by the corporation, whether in cash, stock or otherwise,
which are unclaimed by the stockholder entitled thereto for a period of six
years after the close of business on the payment date shall be and be deemed to
be extinguished and abandoned, and any such unclaimed dividends in the
possession of the corporation, its transfer agents or other agents or
depositaries shall at such time become the absolute property of the corporation,
free and clear of any and all claims of any persons whatsoever.
FIFTH. The name and mailing address of the incorporator are
Carlen C. Sellers, c/o Schiff Hardin & Waite, 6600 Sears Tower, 233 S. Wacker
Drive, Chicago, Illinois 60606.
SIXTH. In furtherance and not in limitation of the powers
conferred by statute, the board of directors of the corporation is expressly
authorized:
(1) To adopt, amend or repeal the by-laws of the corporation and
(2) To provide for the indemnification of directors, officers,
management, employees and agents of the corporation, and of
persons who serve other enterprises in such or similar
capacities at the request of the corporation, to the full
extent permitted by the General Corporation Law of Delaware,
as amended, or any other applicable laws, as may from time
to time be in effect.
SEVENTH. A director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, as amended, or (iv) for any transaction from which the director
derived an improper personal benefit. Any repeal or modification of the
foregoing paragraph by the stockholders of the corporation shall not adversely
affect any right or protection of a director of the corporation existing at the
time of such repeal or modification.
<PAGE>
EIGHTH. Elections of directors need not be by written ballot
unless the by-laws of the corporation shall so provide.
NINTH. Action may be taken by the stockholders of the
corporation, without a meeting, by written consent as and to the extent provided
at the time by the General Corporation Law of Delaware, as amended, provided
that the matter to be acted upon by such written consent previously has been
approved by the board of directors of the corporation and directed by such board
to be submitted to the stockholders for their action thereon by written consent.
TENTH. Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
ELEVENTH. The corporation reserves the right to amend its
certificate of incorporation, and thereby to change or repeal any provision
therein contained, from time to time, in the manner prescribed at the time by
statute, and all rights conferred upon stockholders by such certificate of
incorporation are granted subject to this reservation.
The undersigned, being the incorporator hereinabove named, has
executed this Certificate of Incorporation this 29th day of March, 2000, thereby
acknowledging under penalties of perjury that the foregoing is the act and deed
of the undersigned and that the facts stated therein are true.
/s/ Carlen C. Sellers
---------------------------------------
Carlen C. Sellers
Sole Incorporator
-2-
EXHIBIT A-6
BY-LAWS
OF
NEW NISOURCE INC.
(A Delaware corporation)
ARTICLE 1
OFFICES; REGISTERED AGENT
-------------------------
ss. 1.1 Registered Office And Agent. The corporation shall
---------------------------
maintain in the State of Delaware a registered office and a registered agent
whose business office is identical with such registered office.
ss. 1.2 Principal Business Office. The corporation shall have its
-------------------------
principal business office at such location within or without the State of
Delaware as the board of directors may from time to time determine.
ARTICLE 2
STOCKHOLDERS
------------
ss. 2.1 Annual Meeting. The annual meeting of the stockholders
--------------
shall be held on the second Wednesday of April in each year, for the purpose of
electing directors and for the transaction of such other business as may
properly come before the meeting. If the day fixed for the annual meeting shall
be a legal holiday, such meeting shall be held on the next succeeding business
day.
ss. 2.2 Special Meetings. Special meetings of the stockholders of
----------------
for any purpose or purposes may be called by the Chairman, the Board of
Directors or by the President.
ss. 2.3 Place Of Meetings. The board of directors may designate
-----------------
any place, either within or without the State of Delaware, as the place of
meeting for any annual meeting or for any special meeting called by the board of
directors, but if no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal business office of the
corporation; provided, however, that for any meeting of the stockholders for
which a waiver of notice designating a place is signed by all of the
stockholders, then that shall be the place for the holding of such meeting.
ss. 2.4 Notice Of Meetings. Written or printed notice stating the
------------------
place, date and hour of the meeting of the stockholders and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be given to each stockholder of record entitled to vote at the meeting, not less
than 10 nor more than 60 days before the date of the meeting, or in the case of
a meeting called for the purpose of acting upon a merger or consolidation not
less than 20 nor more than 60 days before the meeting. Such notice shall be
given by or at the direction of the secretary. If mailed, such notice shall be
<PAGE>
deemed to be given when deposited in the United States mail addressed to the
stockholder at his or her address as it appears on the records of the
corporation, with postage thereon prepaid. If delivered (rather than mailed) to
such address, such notice shall be deemed to be given when so delivered.
When a meeting is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken, unless the
adjournment is for more than 30 days or unless a new record date is fixed for
the adjourned meeting.
ss. 2.5 Waiver Of Notice. A waiver of notice in writing signed by
----------------
a stockholder entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Attendance of
a stockholder in person or by proxy at a meeting of stockholders shall
constitute a waiver of notice of such meeting except when the stockholder or his
or her proxy attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened.
ss. 2.6 Meeting Of All Stockholders. If all of the stockholders
---------------------------
shall meet at any time and place, either within or without the State of
Delaware, and shall, in writing signed by all of the stockholders, waive notice
of, and consent to the holding of, a meeting at such time and place, such
meeting shall be valid without call or notice, and at such meeting any corporate
action may be taken.
ss. 2.7 Record Dates.
------------
(a) In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the board of directors may fix a record date, which record
date shall not precede the date on which the resolution fixing the record date
is adopted by the board of directors, and which record date shall not be more
than 60 nor less than 10 days before the date of such meeting (or 20 days if a
merger or consolidation is to be acted upon at such meeting). If no record date
is fixed by the board of directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the next day preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the board
of directors may fix a record date, which record date shall not precede the date
on which the resolution fixing the record date is adopted by the board of
directors, and which date shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the board of
directors. If no record date has been fixed by the board of directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the board of directors is
required by the certificate of incorporation of the corporation or by statute,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered in the manner required by law
to the corporation at its registered office in the State of Delaware or at its
principal place of business or to an officer or agent of the corporation having
custody of the book in which proceedings of meetings of the corporation's
<PAGE>
stockholders are recorded. If no record date has been fixed by the board of
directors and prior action by the board of directors is required by the
certificate of incorporation or by statute, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the board of
directors adopts the resolution taking such prior action.
(c) In order that the corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the board of directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall not be more than 60 days prior to such
action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the
board of directors adopts the resolution relating thereto.
(d) Only those who shall be stockholders of record on the record
date so fixed as aforesaid shall be entitled to such notice of, and to vote at,
such meeting and any adjournment thereof, or to consent to such corporate action
in writing, or to receive payment of such dividend or other distribution, or to
receive such allotment of rights, or to exercise such rights, as the case may
be, notwithstanding the transfer of any stock on the books of the corporation
after the applicable record date.
ss. 2.8 Lists Of Stockholders. The officer who has charge of the
---------------------
stock ledger of the corporation shall prepare and make, at least 10 days before
each meeting of stockholders, a complete list of the stockholders entitled to
vote thereat, arranged in alphabetical order, and showing the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting, either at a place within the municipality where the meeting is
to be held, which place shall be specified in the notice of the meeting, or, if
not so specified, at the place where said meeting is to be held, and the list
shall be produced and kept at the time and place of meeting during the whole
time thereof, for inspection by any stockholder who may be present.
