-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HAffxAjJmHEkvmWfBAs4fbF2z3Z6Ux+ItM/N62o3yNxMt8c9690GYHQ79QXXJuMZ 42jncpCcWmQdwFqIU+iHDw== /in/edgar/work/0000895813-00-000450/0000895813-00-000450.txt : 20001030 0000895813-00-000450.hdr.sgml : 20001030 ACCESSION NUMBER: 0000895813-00-000450 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20001027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NISOURCE INC CENTRAL INDEX KEY: 0000823392 STANDARD INDUSTRIAL CLASSIFICATION: [4931 ] IRS NUMBER: 351719974 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: SEC FILE NUMBER: 333-33896 FILM NUMBER: 748091 BUSINESS ADDRESS: STREET 1: 801 E 86TH AVENUE CITY: MERRILLVILLE STATE: IN ZIP: 46410 BUSINESS PHONE: 2198535200 MAIL ADDRESS: STREET 1: 5265 HOHMAN AVENUE CITY: HAMMOND STATE: IN ZIP: 46320-1775 FORMER COMPANY: FORMER CONFORMED NAME: NIPSCO INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW NISOURCE INC CENTRAL INDEX KEY: 0001111711 STANDARD INDUSTRIAL CLASSIFICATION: [4931 ] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: SEC FILE NUMBER: 333-33896-01 FILM NUMBER: 748092 BUSINESS ADDRESS: STREET 1: 801 EAST 86TH AVE CITY: MERRILLVILLE STATE: IN ZIP: 46410 BUSINESS PHONE: 2196475200 MAIL ADDRESS: STREET 1: 801 EAST 86TH AVE CITY: MERRILLVILLE STATE: IN ZIP: 46410 POS AM 1 0001.txt As filed with the Securities and Exchange Commission on October 27, 2000. Registration Nos. 333-33896 and 333-3896-01 ====================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ POST-EFFECTIVE AMENDMENT NO. 6 ON FORM S-3 TO FORM S-4 Registration Statement Under The Securities Act of 1933 _______________________ NEW NISOURCE INC. NISOURCE INC. (Exact name of registrant as (Exact name of registrant as specified in its charter) specified in its charter) DELAWARE INDIANA (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) 35-2108964 35-1719974 (I.R.S employer (I.R.S employer identification number) identification number) 801 East 86th Avenue Merrillville, Indiana 46410 (219) 853-5200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Stephen P. Adik 801 East 86th Avenue Merrillville, Indiana 46410 (219) 853-5200 (Name, address, including zip code, and telephone number, including area code, of agent for service) WITH A COPY TO : Frederick L. Hartmann Schiff Hardin & Waite 6600 Sears Tower Chicago, Illinois 60606-6473 (312) 258-5500 ___________________________ Approximate Date of Commencement of Proposed Sale to the Public: From time to time after the Merger described in the Explanatory Note below has been completed and this post-effective amendment to the Registration Statement has become effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE Proposed Proposed Amount maximum maximum Title of each class of securities to to be offering price aggregate Amount of be registered registered per share (1) offering price (1) registration fee ------------------------------------ ---------- ------------- ------------------ ---------------- Common Shares, $.01 par value 160,500 (1) (1) (1) (including associated preferred share purchase rights) of New NiSource Inc.
(1) A registration fee with respect to these shares was previously paid in connection with the filing by New NiSource Inc. and NiSource Inc. of the Registration Statement on Form S-4 (File No. 333- 33896), which was declared effective April 24, 2000. See Explanatory Note below. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall be effective on such date as the Commission acting pursuant to said Section 8(a) may determine. EXPLANATORY NOTE New NiSource Inc. (the "Company") and NiSource Inc. ("Old NiSource") hereby amend their Registration Statement on Form S-4 (File No. 333-33896), effective _____, 2000 by filing this Post-Effective Amendment No. 6 on Form S-3 relating to 160,500 common shares of the Company, $.01 par value per share (including associated preferred purchase rights) (the "Common Shares") issuable under the Bay State Gas Company Savings Plan for Operating Employees (the "Plan"). On or about November 1, 2000, the mergers of Old NiSource and Columbia Energy Group ("Columbia") (the "Merger") are expected to be completed. Upon completion of the Merger, Columbia will be a wholly-owned subsidiary of the Company and Old NiSource will be merged into the Company. Pursuant to the Merger Agreement, the Company, Old NiSource and Columbia have taken the necessary actions to cause the Common Shares to be issuable under the Plan when the Merger is completed. Accordingly, Old NiSource's common shares will no longer be issuable under the Plan. This Registration Statement relates to 160,500 Common Shares registered on the Form S-4 that are not being issued at the time of the Merger and that are issuable under the Plan on and after the Merger. SUBJECT TO COMPLETION - DATED OCTOBER 27, 2000 PROSPECTUS NEW NISOURCE INC. 160,500 Shares Common Shares, $.01 Par Value BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES This Prospectus relates to common shares of New NiSource Inc. which may be offered and sold under the Bay State Gas Company Savings Plan for Operating Employees (the "Plan") to Plan participants who ceased to be employees of New NiSource Inc. and its subsidiaries, including Bay State Gas Company, on or prior to November __, 2000. Our common shares are traded on the New York Stock Exchange under the symbol "NI". On October 26, 2000, the closing sale price of the common shares on the New York Stock Exchange was $24 per share. The mailing address and telephone number of New NiSource's principal executive offices are: 801 East 86th Avenue, Merrillville, Indiana 46410, telephone number (219) 853-5200. This Prospectus should be retained for future reference. __________________________________________ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. __________________________________________ The date of this Prospectus is November __, 2000 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. You should rely only on the information provided or incorporated by reference in this Prospectus. The information in this Prospectus is accurate as of the date on these documents, and you should not assume that it is accurate as of any other date. TABLE OF CONTENTS ----------------- Page ---- THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . 6 BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES PROSPECTUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 APPENDIX DATED OCTOBER, 2000 TO SUMMARY PLAN DESCRIPTION DATED AUGUST, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . 8 BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES SUMMARY PLAN DESCRIPTION DATED AUGUST, 1999 . . . . . . . . . 12 PLAN HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 12 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Who Is Eligible? . . . . . . . . . . . . . . . . . . . . . . . 13 When Does Participation Begin? . . . . . . . . . . . . . . . . 14 YOUR CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 14 Employee Pre-Tax Contributions . . . . . . . . . . . . . . . . 14 Changing, Discontinuing Or Resuming Your Contributions . . . . 15 Rollover Contributions From Another Qualified Plan . . . . . . 15 Separate Accounts . . . . . . . . . . . . . . . . . . . . . . 15 EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 16 Employer Contributions . . . . . . . . . . . . . . . . . . . . 16 Separate Accounts . . . . . . . . . . . . . . . . . . . . . . 16 ANNUAL CONTRIBUTION AND COMPENSATION MAXIMUMS . . . . . . . . . . . 16 INVESTMENT FUNDS, INVESTMENT DIRECTION AND FUND TRANSFERS . . . . . 17 Who Makes The Investment Decisions? . . . . . . . . . . . . . 17 How May I Obtain Investment Fund Performance Information? . . 18 How May I Change My Investment Direction And When Does My New Investment Direction Take Effect? . . . . . . . . . . 18 How Do I Transfer My Funds? . . . . . . . . . . . . . . . . . 18 Information Regarding Voting And Tendering Company Stock . . . 19 VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . . . . . . . 19 2 May I Borrow From My Account? . . . . . . . . . . . . . . . . 19 How Much May I Borrow? . . . . . . . . . . . . . . . . . . . . 19 What Is The Loan Interest Rate? . . . . . . . . . . . . . . . 20 What Is The Loan Repayment Term? . . . . . . . . . . . . . . . 20 How Do I Make Loan Payments And How Are The Payments Invested? 20 What Happens If My Employment Terminates? . . . . . . . . . . 20 How Is My Loan Secured? . . . . . . . . . . . . . . . . . . . 21 Are There Any Loan Fees? . . . . . . . . . . . . . . . . . . . 21 What Happens When I Request A Loan? . . . . . . . . . . . . . 21 WITHDRAWALS WHILE YOU ARE AN EMPLOYEE . . . . . . . . . . . . . . . 22 Under What Circumstances May I Make A Withdrawal From The Plan While I Am An Employee? . . . . . . . . . . . . . . 22 What Are My In-Service Withdrawal Payment Options? . . . . . . 23 What Are My In-Service Withdrawal Methods? . . . . . . . . . . 23 What Happens When I Request An In-Service Withdrawal? . . . . 23 What Are The Taxes And Penalties For In-Service Withdrawals? . 24 DISTRIBUTIONS AFTER YOU TERMINATE EMPLOYMENT WITH BAY STATE . . . . 24 What Are My Distribution Payment Options? . . . . . . . . . . 24 What Are My Distribution Methods? . . . . . . . . . . . . . . 24 When Are Distributions Made? . . . . . . . . . . . . . . . . . 25 What Happens When I Request A Distribution? . . . . . . . . . 25 What Are The Tax Treatments, Taxes And Penalties For Distributions? . . . . . . . . . . . . . . . . . . . . . 26 DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . 26 What Happens To My Plan Benefit If I Die? . . . . . . . . . . 26 How May I Designate My Beneficiary? . . . . . . . . . . . . . 26 REEMPLOYMENT WITH BAY STATE . . . . . . . . . . . . . . . . . . . . 27 When Can I Resume My Participation? . . . . . . . . . . . . . 27 FUTURE OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . 27 PLAN ADMINISTRATION ISSUES . . . . . . . . . . . . . . . . . . . . 28 Account Statements And Account Information . . . . . . . . . . 28 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . 28 Hours Of Service . . . . . . . . . . . . . . . . . . . . . . . 28 Agent For Service Of Legal Process . . . . . . . . . . . . . . 28 Type Of Plan . . . . . . . . . . . . . . . . . . . . . . . . . 29 Top Heavy Contribution Provisions . . . . . . . . . . . . . . 29 OTHER THINGS YOU SHOULD KNOW . . . . . . . . . . . . . . . . . . . 29 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Plan Fees And Expenses . . . . . . . . . . . . . . . . . . . . 29 Plan Participation Pursuant To A Collective Bargaining Agreement . . . . . . . . . . . . . . . . . . . . . . . . 30 Claim Review Procedures . . . . . . . . . . . . . . . . . . . 30 No Assignment Of Your Account Is Permitted . . . . . . . . . . 30 No Employment Rights . . . . . . . . . . . . . . . . . . . . . 31 Your Rights Under Federal Law . . . . . . . . . . . . . . . . 31 3 PLAN DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . . . . 32 INSTRUCTIONS AT A GLANCE . . . . . . . . . . . . . . . . . . . . . 33 LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . 35 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . 35 PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . 35 DESCRIPTION OF COMMON SHARES . . . . . . . . . . . . . . . . . . . 35 EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 THE COMPANY On November __, 2000, New NiSource Inc. (the "Company"), a new company formed by NiSource Inc. ("NiSource"), completed the acquisition by merger of Columbia Energy Group ("Columbia"). Effective November __, 2000, the Company changed its name to "NiSource Inc." Upon completion of the merger, Columbia became a wholly-owned subsidiary of the Company, and the Company continues the businesses conducted by NiSource and Columbia prior to the merger. The fiscal year of the Company will end on December 31 of each year. The Company is a Delaware corporation with its corporate headquarters in Merrillville, Indiana. The Company is a super-regional energy and utility-based holding company that provides natural gas, electricity, water and energy related services for residential, commercial and industrial uses through a number of regulated and non-regulated subsidiaries. The Company has over 3.6 million gas and electric customers located primarily in nine states and is the leading gas competitor within the key energy corridor between the Gulf Coast and the Northeast. The Company is a registered holding company under the Public Utility Holding Company Act of 1935. The Company's principal executive offices are located at 801 East 86th Avenue, Merrillville, Indiana 46410, and its telephone number is (219) 853-5200. NATURAL GAS. The Company's gas business is comprised of regulated gas utilities and gas transmission companies that operate in nine states. The Company is the largest gas company east of the Rockies based on customers, and has the nation's second largest volume of gas sales with 911 million cubic feet per day. Through its wholly-owned subsidiary, Columbia Energy Group, the Company owns five distribution subsidiaries that provide natural gas services to nearly 2.1 million residential commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky and Maryland. The Company also distributes natural gas to approximately 751,000 4 customers in northern Indiana through three subsidiaries: Northern Indiana Public Service Company, Kokomo Gas and Fuel Company and Northern Indiana Fuel and Light Company, Inc. Additionally, the Company's subsidiaries, Bay State Gas Company and Northern Utilities, Inc. distribute natural gas to more than 320,000 customers in the areas of Brockton, Lawrence and Springfield, Massachusetts, Lewiston and Portland, Maine, and Portsmouth, New Hampshire. The Company's subsidiaries Columbia Gas Transmission Corporation and Columbia Gulf Transmission Company own and operate an interstate pipeline network of approximately 16,250 miles extending from offshore in the Gulf of Mexico to Lake Erie, New York and the eastern seaboard. Together, Columbia Gas Transmission and Columbia Gulf serve customers in 15 northeastern, mid-Atlantic, midwestern, and southern states and the District of Columbia. In addition, Columbia Gas Transmission operates one of the nation's largest underground natural gas storage systems. Columbia Gas Transmission is also participating in the proposed 442-mile Millennium Pipeline Project that has been submitted to the FERC for approval. As proposed, the project will transport approximately 700,000 Mcf of natural gas per day from the Lake Erie region to eastern markets. The Company's wholly-owned subsidiary, Crossroads Pipeline Company, owns and operates a 201-mile, 20 inch diameter interstate pipeline extending from the northwestern corner of Indiana (near the border with Chicago) eastward into Ohio. Another wholly-owned Company subsidiary, Granite State Transmission, owns and operates a 105-mile, 6 to 12 inch diameter interstate pipeline that extends from Haverhill, Massachusetts in a northeasterly direction to Maine. In addition to the Crossroads and Granite State pipelines, the Company owns a 19% share of Portland Natural Gas Transmission System, a 292-mile pipeline built to bring Canadian gas from New Brunswick into Maine, New Hampshire and Massachusetts in order to increase the gas supply to the region. ELECTRICITY. The Company generates and distributes electricity to the public through its subsidiary Northern Indiana Public Service Company. Northern Indiana provides electric service to approximately 426,000 customers in 30 counties in the northern part of Indiana, with an area of approximately 12,000 square miles and a population of approximately 2.2 million. In addition, the Company develops unregulated power projects through its subsidiary, Primary Energy, Inc. Primary Energy works with industrial customers in managing the engineering, construction, operation and maintenance of "inside the fence" cogeneration plants that provide cost-effective, long-term sources of energy for energy-intensive facilities. WATER. Through its wholly-owned subsidiary IWC Resources Corporation and its subsidiaries, the Company supplies water to residential, commercial and industrial customers and for fire protection service in Indianapolis, Indiana and surrounding areas. 