[Federal Register Volume 61, Number 43 (Monday, March 4, 1996)]
[Notices]
[Pages 8311-8313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4883]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35-26479]
Filings Under the Public Utility Holding Company Act of 1935, as
Amended (``Act'')
February 26, 1996.
Notice is hereby given that the following filing(s) has/have been
made with the Commission pursuant to provisions of the Act and rules
promulgated thereunder. All interested persons are referred to the
application(s) and/or declaration(s) for complete statements of the
proposed transaction(s) summarized below. The application(s) and/or
declaration(s) and any amendments thereto is/are available for public
inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in
writing by March 21, 1996, to the Secretary, Securities and Exchange
Commission, Washington, DC 20549, and serve a copy of the relevant
applicant(s) and/or declarant(s) at the address(es) specified below.
Proof of service (by affidavit or, in case of an attorney at law, by
certificate) should be filed with the request. Any request for hearing
shall identify specifically the issues of fact or law that are
disputed. A person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in the
matter. After said date, the application(s) and/or declaration(s), as
filed or as amended, may be granted and/or permitted to become
effective.
The Columbia Gas System, Inc. (70-8791)
Notice of Proposal to Issue Common Stock; Order Authorizing
Solicitation of Proxies
The Columbia Gas System, Inc. (``Columbia''), 20 Montchanin Road,
Wilmington, Delaware, 19807, a registered holding company, has filed a
declaration under sections 6(a), 7, 12(c) and 12(e) of the Act and
rules 42, 62 and 65 thereunder.
Columbia proposes to adopt, subject to shareholder approval at the
annual meeting of shareholders to be held on April 26, 1996 (``1996
Annual Meeting''), The Columbia Gas System, Inc. Long-Term Incentive
Plan (``Plan''). The Columbia Board of Directors (``Board'') approved
the Plan on December 20, 1995. Columbia states that the purpose of the
Plan is to provide incentives to specific individuals to attract,
retain and motivate certain employees and directors and to align the
interests of these individuals with the shareholders' interests.
The Plan provides long-term incentives to (1) officers and key
employees (``Employees'') of Columbia and its subsidiaries (the
``System'') who, in the opinion of the Compensation Committee of
Columbia's Board (``Committee''), may be able to make substantial
contributions to the System by their ability and efforts; and (2)
members of the Board who are not employees (``Outside Directors''). The
Plan authorizes as incentive awards: stock options, including incentive
and nonqualified stock options; stock appreciation rights (``SARs'');
contingent stock; restricted stock; and awards in other forms,
including a combination of the foregoing, that the Committee may
[[Page 8312]]
deem appropriate and consistent with the Plan's purpose. Employees
could receive any form of award, while Outside Directors are eligible
only for nonqualified stock option awards in accordance with a formula
contained in the Plan.
Up to three million shares of common stock, $10 par value, may be
granted under the Plan, subject to equitable adjustment in certain
instances to prevent dilution or enlargement of the participants'
rights. No more than 20% of the total shares authorized for issuance
under the Plan, or 600,000 shares, may be awarded pursuant to the
contingent and restricted stock award provisions. The maximum number of
shares that may be awarded to any individual during the life of the
Plan will be 20% of the total shares authorized for issuance under the
Plan, or 600,000 shares. Shares issued under the Plan may be authorized
and unissued shares or treasury shares. Shares of common stock subject
to options and awards that expire or terminate for reasons other than
the exercise of a SAR would be available again for awards under the
Plan.
The Board may suspend, terminate or amend the Plan; the Board may
not, however, without Commission authorization, if required, and
shareholder approval, adopt an amendment that would: (1) Materially
increase the benefits accruing to participants; (2) materially increase
the maximum number of shares that may be issued under the Plan; (3)
materially modify the Plan's eligibility requirements; or (4) change
the basis on which awards are granted to Outside Directors. Columbia
reserves the right to terminate all or part of the Plan for any reason,
so long as participants are equitably compensated for their interests.
The portion of the Plan applicable to Employees will be
administered by the Committee, which is composed of Outside Directors
who qualify as ``disinterested persons'' under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (``Exchange Act''), and as
``outside directors'' under Section 162(m) of the Internal Revenue Code
of 1986, as amended (``IRC''), and the regulations thereunder. In
administering the Plan for Employees, the Committee will have full and
final authority in its discretion to interpret the provisions of the
Plan conclusively and to decide all questions of fact arising in its
application; to determine the Employees to who awards shall be made and
the type of award to be made and the amount, size and terms of each
such award; to determine the time when awards will be granted; to make
all other determinations necessary or advisable for the administration
of the Plan; and to accelerate the exercise period of an option or the
restriction/contingency period of restricted and continent stock
awards.
The Committee also will administer the portions of the Plan
applicable to Outside Directors, but only with respect to ministerial
matters. Columbia states that the Plan is designed to be a ``formula
plan'' for Outside Directors meeting the requirements of Exchange Act
Rule 16b-3(c)(2) and, accordingly, is intended to be self-governing.
The Committee will have no discretion with respect to the amount, price
and timing of awards to Outside Directors. The Plan may not be amended
more than once every six months except as may be consistent with
Exchange Act Rule 16b-3(c)(2)(ii)(B).
Nonqualified stock option awards will be made to Outside Directors
if Columbia's total shareholder return (market appreciation and
dividends declared in a year) for a fiscal year exceeds the median of
the total shareholder return for the peer group of companies utilized
for comparison purposes in Columbia's annual proxy statement. If
Columbia's total shareholder return falls within the third quartile
(between 50% and 75%) or the fourth quartile (between 75% and 100%) of
the peer group, then options will be granted to each Outside Director
to purchase 3,000 or 6,000 shares of Columbia common stock,
respectively. No award options will be made to Outside Directors if
total shareholder return is at or below the median.