ss. 2.9 Quorum and Vote Required For Action. Except as may
-----------------------------------
otherwise be provided in the certificate of incorporation of the corporation,
the holders of stock of the corporation having a majority of the total votes
which all of the outstanding stock of the corporation would be entitled to cast
at the meeting, when present in person or by proxy, shall constitute a quorum at
any meeting of the stockholders; provided, however, that where a separate vote
by a class or classes of stock is required, the holders of stock of such class
or classes having a majority of the total votes which all of the outstanding
stock of such class or classes would be entitled to cast at the meeting, when
present in person or by proxy, shall constitute a quorum entitled to take action
with respect to the vote on the matter. Unless a different number of votes is
required by statute or the certificate of incorporation of the corporation, (a)
if a quorum is present with respect to the election of directors, directors
shall be elected by a plurality of the votes cast by those stockholders present
in person or represented by proxy at the meeting and entitled to vote on the
election of directors, and (b) in all matters other than the election of
directors, if a quorum is present at any meeting of the stockholders, a majority
of the votes entitled to be cast by those stockholders present in person or by
proxy shall be the act of the stockholders except where a separate vote by class
or classes of stock is required, in which case, if a quorum of such class or
classes is present, a majority of the votes entitled to be cast by those
stockholders of such class or classes present in person or by proxy shall be the
<PAGE>
act of the stockholders of such class or classes. If a quorum is not present at
any meeting of stockholders, then holders of stock of the corporation who are
present in person or by proxy representing a majority of the votes cast may
adjourn the meeting from time to time without further notice and, where a
separate vote by a class or classes of stock is required on any matter, then
holders of stock of such class or classes who are present in person or by proxy
representing a majority of the votes of such class or classes cast may adjourn
the meeting with respect to the vote on that matter from time to time without
further notice. At any adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the original
meeting. Withdrawal of stockholders from any meeting shall not cause failure of
a duly constituted quorum at that meeting.
ss. 2.10 Proxies. Each stockholder entitled to vote at a meeting
-------
of the stockholders or to express consent to corporate action in writing without
a meeting may authorize another person or persons to act for him by proxy, but
no proxy shall be valid after three years from its date unless otherwise
provided in the proxy. Such proxy shall be in writing and shall be filed with
the secretary of the corporation before or at the time of the meeting or the
giving of such written consent, as the case may be.
ss. 2.11 Voting Of Shares. Each stockholder of the corporation
----------------
shall be entitled to such vote (in person or by proxy) for each share of stock
having voting power held of record by such stockholder as shall be provided in
the certificate of incorporation of the corporation or, absent provision therein
fixing or denying voting rights, shall be entitled to one vote per share.
ss. 2.12 Voting By Ballot. Any question or any election at a
----------------
meeting of the stockholders may be decided by voice vote unless the presiding
officer shall order that voting be by ballot or unless otherwise provided in the
certificate of incorporation of the corporation or required by statute.
ss. 2.13 Inspectors. At any meeting of the stockholders the
----------
presiding officer may, or upon the request of any stockholder shall, appoint one
or more persons as inspectors for such meeting. Such inspectors shall ascertain
and report the number of shares represented at the meeting, based upon their
determination of the validity and effect of proxies; count all votes and report
the results; and do such other acts as are proper to conduct the election and
voting with impartiality and fairness to all the stockholders. Each report of an
inspector shall be in writing and signed by him or a majority of them if there
is more than one inspector acting at such meeting. If there is more than one
inspector, the report of a majority shall be the report of the inspectors. The
report of the inspector or inspectors on the number of shares represented at the
meeting and the results of the voting shall be prima facie evidence thereof.
ss. 2.14 Informal Action. Any corporate action upon which a vote
---------------
of stockholders is required or permitted may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the corporation in the manner
required by law at its registered office within the State of Delaware or at its
principal place of business or to an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders of the
corporation are recorded. Every written consent shall bear the date of signature
of each stockholder who signs the consent and no written consent shall be
effective to take the corporate action referred to therein unless, within 60
days of the earliest dated consent delivered, as aforesaid, written consents
signed by a sufficient number of holders to take action are delivered to the
corporation in the manner required by law at its registered office within the
<PAGE>
State of Delaware or at its principal place of business or to an officer or
agent of the corporation having custody of the book in which proceedings of
meetings of stockholders of the corporation are recorded. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not so consented in
writing.
ARTICLE 3
DIRECTORS
---------
ss. 3.1 Powers. The business and affairs of the corporation shall
------
be managed under the direction of its board of directors which may do all such
lawful acts and things as are not by statute or by the certificate of
incorporation of the corporation or by these by-laws directed or required to be
exercised or done by the stockholders.
ss. 3.2 Number, Election, Term Of Office And Qualifications. The
---------------------------------------------------
number of directors which shall constitute the whole board shall be not less
than one nor more than five. The directors shall be elected at the annual
meeting of the stockholders, except as provided in ss. 3.3, and each director
elected shall hold office until his or her successor is elected and qualified or
until his or her earlier death, resignation or removal in a manner permitted by
statute or these by-laws. Directors need not be stockholders.
ss. 3.3 Vacancies. Vacancies occurring in the board of directors
---------
and newly-created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director, and any director
so chosen shall hold office until the next annual election of directors and
until his or her successor is duly elected and qualified or until his or her
earlier death, resignation or removal in a manner permitted by statute or these
by-laws.
ss. 3.4 Regular Meetings. A regular meeting of the board of
----------------
directors shall be held immediately following the close of, and at the same
place as, each annual meeting of stockholders. No notice of any such meeting,
other than this by-law, shall be necessary in order legally to constitute the
meeting, provided a quorum shall be present. In the event such meeting is not
held at such time and place, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the board of directors or as shall be specified in a written waiver
signed by all of the directors. The board of directors may provide, by
resolution, the time and place for the holding of additional regular meetings
without notice other than such resolution.
ss. 3.5 Special Meetings. Special meetings of the board may be
----------------
called by the president or any two directors. The person or persons calling a
special meeting of the board shall fix the time and place at which the meeting
shall be held and such time and place shall be specified in the notice of such
meeting.
ss. 3.6 Notice. Notice of any special meeting of the board of
------
directors shall be given at least 2 days previous thereto by written notice to
each director at his or her business address or such other address as he or she
may have advised the secretary of the corporation to use for such purpose. If
delivered, such notice shall be deemed to be given when delivered to such
address or to the person to be notified. If mailed, such notice shall be deemed
to be given two business days after deposit in the United States mail so
<PAGE>
addressed, with postage thereon prepaid. If given by telegraph, such notice
shall be deemed to be given the next business day following the day the telegram
is given to the telegraph company. Such notice may also be given by telephone or
other means not specified herein, and in each such case shall be deemed to be
given when actually received by the director to be notified. Notice of any
meeting of the board of directors shall set forth the time and place of the
meeting. Neither the business to be transacted at, nor the purpose of, any
meeting of the board of directors (regular or special) need be specified in the
notice or waiver of notice of such meeting.
ss. 3.7 Waiver Of Notice. A written waiver of notice, signed by a
----------------
director entitled to notice of a meeting of the board of directors or of a
committee of such board of which the director is a member, whether before or
after the time stated therein, shall be deemed equivalent to the giving of such
notice to that director. Attendance of a director at a meeting of the board of
directors or of a committee of such board of which the director is a member
shall constitute a waiver of notice of such meeting except when the director
attends the meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened.
ss. 3.8 Quorum And Vote Required For Action. At all meetings of
-----------------------------------
the board of directors, a majority of the number of directors fixed by these
by-laws shall constitute a quorum for the transaction of business and the act of
a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors except as may be otherwise
specifically provided by statute, the certificate of incorporation of the
corporation or these by-laws. If a quorum shall not be present at any meeting of
the board of directors, a majority of the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
ss. 3.9 Attendance By Conference Telephone. Members of the board
----------------------------------
of directors or any committee designated by the board may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such a meeting.
ss. 3.10 Presumption Of Assent. A director of the corporation who
---------------------
is present at a duly convened meeting of the board of directors at which action
on any corporate matter is taken shall be conclusively presumed to have assented
to the action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless he or she shall file his or her written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered or certified
mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in
favor of such action.
ss. 3.11 Informal Action. Unless otherwise restricted by statute,
---------------
the certificate of incorporation of the corporation or these by-laws, any action
required or permitted to be taken at any meeting of the board of directors or of
any committee thereof may be taken without a meeting, if a written consent
thereto is signed by all the directors or by all the members of such committee,
as the case may be, and such written consent is filed with the minutes of
proceedings of the board of directors or of such committee.