5 NON-REGULATED ENERGY SERVICES. The Company provides non- regulated energy services through its wholly-owned subsidiary Energy USA, Inc. Through its subsidiaries and investments, Energy USA provides to customers in 22 states a variety of energy-related services, including gas marketing and asset management services, pipeline construction and underground utility locating and marking services. The Company expanded its gas marketing and trading operations with the April 1999 acquisition of TPC Corporation, now renamed Energy USA-TPC Corp., a natural gas asset management company. Through Columbia, it also owns Columbia Energy Resources, Inc., an exploration and production subsidiary that explores for, develops, gathers and produces natural gas and oil in Appalachia and Canada. In addition, the Company has invested in a number of distributed generation technologies, including fuel cells and microturbine ventures. In the merger, NiSource shareholders received one common share of the Company, par value $.01 per share, ("Common Share") for each of their NiSource common shares. Accordingly, each of the NiSource common shares held in the NiSource Common Stock Fund under the Plan has been converted into one Common Share of the Company. ALL REFERENCES IN THE PLAN AND THE SUMMARY PLAN DESCRIPTION TO NISOURCE ARE NOW REFERENCES TO THE COMPANY, AND ALL REFERENCES IN THE PLAN AND THE SUMMARY PLAN DESCRIPTION TO NISOURCE COMMON SHARES ARE NOW REFERENCES TO COMPANY COMMON SHARES. EXCEPT AS DESCRIBED BELOW, ALL OF THE TERMS OF THE PLAN WILL CONTINUE TO APPLY. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov. The SEC allows us to "incorporate by reference" into this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our offering is completed: 1. The Annual Report on Form 10-K of NiSource for the fiscal year ended December 31, 1999; 6 2. The Annual Report on Form 10-K and Form 10-K/A of Columbia for the fiscal year ended December 31, 1999; 3. The Quarterly Reports on Form 10-Q of NiSource for the quarterly periods ended March 31, 2000 and June 30, 2000; 4. The Quarterly Reports on Form 10-Q of Columbia for the quarterly periods ended March 31, 2000, June 30, 2000 and September 30, 2000; 5. The Current Reports on Form 8-K of NiSource dated February 14, 2000, February 24, 2000, March 3, 2000, April 3, 2000, April 25, 2000, June 13, 2000, September 1, 2000 and September 13, 2000; 6. The Current Reports on Form 8-K of Columbia dated January 25, 2000, April 13, 2000, May 3, 2000, May 12, 2000, May 22, 2000, June 2, 2000, June 15, 2000 and July 14, 2000; 7. The description of our Common Shares contained in our Joint Proxy Statement / Prospectus dated April 24, 2000; 8. The description of our Rights contained in our Joint Proxy Statement / Prospectus dated April 24, 2000; and 9. The description of our SAILS contained in our Joint Proxy Statement / Prospectus dated April 24, 2000. You may request a copy of these filings at no cost, by writing to or telephoning us at the following address: New NiSource Inc. 801 East 86th Avenue Merrillville, Indiana 46410 (219) 853-5200 You should rely only on the information included or incorporated by reference in this prospectus. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information is this prospectus is accurate as of any date other than the date on the front of the document. BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES PROSPECTUS The prospectus for the Plan includes (i) the Appendix dated October, 2000 to the Summary Plan Description dated August, 1999, and (ii) the Summary Plan Description dated August, 1999. 7 NOTE: REFERENCES IN THE APPENDIX DATED OCTOBER, 2000 AND IN THE SUMMARY PLAN DESCRIPTION TO NISOURCE AND NISOURCE COMMON SHARES NOW REFER TO THE COMPANY AND THE COMPANY'S COMMON SHARES. APPENDIX THIS DOCUMENT CONSTITUTES PART OF A SECTION 10(A) PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES Appendix dated October, 2000 to Summary Plan Description dated August, 1999 This Appendix provides certain current and updated information regarding the Plan identified above, which is fully described in the Prospectus and Summary Plan Description to which this Appendix relates. Capitalized terms in this Appendix have the same meaning assigned in the Prospectus and Summary Plan Description. MERGER On November __, 2000, New NiSource Inc. (the "Company"), a new company formed by NiSource Inc. ("NiSource") completed the acquisition by merger of Columbia Energy Group ("Columbia"). Effective November __, 2000, the Company changed its name to "NiSource Inc." Upon completion of the merger, Columbia became a wholly-owned subsidiary of the Company, and the Company continues the businesses conducted by NiSource and Columbia prior to the merger. The fiscal year of the Company will end on December 31 of each year. The Company is a Delaware corporation with its corporate headquarters in Merrillville, Indiana. All references in the Plan and the Summary Plan Description to NiSource common shares are now references to common shares of the Company, par value $.01 per share ("Common Shares"). Except as described below, all of the terms of the Plan will continue to apply. In the merger, each NiSource common share was converted into the right to receive one Common Share of the Company. Accordingly, each NiSource common share held in the NiSource Common Stock Fund under the Plan has been converted into one Company Common Share. FINANCIAL INFORMATION Certain information regarding the performance of the Funds described below has been extracted from materials provided to the Company by the Funds. The Company has not made any independent review of the accuracy of this information and, accordingly, makes no warranty or representation concerning this information. Performance information 8 related to an investment in the Funds will be updated periodically and can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). STABLE VALUE FUND* ----------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 6.28%, 6.30%, 5.96% and 1.45% for 1997, 1998, 1999 and year to date through March 31, 2000; respectively. Additional information is included in its annual report and product description, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155- 6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). * Note: Effective April 10, 2000, the Bay State Gas Stable Value Fund was replaced by the Merrill Lynch Income Accumulation Fund. LIFE PATH INCOME FUND --------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 9.77%, 9.65%, 5.16% and 2.03% for 1997, 1998, 1999 and year to date through March 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637- 1215). LIFE PATH 2010 FUND ------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 14.82%, 14.49%, 9.71% and 2.21% for 1997, 1998, 1999 and year to date through March 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). LIFE PATH 2020 FUND ------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 18.57%, 18.26%, 14.42% and 2.37% for 1997, 1998, 1999 and year to date through March 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group 9 Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). AIM CONSTELLATION FUND(A) ------------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 12.92%, 18.89%, 44.38% and 14.32% for 1997, 1998, 1999 and year to date through March 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637- 1215). TEMPLETON FOREIGN FUND ---------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 6.65%, -4.89%, 39.21% and -5.61% for 1997, 1998, 1999 and year to date through March 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). BGI S&P 500 STOCK FUND ---------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 33.07%, 28.41%, 20.59% and 2.20% for 1997, 1998, 1999 and year to date through March 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). LIFE PATH 2030 FUND ------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 21.85%, 21.40%, 16.83% and 3.20% for 1997, 1998, 1999 and year to date through March 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). 10 LIFE PATH 2040 FUND ------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 23.75%, 24.46%, 21.83% and 2.81% for 1997, 1998, 1999 and year to date through March 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Merrill Lynch, Group Employee Services, P.O. Box 6610, Englewood, CO 80155-6610, telephone (800) 228-4015 (or if hearing impaired telephone (800) 637-1215). NISOURCE COMMON STOCK FUND -------------------------- The Fund, based on NiSource Common Shares, has experienced annual returns, after deduction for Fund expenses and asset based fees and inclusion of dividends, of 16.1%, 16.1% and 12.8% for 1997, 1998 and 1999; respectively. Effective as of November __, 2000, the Fund performance will be based on the Company Common Shares. AVAILABLE INFORMATION The Company has filed a Registration Statement on Form S-3 (the "Registration Statement") with the Securities and Exchange Commission covering up to 160,500 Common Shares, to be offered and sold under the Plan to Plan participants who ceased to be employees of NiSource and its subsidiaries on or prior to November __, 2000. The Company will provide, without charge, to each person eligible to participate in the Plan, upon written or oral request, (i) a copy of any of the documents which are incorporated by reference in the Registration Statement, other than the exhibits to such documents (unless such exhibits are specifically incorporated by reference into the information that the Registration Statement incorporates) and (ii) a copy of its Annual Report to Shareholders for its most recent fiscal year. The documents incorporated by reference in the Registration Statement are hereby specifically incorporated by reference in this Prospectus. Requests for copies of such documents should be directed to the Director, Compensation and Benefits, at New NiSource Inc., 801 East 86th Avenue, Merrillville, Indiana 46410, telephone number (219) 853-5200. 11 NOTE: REFERENCES IN THIS DOCUMENT TO NISOURCE AND NISOURCE COMMON SHARES NOW REFER TO THE COMPANY AND THE COMPANY'S COMMON SHARES. BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES ---------------------------------------------- SUMMARY PLAN DESCRIPTION ------------------------ Dated August, 1999 PLAN HIGHLIGHTS Saving for your future is a challenge, but with the Bay State Gas Company Savings Plan for Operating Employees saving can be both convenient and profitable. The Plan offers you these advantages: * You choose how much to save, up to 15% of your eligible pay through convenient payroll deduction. * You may save on taxes since contributions and earnings are not subject to current federal and, in most cases, state income taxes. The Plan offers you flexibility: * You choose how to invest your Account among the investment funds offered. You may borrow or withdraw from your Account (subject to certain conditions and terms). * You have easy access to Account information by telephone. The Plan is a profit-sharing 401(k) plan designed to help you accumulate savings for retirement and achieve your future financial goals. It is one of the few ways you can set aside savings for the future without having to pay current federal and, in most cases, state income taxes on the money you are saving and the earnings from the investments in your Account. (You will find a useful "Instructions At A Glance" on pages 22 and 23.) INTRODUCTION Effective January 1, 1988, Bay State Gas Company ("Bay State") established the Bay State Gas Company Savings Plan for Operating Employees (the "Plan"). The Plan is governed by the official text of the Plan and Trust Agreement. The purpose of this Summary Plan Description is to provide a simplified description of how the Plan works. If the meaning of the Plan and Trust Agreement differs from that of the Summary Plan Description in any way, the official text of the Plan and Trust Agreement will govern in administering the Plan. 12 References to Bay State generally mean Bay State Gas Company, and, if applicable, any successor by merger, purchase or otherwise, and its affiliated companies participating in the Plan as the context requires and except that with regard to issues related to service credit, termination of employment or reemployment, references to Bay State shall also include any affiliated companies not participating in the Plan. With regard to primarily administrative matters, however, references to Bay State mean Bay State Gas Company, which is the Plan Sponsor. ELIGIBILITY WHO IS ELIGIBLE? All employees of Bay State who are covered by one of the following collective bargaining agreements are eligible: * Lawrence Division, International Brotherhood of Electrical Workers, Local No. 326 ("Local 326-Lawrence Employees"); * Brockton Division, Utility Workers' Union of America, AFL- CIO, Local No. 273 Operating ("Local 273-Brockton Operating Employees"); * Brockton Division, Utility Workers' Union of America, AFL- CIO, Local No. 273 Clerical/Technical Unit ("Local 273- Brockton Clerical/Technical Employees"); * Northern Utilities, Inc., Portland Division, Brotherhood of Utility Workers of New England, Incorporated, Local No. 341 ("Local 341-Portland Employees"); * Granite State Gas Transmission, Inc., Brotherhood of Utility Workers of New England, Incorporated, Local No. 341 ("Local 341-Granite State Employees"); * Springfield Division, United Steel Workers of America, AFL- CIO-CLC, Local No. 12026 ("Local 12026-Springfield Employees"); * Springfield Division, International Brotherhood of Electrical Workers, Local No. 486 ("Local 486-Springfield Employees"); Northern Utilities, Inc., Portsmouth Division, United Steelworkers of America, AFL-CIO-CLC, Local No. 12012-6 ("Local 12012-6 Portsmouth Employees"); * EnergyUSA, Brockton Propane Division, Oil, Chemical and Atomic Workers International Union, AFL-CIO, Quincy Local 8- 366 ("Local 8-366-EnergyUSA Employees"); and 13 * EnergyUSA, Northern Propane Division, United Steelworkers of America, AFL-CIO-CLC, Local No. 12012-8, ("Local 12012-8 EnergyUSA Employees"). WHEN DOES PARTICIPATION BEGIN? If you are an eligible Employee, your participation will begin on the first day of the next month after completion of a 12 consecutive month eligibility period in which you are credited with at least 1,000 hours of service during that period. However, if provided by your collective bargaining agreement, for purposes of Employee Pre-Tax Contributions only, you may participate on the first day of the next month after you have completed 60 days of service. Your initial eligibility period begins on your date of hire. Subse- quent eligibility periods begin with the start of the next Plan Year beginning after your date of hire. To enroll, refer to Section entitled INSTRUCTIONS AT A GLANCE. YOUR CONTRIBUTIONS You may elect to contribute regularly through payroll deductions once you are eligible to participate. Your contributions are based on your eligible pay. Eligible pay for this purpose is straight time wages, exclusive of all daily or weekly overtime, bonuses, supplementary compensation payments, retirement benefits and other forms of non- recurring compensation, but inclusive of shift differentials, Saturday/Sunday premiums, compensation paid at an alternative rate (not including compensation paid at an alternative rate if you are a salesperson) and seventy-five percent of sales commissions paid to you by Bay State (one hundred percent of sales commissions if paid to you by