Outside Director's nonqualified stock option awards would be
granted effective as of 90 days after the close of Columbia's fiscal
year for total shareholder return performance for the preceding fiscal
year. Grants to Outside Directors would vest one-third upon the date of
the grant, one-third upon the first anniversary of the grant, and one-
third upon the second anniversary of the grant. The purchase price per
share of stock for Outside Directors' awards would be 100% of the fair
market value of the stock on the day the option is granted, less any
dividends paid as long as the option is outstanding, but no less than
par value. Fair market value is the average of the high and low sales
prices per share of Columbia's common stock on the New York Stock
Exchange as reported in the Wall Street Journal for a given date. In
all other respects and to the extent consistent with Exchange Act Rule
16b-3(c)(2), Outside Director stock options will be governed by the
provisions of the Plan governing Employee options.
Options will be evidenced by stock option agreements with, in
substance, the following terms and conditions. The purchase price per
share deliverable upon the exercise of an incentive stock option will
be 100% of the fair market value of the stock on the day the option is
granted. The purchase price per share deliverable upon the exercise of
a nonqualified stock option will be 100% of the fair market value of
the stock on the day the option is granted, less any dividends paid
while the option is outstanding, but no less than the par value of the
stock. The option period will not start earlier than six months or end
not more than ten years after the date of the grant of the option. The
Committee may permit an acceleration of the previously determined
exercise terms, subject to the terms of the Plan and to the extent
permitted by Exchange Act Rule 16b-3(c). If an optionee ceases to be an
Employee of the System or an Outside Director of Columbia for any cause
other than death, disability or retirement or a change in control, the
optionee may be able to exercise the option during its term within a
period of three months after such termination. Incentive stock option
agreements may contain such terms, conditions and provisions as the
Committee may determine to be necessary or desirable to qualify the
option as a tax-favored option under the IRC. Stock purchased pursuant
to an option agreement is to be paid for in full at the time of
purchase, either in the form of cash, common stock of Columbia at fair
market value or in a combination thereof, as determined by the
Committee.
SARS may be granted in connection with options and will entitle the
grantee to receive all or a portion of the excess of (1) the fair
market value of a specified number of shares of Columbia's common stock
at the option's surrender, over (2) 100% of the fair market value of
the same number of shares at the time the option was granted, less any
dividends paid while the option was outstanding but unexercised. SARs
will be granted for a period of not less than six months nor more than
10 years. No SAR will exercisable during the first six months from the
date of the grant or after a grantee's employment by the System is
terminated, except that the Committee may permit an SAR to be
exercisable for up to three months after the grantee's employment is
terminated. If the termination was due to death, retirement or
disability, however, the grantee or his successor may be able to
exercise the SAR within 24 months after the date of the termination.
The
[[Page 8313]]
Committee may reserve the right to accelerate previously determined
exercise terms.
In contingent stock awards, the stock is not issued until the right
to receive the stock is vested. For restricted stock awards, shares
will be issued in the name of the recipient, but the recipient will not
receive them until the specified restrictions lapse, or if he receives
them, the shares will bear a legend referring to all applicable
restrictions. Attempts to dispose of such stock in contravention of the
restrictions will be ineffective. Recipients of restricted stock awards
will have all the rights of a stockholder during the restricted period.
Under contingent and restricted stock awards, Employees are given
the right to receive shares of stock when the specified contingencies
and/or restrictions are satisfied. The Committee may determine such
restrictions and, except for an initial six month period, may
accelerate any applicable contingency or restriction period.
Termination of employment for any reason prior to the lapse of
contingencies or restrictions and unless otherwise provided for in the
Plan or award agreement will result in the forfeiture by the
participant to Columbia, without payment or any other consideration, of
all rights to the shares as to which there remain unlapsed
contingencies or restrictions. If a recipient of a contingent or
restricted stock award is terminated but continues to receive a salary
because of an agreement, severance program or other arrangement, then
contingencies and restrictions that are or could have been satisfied
during the period the salary payments are continued will be deemed to
have been satisfied and the applicable shares will be issued and
delivered to the recipient before the salary payments are ended.
Upon a change in control, all contingent, restricted and stock
option awards (including SARs) automatically vest and all restrictions
or contingencies will be deemed to have been satisfied. A change in
control will occur upon: (1) the acquisition by any party or parties of
the beneficial ownership of 25% or more of the voting shares of
Columbia; (2) the occurrence of a transaction requiring shareholders'
approval for the acquisition of Columbia through purchase or exchange
of stock or assets, or by merger or otherwise; or (3) the election
during a period of 24 months or less of 30% or more of the members of
the Board, without the approval of a majority of the Board as
constituted at the beginning of the period.
Columbia proposes to submit the Plan for consideration and action
by its stockholders at the annual meeting to be held on April 26, 1996,
and in connection therewith, to solicit proxies from its stockholders.
Consequently, Columbia requests that the effectiveness of its
declaration with respect to such solicitation of proxies be permitted
to become effective as soon as practicable as provided in rule 62(d).
It is stated that no state or federal commission, other than this
Commission, has jurisdiction over the proposed transactions.
It appearing to the Commission that Columbia's declaration
regarding the proposed solicitation of proxies should be permitted to
become effective forthwith, pursuant to rule 62:
It is Ordered, that the declaration regarding the proposed
solicitation of proxies be, and it hereby is, permitted to become
effective forthwith, pursuant to rule 62 and subject to the terms and
conditions prescribed in rule 24 under the Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-4883 Filed 3-1-96; 8:45 am]
BILLING CODE 8010-01-M