<PAGE>
ss. 3.12 Compensation. The directors may be paid their expenses,
------------
if any, of attendance at each meeting of the board of directors and at each
meeting of a committee of the board of directors of which they are members. The
board of directors, irrespective of any personal interest of any of its members,
shall have authority to fix compensation of all directors for services to the
corporation as directors, officers or otherwise.
ss. 3.13 Removal. Any director or the entire board of directors
-------
may be removed by the stockholders, with or without cause, by a majority of the
votes entitled to be cast at an election of directors.
ARTICLE 4
COMMITTEES
----------
ss. 4.1 Committees. By resolution passed by a majority of the
----------
whole Board, the Board of Directors may designate one or more committees, each
such committee to consist of two or more directors of the Corporation. The Board
may designate one or more directors as alternate members of any committee, who
may replace any absent or disqualified member of any meeting of the committee.
Any such committee, to the extent provided in the resolution or in these
by-laws, shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. In the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at the meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member.
ARTICLE 5
OFFICERS
--------
ss. 5.1 Designation; Number; Election. The board of directors, at
-----------------------------
its initial meeting and thereafter at its first regular meeting after each
annual meeting of stockholders, shall choose the officers of the corporation.
Such officers shall be a president, a secretary, and a treasurer, and such vice
presidents, assistant secretaries and assistant treasurers as the board of
directors may choose. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board. Any two or more offices may be held by the same
person. Except as provided in Article 6, election or appointment as an officer
shall not of itself create contract rights.
ss. 5.2 Salaries. The salaries of all officers and agents of the
--------
corporation chosen by the board of directors shall be fixed by the board of
directors, and no officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the corporation.
ss. 5.3 Term Of Office; Removal; Vacancies. Each officer of the
----------------------------------
corporation chosen by the board of directors shall hold office until the next
annual appointment of officers by the board of directors and until his or her
successor is appointed and qualified, or until his or her earlier death,
resignation or removal in the manner hereinafter provided. Any officer or agent
<PAGE>
chosen by the board of directors may be removed at any time by the board of
directors whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any vacancy occurring in any office of
the corporation at any time or any new offices may be filled by the board of
directors for the unexpired portion of the term.
ss. 5.4 Chairman. The chairman of the board, if appointed, shall,
--------
if present, preside at all meetings of the Board of Directors and exercise and
perform such other powers and duties as may be from time to time assigned to him
by the Board of Directors.
ss. 5.5 President. The president shall be the chief executive
---------
officer of the corporation and, subject to the direction and control of the
board of directors, shall be in charge of the business of the corporation. In
general, the president shall discharge all duties incident to the principal
executive office of the corporation and such other duties as may be prescribed
by the board of directors from time to time. Without limiting the generality of
the foregoing, the president shall see that the resolutions and directions of
the board of directors are carried into effect except in those instances in
which that responsibility is specifically assigned to some other person by the
board of directors; shall preside at all meetings of the stockholders and, if he
or she is a director of the corporation, of the board of directors; and, except
in those instances in which the authority to execute is expressly delegated to
another officer or agent of the corporation or a different mode of execution is
expressly prescribed by the board of directors, may execute for the corporation
certificates for its shares of stock (the issue of which shall have been
authorized by the board of directors), and any contracts, deeds, mortgages,
bonds, or other instruments which the board of directors has authorized, and may
(without previous authorization by the board of directors) execute such
contracts and other instruments as the conduct of the corporation's business in
its ordinary course requires, and may accomplish such execution in each case
either under or without the seal of the corporation and either individually or
with the secretary, any assistant secretary, or any other officer thereunto
authorized by the board of directors, according to the requirements of the form
of the instrument. The president may vote all securities which the corporation
is entitled to vote except as and to the extent such authority shall be vested
in a different officer or agent of the corporation by the board of directors.
ss. 5.6 Vice Presidents. The vice president (and, in the event
---------------
there is more than one vice president, each of the vice presidents) shall render
such assistance to the president in the discharge of his or her duties as the
president may direct and shall perform such other duties as from time to time
may be assigned by the president or by the board of directors. In the absence of
the president or in the event of his or her inability or refusal to act, the
vice president (or in the event there may be more than one vice president, the
vice presidents in the order designated by the board of directors, or by the
president if the board of directors has not made such a designation, or in the
absence of any designation, then in the order of seniority of tenure as vice
president) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. Except in those instances in which the authority to execute is
expressly delegated to another officer or agent of the corporation or a
different mode of execution is expressly prescribed by the board of directors or
these by-laws, the vice president (or each of them if there are more than one)
may execute for the corporation certificates for its shares of stock (the issue
of which shall have been authorized by the board of directors), and any
contracts, deeds, mortgages, bonds or other instruments which the board of
directors has authorized, and may (without previous authorization by the board
of directors) execute such contracts and other instruments as the conduct of the
corporation's business in its ordinary course requires, and may accomplish such
<PAGE>
execution in each case either under or without the seal of the corporation and
either individually or with the secretary, any assistant secretary, or any other
officer thereunto authorized by the board of directors, according to the
requirements of the form of the instrument.
ss. 5.7 Treasurer. The treasurer, if appointed, shall be the
---------
principal accounting and financial officer of the corporation and as such shall
perform all the duties incident to the office of treasurer and such other duties
as from time to time may be assigned by the board of directors or the president.
Without limiting the generality of the foregoing, the treasurer shall have
charge of and be responsible for the maintenance of adequate books of account
for the corporation and shall have charge and custody of all funds and
securities of the corporation and be responsible therefor and for the receipt
and disbursement thereof. If required by the board of directors, the treasurer
shall give a bond for the faithful discharge of his or her duties in such sum
and with such surety or sureties as the board of directors may determine.
ss. 5.8 Secretary. The secretary shall perform all duties
---------
incident to the office of secretary and such other duties as from time to time
may be assigned by the board of directors or president. Without limiting the
generality of the foregoing, the secretary shall (a) record the minutes of the
meetings of the stockholders and the board of directors in one or more books
provided for that purpose and shall include in such books the actions by written
consent of the stockholders and the board of directors; (b) see that all notices
are duly given in accordance with the provisions of these by-laws or as required
by statute; (c) be the custodian of the corporate records and the seal of the
corporation; (d) keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder; (e) sign with the
president, or a vice president, or any other officer thereunto authorized by the
board of directors, certificates for shares of stock of the corporation (the
issue of which shall have been authorized by the board of directors), and any
contracts, deeds, mortgages, bonds, or other instruments which the board of
directors has authorized, and may (without previous authorization by the board
of directors) sign with such other officers as aforesaid such contracts and
other instruments as the conduct of the corporation's business in its ordinary
course requires, in each case according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors; and (f) have general charge of the stock transfer books
of the corporation.
ss. 5.9 Assistant Treasurers And Assistant Secretaries. The
----------------------------------------------
assistant treasurers and assistant secretaries, if appointed, shall perform such
duties as shall be assigned to them by the treasurer, in the case of assistant
treasurers, or the secretary, in the case of assistant secretaries, or by the
board of directors or president in either case. Each assistant secretary may
sign with the president, or a vice president, or any other officer thereunto
authorized by the board of directors, certificates for shares of stock of the
corporation (the issue of which shall have been authorized by the board of
directors), and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized, and may (without previous
authorization by the board of directors) sign with such other officers as
aforesaid such contracts and other instruments as the conduct of the
corporation's business in its ordinary course requires, in each case according
to the requirements of the form of the instrument, except when a different mode
of execution is expressly prescribed by the board of directors. The assistant
treasurers shall, if required by the board of directors, give bonds for the
faithful discharge of their duties in such sums and with such sureties as the
board of directors shall determine.