EnergyUSA). Your eligible pay includes pre-tax contributions you make to this Plan and other plans sponsored by Bay State. To elect to contribute, refer to Section entitled INSTRUCTIONS AT A GLANCE. EMPLOYEE PRE-TAX CONTRIBUTIONS You may choose to save pre-tax dollars by electing to contribute any percentage, up to 15%, of your eligible pay, subject to an annual contribution maximum. Refer to "Maximum Pre-Tax Contribution Dollar Limit" paragraph in Section entitled ANNUAL CONTRIBUTION AND COMPENSATION MAXIMUMS. If you are a highly compensated employee, as defined by the Internal Revenue Code and related regulations, you may be limited to a percentage that is less than 15%. Refer to "Maximum Allowable Contribution Percentage Limit" in Section entitled ANNUAL 14 CONTRIBUTION AND COMPENSATION MAXIMUMS. If you are limited to a percentage that is less than 15%, you will be notified. Your Employee Pre-Tax contributions are deposited into your Employee Pre-Tax Account. CHANGING, DISCONTINUING OR RESUMING YOUR CONTRIBUTIONS You may change your contribution percentage election as of the first day of any month. Your payroll deductions will change as soon as practicable after your request has been processed. You may discontinue contributions at any time. Your payroll deductions will stop as soon as practicable after your request has been processed. You may resume contributions as of the first day of any month. Your payroll deductions will resume as soon as practicable after your request has been processed. If you discontinue contributions more than once in a 12-month period, the Administrator reserves the right to require a longer waiting period before you resume contributions. To begin or change your contribution percentage election or to discontinue or resume contributions, refer to Section entitled INSTRUCTIONS AT A GLANCE. ROLLOVER CONTRIBUTIONS FROM ANOTHER QUALIFIED PLAN If you receive a distribution eligible for rollover from another employer's qualified plan (or a qualified plan of Bay State) or if you have a "rollover IRA," you may "roll over" all or part of that amount into this Plan if you are an eligible employee, even if you have not yet met the Plan's eligibility requirements. By making a Rollover contribution, you defer the tax liability on your distribution and take advantage of the investments offered in this Plan. Your Rollover contributions are deposited into your Rollover Account. To make a Rollover contribution, refer to Section entitled INSTRUCTIONS AT A GLANCE. SEPARATE ACCOUNTS Separate Accounts will be maintained for your contributions as described above and may also include a Prior After-Tax Account for after-tax contributions made under former Plan provisions. EMPLOYER CONTRIBUTIONS EMPLOYER CONTRIBUTIONS Your eligibility for Employer contributions and the amount Bay State contributes are determined under the terms of your governing collective bargaining agreement. If your collective bargaining agreement calls for Employer contributions, the Employer contributions 15 are based on your Employee Pre-Tax contributions and are deposited to your Account each time you contribute. Employer contributions made on your behalf are deposited into your Employer Account. SEPARATE ACCOUNTS Separate Accounts will be maintained for your Employer contributions as described above and which may also include a Prior Company Account for contributions made under former Plan provisions. ANNUAL CONTRIBUTION AND COMPENSATION MAXIMUMS The Internal Revenue Code and related regulations require that a number of limitations be applied to the Plan. These include (1) maximum amounts which may be contributed by you or on your behalf in any year and (2) a maximum amount of your eligible pay that may be taken into account for purposes of contributions. These limitations are briefly described below: MAXIMUM PRE-TAX CONTRIBUTION DOLLAR LIMIT. Your maximum pre-tax contribution dollar limit (including any pre-tax contributions you may make to any other 401(k) plan) is established each calendar year. This limit may be adjusted annually as announced by the Internal Revenue Service. For the calendar years 1998 and 1999, this limit is $10,000. For the calendar year 2000, this limit is $10,500. If you make pre-tax contributions to more than one 401(k) plan during the calendar year and the combination of your pre-tax contributions to the plans exceeds the maximum pre-tax contribution dollar limit, you should notify the Plan Administrator of this Plan or the plan administrator of the other plan that an excess has occurred and request that the excess amount be returned to you no later than April 15 of the following year. If the excess amount is not returned to you by April 15 of the following year, the excess amount will be taxable to you in the year the amount was contributed and the year the amount is distributed. MAXIMUM ALLOWABLE CONTRIBUTION PERCENTAGE LIMIT. If you are a highly compensated employee, your maximum Employee Pre- Tax contribution percentage may be limited to a percentage that is less than the percentage described in Section entitled YOUR CONTRIBUTIONS, as determined by a factor based on the average Employee Pre-Tax contribution percentage for non-highly compensated employees. Highly compensated employees generally include employees who earn more than a specified amount in the preceding Plan Year ($80,000 for 1998 and 1999, $85,000 for 2000). This amount may be adjusted annually as announced by the Internal Revenue Service. 16 If you are a highly compensated employee and you exceed this limit at any time, you will be notified and your future contributions may be reduced or stopped, and any excess may be refunded to you. MAXIMUM ANNUAL ADDITION LIMIT. The maximum amount that may be contributed by you (excluding rollover contributions) or on your behalf to this Plan or any other qualified defined contribution plan sponsored by Bay State is the lesser of (1) 25% of your W-2 taxable income (and salary reductions, if any, pursuant to Code Section 125, 402(e)(3), 402(h)(l)(B), 403(b), 408(p)(2)(A)(i) or 457) or (2) $30,000. The $30,000 amount may be adjusted annually as announced by the Internal Revenue Service. MAXIMUM ELIGIBLE PAY LIMIT. The maximum amount of your eligible pay that may be taken into account per Plan Year for purposes of contributions is $160,000. This amount may be adjusted annually as announced by the Internal Revenue Service. INVESTMENT FUNDS, INVESTMENT DIRECTION AND FUND TRANSFERS WHO MAKES THE INVESTMENT DECISIONS? You make your own investment decisions. Bay State has selected a variety of daily valued investment funds with different risk and return characteristics. Investment fund information sheets and prospectuses provide information about the investment options. If you have not received this information or would like updated information, you may obtain this information by telephoning 1-800-228-4015 and peaking with a participant services representative (or if you are hearing impaired, telephone 1-800-637-1215). Each of the investment funds has specific investment objectives for both risk and expected return. The specific investment funds available to you may be changed from time to time. The investment funds include a Company Stock Fund, which invests in shares of NiSource Inc. ("NiSource") common stock ("Company Stock"). For liquidity purposes, a portion of the Company Stock Fund will also be invested in money market type assets. When you enroll in the Plan you may elect the percentage of your Account you want invested in each investment fund. However, the Administrator reserves the right to set a maximum percentage of the total election that you may direct into any specific investment fund. You should make your investment choices based on your investment goals and your willingness to assume investment risk in order to realize potentially higher returns. Investment risk is defined as a measure of how much the investment returns can vary, either up or down, from period to period. 17 HOW MAY I OBTAIN INVESTMENT FUND PERFORMANCE INFORMATION? You may obtain recent investment fund performance information by telephoning 1-800-228-4015 (or if you are hearing impaired, telephone 1-800-637-1215). HOW MAY I CHANGE MY INVESTMENT DIRECTION AND WHEN DOES MY NEW INVESTMENT DIRECTION TAKE EFFECT? You may change your investment direction for future contributions and loan payments to your Account at any time. Only one investment direction will be allowed each day. If you telephone on a business day before the close of the New York Stock Exchange (4 p.m. Eastern time), your investment change will be processed that day. Otherwise it will be processed the next business day. For this purpose, a business day is a day on which the stock markets are open for trading. A written confirmation of your investment direction change will be sent within 48 hours of processing the transaction. To change your investment direction, refer to Section entitled INSTRUCTIONS AT A GLANCE. HOW DO I TRANSFER MY FUNDS? You may elect to transfer funds by telephoning 1-800-228-4015 (or if you are hearing impaired, telephone 1-800-637-1215). Transfers out may be requested in terms of dollars, shares or percentages. Dollar and percent transfers are based on the previous night's closing Net Asset Value and will be converted into a specific number of shares to be sold. Transfers in are always in percentages (in 1% increments) and must total to 100%. Only one fund transfer per day may be requested. In order for a fund transfer to be executed on the same business day as the telephone call, it must be completed by 4 p.m. Eastern time. To initiate a fund transfer, refer to Section entitled INSTRUCTIONS AT A GLANCE. INFORMATION REGARDING VOTING AND TENDERING COMPANY STOCK You will be entitled to instruct the Plan Trustee as to the voting or tendering of any whole and fractional shares of Company Stock held on your behalf in the Company Stock Fund. Nisource will be responsible for the timely distribution of proxy solicitation or other material to you in connection with any shareholder vote or tender decision, including a form for you to complete to instruct the Trustee with regard to voting or tendering. The Trustee is responsible for tabulating and complying with the voting or tendering instructions it receives from participants. The 18 Trustee will hold your instructions in confidence and will not divulge or release specific information regarding such instructions, on an individual basis, to any person, including officers or employees of NiSource or Bay State, except to the extent required by law. If you do not instruct the Trustee with regard to a shareholder vote or tender decision, your shares will be voted or tendered as instructed by the Committee for the Plan. VESTING Vesting is a term used to describe the portion of your Account which you own. Your balance in each of your Accounts is fully vested at all times. PARTICIPANT LOANS MAY I BORROW FROM MY ACCOUNT? You may borrow from all of your Accounts. You may have two loans outstanding at a time. HOW MUCH MAY I BORROW? The minimum loan amount is $1,000. The maximum you may borrow is 50% of your vested Account balance or, if less, $50,000. The $50,000 amount is reduced by your highest outstanding balance on all loans during the preceding 12 months. For purposes of this paragraph, all of Bay State's qualified plans are considered as part of this Plan to the extent the maximum loan amount would be decreased. You may obtain information about the amount you may borrow or do "modeling" to help you decide on the terms of the loan by telephoning 1-800-228-4015 (or if you are hearing impaired, telephone 1-800-637- 1215). WHAT IS THE LOAN INTEREST RATE? The interest rate is fixed at the time you borrow and shall be a reasonable rate of interest, determined by the Plan Administrator, which provides the Plan with a return commensurate with the prevailing interest rate charged by persons in the business of lending money for loans which would be made under similar circumstances. The interest rate may be changed from time to time. You may obtain information about the current interest rate by telephoning 1-800-228- 4015 (or if you are hearing impaired, telephone 1-800-637-1215). 19 WHAT IS THE LOAN REPAYMENT TERM? The loan repayment term may be for a period not to exceed five years. HOW DO I MAKE LOAN PAYMENTS AND HOW ARE THE PAYMENTS INVESTED? Loan payments, consisting of principal and interest, are made through convenient payroll deduction (or by check during any period you are temporarily ineligible for payroll deduction), and each payment is credited to your Account. You may make additional loan payments at any time by check or pay off the remaining balance of your loan at any time by cashier's check, certified check or money order. You may obtain your loan payoff amount by telephoning 1-800-228-4015 (or if you are hearing impaired, telephone 1-800-637-1215). Loan payments credited to your Account are invested in accordance with your current investment instructions for future contributions to your Account at the time the loan payment is deposited into your Account. WHAT HAPPENS IF MY EMPLOYMENT TERMINATES? Your outstanding loan balance is due should your employment with Bay State terminate for any reason. Your outstanding loan balance is due upon the earlier of the date you request a distribution from your Account or approximately 90 days after you terminate employment with Bay State. If you do not take action to pay your outstanding loan balance before that time, the unpaid balance will become a taxable distribution to you, except to the extent any portion of the unpaid balance represents a return of after-tax contributions. HOW IS MY LOAN SECURED? Your loan will be evidenced by a promissory note, secured by the portion of your Account from which the loan is made. The Plan shall have a lien on this portion of your Account. A suspension of loan payments may be authorized for up to 12 months if you are on leave of absence without pay. During the suspension period interest on your outstanding loan balance will continue to accrue. All past due amounts will be due at the end of the suspension period unless otherwise authorized. A loan is treated as in default if a scheduled loan payment is not made at the time required. You will have a grace period to cure the default before it becomes final. In the event the default becomes final, the default will be treated as a taxable distribution to you, except to the extent any portion of the unpaid balance represents a return of after-tax contributions. However, your promissory note will not be distributed and interest will continue to accrue on your outstanding loan balance, until such time as you are otherwise eligible for an in-service withdrawal or a distribution from your Account. 20 ARE THERE ANY LOAN FEES? If you took a loan prior to May 28, 1999, a loan maintenance fee of $3.50 will be assessed to your Account for each month your Account has a loan balance. The fee will be charged quarterly to your Account. You will see these fees on your quarterly statement. However, for new loans initiated after May 28, 1999, there will be a one-time fee of $40.00 that will be assessed to your Account at the time you take out the loan. WHAT HAPPENS WHEN I REQUEST A LOAN? Upon processing of your request, your investments will be redeemed as needed to fund your loan. Within each Account used for funding your loan, amounts will be redeemed from your investment funds in direct proportion to the value of your interest in each investment fund as of the date the loan is processed. As the Plan's investment funds are daily valued investment funds, your investments are redeemed based on the value of each such investment on the day your loan is processed. Your check and loan documents are generally issued within three business days thereafter. To request a loan, refer to Section entitled INSTRUCTIONS AT A GLANCE. WITHDRAWALS WHILE YOU ARE AN EMPLOYEE UNDER WHAT CIRCUMSTANCES MAY I MAKE A WITHDRAWAL FROM THE PLAN WHILE I AM AN EMPLOYEE? Withdrawals while you are an employee are permitted as described below. These withdrawals are referred to as in-service withdrawals. There is no minimum amount for any type of in-service withdrawal. * HARDSHIP WITHDRAWAL You may make an in-service withdrawal in certain cases of financial hardship. You may withdraw from all of your Accounts, except for any earnings credited to your Employee Pre-Tax Account after December 31, 1988. The amount you may withdraw may be no greater than the amount necessary to satisfy your financial need including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal. For this purpose, hardship is a financial need to: * Purchase your principal residence. 