<PAGE>
ARTICLE 6
INDEMNIFICATION
---------------
ss. 6.1 Indemnification Of Directors And Officers. The
-----------------------------------------
corporation shall, to the fullest extent to which it is empowered to do so by
the General Corporation Law of Delaware or any other applicable laws, as may
from time to time be in effect, indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding.
ss. 6.2 Advancement of Expenses. Expenses incurred by an officer
-----------------------
or director of the corporation in defending a civil or criminal action, suit or
proceeding shall be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall be
ultimately determined that he or she is not entitled to be indemnified as
authorized by the General Corporation Law of Delaware, as amended.
ss. 6.3 Contract With The Corporation. The provisions of this
-----------------------------
Article 6 shall be deemed to be a contract between the corporation and each
person who serves as such officer or director in any such capacity at any time
while this Article and the relevant provisions of the General Corporation Law of
Delaware, as amended, or other applicable laws, if any, are in effect, and any
repeal or modification of any such law or of this Article 6 shall not affect any
rights or obligations then existing with respect to any state of facts then or
theretofore existing or any action, suit or proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such state of facts.
ss. 6.4 Indemnification Of Employees And Agents. Persons who are
---------------------------------------
not covered by the foregoing provisions of this Article 6 and who are or were
employees or agents of the corporation, or are or were serving at the request of
the corporation as employees or agents of another corporation, partnership,
joint venture, trust or other enterprise, may be indemnified to the extent
authorized at any time or from time to time by the board of directors.
ss. 6.5 Other Rights Of Indemnification. The indemnification and
-------------------------------
the advancement of expenses provided or permitted by this Article 6 shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
by law or otherwise, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such person.
ARTICLE 7
LIMITATION ON DIRECTOR'S LIABILITY
----------------------------------
The personal liability for monetary damages to the corporation or
its stockholders of a person who serves as a director of the corporation shall
be limited if and to the extent provided at the time in the certificate of
incorporation of the corporation, as then amended.
<PAGE>
ARTICLE 8
CERTIFICATES OF STOCK AND THEIR TRANSFER
----------------------------------------
ss. 8.1 Form And Execution Of Certificates. Every holder of stock
----------------------------------
in the corporation shall be entitled to have a certificate signed by, or in the
name of, the corporation by the president or a vice president and by the
secretary or an assistant secretary of the corporation, certifying the number of
shares owned. Such certificates shall be in such form as may be determined by
the board of directors. During the period while more than one class of stock of
the corporation is authorized there will be set forth on the face or back of the
certificates which the corporation shall issue to represent each class or series
of stock a statement that the corporation will furnish, without charge to each
stockholder who so requests, the designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights. In case any officer, transfer agent or registrar of the
corporation who has signed, or whose facsimile signature has been placed upon,
any such certificate shall have ceased to be such officer, transfer agent or
registrar of the corporation before such certificate is issued by the
corporation, such certificate may nevertheless be issued and delivered by the
corporation with the same effect as if the officer, transfer agent or registrar
who signed, or whose facsimile signature was placed upon, such certificate had
not ceased to be such officer, transfer agent or registrar of the corporation.
ss. 8.2 Replacement Certificates. The board of directors may
------------------------
direct a new certificate to be issued in place of any certificate evidencing
shares of stock of the corporation theretofore issued by the corporation alleged
to have been lost, stolen or destroyed, upon the making of an affidavit of the
fact by the person claiming the certificate to be lost, stolen or destroyed.
When authorizing such issue of a new certificate, the board of directors may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to advertise the same in such manner as it shall require and may
require such owner to give the corporation a bond in such sum as it may direct
as indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen or destroyed. The
board of directors may delegate its authority to direct the issuance of
replacement stock certificates to the transfer agent or agents of the
corporation upon such conditions precedent as may be prescribed by the board.
ss. 8.3 Transfers Of Stock. Upon surrender to the corporation or
------------------
the transfer agent of the corporation of a certificate for shares of stock of
the corporation duly endorsed or accompanied by proper evidence of succession,
assignment, or other authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books, provided the
corporation or a transfer agent of the corporation shall not have received a
notification of adverse interest and that the conditions of Section 8-401 of
Title 6 of the Delaware Code have been met.
ss. 8.4 Registered Stockholders. The corporation shall be
-----------------------
entitled to treat the holder of record (according to the books of the
corporation) of any share or shares of its stock as the holder in fact thereof
and shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other party whether or not the
corporation shall have express or other notice thereof, except as expressly
provided by the laws of the State of Delaware.
<PAGE>
ARTICLE 9
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
ss. 9.1 Contracts. The board of directors may authorize any
---------
officer or officers, or agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances; provided,
however, that this ss. 9.1 shall not be a limitation on the powers of office
granted under Article 5 of these by-laws.
ss. 9.2 Loans. No loans shall be contracted on behalf of the
-----
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
ss. 9.3 Checks, Drafts And Other Instruments. All checks, drafts
------------------------------------
or other orders for the payment of money and all notes or other evidences of
indebtedness issued in the name of the corporation shall be signed by such
officer or officers or such agent or agents of the corporation and in such
manner as from time to time may be determined by the resolution of the board of
directors or by an officer or officers of the corporation designated by the
board of directors to make such determination.
ss. 9.4 Deposits. All funds of the corporation not otherwise
--------
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositaries as the board of directors,
or an officer or officers designated by the board of directors, may select.
ARTICLE 10
MISCELLANEOUS PROVISIONS
------------------------
ss. 10.1 Dividends. Subject to any provisions of any applicable
---------
statute or of the certificate of incorporation, dividends may be declared upon
the capital stock of the corporation by the board of directors at any regular or
special meeting thereof; and such dividends may be paid in cash, property or
shares of stock of the corporation.
ss. 10.2 Reserves. Before payment of any dividends, there may be
--------
set aside out of any funds of the corporation available for dividends such sum
or sums as the board of directors from time to time, in its discretion,
determines to be proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the board of directors shall determine
to be conducive to the interests of the corporation, and the directors may
modify or abolish any such reserve in the manner in which it was created.
ss. 10.3 Voting Stock Of Other Corporations. In the absence of
----------------------------------
specific action by the board of directors, the president shall have authority to
represent the corporation and to vote, on behalf of the corporation, the
securities of other corporations, both domestic and foreign, held by the
corporation.
ss. 10.4 Fiscal Year. The fiscal year of the corporation shall
-----------
begin on the first day of January in each year and end on the last day of the
next following December.
<PAGE>
ss. 10.5 Seal. The corporate seal shall have inscribed thereon
----
the name of the corporation and the words "Corporate Seal, Delaware". The seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise applied.
ss. 10.6 Severability. If any provision of these by-laws, or its
------------
application thereof to any person or circumstances, is held invalid, the
remainder of these by-laws and the application of such provision to other
persons or circumstances shall not be affected thereby.
ss. 10.7 Amendment. These by-laws may be amended or repealed, or
---------
new by-laws may be adopted, by the board of directors of the corporation. These
by-laws may also be amended or repealed, or new by-laws may be adopted, by
action taken by the stockholders of the corporation.
EXHIBIT D-9
THE STATE OF MAINE
PUBLIC UTILITIES COMMISSION
- ----------------------------------------
)
PETITION OF NORTHERN UTILITIES, INC. )
FOR APPROVAL OF A MERGER ) Docket no.
AND RELATED TRANSACTIONS ) --------
)
- ----------------------------------------
Petition of Northern Utilities, Inc.
For Approval of a Merger and Related Transactions
-------------------------------------------------
Now comes the petitioner, Northern Utilities, Inc. ("Northern"), a
Maine gas utility, and hereby respectfully requests that the Maine Public
Utilities Commission (the "Commission") approve a merger and related
transactions pursuant to which the ultimate corporate parent of Northern,
NiSource Inc. ("NiSource"), acquires Columbia Energy Group ("Columbia").1 In
support of the foregoing, Northern hereby represents as follows.
1. Northern is defined to be a "gas utility" pursuant to section 102 of title
35-A of the Maine Revised Statutes. Northern provides gas service to
approximately twenty-two thousand (22,000) customers in the greater Portland and
Lewiston areas.
2. Northern brings this petition pursuant to section 708 of title 35-A of the
Maine Revised Statutes, which provides that no Reorganization (as defined in
such section) may take place without the approval of the Commission, which
approval may not be given unless "the Reorganization is consistent with the
- ------------------------
1 In addition, Northern hereby requests that the Commission exempt Portland
Natural Gas Transmission System ("PNGTS"), an interstate natural gas pipeline of
which NiSource owns 19 percent and which is regulated by the Federal Energy
Regulatory Commission ("FERC"), from any provisions of the Maine statutes that
might apply to PNGTS with respect to the subject merger and related
transactions.
<PAGE>
interests of the utility's ratepayers and investors." 35-A M.R.S.A. ss.708.2.A.2
As is set forth below, the transactions for which Northern seeks the
Commission's approval are consistent with such interests.
3. Northern is an indirect subsidiary of NiSource, which is an Indiana
corporation. NiSource is a public utility holding company that is currently
exempt from registration with the United States Securities and Exchange
Commission (the "SEC") under section 3(a)(1) of the Public Utility Holding
Company Act of 1935, as amended ("PUHCA"), pursuant to an order dated February
10, 1999 exempting NiSource from most of the provisions of PUHCA. NiSource is an
"affiliate" of Northern pursuant to 35-A M.R.S.A. ss.707. Northern's parent, Bay
State Gas Company ("Bay State," a Massachusetts gas utility), is a wholly-owned
subsidiary of NiSource.3 NiSource is also the parent company of two utilities
providing gas service in Indiana and one providing both gas and electric service
in Indiana.4 Other principal NiSource subsidiaries are engaged in gas
transportation and water distribution. See the organization chart entitled
"NiSource Inc. Pre-Merger Organizational Structure," which is attached hereto.
4. PNGTS is an interstate natural gas transporter providing service pursuant
to FERC-filed tariffs. Although subject to FERC's regulatory oversight, PNGTS is
nonetheless defined to be a "natural gas pipeline utility" and an "affiliate" of
- ------------------------
2 Northern does not believe that any approval of the subject merger is required
under 35-A M.R.S.A. ss.ss. 1101(2) and 1103(1). However, to the extent that any
such approval is required, Northern hereby requests that the Commission grant
the same.
3 The acquisition by NiSource (then known as "NIPSCO Industries, Inc.") of
Northern (through the acquisition of Bay State) was approved by the Commission
in Northern Utilities, Inc., No. 98-216 (Maine P.U.C., June 12, 1998). During
the course of that proceeding, Northern indicated its expectation that as part
of the merger Northern's stock would be distributed by Bay State to NiSource
such that Northern - while maintaining its distinct corporate identity and its
own board of directors - would thus become a direct subsidiary of NiSource.
However, such a distribution could have resulted in possible adverse state
income tax consequences for Bay State. Accordingly, Northern remains a
subsidiary of Bay State. Because Northern still maintains its distinct corporate
identity with its own board of directors, this variation has no effect on
Northern or its ratepayers.
4 Northern Indiana Public Service Company serves both gas and electric
customers; Kokomo Gas and Fuel Company and Northern Indiana Fuel and Light
Company, Inc. serve gas customers.
-2-
<PAGE>
Northern pursuant to 35-A M.R.S.A. ss.ss. 102 and 707;5 accordingly, the
provisions of section 708 would seem literally to apply to PNGTS. In recognition
of the pre-emptive effect of FERC jurisdiction over PNGTS, and in recognition of
the fact that the subject merger will have no effect on PNGTS (NiSource will
remain the ultimate corporate parent of the owner of a less-than-20-percent
minority interest in PNGTS), the Commission should in accordance with section
708 exempt PNGTS from the provisions of the Maine statutes that might apply to
it with respect to the subject merger and related transactions.
5. Columbia is a Delaware corporation and a public utility holding company
registered with the SEC under PUHCA and subject to all the regulatory
requirements applicable to such companies under PUHCA. Columbia, through its
various subsidiaries, is engaged in all phases of the natural gas business,
including exploration and production, transmission, storage, and distribution,
as well as retail energy marketing, propane and petroleum product sales, and
electric power generation.6 See the organization chart entitled "Columbia Energy
Group Pre-Merger Organizational Structure," which is attached hereto.
6. NiSource and Columbia have entered into an Agreement and Plan of Merger,
dated as of February 27, 2000 and amended and restated as of March 31, 2000 (the
"Merger Agreement"), providing for the acquisition by NiSource of Columbia
through the creation of a new holding company. Pursuant to the Merger Agreement,
New NiSource Inc. ("New NiSource") has been organized under the laws of
Delaware, and New NiSource has in turn formed two subsidiaries, NiSource
Acquisition Corp. ("NAC") and Columbia Acquisition Corp. ("CAC"). Under the
- ------------------------
5 NiSource owns a total of 19.06 percent of PNGTS. The remaining 80.94% of PNGTS
is owned by parties unrelated to Northern or NiSource.
6 Columbia subsidiaries provide gas utility service to customers in Kentucky,
Maryland, Ohio, Pennsylvania, and Virginia. In addition, Northern notes that
Columbia indirectly owns a ten percent interest in the owner of the CEC Rumford
Cogeneration Plant. Such facility is defined to be an "excluded electric plant"
and its owner is therefore excluded from the definitions of "electric utility"
and "public utility."
-3-
<PAGE>
Merger Agreement, NAC and CAC will be merged with and into NiSource and Columbia
respectively. NiSource and Columbia will thus each become wholly-owned
subsidiaries of New NiSource. It is anticipated that promptly after the mergers,
NiSource will be merged into New NiSource. (Note that an alternative structure
is described in paragraph 8 hereto.)
7. In the event that the Merger Agreement is approved by holders of a majority
of the outstanding shares of NiSource stock as well as by Columbia's
shareholders, the subject merger will take place as described in the previous
paragraph (the "Preferred Plan"). Under the Preferred Plan, each share of
Columbia stock will be converted into (i) cash and other consideration (i.e.,
New NiSource debt and a forward equity contract), or (ii) at the shareholder's
election and subject to terms and limitations, into New NiSource stock. As a
result of such merger, Columbia will become a wholly-owned subsidiary of New
NiSource. Thus, both Columbia and the NiSource subsidiaries will be wholly-owned
by New NiSource, which is then expected to be register as a public utility
holding company under PUHCA. The net result of the transactions under the
Preferred Plan will be (i) that the current shareholders of NiSource will become
the shareholders of New NiSource, of which Columbia will be a wholly-owned
subsidiary; and (ii) that the current shareholders of Columbia, in exchange for
their Columbia shares, will receive either cash and New NiSource debt and a
forward equity contract, or (at their election and subject to limitations) New
NiSource stock. See the organization chart entitled "NiSource Inc. Post-Merger
Planned Organizational Structure," which is attached hereto.
8. In the event that the Merger Agreement is approved by Columbia's
shareholders but NiSource's shareholders do not vote in favor of it, the
transaction automatically will be restructured so that Columbia will become a
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<PAGE>
wholly-owned subsidiary of NiSource (the "Alternative Plan"). Under the
Alternative Plan, each share of Columbia stock will be converted into cash and
other consideration (which will not include any stock). The net result of the
transactions under the Alternative Plan will be (i) that the current
shareholders of NiSource remain shareholders of NiSource, of which Columbia will
be a wholly-owned subsidiary; and (ii) that the current shareholders of
Columbia, in exchange for their Columbia shares, will receive cash and NiSource
debt and a forward equity contract. See the organization chart entitled
"NiSource Inc. Post-Merger Alternative Organizational Structure," which is
attached hereto.
9. Regardless of whether the subject merger takes place under the Preferred
Plan or the Alternative Plan, the jurisdiction of the Commission over Northern's
current operations will not be affected.
10. No changes in the management of Northern or Bay State will result from the
merger, and thus the merger will have no material impact on the local operations
of Northern. The subject merger will not result in any change in the current
ownership or control of Northern. The subject merger will not cause Northern's
rates for service to increase, nor will it require any "acquisition premium" to
be allocated to Northern.7
11. In no manner will the ratepayers of Northern be adversely affected by the
subject merger; indeed, the subject merger will provide a number of affirmative
ratepayer benefits, including the acquisition by Northern's parent company of
significant assets, which will better enable Northern to serve the needs of its
customers.