21 Pay unreimbursable medical expenses incurred or to be incurred by you, your spouse or dependents. * Pay unreimbursable tuition, related educational fees and room and board for up to the next 12 months of post- secondary education for you, your spouse or dependents. * Pay amounts necessary to prevent losing your principal residence through eviction or foreclosure on your mortgage. You may qualify for a Hardship Withdrawal by first borrowing and withdrawing all other available amounts from this Plan (and from any other plan maintained by Bay State), other than hardship withdrawals. You will be ineligible to contribute to the Plan for 12 months from the date of your Hardship Withdrawal. A special limitation may reduce the maximum amount of Employee Pre-Tax contributions you may contribute in the calendar year following the calendar year of your Hardship Withdrawal. * PRIOR AFTER-TAX ACCOUNT WITHDRAWAL You may make a Prior After-Tax Account Withdrawal once in any 12-month period. * ROLLOVER ACCOUNT WITHDRAWAL You may make a Rollover Account Withdrawal once in any 12- month period. * OVER AGE 59-1/2 WITHDRAWAL Once you have attained age 59-1/2 , you may make an Over Age 59-1/2 Withdrawal once in any 12-month period. You may withdraw from all of your Accounts. If you have a Prior After-Tax Account, you will need to designate whether you want to withdraw from this Account first as part of your Over Age 59-1/2 Withdrawal. * PRIOR COMPANY ACCOUNT PLUS WITHDRAWAL You may make a Prior Company Account Plus Withdrawal once in any 12-month period. You may withdraw from your Prior After-Tax, Rollover and Prior Company Accounts. 22 WHAT ARE MY IN-SERVICE WITHDRAWAL PAYMENT OPTIONS? Your in-service withdrawal will be paid in a single lump sum, in cash. WHAT ARE MY IN-SERVICE WITHDRAWAL METHODS? You may choose to have all or a portion of your in-service withdrawal that is eligible for rollover be made payable directly to an IRA, another employer's qualified plan or to you. The portion of your in- service withdrawal representing a return of after-tax contributions and, effective January 1, 1999 the portion of your hardship withdrawal representing Employee Pre-Tax contributions, are not eligible for rollover and will be made payable to you. Regarding the portion of your in-service withdrawal that is eligible for rollover and that is made payable to you, the law requires that 20% of that amount be withheld for federal taxes. Your actual tax liability may be more or less depending on your personal tax situation. WHAT HAPPENS WHEN I REQUEST AN IN-SERVICE WITHDRAWAL? An IRS Tax Notice is required to be provided to you no more than 90 days before your in-service withdrawal is made. The IRS Tax Notice summarizes the rules related to rollovers, income tax and penalties that may apply to your in-service withdrawal. You should review the IRS Tax Notice prior to requesting an in-service withdrawal. Upon processing of your request, your investments will be redeemed as needed to fund your in-service withdrawal. Within each Account used for funding your in-service withdrawal, amounts will be redeemed from your investment funds in direct proportion to the value of your interest in each investment fund as of the date the in-service withdrawal is processed. As the Plan's investment funds are daily valued investment funds, your investments are redeemed based on the value of each such investment on the day your in-service withdrawal is processed. Your check is generally issued within three business days thereafter. To request an in-service withdrawal, refer to Section entitled INSTRUCTIONS AT A GLANCE. WHAT ARE THE TAXES AND PENALTIES FOR IN-SERVICE WITHDRAWALS? The IRS Tax Notice summarizes the rules related to rollovers, income tax and penalties that may apply to your in-service withdrawal. DISTRIBUTIONS AFTER YOU TERMINATE EMPLOYMENT WITH BAY STATE WHAT ARE MY DISTRIBUTION PAYMENT OPTIONS? If your vested Account balance is $5,000 or less, your distribution payment options are limited to a single lump sum. Otherwise, you may choose to have your vested Account balance distributed as follows: 23 * paid in a single lump sum, * a portion paid in a lump sum, and the remainder paid later, or * paid in periodic installments over a period not to exceed the life expectancy of you and your beneficiary. Your distribution will be paid in cash, except to the extent of the distribution of your outstanding loan balance, if any, and except (if your Account is distributed in a lump sum) to the extent you choose to receive the portion of your distribution attributable to your Account balance invested in the Company Stock Fund in the form of whole shares of Company Stock and cash in lieu of fractional shares. WHAT ARE MY DISTRIBUTION METHODS? You may choose to have all or a portion of your distribution that is eligible for rollover be made payable directly to an IRA, another employer's qualified plan or to you. The portion of your distribution representing a return of after-tax contributions is not eligible for rollover and will be made payable to you. If your vested Account balance is $5,000 or less and you do not request a distribution, your vested Account balance may be distributed to you without your consent in a check made payable to you. Regarding the portion of your distribution that is eligible for rollover and that is made payable to you, the law requires that 20% of that amount be withheld for federal taxes. Your actual tax liability may be more or less depending on your personal tax situation. If you elect distribution in periodic installments, your Account will be charged a fee for each installment payment. You will see these fees on your quarterly statement. Currently, this fee is $3.00 per check and may be changed from time to time. WHEN ARE DISTRIBUTIONS MADE? You may generally choose when to take a distribution of your vested Account balance following your termination of employment with Bay State. Prior to 1999, the law required that you start taking distributions from your Account on or before the April 1 immediately after the later of the end of the calendar year in which you reach age 70-1/2 or the end of the calendar year in which your employment with Bay State terminates. Beginning in 1999, your distribution must begin upon the later of your attainment of age 70-1/2 or your termination of employment with Bay State. If your vested Account balance is $5,000 or less, you should request a distribution of your vested Account balance at the time you terminate employment with Bay State or shortly thereafter. If you do not request a distribution, your vested Account balance may be distributed to you 24 without your consent in a check made payable to you. Mandatory 20% federal tax withholding will apply as described above. If you are eligible and choose to defer distribution of your Account after your employment with Bay State terminates, an administrative fee will continue to be assessed to your Account each month and charged quarterly to your Account as described in Section entitled OTHER THINGS YOU SHOULD KNOW. Your Account will continue to be invested as you direct until it is distributed to you. WHAT HAPPENS WHEN I REQUEST A DISTRIBUTION? An IRS Tax Notice is required to be provided to you no more than 90 days before your distribution is made. The IRS Tax Notice summarizes the rules related to rollovers, income tax and penalties that may apply to your distribution. You should review the IRS Tax Notice prior to requesting a distribution. Upon processing of your request, your investments will be redeemed as needed to fund your distribution. Within each Account used for funding your distribution, amounts will be redeemed from your investment funds in direct proportion to the value of your interest in each investment fund as of the date the distribution is processed. As the Plan's investment funds are daily valued investment funds, your investments are redeemed based on the value of each such investment on the day your distribution is processed. Your check is generally issued within three business days thereafter. If you choose to receive the portion of your distribution attributable to your Account balance in the Company Stock Fund in the form of whole shares of Company Stock and cash in lieu of fractional shares, your stock certificate will be issued within a few weeks thereafter. To request a distribution upon termination of employment with Bay State, refer to Section entitled INSTRUCTIONS AT A GLANCE. WHAT ARE THE TAX TREATMENTS, TAXES AND PENALTIES FOR DISTRIBUTIONS? The IRS Tax Notice summarizes the rules related to rollovers, tax treatments, income tax and penalties that may apply to your distribution. DEATH BENEFITS WHAT HAPPENS TO MY PLAN BENEFIT IF I DIE? Upon your death, your Account becomes payable to your beneficiary(ies). If you die while an employee, your Account will become fully vested, if not otherwise fully vested. In general, your beneficiary has the same options as you do regarding when and how to 25 receive payment, except that a distribution to your beneficiary may only be eligible for rollover if your beneficiary is your spouse. Your beneficiary should contact the benefits department for further instructions. HOW MAY I DESIGNATE MY BENEFICIARY? When you become eligible to participate in the Plan or, if earlier, at the time you make a Rollover Contribution, you must complete and file a Beneficiary Designation Form stating who is to receive your Account balance if you die. You may change your beneficiary(ies) at any time by completing and filing a new Beneficiary Designation Form. The change takes effect on the date your new completed Beneficiary Designation Form is on file with the benefits department. If you are married, your spouse is automatically your sole primary beneficiary. To designate someone in addition to or other than your spouse as a primary beneficiary, you must obtain your spouse's written consent to your designation and your spouse's signature must be witnessed by a Plan representative or Notary Public. If you complete and file a Beneficiary Designation Form and later become married or remarry, your earlier Beneficiary Designation Form will not be valid. You will need to complete and file a new Beneficiary Designation Form. If you fail to complete and file a Beneficiary Designation Form before you die, your benefit upon death will be paid to the individual(s) in the first of the following categories in which there is at least one survivor: your spouse; your children (in equal shares), by right of representation; or your estate. REEMPLOYMENT WITH BAY STATE WHEN CAN I RESUME MY PARTICIPATION? If you were a Plan participant before your employment with Bay State terminated and you are rehired by Bay State, you may resume participation on the date of your rehire as an eligible employee. If you were not a participant when your employment with Bay State terminated, or were not eligible for Employer contributions, you will enter the Plan or become eligible for Employer contributions as described in Section entitled ELIGIBILITY, but no earlier than the date you would have entered the Plan or become eligible for Employer contributions if you had not terminated your employment with Bay State. FUTURE OF THE PLAN Bay State intends for the Plan to be a permanent part of your total benefits program. However, Bay State reserves the right to terminate the Plan at any time. 26 Bay State reserves the right to amend the Plan at any time if it becomes desirable or necessary. You will be notified within 210 days after the end of the Plan Year of any relevant Plan amendment. The Plan (including any amendments) is subject to approval by the IRS. From time to time, changes in the details of the Plan may be required by the IRS. However, no Plan amendment may take away any benefits you have earned. As the Plan benefits are provided by individual participant accounts, benefits under this Plan are not insured by the Pension Benefit Guaranty Corporation (PBGC). PBGC insurance does not apply to this type of plan. PLAN ADMINISTRATION ISSUES ACCOUNT STATEMENTS AND ACCOUNT INFORMATION You will receive statements four times each year. They will normally be sent to you within three weeks after the end of each quarter of the Plan Year. You have easy access to information regarding your Account at any time. To obtain information regarding your Account, refer to Section entitled INSTRUCTIONS AT A GLANCE. PLAN ADMINISTRATOR The Bay State Gas Company Benefits Committee is the Plan Administrator. Bay State has appointed this Benefits Committee and delegated to it all or part of its duties to oversee the Plan's operations. As a Plan fiduciary, the Plan Administrator acts on your behalf to see that the Plan is administered fairly according to standards outlined in the law and the terms of the Plan and Trust Agreement. Plan records are maintained on a Plan Year basis. The Plan Year ends on December 31. HOURS OF SERVICE Hours of service are used in determining your eligibility to participate. You earn one hour of service for each hour you are paid by Bay State (including any back pay you may be awarded). This includes hours when you do not actually work but receive pay (such as vacation, holiday, jury duty, illness or incapacity, such as disability). You receive credit for non-paid company time, such as a leave of absence approved by Bay State, military duty or a temporary layoff. 