- ------------------------
7 In its above-cited decision approving the acquisition by NiSource
(then known as "NIPSCO Industries, Inc.") of Northern, the Commission also
approved a Stipulation among Northern, NIPSCO Industries, and Maine's Office of
the Public Advocate. The subject merger will not affect such Stipulation.
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<PAGE>
12. The subject merger will provide the opportunity for Northern's ratepayers
to realize certain long-term advantages through the efficient use of the
combined pipeline and storage assets of its parent company, plus the ability to
best use natural gas supplies across time, weather, and geography (which ability
is expected to increase over time as existing resource commitments expire).
13. The subject merger will facilitate the provision of new products and
services to Northern's customers. It will facilitate the development of new
technological processes and systems in the future.
14. The subject merger will enhance Northern's efforts to maintain operational
excellence through technological improvements, process enhancements, and
effective cost management. Both the NiSource and Columbia companies are
respected for their technical expertise, and the subject merger will allow them
to implement the best practices of each, for their mutual benefit.
15. Northern's ratepayers will also benefit from the increased expertise and
stability of its corporate parent resulting from the subject merger. The
combined base of energy assets resulting from the subject merger will enhance
the marketing and delivery of complementary energy products and services through
assured energy supplies, broad knowledge of a wide range of energy products,
greater credibility with customers, and opportunities to utilize the
complementary business activities of each company.
16. The subject merger will also provide significant benefits to the owners of
Northern - that is, the shareholders of NiSource. The merger will provide new
strategic and operational opportunities to NiSource through its ownership of a
significantly larger and more diverse group of operating energy companies.
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<PAGE>
17. The subject merger and the related transactions, for which Northern hereby
seeks the Commission's approval, are thus consistent with the interests of
Northern's ratepayers and investors and should therefore be approved by the
Commission.
WHEREFORE, Northern requests that the Commission
Determine that the merger of NiSource and Columbia, and the related
transactions described in this petition, are consistent with the public
interest and are authorized, allowed, and approved in accordance with the
provisions of 35-A M.R.S.A. ss.708;8 and
Issue a decision setting forth such determination, stating
affirmatively therein (i) that the Commission has the resources to, and
does currently exercise regulatory jurisdiction over the rates, services,
and operations of Northern; (ii) that the Commission intends to continue
exercising such jurisdiction over Northern following completion of the
subject merger; and (iii) that PNGTS is exempted from any provisions of the
Maine statutes that might apply to PNGTS with respect to the subject merger
and related transactions; and
- ------------------------
8 Northern also requests that to the extent that any approval of the subject
merger is required under 35-A M.R.S.A.ss.ss. 1101(2) and 1103(1), the Commission
grant the same.
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<PAGE>
Grant such further relief as the Commission deems just and
appropriate.
Respectfully submitted,
NORTHERN UTILITIES, INC.
By its attorneys,
/s/ Edward R. Hill, Jr.
---------------------------------------
John A. DeTore
Edward R. Hill, Jr.
RUBIN AND RUDMAN LLP
50 Rowes Wharf
Boston, Massachusetts 02110
(617) 330-7000
Dated: April 7, 2000
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Chart of NiSource Inc. Pre-Merger Organizational Structure appears here.
Chart of Columbia Energy Group. Pre-Merger Organizational Structure
appears here.
Chart of NiSource Inc. Post-Merger Planned Organizational Structure
appears here.
Chart of NiSource Inc. Post-Merger Alternative Organizational
Structure appears here.
EXHIBIT D-11
THE STATE OF NEW HAMPSHIRE
PUBLIC UTILITIES COMMISSION
- ----------------------------------------
)
PETITION OF NORTHERN UTILITIES, INC. )
WITH RESPECT TO A MERGER ) Docket no.
AND RELATED TRANSACTIONS ) ---------
)
- ----------------------------------------
Petition of Northern Utilities, Inc.
For a Determination that the Commission's Approval is not Required with
Respect to, Or For Approval of
A Merger and Related Transactions
---------------------------------
Now comes the petitioner, Northern Utilities, Inc. ("Northern"), a New
Hampshire corporation and public utility, and hereby respectfully requests that
the New Hampshire Public Utilities Commission (the "Commission") either (i) find
that its approval is not required with respect to a merger and related
transactions pursuant to which the ultimate corporate parent of Northern,
NiSource Inc. ("NiSource"), acquires Columbia Energy Group ("Columbia"), or (ii)
approve the subject merger and related transactions. In support of the
foregoing, Northern hereby represents as follows.
1. Northern is a New Hampshire gas utility pursuant to section 2 of title 362
of the New Hampshire Revised Statutes. Northern provides gas service to
approximately twenty-three thousand (23,000) customers in the greater Portsmouth
and seacoast areas.
<PAGE>
2. Northern is hereby petitioning the Commission either (i) to find that the
subject merger does not require the Commission's approval under R.S.A. 374:33;
or (ii) to approve the subject merger consistent with the provisions of R.S.A.
369:8.
3. Northern is an indirect subsidiary of NiSource, which is an Indiana
corporation. NiSource is a public utility holding company that is currently
exempt from registration with the United States Securities and Exchange
Commission (the "SEC") under section 3(a)(1) of the Public Utility Holding
Company Act of 1935, as amended ("PUHCA"), pursuant to an order dated February
10, 1999 exempting NiSource from most of the provisions of PUHCA. NiSource is an
"Affiliate" of Northern pursuant to R.S.A. 366:1. Northern's parent, Bay State
Gas Company ("Bay State," a Massachusetts gas utility), is a wholly-owned
subsidiary of NiSource.1 NiSource is also the parent company of two utilities
providing gas service in Indiana and one providing both gas and electric service
in Indiana.2 Other principal NiSource subsidiaries are engaged in gas
transportation, energy generation, and water distribution. See the organization
chart entitled "NiSource Inc. Pre-Merger Organizational Structure," which is
attached hereto.
4. Columbia is a Delaware corporation and a public utility holding company
registered with the SEC under PUHCA and subject to all the regulatory
requirements applicable to such companies under PUHCA. Columbia, through its
various subsidiaries, is engaged in all phases of the natural gas business,
including exploration and production, transmission, storage, and distribution,
as well as retail energy marketing, propane and petroleum product sales, and
- ------------------------
1 The acquisition by NiSource (then known as "NIPSCO Industries,
Inc.") of Northern (through the acquisition of Bay State) was approved by the
Commission in Northern Utilities, Inc., No. 98-040 (N.H. P.U.C., June 20, 1998).
2 Northern Indiana Public Service Company serves both gas and electric
customers; Kokomo Gas and Fuel Company and Northern Indiana Fuel and Light
Company, Inc. serve gas customers.
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<PAGE>
electric power generation.3 See the organization chart entitled "Columbia Energy
Group Pre-Merger Organizational Structure," which is attached hereto.
5. NiSource and Columbia have entered into an Agreement and Plan of Merger,
dated as of February 27, 2000 and amended and restated as of March 31, 2000 (the
"Merger Agreement"), providing for the acquisition by NiSource of Columbia
through the creation of a new holding company. A copy of the Merger Agreement is
attached. Pursuant to the Merger Agreement, New NiSource Inc. ("New NiSource")
has been organized under the laws of Delaware. New NiSource will effect the
merger through two whollly-owned subsidiaries.
6. In the event that the Merger Agreement is approved by holders of a majority
of the outstanding shares of NiSource stock as well as by Columbia's
shareholders, the subject merger will take place as described in the previous
paragraph (the "Preferred Plan"). Under the Preferred Plan, each share of
Columbia stock will be converted into (i) cash and other consideration (i.e.,
New NiSource debt and a forward equity contract), or (ii) at the shareholder's
election and subject to terms and limitations, New NiSource stock. As a result
of such merger, Columbia will become a wholly-owned subsidiary of New NiSource.
Thus, both Columbia and the NiSource subsidiaries will be wholly-owned by New
NiSource, which will register as a public utility holding company under PUHCA.