27 Service earned while you are not actively at work is based on your normally scheduled weekly hours. If you are a salaried employee, or there are no accurate records of your working hours, you will be credited with a set number of hours for each pay period in which you are paid for at least one hour. The rates of hours credited for each pay period are: 45 hours per weekly pay period, 90 hours per bi-weekly pay period, 95 hours per semi-monthly pay period and 190 hours per monthly pay period. AGENT FOR SERVICE OF LEGAL PROCESS Service of legal process may be made upon the Clerk of Bay State at the address listed in Section entitled PLAN DIRECTORY. TYPE OF PLAN This Plan is a profit sharing plan with a pre-tax salary deferral (401(k)) feature. TOP HEAVY CONTRIBUTION PROVISIONS The Plan includes provisions which apply only if the Plan is "top heavy." A plan is top heavy if more than 60% of the total plan assets belong to "key employees." Key employees include certain officers, shareholders and owners. If the plan is top heavy, contributions may not be made by or on behalf of key employees, other than a Rollover contribution, unless Bay State makes a minimum contribution to all eligible employees. OTHER THINGS YOU SHOULD KNOW TRUST FUND All of the Plan's assets are held in a trust fund which is the sole source of all benefit payments. The trust fund is a separate and distinct legal entity, and is not part of Bay State. The assets of the trust fund are not commingled with Bay State's assets. Generally, no part of the trust fund can be attached by creditors of any Plan participant or of Bay State. Assets of the trust fund are held exclusively to pay Plan benefits and expenses, and cannot revert to or be paid to Bay State, except under certain limited circumstances permitted by law. The Plan Trustee holds the Plan's assets, executes all of the investments, maintains the financial records relating to the trust, and makes all benefit payments as directed by the Plan Administrator. PLAN FEES AND EXPENSES Bay State pays all administrative fees and expenses related to maintaining the Plan as a whole. Bay State may, at a later date, 28 choose to have all or a portion of such fees and expenses paid by participants. Bay State will notify you in advance of any such change. If changed, an administrative fee will be assessed to your Account each month and charged quarterly to your Account, except that no fee may reduce your Account balance below zero. You will pay any special fees related to your own Account, such as loan fees and fees for installment payments. You will see these fees on your quarterly statement. PLAN PARTICIPATION PURSUANT TO A COLLECTIVE BARGAINING AGREEMENT The Plan is maintained pursuant to one or more collective bargaining agreements. You may obtain a copy of each such collective bargaining agreement by contacting the Plan Administrator or Human Resources. CLAIM REVIEW PROCEDURES As the Plan Administrator, the Benefits Committee is responsible for determining and informing you of your entitlement to a benefit and of any amounts payable to you. If you disagree with a decision, you or your authorized representative may ask for a review by submitting a written request to the benefits department. Your request should include the issues and comments you feel are important. You also have the right to review pertinent documents. The review process sets the following limits on the amount of time you may take to make your request and for the Plan Administrator to respond: DAYS TO RESPOND ACTION FROM PRIOR ACTION ------ ----------------- Plan Administrator sends you a benefit statement - You request an initial review . . . . . . . . . . . . . . . 60 days Plan Administrator sends you its initial decision . . . . . 90 days You request a final review. . . . . . . . . . . . . . . . . 60 days Plan Administrator sends you its final decision . . . . . . 60 days The Plan Administrator will either approve your claim or explain why your claim is being denied (by referring to specific Plan provisions) and how applications are reviewed. In special circumstances, the Plan Administrator may notify you and take up to an additional 90 days for its initial review and 60 days for its final review. NO ASSIGNMENT OF YOUR ACCOUNT IS PERMITTED Under this Plan, you may not assign, sell, transfer or use your Account as collateral, other than for a loan from your Account as 29 described in Section entitled PARTICIPANT LOANS. In addition, creditors may not attach your Account as a means of collecting debts. However, the Plan Administrator will comply with a "qualified domestic relations order" (QDRO). This is an order or judgment from a state court directing that a participant's Account, or portion thereof, be paid to an Alternate Payee (spouse, former spouse, child or other dependent of the participant) as child support, alimony or part of a division of marital property rights, provided that the order meets certain requirements of federal law. NO EMPLOYMENT RIGHTS Your participation in the Plan does not give you any employment rights with Bay State. YOUR RIGHTS UNDER FEDERAL LAW As a participant of this Plan you are entitled to certain rights and protection under the Employee Retirement Income Security Act of 1974 ("ERISA"). ERISA provides that all Plan participants shall be entitled to: * examine, without charge, at the Plan Administrator's office, all Plan documents and copies of all documents filed by the Plan with the U.S. Department of Labor, such as annual reports; * obtain copies of all Plan documents and information upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies; * receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report; and * obtain a statement telling you the amount of your Account balance, the portion of your Account balance you currently have a right to and when you will have the right to receive payment. If you do not have a right to a benefit, the statement will tell you how many years you have to work to get this right. This statement must be requested in writing and is not required to be given more than once a year. The Plan Administrator must provide the statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. 30 No one, including your employer or any other person, may terminate you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan Administrator review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request written materials from the Plan Administrator and do not receive them within 30 days, you may file suit in federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $100 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for a benefit which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay the costs and fees if, for example, it finds your claim is frivolous. If you have any questions about your Plan, you should contact the benefits department. If you have any questions about this statement of your rights under ERISA, you should contact the nearest Area Office of the Pension and Welfare Benefits Administration, U.S. Department of Labor. PLAN DIRECTORY * OFFICIAL PLAN NAME Bay State Gas Company Savings Plan for Operating Employees * Employer and Plan Number Employer's Identification Number (EIN) is 04-3442797 Plan Identification Number (PN) is 011 * OTHER PARTICIPATING COMPANIES Northern Utilities, Inc. Granite State Gas Transmission, Inc. EnergyUSA * PLAN YEAR January 1 through December 31 31 * PLAN SPONSOR Bay State Gas Company 300 Friberg Parkway Westborough, MA 01581-5039 1-508-836-7000 * INITIAL EFFECTIVE DATE January 1, 1988 * PLAN ADMINISTRATOR Benefits Committee Bay State Gas Company * PLAN'S RECORDKEEPING SERVICE PROVIDER Merrill Lynch Group Employee Services P.O. Box 6610 Englewood, CO 80155-6610 * PLAN TRUSTEE Merrill Lynch Trust Company, FSB 300 Davidson Avenue Somerset, NJ 08873 * AGENT FOR SERVICE OF LEGAL PROCESS Clerk - Bay State Gas Company 300 Friberg Parkway Westborough, MA 01581-5039 1-508-836-7000 INSTRUCTIONS AT A GLANCE IF YOU WANT TO ... YOU NEED TO DO THE FOLLOWING ... ------------------ -------------------------------- ENROLL IN THE PLAN * COMPLETE A PLAN ENROLLMENT FORM AND AND ELECT TO MAKE BENEFICIARY DESIGNATION FORM. RETURN CONTRIBUTIONS: THE FORMS TO THE BENEFITS DEPARTMENT FOR PROCESSING. YOUR ENROLLMENT FORM WILL BE FORWARDED TO MERRILL LYNCH FOR PROCESSING OF YOUR INVESTMENT FUND DIRECTION. YOU WILL RECEIVE A PERSONAL IDENTIFICATION NUMBER (PIN) FOR THE BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES IN A SECURED ENVELOPE AS A SEPARATE MAILING. 32 MAKE A ROLLOVER * Request a Rollover Contribution Form Contribution: from the benefits department. Complete and return the form to the benefits department for approval and forwarding to Merrill Lynch for processing. CHANGE OR SUSPEND YOUR * Request a Deferral Percentage Change SAVINGS RATE (DEFERRAL Form from the benefits department. PERCENTAGE): Complete and return the form to the benefits department for processing. CHANGE YOUR INVESTMENT * Telephone* Merrill Lynch at 1-800-228- DIRECTION OR TRANSFER 4015 (or if you are hearing impaired FUNDS:<1> telephone 1-800-637-1215). REQUEST A PARTICIPANT * Telephone* Merrill Lynch at 1-800-228- LOAN:<1> 4015 (or if you are hearing impaired telephone 1-800-637-1215). REQUEST AN IN-SERVICE * Telephone* Merrill Lynch at 1-800-228- WITHDRAWAL:<1> 4015 (or if you are hearing impaired telephone 1-800-637-1215). If you have not already received an IRS Tax Notice within the last 90 days, an IRS Tax Notice will be provided to you. * If you are requesting a Hardship Withdrawal, Merrill Lynch will send you a Hardship Withdrawal Request Form. Upon completion, return the form to the benefits department for approval and forwarding to Merrill Lynch for processing. REQUEST A DISTRIBUTION * Telephone* Merrill Lynch at 1-800-228- UPON TERMINATION: 4015 (or if you are hearing impaired telephone 1-800-637-1215). If you have not already received an IRS Tax Notice within the last 90 days, an IRS Tax Notice will be provided to you. OBTAIN INFORMATION * Telephone* Merrill Lynch at 1-800-228- REGARDING YOUR 4015 (or if you are hearing impaired ACCOUNT, INVESTMENT telephone 1-800-637-1215). FUND PRICES, LOAN INTEREST RATE ETC.: The Voice Response System (VRS) operates 24 hours a day, 7 days a week. If the information you need or the transaction you want to perform is not available through the VRS, or if you prefer to speak to a participant services representative, press "0" as soon as the VRS answers. If you have a rotary phone, simply stay on the line. 33 PARTICIPANT SERVICES REPRESENTATIVES ARE AVAILABLE ON ANY BUSINESS DAY BETWEEN 8 A.M. AND 8 P. M. (EASTERN TIME). * All or a portion of the calls are tape recorded for your protection. <1> Limitations on Transactions. Only ONE FINANCIAL TRANSACTION may be initiated in any given business day. Therefore, transfers, loans and withdrawals may not be transacted on the same business day. ______________________________________________________________________ ______________________________________________________________________ INTERNET ACCESS Internet access to your account will be provided through Bene OnLine{SM} Bene OnLine is a comprehensive web site that will allow you to make transactions as well as check the status of your Plan account. To access Bene OnLine, you will need your Social Security number and your PIN. Then, just follow these steps to gain access to the web site. 1. Connect to the Internet 2. Type http://www.benefits.ml.com in the "location" box of your browser. Hit the "enter" key on your keyboard. 3. Enter your Social Security number and PIN. If you don't enter your PIN, you will still be able to view the entire site with the exception of account-related information. 4. Click on the "sign-on" button. Remember to log off the site when you are finished. LIMITATION OF LIABILITY Neither the Company, Bay State, nor any of their agents (including Bay State if it is acting as such) in administering the Plan shall be liable for any act done in good faith or for the good faith omission to act in connection with the Plan. However, nothing contained herein shall affect a Participant's right to bring a cause of action based on alleged violations of federal securities laws. USE OF PROCEEDS The Company does not anticipate that it will realize any net proceeds from the issuance of its Common Shares under the Plan. PLAN OF DISTRIBUTION The Common Shares being offered hereby are offered pursuant to the Plan, the terms of which provide for the issuance of Common Shares in 34 connection with investment of participant and employer contributions to the Plan. DESCRIPTION OF COMMON SHARES The Company's certificate of incorporation authorizes the issuance of 400,000,000 Common Shares. The description of the Common Shares is incorporated by reference into this Prospectus. See "Where You Can Find More Information" for information on how to obtain a copy of this description. EXPERTS The consolidated financial statements and schedules of NiSource incorporated by reference herein have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said reports. The consolidated financial statements of Columbia incorporated in this document by reference herein have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said report. LEGAL MATTERS Certain legal matters in connection with the Company's Common Shares offered hereby have been passed upon for the Company by Schiff Hardin & Waite, Chicago, Illinois. 35 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses in connection with the offering are as follows: Registration fee under the Securities Act . . . . . . . . . $0* Legal fees and expenses . . . . . . . . . . . . . . . . $15,000 Accounting fees and expenses . . . . . . . . . . . . . $ 5,000 Miscellaneous . . . . . . . . . . . . . . . . . . . . . $15,000 ------ Total . . . . . . . . . . . . . . . . . . $35,000 *Registration fee was previously paid in connection with the filing by Registrants of the Registration Statement on Form S-4 (File No. 333- 33896). ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Delaware General Corporation Law permits a corporation to indemnify any person who is a party or is threatened to be made a party to any action, suit or proceeding brought or threatened by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving as such with respect to another corporation at the request of the corporation, if that person acted in good faith, in the case of conduct in his or her official capacity, that person reasonably believed his or her conduct to be in the best interests of the corporation, or in the case of all other conduct, that person reasonably believed his or her conduct was not opposed to the best interests of the corporation, and with respect to any criminal action, that person had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her actions were unlawful. A corporation must indemnify a 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, because he or she is or was a director or officer or is or was serving at the request of the corporation as a director or officer of another corporation or other enterprise, if the person has been wholly successful in defense of the proceeding on the merits or otherwise. A corporation may advance expenses, including attorneys' fees, to any director or officer who is a party to a proceeding in advance of final disposition of the proceeding if the director or officer furnishes the corporation a written undertaking to repay the advance if it is ultimately determined that the director did not meet the required standard of conduct. Amounts to be indemnified include judgments, penalties, fines, settlements and reasonable expenses that were actually incurred by the person. However, if the 36 proceeding was by or in the right of the corporation, the person will be indemnified only against reasonable expenses incurred and indemnification will not be provided if the individual is adjudged liable to the corporation in the proceeding. The Company's certificate of incorporation permits the Company to indemnify directors, officers, employees and agents of the corporation and its wholly-owned subsidiaries to the fullest extent permitted by law. As authorized under the Company's By-Laws and the Delaware General Corporation Law, the Company and its subsidiaries maintain insurance that insures directors and officers for acts committed in their capacities as such directors or officers that are determined to be not indemnifiable under the Company's indemnity provisions. Section 6.10 of the Agreement and Plan of Merger dated as of February 27, 2000, as amended and restated as of March 31, 2000, among Columbia Energy Group, NiSource Inc., New NiSource Inc., Parent Acquisition Corp., Company Acquisition Corp. and NiSource Finance Corp. (the "Merger Agreement") provides for indemnification by the Company under certain circumstances of the directors and officers of Columbia. Additionally, the Merger Agreement provides that the Company will maintain Columbia's existing officers' and directors' insurance policies or provide substantially similar insurance coverage for at least six years. ITEM 16. EXHIBITS. The Exhibits filed herewith are set forth on the Exhibit Index filed as part of this Registration Statement. ITEM 17. UNDERTAKINGS. The Registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed 37 with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of an annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, 38 the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 39 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Merrillville, State of Indiana, on October 27, 2000. NEW NISOURCE INC. (Registrant) By: /s/ Gary L. Neale ----------------------------------- Gary L. Neale Chairman, President and Chief Executive Officer POWER OF ATTORNEY Each director and officer of the Registrant whose signature appears below hereby authorizes the agent for service named in the registration statement to execute in the name of such person and to file any amendments to this registration statement necessary or advisable to enable the Registrant to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such other changes in this registration statement as the agent for service deems appropriate, and any subsequent registration statement for the same offering that may be filed under Rule 462(b) under the Securities Act of 1933, as amended. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- /s/ Gary L. Neale Chairman, President and October 27, 2000 ----------------------- Chief Executive Officer Gary L. Neale (Principal Executive Officer) /s/ Stephen P. Adik Vice President and October 27, 2000 ----------------------- Director (Principal Stephen P. Adik Financial and Accounting Officer) 40 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, NiSource Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Merrillville, State of Indiana, on October 27, 2000. NISOURCE INC. (Registrant) By: /s/ Gary L. Neale --------------------------------- Gary L. Neale Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- /s/ Gary L. Neale Chairman, President October 27, 2000 ----------------------- and Chief Executive Gary L. Neale Officer (Principal Executive Officer) /s/ Stephen P. Adik Senior Executive Vice October 27, 2000 ----------------------- President, Chief Stephen P. Adik Financial Officer and Treasurer (Principal Accounting Officer) /s/ Steven C. Beering* Director October 27, 2000 ------------------------- Steven C. Beering 41 /s/ Arthur J. Decio* Director October 26, 2000 ------------------------- Arthur J. Decio /s/ Dennis E. Foster* Director October 26, 2000 ------------------------- Dennis E. Foster /s/ James T. Morris* Director October 26, 2000 ------------------------- James T. Morris /s/ Ian M. Rolland* Director October 26, 2000 ------------------------- Ian M. Rolland /s/ John W. Thompson* Director October 26, 2000 ------------------------- John W. Thompson /s/ Robert J. Welsh* Director October 26, 2000 ------------------------- Robert J. Welsh /s/ Carolyn Y. Woo* Director October 26, 2000 ------------------------- Carolyn Y. Woo /s/ Roger A. Young* Director October 26, 2000 ------------------------- Roger A. Young *By: /s/ Stephen P. Adik ------------------------ Stephen P. Adik Attorney-in-Fact 42 INDEX TO EXHIBITS Exhibit Number Description ------------- ----------- 2* Agreement and Plan of Merger dated as of February 27, 2000, as amended and restated as of March 31, 2000, among Columbia Energy Group, NiSource Inc., New NiSource Inc., Parent Acquisition Corp., Company Acquisition Corp. and NiSource Finance Corp. (incorporated by reference to Annex I of the Joint Proxy Statement/Prospectus contained in the Company's Registration Statement on Form S-4/A (File No. 333-33896), filed with the Commission on April 24, 2000). 4.1 Form of Bay State Gas Company Savings Plan for Operating Employees. 4.2** Rights Agreement between New NiSource Inc. and ChaseMellon Shareholder Services, L.L.C., as rights agent dated ______, 2000. 5 Opinion of Schiff Hardin & Waite. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Arthur Andersen LLP. 23.3 Consent of Schiff Hardin & Waite (included in its opinion filed as Exhibit 5). 24.1 Power of Attorney for New NiSource Inc. (included on signature page). 24.2 Power of Attorney for NiSource Inc. __________ * Incorporated by reference. ** To be filed by amendment. 43 EX-4 2 0002.txt EXHIBIT 4.1 ----------- BAY STATE GAS COMPANY SAVINGS PLAN FOR OPERATING EMPLOYEES AND TRUST Amended and Restated effective January 1,1998 First Amendment to the Bay State Gas Company Savings Plan for Operating Employees and Trust WHEREAS, Bay State Gas Company (the "Company"), approved and adopted the Bay State Gas Company Savings Plan for Operating Employees (the "Plan") and Trust Agreement (the "Trust") which were originally effective January 1, 1988, and most recently restated January 1, 1998; WHEREAS, Section 19.1 of the Plan and Trust provides that the Company reserves the right to amend the Plan and Trust; NOW THEREFORE RESOLVED, that the Plan is amended as follows: EFFECTIVE JANUARY 9, 2000: 1. The Appendices are amended to amend Appendix D to add (k) as follows: (k) Springfield Division, United Steelworkers of America, AFL- CIO-CLC, Local 12026 Clerical Technical Unit ("Local 12026- Springfield Employees-Clerical Technical Unit") - 2. The Schedules are amended to add Schedule K as follows: SCHEDULE K - LOCAL 12026 SPRINGFIELD CLERICAL TECHNICAL UNIT Employee Pre-Tax Contributions Eligibility: First day of the month following the completion of a 60 day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 1202 SpringfieId Employee- Clerical Technical Unit Employee. Amount of Employer Contributions: The Employer Contribution for each period shall total 50% of each eligible Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. Notwithstanding the foregoing, "100% of each eligible Participant's Employee Pre-Tax Contributions for the period up to 2.5% of his or her Pay and 50% of each eligible Participant's 1 Employee Pre-Tax Contributions for the period on the next 5% of his or her Pay" shall be substituted for the formula as stated in the preceding sentence with regard to an eligible Participant who: (1) became an Employee before September 1, 1990 and was under age 45 on January 1, 1992; or (2) became an Employee on or after September 1, 1990; or (3) became an Employee before September 1, 1990, was at least age 45 on January 1, 1992 and irrevocably elected to waive eligibility for post-retiree medical coverage no later than September 1, 1992. 3. The Table of Contents is amended to amend APPENDIX D EL1GIBLE EMPLOYEE to add SCHEDULE K as follows: SCHEDULE K - LOCAL 12026 - SPRINGFIELD EMPLOYEES - CLERICAL TECHNICAL UNIT 4. Section 5.1(a) is amended by deleting the phrase "Schedules A through J" and substituting "Schedules A through K" therefor. 5. Section 5.1(b) is amended by deleting the phrase "Schedules A through J" and substituting "Schedules A through K" therefor. Date:_______________, 2000 Bay State Gas Company By:___________________________________ Title:________________________________ The provisions of the above amendment that relate to the Trustee are hereby approved and executed. Date:_______________, 2000 Merrill Lynch Trust Company, FSB By:___________________________________ Title:________________________________ 2 Bay State Gas Company Savings Plan for Operating Employees and Trust As Amended and Restated Effective January 1, 1998 Bay State Gas Company (the "Company"), having originally adopted and established the Bay State Gas Company Savings Plan for Operating Employees (the "Plan") and Trust Agreement (the "Trust") effective January 1, 1988, for the exclusive benefit of eligible employees of the Company and its participating affiliates, last amended and restated the Plan and Trust effective April 1, 995. The Plan is intended to constitute a qualified profit sharing plan, as described in Code section 401(a), which includes a qualified cash or deferred arrangement, as described in Code section 401(k). The provisions of the Plan and Trust relating to the Trustee constitute the trust agreement which is entered into by and between the Company and Merrill Lynch Trust Company, FSB (the "Trustee"). The Trust is intended to be tax exempt, as described in Code section 501(a). The Plan is intended to comply with the qualification requirements as amended by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), the Uruguay Round Agreements Act (GATT), the Small Business Job Protection Act of 1996 (SBJPA), the Taxpayer Relief Act of 1997 (TRA '97), and the Restructuring and Reform Act of 1998 (RRA '98), and is intended to comply in operation therewith. To the extent that the Plan, as set forth below, is subsequently determined to be insufficient to comply with such requirements and any regulations issued under these qualification requirements, the Plan shall later be amended to so comply. The Bay State Gas Company Savings Plan for Operating Employees and Trust, as set forth in this document, is hereby amended and restated effective as of January 1, 1998 (except as otherwise indicated herein). Date:_______________, 2000 Bay State Gas Company By: /s/ Barbara McKay ------------------------------------ Title:_________________________________ The trust agreement set forth in those provisions of the Plan and Trust which relate to the Trustee is hereby executed. Date:_______________, 2000 Merrill Lynch Trust Company, FSB By:____________________________________ Title:_________________________________ TABLE OF CONTENTS PAGE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1 2 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . 12 2.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . 12 2.2 Ineligible Employees . . . . . . . . . . . . . . . . . 13 2.3 Ineligible, Terminated or Former Participants . . . . . 13 3 PARTICIPANT CONTRIBUTIONS . . . . . . . . . . . . . . . . . 14 3. 1 Employee Pre-Tax Contribution Election . . . . . . . . 14 3.2 Changing a Contribution Election . . . . . . . . . . . 14 3.3 Revoking and Resuming a Contribution Election . . . . . 14 3.4 Contribution Percentage Limits . . . . . . . . . . . . 14 3.5 Refunds When Contribution Dollar Limit Exceeded . . . . 15 3.6 Timing, Posting and Tax Considerations . . . . . . . . 15 4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS . . . . . . . . . . . . . . . . . . . . . . 16 4.1 Rollover Contributions . . . . . . . . . . . . . . . . 16 4.2 Transfers From and To Other Qualified Plans . . . . . . 17 5 EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 17 5.1 Employer Contributions . . . . . . . . . . . . . . . . 17 5.2 Plan Expenses Contributions . . . . . . . . . . . . . . 18 6 ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.1 Individual Participant Accounting . . . . . . . . . . . 18 6.2 Sweep Account is Transaction Account . . . . . . . . . 18 6.3 Trade Date Accounting and lnvestment Cycle . . . . . . 19 6.4 Accounting for Investment Funds . . . . . . . . . . . . 19 6.5 Payment of Fees and Expenses . . . . . . . . . . . . . 19 6.6 Accounting for Participant Loans . . . . . . . . . . . 20 6.7 Error Correction . . . . . . . . . . . . . . . . . . . 20 6.8 Participant Statements . . . . . . . . . . . . . . . . 20 6.9 Special Accounting During Conversion Period . . . . . . 21 6.10 Accounts for Alternate Payees . . . . . . . . . . . . . 21 7 INVESTMENT FUNDS AND ELECTIONS . . . . . . . . . . . . . . . 22 7.1 Investment Funds . . . . . . . . . . . . . . . . . . . 22 7.2 Responsibility for Investment Choice . . . . . . . . . 22 7.3 Investment Fund Elections . . . . . . . . . . . . . . . 23 7.4 Default if No Valid Investment Election . . . . . . . . 23 7.5 Investment Fund Election Change Fees . . . . . . . . . 23 8 VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . 23 8.1 Fully Vested Accounts . . . . . . . . . . . . . . . . . 23 9 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . . . 23 9.1 Participant Loans Permitted . . . . . . . . . . . . . . 23 i 9.2 Loan Application, Note and Security . . . . . . . . . . 24 9.3 Spousal Consent . . . . . . . . . . . . . . . . . . . . 24 9.4 Loan Approval . . . . . . . . . . . . . . . . . . . . . 24 9.5 Loan Funding Limits, Account Sources and Funding Order 24 9.6 Maximum Number of Loans . . . . . . . . . . . . . . . . 25 9.7 Source and Timing of Loan Funding . . . . . . . . . . . 25 9.8 Interest Rate . . . . . . . . . . . . . . . . . . . . . 25 9.9 Loan Payment . . . . . . . . . . . . . . . . . . . . . 25 9.10 Loan Payment Hierarchy . . . . . . . . . . . . . . . . 25 9.11 Repayment Suspension . . . . . . . . . . . . . . . . . 26 9.12 Loan Default . . . . . . . . . . . . . . . . . . . . . 26 9.13 Call Feature . . . . . . . . . . . . . . . . . . . . . 26 10 IN-SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . . . 26 10.1 In-Service Withdrawals Permitted . . . . . . . . . . . 26 10.2 In-Service Withdrawal Application and Notice . . . . . 27 10.3 Spousal Consent . . . . . . . . . . . . . . . . . . . . 27 10.4 In-Service Withdrawal Approval . . . . . . . . . . . . 27 10.5 Payment Form and Medium . . . . . . . . . . . . . . . . 28 10.6 Source and Timing of In-Service Withdrawal Funding . . 28 10.7 Hardship Withdrawals . . . . . . . . . . . . . . . . . 28 10.8 Prior After-Tax Account Withdrawals . . . . . . . . . . 30 10.9 Rollover Account Withdrawals . . . . . . . . . . . . . 30 10.10 Prior Company Account Plus Withdrawals . . . . . . 31 10.11 Over Age 59 1/2 Withdrawals . . . . . . . . . . . 31 11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S REQUIRED BEGINNING DATE . . . . . . . . . . . 32 11.1 Benefit Information, Notices and Election . . . . . . . 32 11.2 Spousal Consent . . . . . . . . . . . . . . . . . . . . 33 11.3 Payment Form and Medium . . . . . . . . . . . . . . . . 33 11.4 Distribution of Small Amounts . . . . . . . . . . . . . 33 11.5 Source and Timing of Distribution Funding . . . . . . . 34 11.6 Latest Commencement Permitted . . . . . . . . . . . . . 34 11.7 Payment Within Life Expectancy . . . . . . . . . . . . 35 11.8 Incidental Benefit Rule . . . . . . . . . . . . . . . . 35 11.9 Payment to Beneficiary . . . . . . . . . . . . . . . . 36 11.10 Beneficiary Designation . . . . . . . . . . . . . 36 12 ADP AND ACP TESTS . . . . . . . . . . . . . . . . . . . . . 37 12.1 Contribution Limitation Definitions . . . . . . . . . . 37 12.2 ADP and ACP Tests . . . . . . . . . . . . . . . . . . . 41 12.3 Connection of ADP and ACP Tests for Plan Years Commencing Before January 1, 1997 . . . . . . . . . . . 42 12.4 Connection of ADP and ACP Tests for Plan Years Commencing After December 31, 1996 . . . . . . . . . . 43 12.5 Multiple Use Test . . . . . . . . . . . . . . . . . . . 45 12.6 Connection of Multiple Use Test . . . . . . . . . . . . 45 12.7 Adjustment for Investment Gain on Loss . . . . . . . . 45 12.8 Testing Responsibilities and Required Records . . . . . 46 12.9 Separate Testing . . . . . . . . . . . . . . . . . . . 46 ii 13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS . . . . . . . . 46 13.1 "Annual Addition" Defined . . . . . . . . . . . . . . . 46 13.2 Maximum Annual Addition . . . . . . . . . . . . . . . . 47 13.3 Avoiding an Excess Annual Addition . . . . . . . . . . 47 13.4 Correcting an Excess Annual Addition . . . . . . . . . 47 13.5 Correcting a Multiple Plan Excess . . . . . . . . . . . 47 13.6 "Defined Benefit Fraction" Defined . . . . . . . . . . 48 13.7 "Defined Contribution Fraction" Defined . . . . . . . . 48 13.8 Combined Plan Limits and Correction . . . . . . . . . . 48 14 TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . . . 49 14.1 Top Heavy Definitions . . . . . . . . . . . . . . . . . 49 14.2 Special Contributions . . . . . . . . . . . . . . . . . 51 14.3 Adjustment to Combined Limits for Different Plans . . . 51 15 PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 51 15.1 Plan Delineates Authority and Responsibility . . . . . 51 15.2 Fiduciary Standards . . . . . . . . . . . . . . . . . . 52 15.3 Company's Benefits Committee is ERISA Plan Administrator . . . . . . . . . . . . . . . . . . . . . 52 15.5 Advisors May be Retained . . . . . . . . . . . . . . . 53 15.6 Delegation of Administrator Duties . . . . . . . . . . 54 15.7 Committee Operating Rules . . . . . . . . . . . . . . . 54 15.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . 55 15.9 Company Not A Fiduciary . . . . . . . . . . . . . . . . 55 16 MANAGEMENT OF INVESTMENTS . . . . . . . . . . . . . . . . . 55 16.1 Trust Agreement . . . . . . . . . . . . . . . . . . . . 55 16.2 Investment Funds . . . . . . . . . . . . . . . . . . . 55 16.3 Authority to Hold Cash . . . . . . . . . . . . . . . . 56 16.4 Trustee to Act Upon Instructions . . . . . . . . . . . 56 16.5 Administrator Has Right to Vote Registered Investment Company Shares . . . . . . . . . . . . . . . . . . . . 57 16.6 Custom Fund Investment Management . . . . . . . . . . . 57 16.7 Master Custom Fund . . . . . . . . . . . . . . . . . . 58 16.8 Authority to Segregate Assets . . . . . . . . . . . . . 58 16.10 Participants Have Right to Vote and Tender Company Stock . . . . . . . . . . . . . . . . . . . . . . 59 16. 11 Registration and Disclosure for Company Stock . . 59 17 TRUST ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 59 17.1 Trustee to Construe Trust . . . . . . . . . . . . . . . 59 17.2 Trustee To Act As Owner of Trust Assets . . . . . . . . 60 17.3 United States Indicia of Ownership . . . . . . . . . . 60 17.4 Tax Withholding and Payment . . . . . . . . . . . . . . 60 17.5 Trust Accounting . . . . . . . . . . . . . . . . . . . 61 17.6 Valuation of Certain Assets . . . . . . . . . . . . . . 61 17.7 Legal Counsel . . . . . . . . . . . . . . . . . . . . . 61 17.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . 62 17.9 Trustee Duties and Limitations . . . . . . . . . . . . 62 18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION . . . . . 62 iii 18.1 Plan Does Not Affect Employment Rights . . . . . . . . 62 18.2 Compliance With USERRA . . . . . . . . . . . . . . . . 62 18.3 Limited Return of Contributions . . . . . . . . . . . . 63 18.4 Assignment and Alienation . . . . . . . . . . . . . . . 63 18.5 Facility of Payment . . . . . . . . . . . . . . . . . . 64 18.6 Reallocation of Lost Participant's Accounts . . . . . . 64 18.7 Suspension of Certain Plan Provisions During Conversion Period . . . . . . . . . . . . . . . . . . . . . . . . 64 18.8 Suspension of Certain Plan Provisions During Other Periods . . . . . . . . . . . . . . . . . . . . . . . . 64 18.9 Claims Procedure . . . . . . . . . . . . . . . . . . . 65 18.10 Construction . . . . . . . . . . . . . . . . . . . 66 18.11 Jurisdiction and Severability . . . . . . . . . . 66 18.12 Indemnification by Employer . . . . . . . . . . . 66 18.13 Effect of Collectively Bargained Schedules . . . . 67 18.14 Release by Participants and Beneficiaries . . . . 67 19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION . . . . . . 67 19.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . 67 19.2 Merger . . . . . . . . . . . . . . . . . . . . . . . . 68 19.3 Divestitures . . . . . . . . . . . . . . . . . . . . . 68 19.4 Plan Termination and Complete Discontinuance of Contributions . . . . . . . . . . . . . . . . . . . . . 69 19.5 Amendment and Termination Procedures . . . . . . . . . 69 19.6 Termination of Employer's Participation . . . . . . . . 70 19.7 Replacement of the Trustee . . . . . . . . . . . . . . 70 19.8 Final Settlement and Accounting of Trustee . . . . . . 70 APPENDIX A - INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . 72 APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES . . . . . . . . . 73 APPENDIX C - LOAN INTEREST RATE . . . . . . . . . . . . . . . . . 74 APPENDIX D - ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . 75 SCHEDULE A - LOCAL 326 LAWRENCE EMPLOYEES . . . . . . . . . . . . 76 SCHEDULE B - LOCAL 273 BROCKTON OPERATING EMPLOYEES . . . . . . . 77 SCHEDULE C - LOCAL 273 BROCKTON CLERICAL/TECHNICAL EMPLOYEES . . 78 SCHEDULE D - LOCAL 341PORTLAND EMPLOYEES . . . . . . . . . . . . 79 SCHEDULE E - LOCAL 341 GRANITE STATE EMPLOYEES . . . . . . . . . 80 SCHEDULE F - LOCAL 12026 SPRINGFIELD EMPLOYEES . . . . . . . . . 81 SCHEDULE G - LOCAL 486 SPRINGFIELD EMPLOYEES . . . . . . . . . . 82 SCHEDULE H - LOCAL 12012-6 PORTSMOUTH EMPLOYEES . . . . . . . . . 83 iv SCHEDULE I - LOCAL 8-366 ENERGYUSA BROCKTON PROPANE EMPLOYEES . . 84 SCHEDULE J - LOCAL 12012-8 ENERGYUSA NORTHERN PROPANE EMPLOYEES . 85 v 1 DEFINITIONS When capitalized, the words and phrases below have the following meanings unless different meanings are clearly required by the context: 1.1 "Account". The records maintained by the Administrator for purposes of accounting for a Participant's interest in the Plan. "Account" may refer to one or all of the following accounts which have been created on behalf of a Participant to hold amounts attributable to specific types of Contributions under the Plan, contributions previously permitted under the Plan and amounts transferred from the Bay State Gas Company Employee Stock Ownership Plan (the "ESOP") and/or the Bay State Gas Company Employee Savings Plan (the "Salaried Plan") in accordance with Section 4.2: (a) "Employee Pre-Tax Account". An account created to hold amounts attributable to Employee Pre-Tax Contributions and amounts transferred from the Salaried Plan designated as "Employee Pre-Tax Account" amounts thereunder. (b) "Prior After-Tax. Account". An account created to hold amounts attributable to amounts transferred from the Salaried Plan designated as "Prior After-Tax Account" amounts thereunder. (c) "Rollover Account". An account created to hold amounts attributable to Rollover Contributions and amounts transferred from the Salaried Plan designated as "Rollover Account" amounts thereunder. (d) "Employer Account". An account created to hold amounts attributable to Employer Contributions and amounts transferred from the Salaried Plan designated as "Employer Match Account" amounts thereunder. (e) "Plan Expense Account". An account created to hold amounts attributable to Plan Expenses Contributions. (f) "Prior Company Account". An account created to hold amounts transferred from the Salaried Plan designated as "Prior Company Account" amounts thereunder. 1.2 "ACP" or "Average Contribution Percentage". The percentage calculated in accordance with Section 12.1. 1.3 "Administrator". The Bay State Gas Company Benefits Committee, which may delegate all or a portion of the duties 1 of the Administrator under the Plan to a Committee in accordance with Section 15.6. 1.4 "ADP" or "Average Deferral Percentage". The percentage calculated in accordance with Section 12.1. 1.5 "Alternate Payee". Any spouse, former spouse, child or other dependent (as defined in Code section 152) of a Participant who is recognized by a qualified domestic relations order ("ODRO") as having a right to receive all, or a portion, of the Participant's Account under the Plan. 1.6 "Beneficiary". The person(s) entitled to receive benefits under the Plan after the death of either the Participant pursuant to the "Beneficiary Designation" paragraph in Section 11 or the Alternate Payee pursuant to Section 6.10. 1.7 "Code". The Internal Revenue Code of 1986, as amended. Reference to any specific Code section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section. 1.8 "Committee". If applicable, the committee which has been appointed by the Administrator to administer the Plan in accordance with Section 15.6. 1.9 "Company". Bay State Gas Company or any successor by merger, purchase or otherwise. 1.10 "Company Stock". Shares of common stock of the Company, its predecessor(s), or its successors or assigns, or any corporation with or into which said Company may be merged, consolidated or reorganized, or to which a majority of its assets may be sold. 1.11 "Compensation". The sum of a Participant's Taxable Income and salary reductions, if any, pursuant to Code section 125, 402(e)(3), 402(g), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or 457. For purposes of determining benefits under the Plan, Compensation is limited to $150,000 per Plan Year (as adjusted for cost of living increases pursuant to Code sections 401(a)(17) and 415(d)). For Plan Years commencing before January 1, 1997, for purposes of the preceding sentence, in the case of an HCE who is a 5% Owner or one of the 10 most highly compensated Employees, (i) such HCE and such HCE"s family group (as defined below) shall be treated as a single employee and the Compensation of each family group member shall be aggregated with the Compensation of such HCE, and (ii) the limitation on Compensation shall be 2 allocated among such HCE and his or her family group members in proportion to each individual's Compensation before the application of this sentence. For purposes of this Section, the term "family group" shall mean an Employee's spouse and lineal descendants who have not attained age 19 before the close of the year in question. For purposes of determining HCEs and key employees and for Plan Years commencing after December 31, 1997, for purposes of Sections 13.2 and 14.2, Compensation for the entire Plan Year shall be used. For purposes of determining ADP and ACP, Compensation shall be limited to amounts paid to an Eligible Employee while a Participant. 1.12 "Contribution". An amount contributed to the Plan by the Employer or an Eligible Employee, and allocated by contribution type to Participants" Accounts, as described in Section 1.1. Specific types of contribution include: (a) "Employee Pre-Tax Contribution". An amount contributed by an eligible Participant in conjunction with his or her Code section 401(k) salary deferral election which shall be treated as made by the Employer on the eligible Participant's behalf. (b) "Rollover Contribution". An amount contributed by an Eligible Employee which originated from another employer's or the Employer's qualified plan. (c) "Employer Contribution". An amount contributed by the Employer on an eligible Participant's behalf based upon the amount contributed by the eligible Participant. (d) "Plan Expenses Contribution". An amount contributed by the Employer, at its discretion, for the payment of expenses of the Plan and Trust. 1.13 "Contribution Dollar Limit". The annual limit placed on each Participant's Employee Pre-Tax Contributions, which shall be $7,000 per calendar year (as adjusted for cost of living increases pursuant to Code sections 402(g)(5) and 415(d)). For purposes of this Section, a Participant's Employee Pre- Tax Contributions shall include (i) any employer contribution under a qualified cash or deferred arrangement (as defined in Code section 401(k)) to the extent not includible in gross income for the taxable year under Code section 402(e)(3) (determined without regard to Code section 402(g)), (ii) any employer contribution to the extent not includible in gross income for the taxable year under Code section 402(h)(1)(B) (determined without regard to Code section 402(g)), (iii) any employer contribution to purchase an annuity contract under Code section 403(b) under a salary reduction agreement (within the meaning of Code section 3 3121(a)(5)(D)) and (iv) for calendar years commencing after December 31, 1996, any elective employer contribution under Code section 408(p) (2) (A) (i). 1.14 "Conversion Period". The period of converting the prior accounting system of any plan and trust which is merged, in whole or in part, into the Plan and Trust, to the accounting system described in Section 6. 1.15 "Direct Rollover". An Eligible Rollover Distribution that is paid by the Plan directly to an Eligible Retirement Plan for the benefit of a Distributee. 1.16 "Disability". A Participant's total and permanent, mental or physical disability resulting in termination of employment as evidenced by presentation of medical evidence satisfactory to the Administrator. 1.17 "Distributee". A Participant, a Beneficiary (if he or she is the surviving spouse of a Participant) or an Alternate Payee under a ODRO (if he or she is the spouse or former spouse of a Participant). 1.18 "Effective Date". The date upon which the provisions of this document become effective. This date is January 1, 1998, unless stated otherwise. In general, the provisions of this document only apply to Participants who are Employees on or after the Effective Date. However, investment and distribution provisions apply to all Participants with Account balances to be invested or distributed after the Effective Date. 1.19 "Eligible Employee". An Employee of the Employer, whose compensation, conditions of employment, or position are covered by a collective bargaining agreement to which the Employer is a party, which agreement calls for the Employee's participation in the Plan, which collective bargaining units as of the Effective Date are set forth in Appendix D. 1.20 "Eligible Retirement Plan". An individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section 401(a), that accepts a Distributee's Eligible Rollover Distribution, except that, if the Distributee is the surviving spouse of a Participant, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. 1.21 "Eligible Rollover Distribution". A distribution of all or any portion of the balance to the credit of a Distributee, 4 excluding (i) a distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated Beneficiary, or for a specified period often years or more; (ii) a distribution to the extent such distribution is required under Code section 401(a)(9); (iii) the portion of a distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities); and effective January 1, 1999, (iv) Hardship Withdrawal amounts withdrawn from a Participant's Pre-Tax Account. As regards (iv) above, for the 1999 calendar year, the Distributee may determine a distribution to be an Eligible Rollover Distribution using the definition prior to 1999. 1.22 "Employee". An individual who is directly employed by the Employer in a position that the Company determines to be subject to federal and/or state employment income or social security taxes and for whom such taxes are regularly withheld from such employment income by the Employer. 5 1.23 "Employer". The Company and any other Related Company which adopts the Plan with the approval of the Company. 1.24 "ERISA". The Employee Retirement Income Security Act of 1974, as amended. Reference to any specific ERISA section shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section. 1.25 "Former Participant". The Plan status of an individual after he or she is determined to be a Terminated Participant and his or her Account is distributed or forfeited. 1.26 "HCF" or "Highly Compensated Employee". An Employee described as a Highly Compensated Employee in Section 12. 1.27 "Hour of Service". Each hour for which an Employee is entitled to: (a) payment for the performance of duties for any Related Company; (b) payment from any Related Company on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence; (c) back pay, irrespective of mitigation of damages, by award or agreement with any Related Company (and these hours shall be credited to the period to which the award or agreement pertains); or (d) no payment, but is on a Leave of Absence (and these hours shall be based upon his or her normally scheduled hours per week or a 40 hour week if there is no regular schedule). The crediting of Hours of Service for which no duties are performed shall be in accordance with the U.S. Department of Labor regulation sections 2530.200b- 2(b) and (c). Actual hours shall be used whenever an accurate record of hours are maintained for an Employee. Otherwise, an equivalent number of hours shall be credited for each payroll period in which the Employee would be credited with at least 1Hour of Service. The payroll period equivalencies are 45 hours weekly, 90 hours biweekly, 95 hours semimonthly and 190 hours monthly. 6 An Employee's service with a predecessor or acquired company shall only be counted in the determination of his or her Hours of Service for eligibility and/or vesting purposes if (1) the Company directs that credit for such service be granted, or (2) a qualified plan of the predecessor or acquired company is subsequently maintained by any Related Company. 