The net result of the transactions under the Preferred Plan will be (i) that the
current shareholders of NiSource will become the shareholders of New NiSource,
of which Columbia will be a wholly-owned subsidiary; and (ii) that the current
shareholders of Columbia, in exchange for their Columbia shares, will receive
either cash and New NiSource debt and a forward equity contract, or (at their
- ------------------------
3 Columbia subsidiaries provide gas utility service to customers in
Kentucky, Maryland, Ohio, Pennsylvania, and Virginia.
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<PAGE>
election and subject to limitations) New NiSource stock. NiSource will then
merge into New NiSource. See the organization chart entitled "NiSource Inc.
Post-Merger Planned Organizational Structure," which is attached hereto.
7. In the event that the Merger Agreement is approved by Columbia's
shareholders but NiSource's shareholders do not vote in favor of it, the
transaction automatically will be restructured so that Columbia will become a
wholly-owned subsidiary of NiSource (the "Alternative Plan"), which will
register as a public utility holding company under PUHCA. Under the Alternative
Plan, each share of Columbia stock will be converted into cash and other
consideration (which will not include any stock). The net result of the
transactions under the Alternative Plan will be (i) that the current
shareholders of NiSource remain shareholders of NiSource, of which Columbia will
be a wholly-owned subsidiary; and (ii) that the current shareholders of
Columbia, in exchange for their Columbia shares, will receive cash and NiSource
debt and a forward equity contract. See the organization chart entitled
"NiSource Inc. Post-Merger Alternative Organizational Structure," which is
attached hereto.
8. Section 33 of title 374 of the New Hampshire Revised Statutes provides that
no public utility holding company shall acquire an ownership interest in the
stock "of any other public utility or public utility holding company doing
business in this state, unless the [C]ommission finds that such acquisition is
lawful, proper and in the public interest." As an initial matter, Northern notes
that in no manner under either the Preferred Plan or the Alternative Plan will
its stock - or indeed the stock of any New Hampshire public utility - be
acquired. Further, under the Alternative Plan no stock of any public utility
holding company doing business in New Hampshire would be acquired - even
indirectly. Only under the Preferred Plan would any stock of such a public
utility holding company possibly be acquired, and thus, only under the Preferred
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<PAGE>
Plan could the Commission's approval of the subject merger under R.S.A. 374:33
possibly be required.
9. Even under the Preferred Plan, the Commission should find that its approval
of the subject merger is not required. Such approval would be required only if
the transactions thereunder would constitute the "acquisition" of an ownership
interest in an "other" public utility holding company. However, these
transactions would merely serve to interpose a holding company (New NiSource)
between NiSource and its shareholders, and then only temporarily. Thus, the
existing direct owners of NiSource will become the future direct owners of
NiSource. Only under the most literal interpretation of such transactions would
there be any "acquisition" of NiSource stock, and then only by New NiSource,
which is not an "other" holding company but is merely a subsidiary of NiSource
established to effectuate the subject merger. Again, the subject merger involves
the acquisition by the parent of a New Hampshire utility of a non-New Hampshire
entity - not the acquisition of such a parent, which section 33 clearly
contemplates.
10. As is further described below, the transactions that would occur under the
Preferred Plan would not impose any of the issues for Northern's ratepayers that
a genuine takeover of Northern's parent could. Northern also notes that it would
be anomalous for the Commission to exercise jurisdiction to review and approve
the subject merger under the Preferred Plan, while under the Alternative Plan -
which poses identical consequences to Northern and its ratepayers (namely, none)
- - the merger could take place without regard to Commission approval.
11. If the Commission nonetheless declines to find that its approval is not
required under R.S.A. 374:33, Northern requests that the Commission approve the
subject merger and related transactions under the Preferred Plan consistent with
the provisions of R.S.A. 369:8. Section 8 of title 369 provides that to the
extent that the approval of the Commission is required by any other statute for
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<PAGE>
any corporate merger involving the parent company of a regulated New Hampshire
public utility, the approval of the Commission shall not be required if the
public utility files with the Commission "a detailed representation" that the
merger "will not have an adverse effect on rates, terms, service, or operation
of the public utility within the state." As is set forth below, the subject
merger will have no such adverse effect. See, testimony of Mark T. Maassel,
attached hereto.
12. Regardless of whether the subject merger takes place under the Preferred
Plan or the Alternative Plan, the jurisdiction of the Commission over Northern's
current operations will not be affected.
13. No changes in the management of Northern or Bay State will result from the
merger, and thus the merger will have no material impact on the local operations
of Northern. The subject merger will not result in any change in the current
ownership or control of Northern. The subject merger will not cause Northern's
rates for service to increase, nor will it require any "acquisition premium" to
be allocated to Northern.4
14. In no manner will the ratepayers of Northern be adversely affected by the
subject merger; indeed, the subject merger will provide a number of affirmative
ratepayer benefits, including the acquisition by Northern's parent company of
significant assets, which will better enable Northern to serve the needs of its
customers.
15. The subject merger will provide the opportunity for Northern's ratepayers
to realize certain long-term advantages through the efficient use of the
combined pipeline and storage assets of its parent company, plus the ability to
best use natural gas supplies across time, weather, and geography (which ability
- ------------------------
4 In its above-cited decision approving the acquisition by NiSource
(then known as "NIPSCO Industries, Inc.") of Northern, the Commission also
approved a Stipulation and Agreement among Northern, NIPSCO Industries, New
Hampshire's Office of the Consumer Advocate, and Commission Staff. The subject
merger will not affect such Stipulation.
-6-
<PAGE>
is expected to increase over time as existing resource commitments expire).
16. The subject merger will facilitate the provision of new products and
services to Northern's customers. It will facilitate the development of new
technological processes and systems in the future.
17. The subject merger will enhance Northern's efforts to maintain operational
excellence through technological improvements, process enhancements, and
effective cost management. Both the NiSource and Columbia companies are
respected for their technical expertise, and the subject merger will allow them
to implement the best practices of each, for their mutual benefit.
18. Northern's ratepayers will also benefit from the increased expertise of its
corporate parent resulting from the subject merger. The combined base of energy
assets resulting from the subject merger will enhance the marketing and delivery
of complementary energy products and services through assured energy supplies,
broad knowledge of a wide range of energy products, greater credibility with
customers, and opportunities to utilize the complementary business activities of
each company.
19. The subject merger and the related transactions are thus consistent with
the public interest and will not have an adverse effect on Northern's rates,
terms, service, or operation within New Hampshire, and should therefore be
approved by the Commission.
-7-
<PAGE>
WHEREFORE, Northern requests that the Commission
Determine that the merger of NiSource and Columbia, and the related
transactions described in this petition, do not require the approval of the
Commission under R.S.A. 374:33, or approve the subject merger and related
transactions in accordance with the provisions of R.S.A. 374:33 and 369:8;
and
Issue a decision setting forth such determination, stating
affirmatively therein (i) that the Commission has the resources to, and
does currently exercise regulatory jurisdiction over the rates, services,
and operations of Northern; and (ii) that the Commission intends to
continue exercising such jurisdiction over Northern following completion of
the subject merger; and
Grant such further relief as the Commission deems just and
appropriate.
Respectfully submitted,
NORTHERN UTILITIES, INC.
By its attorneys,
---------------------------------------
John A. DeTore
Edward R. Hill, Jr.
RUBIN AND RUDMAN LLP
50 Rowes Wharf
Boston, Massachusetts 02110
(617) 330-7000
Dated: April 12, 2000
-8-
<PAGE>
Chart of NiSource Inc. Pre-Merger Organizational Structure appears here.
Chart of Columbia Energy Group. Pre-Merger Organizational Structure
appears here.
Chart of NiSource Inc. Post-Merger Planned Organizational Structure
appears here.
Chart of NiSource Inc. Post-Merger Alternative Organizational
Structure appears here.
<PAGE>
The State of New Hampshire
Public Utilities Commission
Direct Testimony of Mark T. Maassel
Q. Please state your name and business address.
A. My name is Mark T. Maassel and my business address is 801 East 86th Avenue,
Merrillville, Indiana 46410.
Q. Please describe your current position and responsibilities.
A. I am the Vice President, Regulatory and Government Policy, for NiSource Inc
("NiSource"). NiSource is the ultimate corporate parent of Northern Utilities,
Inc. ("Northern"), which is a company regulated by this Commission and is the
petitioner in this proceeding. In this role, I am the corporate officer within
NiSource having direct responsibility for the review and approval of the
proposed merger with Columbia Energy Group ("Columbia") by various regulatory
agencies. As is stated in Northern's petition, NiSource has entered into an
Agreement and Plan of Merger with Columbia, dated as of February 27, 2000 and
amended and restated as of March 31, 2000 (the "Merger Agreement"), pursuant to
which NiSource will acquire Columbia.
Q. Please describe your background and prior experience.
A. I have been an employee in the NiSource corporate family since 1977. Prior
to assuming my current position in 1997, I was Vice President of Marketing and
Sales for NIPSCO Industries (as NiSource was formerly known), responsible for
the promotion and sales of products of the company's subsidiaries. Prior to that
I was Vice President, Electric Service and Sales, with responsibility for the
electric transmission and distribution operations and gas construction
-1-
<PAGE>
activities for Northern Indiana Public Service Company ("Northern Indiana").
Prior to that I served as Director of Northern Indiana's Central Region, where I
was responsible for gas and electric transmission and distribution operations.
Prior to that I was Manager of Environmental Affairs. I have a J.D. degree from
Illinois Institute of Technology's Chicago-Kent College of Law and a B.S. in
Civil Engineering from the University of Minnesota.
Q. Have you previously testified before the Commission or other regulatory
agencies?
A. I testified before the Commission in Northern Utilities, Inc., docket no.
98-040. In that proceeding, the Commission reviewed and approved (in its
decision issued June 20, 1998) the acquisition by NiSource (then known as
"NIPSCO Industries, Inc.") of Northern (through the acquisition of Northern's
direct corporate parent, Bay State Gas Company ["Bay State"]). I have also
testified before the Maine Public Utilities Commission, the Massachusetts
Department of Telecommunications and Energy, and the Indiana Utility Regulatory
Commission.
Q. What is the purpose of your testimony?
A. The purpose of my testimony is to describe the proposed acquisition of
Columbia by NiSource and to explain why that acquisition satisfies the relevant
statutory criteria for any Commission approval that may be required: namely (as
set forth in section 8 of title 369 of the New Hampshire Revised Statutes), that
NiSource's acquisition of Columbia "will not have an adverse effect on rates,
terms, service, or operation" of Northern "within the state."
Q. What corporate entities has NiSource formed for the specific purpose of
effectuating the proposed merger.
-2-
<PAGE>
A. In accordance with the Merger Agreement, NiSource has formed a wholly-owned
subsidiary for the purposes of effectuating this merger - New NiSource Inc.
("New NiSource"), which is a Delaware corporation. Also in accordance with the
Merger Agreement, New NiSource will effect the merger through two-wholly owned
subsidiaries.
Q. Please describe the terms of the proposed merger.
A. Essentially, NiSource will acquire Columbia through one of two mechanisms,
the "Preferred Plan" and the "Alternative Plan," based on what shareholder
approvals are received.
Q. Please describe the Preferred Plan.
A. If the Merger Agreement is approved by both the NiSource shareholders and
the Columbia shareholders, the merger will take place under the "Preferred
Plan," as follows:
- A wholly-owned subsidiary of New NiSource will merge with and into
Columbia. Each outstanding share of Columbia stock will be converted into,
and the Columbia stockholders will receive, (i) cash and other
consideration (i.e., New NiSource debt and a forward equity contract), or
(ii) at the Columbia shareholder's election and subject to terms and
limitations, into New NiSource stock. As a result of that transaction,
Columbia will become a wholly-owned subsidiary of New NiSource.
- Simultaneously with the foregoing, another wholly-owned subsidiary of
New NiSource will merge with and into NiSource. Each outstanding share of
NiSource stock will be converted into, and the NiSource shareholders will
receive, a share of New NiSource stock. As a result of that transaction,
NiSource will become a wholly-owned subsidiary of New NiSource. NiSource
will be merged into New NiSource promptly thereafter.
-3-
<PAGE>
Q. Please describe the Alternative Plan.
A. In the event that the Merger Agreement is approved by Columbia's
shareholders but NiSource's shareholders do not vote in favor of it, the
transaction automatically will be restructured to take place under the
"Alternative Plan," as follows:
- A wholly-owned subsidiary of NiSource will merge with and into
Columbia. Each outstanding shares of Columbia stock will be converted into,
and the Columbia stockholders will receive, cash and other consideration
(i.e., NiSource debt and a forward equity contract). Note that under the
Alternative Plan, the Columbia shareholders are not entitled to elect to
receive any NiSource stock. As a result of that transaction, Columbia will
become a wholly-owned subsidiary of NiSource.
- No changes will occur to NiSource, and its shares will not be
affected.
Q. Please describe the net effect of the Preferred and Alternative Plans on
the organizational structures of NiSource and Columbia.
A. Both plans will produce essentially the same result: Under the Preferred
Plan, NiSource's shareholders will become New NiSource's shareholders, all of
the prior subsidiaries of NiSource will become subsidiaries of New NiSource, and
Columbia will become a wholly-owned subsidiary of New NiSource. Under the
Alternative Plan, NiSource's shareholders will remain NiSource's shareholders,
all of the subsidiaries of NiSource will remain subsidiaries of NiSource, and
Columbia will become a wholly-owned direct subsidiary of NiSource. Under both
the Preferred and Alternative Plans, Columbia's shareholders will receive cash
and New NiSource (or NiSource) debt and a forward equity contract; under the
Preferred Plan Columbia's shareholders will also have the option (subject to
limitations) to elect to receive New NiSource stock instead. A visual depiction
of the proposed merger is provided in the organization charts attached to
Northern's Petition.
-4-
<PAGE>
Q. Please describe the net effect of the Preferred and Alternative Plans on
Northern.
A. The proposed merger, whether it takes place under either the Preferred Plan
or the Alternative Plan, will have no material effect on Northern:
- The merger will in no manner affect the jurisdiction of the Commission
over Northern's current operations.
- The merger will not result in a change the management of Northern or
Bay State, and thus the merger will have no material impact on the local
operations of Northern. - The merger will not result in any change in the
current ownership or control of Northern.
- The merger will not cause Northern's rates for service to increase,
nor will it require any "acquisition premium" to be allocated to Northern.
For these reasons, the proposed merger "will not have an adverse effect on
rates, terms, service, or operation" of Northern within New Hampshire.
Q. Recalling the subject matter of your previous testimony before the
Commission, is the merger at issue here similar to the merger at issue in P.U.C.
98-040?
A. No, it is not. In that case, Northern's direct corporate parent - Bay
State - was being acquired. In this case, neither Northern nor Bay State is
being acquired - in fact, neither of them is being affected in any material way
by the proposed merger. Instead, their ultimate corporate parent - NiSource - is
acquiring another public utility holding company having all of its utility
assets located outside of New Hampshire.
-5-
<PAGE>
Q. You have already described how the proposed merger will not have an adverse
effect on Northern's rates, terms, service, or operation within New Hampshire.
What public benefits could be expected from the proposed merger?
A. Through the proposed merger, Northern's ultimate parent will acquire
significant assets, which will better enable Northern to serve the needs of its
customers. These include certain long-term advantages through the efficient use
of the combined pipeline and storage assets of Northern's ultimate parent, plus
the ability to best use natural gas supplies across time, weather, and geography
(which ability is expected to increase over time as existing resource
commitments expire). The merger will also facilitate the development of new
technological processes and systems in the future, and will enhance Northern's
efforts to maintain operational excellence through technological improvements,
process enhancements, and effective cost management. Both the NiSource and
Columbia companies are respected for their technical expertise, and the subject
merger will allow them to implement the best practices of each, for their mutual
benefit. The combined base of energy assets resulting from the subject merger
will enhance the marketing and delivery of complementary energy products and
services through assured energy supplies, broad knowledge of a wide range of
energy products, greater credibility with customers, and opportunities to
utilize the complementary business activities of each company.
Q. Does that complete your testimony?
A. Yes, it does.
-6-