1.28 "Ineligible". The Plan status of an individual who is (1) an Employee of a Related Company which is not then an Employer, (2) an Employee of an Employer, but not an Eligible Employee, or (3) not an Employee. 1.29 "Ineligible Participant". The Plan status of a Participant who is (1) an Employee of a Related Company which is not then an Employer, or (2) an Employee of an Employer, but not an Eligible Employee. 1.30 "Investment Fund". An investment fund as described in Section 16.2. The Investment Funds authorized by the Administrator to be offered under the Plan as of the Effective Date are set forth in Appendix A. 1.31 "Leave of Absence". A period during which an individual is deemed to be an Employee, but is absent-from active employment, provided that the absence: (a) was authorized by a Related Company; or (b) was due to military service in the United States armed forces and the individual returns to active employment within the period during which he or she retains employment rights under federal law. 1.32 "Loan Account". The record maintained for purposes of accounting for a Participant's loan and payments of principal and interest thereon. 1.33 "NHCE" or "Non-Highly Compensated Employee". An Employee described as a Non-Highly Compensated Employee in Section 12. 1.34 "Normal Retirement Date". The date of a Participant's 65th birthday. 1.35 "Owner". A person with an ownership interest in the capital, profits, outstanding stock or voting power of a Related Company within the meaning of Code section 318 or 416 (which exclude indirect ownership through a qualified plan). 7 1.36 "Parental Leave". The period of absence from work by reason of the pregnancy of an Employee, the birth of the Employee's child, the placement of a child with the Employee in connection with the child's adoption, or the caring for such child immediately after birth or placement as described in Code section 410(a)(5)(F). 1.37 "Participant". The Plan status of an Eligible Employee after he or she completes the eligibility requirements and enters the Plan as described in Section 2. 1 and any individual for whom assets have been transferred from a predecessor plan merged, in whole or in part, with the Plan. An Eligible Employee who makes a Rollover Contribution prior to completing the eligibility requirements as described in Section 2.1 shall also be considered a Participant, except that he or she shall not be considered a Participant for purposes of Plan provisions related to Contributions, other than a Rollover Contribution, until he or she completes the eligibility requirements and enters the Plan as described in Section 2.1. A Participant's participation continues until his or her employment with all Related Companies ends and his or her Account is distributed or forfeited. 1.38 "Pay". The straight time wages, exclusive of all daily or weekly overtime, bonuses, supplementary compensation payments, retirement benefits and other forms of non- recurring compensation, but inclusive of shift differentials, Saturday/Sunday premiums, compensation paid at an alternative rate (not including compensation paid at an alternative rate to a salesperson) and seventy-five percent of sales commissions paid to an Eligible Employee by an Employer while he or she is a Participant during the current period. Notwithstanding the foregoing sentence, one- hundred percent of sales commissions paid to an Eligible Employee of Energy USA while he or she is a Participant during the period beginning on or after the date he first performs an Hour of Service for Energy USA shall be included in Pay. Pay is neither increased by any salary credit or decreased by any salary reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited to $150,000 per Plan Year (as adjusted for cost of living increases pursuant to Code sections 401(a)(17) and 415(d)). 1.39 "Period of Employment". The period beginning on the date an Employee first performs an hour of service and ending on the date his or her employment ends. Employment ends on the date the Employee quits, is discharged, retires or dies or (if earlier) the first anniversary of his or her absence for any other reason. The period of absence starting with the date an Employee's employment ends and ending on the date he or 8 she next performs an hour of service is (1) included in his or her Period of Employment if the period of absence does not exceed one year, and (2) excluded if such period exceeds one year. An Employee's service with a predecessor or acquired company shall only be counted in the determination of his or her Period of Employment for eligibility and/or vesting purposes if (1) the Company directs that credit for such service be granted, or (2) a qualified plan of the predecessor or acquired company is subsequently maintained by any Related Company. 1.40 "Plan". The Bay State Gas Company Savings Plan for Operating Employees set forth in this document, as from time to time amended. 1.41 "Plan Year". The annual accounting period of the Plan and Trust which ends on each December 31. 1.42 "ODRO". A domestic relations order which the Administrator has determined to be a qualified domestic relations order within the meaning of Code section 414(p). 1.43 "Reduction in Force". An Employer sponsored program developed to reduce its workforce on a permanent basis. 1.44 "Related Company". With respect to any Employer, that Employer and any corporation, trade or business which is, together with that Employer, a member of the same controlled group of corporations, a trade or business under common control, or an affiliated service group within the meaning of Code sections 414(b), (c), (IN) or (o), except that for purposes of Section 13 "within the meaning of Code sections 414(b), (c), (IN) or (o), as modified by Code section 415(h)" shall be substituted for the preceding reference to "within the meaning of Code sections 414(b), (c), (IN) or (o)". 1.45 "Required Beginning Date". The latest date benefit payments shall commence to a Participant. (a) For calendar years commencing before January 1, 1997, such date shall mean: (1) with regard to a Participant who attained age 70 1/2 in 1996, did not terminate employment with all Related Companies before January 1, 1997, and is or was not a 5% Owner, the April 1 that next follows (i) the calendar year in which the Participant attained age 70 1/2, or (ii) if the Participant elects to apply this clause (ii), the 9 calendar year in which the Participant terminates employment with all Related Companies and any such election must be made prior to January 1, 1998); and (2) with regard to a Participant who attained age 70 1/2 after December 31, 1987 and before January 1, 1996 or, in 1996 if he or she terminated employment with all Related Companies before January 1, 1997 or is or was a 5% Owner, the April 1 that next follows the calendar year in which the Participant attains age 70 1/2; and (3) with regard to a Participant who attained age 70 1/2 before January 1, 1988 and who is not a 5% Owner, the April 1 that next follows the later of (i) the calendar year in which the Participant attained age 70 1/2, or (ii) the calendar year in which the Participant terminates employment with all Related Companies; and (4) with regard to a Participant who attained age 70 1/2 before January 1, 1988 and who is a 5% Owner, the April 1 that next follows the later of (i) the calendar year in which the Participant attained age 70 1/2, or (ii) the earlier of the calendar year in which or within which ends the Plan Year in which the Participant becomes a 5% Owner or the calendar year in which he or she terminates employment with all Related Companies. A Participant shall be considered a 5% Owner for this purpose if such Participant is a 5% Owner as defined in Code section 416(i) (determined in accordance with Code section 416 but without regard to whether the Plan is top-heavy) at any time during the Plan Year ending with or within the calendar year in which the Participant attains age 661/2 or in any subsequent Plan Year. (b) For calendar years commencing after December 31, 1996 and before January 1, 1999, such date shall mean: (1) with regard to a Participant who attained age 70 1/2 in 1997 or 1998, the April 1 that next follows the calendar year in which he or she attained age 70 1/2, except that if the Participant did not terminate employment with all Related Companies before January 1 of the calendar year following the calendar year in which he or she attained age 70 1/2, is not a 5% Owner, such date shall instead mean the April 1 that next follows (i) the calendar year in which the Participant attained 10 age 70 1/2, or (ii) if the Participant elects to apply this clause (ii), the calendar year in which the Participant terminates employment with all Related Companies (and any such election must be made prior to the April 1 of the calendar year following the calendar year in which he or she attained age 70 1/2); and (2) with regard to a Participant who is a 5% Owner, the April 1 that next follows the calendar year in which the Participant attains age 70 1/2. A Participant shall be considered a 5% Owner for this purpose if such Participant is a 5% Owner with respect to the Plan Year ending in the calendar year in which the Participant attains age 70 1/2. (c) For calendar years commencing after December 31, 1998, such date shall mean: (1) with regard to a Participant who is not a 5% Owner, the April 1 that next follows the later of (i) the calendar year in which the Participant attained age 70 1/2, or (ii) the calendar year in which the Participant terminates employment with all Related Companies; and (2) with regard to a Participant who is a 5% Owner, the April 1 that next follows the calendar year in which the Participant attains age 70 1/2. A Participant shall be considered a 5% Owner for this purpose if such Participant is a 5% Owner with respect to the Plan Year ending in the calendar year in which the Participant attains age 70 1/2. 1.46 "Settlement Date". For each Trade Date, the Trustee's next business day. 1.47 "Spousal Consent". The written consent given by a spouse to a Participant's Beneficiary designation.- The spouse's consent must acknowledge the effect on the spouse of the Participant's designation, and be duly witnessed by a Plan representative or notary public. Spousal Consent shall be valid only with respect to the spouse who signs the Spousal Consent and only for the particular choice made by the Participant which requires Spousal Consent. A Participant may revoke (without Spousal Consent) a prior designation that required Spousal Consent at any time before payments begin. Spousal Consent also means a determination by the Administrator that there is no spouse, the spouse cannot be 11 located, or such other circumstances as may be established under Code section 417(a)(2)(B). 1.48 "Sweep Account". The subsidiary Account for each Participant through which all transactions are processed, which is invested in interest bearing deposits (which may include interest bearing deposits of the Trustee) and/or money market type assets or funds. 1.49 "Sweep Date". The cut off date and time for receiving instructions for transactions to be processed on the next Trade Date. 1.50 "Taxable Income". Compensation in the amount reported by the Employer or a Related Company as "Wages, tips, other compensation" on Form W-2, or any successor method of reporting under Code section 6041(d). 1.51 "Terminated Participant". The Plan status of a Participant who is not an Employee and with respect to whom the Administrator has reported to the Trustee that the Participant's employment has terminated with all Related Companies. 1.52 "Trade Date". Each day the Investment Funds are valued, which is normally every day the assets of such Investment Funds are traded. 1.53 "Trust". The legal entity created by those provisions of this document which relate to the Trustee. The Trust is part of the Plan and holds the Plan assets which are comprised of the aggregate of Participants" Accounts, any unallocated funds invested in interest bearing deposits (which may include interest bearing deposits of the Trustee) and/or money market type assets or funds, pending allocation to Participants" Accounts or disbursement to pay Plan fees and expenses. 1.54 "Trustee". Merrill Lynch Trust Company, FSB, a federal savings bank, chartered under the laws of the United States. 1.55 "USERRA". The Uniformed Services Employment and Reemployment Rights Act of 1994, as amended. 2 ELIGIBILITY 2.1 Eligibility Except as otherwise provided in the Schedules attached to this Plan, eligibility to participate in the Plan and to receive benefits under the Plan, shall be determined by reference to this Article 2. In the event of any conflict 12 between the terms of this Article 2, and one or more of the Schedule(s), the terms of the Schedules shall govern with respect to the Participants covered by the affected Schedule(s). All Participants as of January 1, 1998 shall continue their eligibility to participate. Each other Eligible Employee shall become a Participant on the first day of the next month after the date he or she completes a Period of Employment consisting of twelve consecutive months during which he or she is credited with at least 1,000 Hours of Service. The initial twelve consecutive month Period of Employment used to determine whether an otherwise Eligible Employee may become-a Participant begins on the date an Employee first performs an Hour of Service. Subsequent measuring periods for this purpose begin with the first day of each Plan Year beginning after the first Hour of Service is performed. Notwithstanding the foregoing, if so provided by the Employee's governing collective bargaining agreement, for purposes of Employee Pre-Tax Contributions only, such Eligible Employee shall become a Participant on the first day of the next month after the date he or she completes a 60 day Period of Employment but in no event later than the date he or she would have otherwise become a Participant in accordance with the preceding paragraph. The eligibility period begins on the date an Employee's Period of Employment commences. 2.2 Ineligible Employees If an Employee completes the above eligibility requirements, but is Ineligible at the time participation would otherwise begin (if he or she were not Ineligible), he or she shall become a Participant on the first subsequent date on which he or she is an Eligible Employee. 2.3 Ineligible, Terminated or Former Participants An Ineligible, Terminated or Former Participant may not make or share in any Contributions, other than such Contributions due to be made on his or her behalf after the date he or she became an Ineligible, Terminated or Former participant for periods prior to such date, nor may an Ineligible or Terminated Participant be eligible for a new Plan loan (except as described in Section 9.1), during the period he or she is an Ineligible or Terminated Participant, but he or she shall continue to participate for all other purposes. An Ineligible, Terminated or Former Participant shall 13 automatically become an active Participant on the date he or she again becomes an Eligible Employee. 3 PARTICIPANT CONTRIBUTIONS 3. 1 Employee Pre-Tax Contribution Election Upon becoming a Participant, an Eligible Employee may elect to reduce his or her Pay by an amount which does not exceed the Contribution Dollar Limit or the limits described in the Contribution Percentage Limits paragraph of this Section 3, and have such amount contributed to the Plan by the Employer as a Employee Pre-Tax Contribution. The election shall be made in such manner and with such advance notice as prescribed by the Administrator and may be limited to a whole percentage of Pay. In no event shall an Employee's Employee Pre-Tax Contributions under the Plan and comparable contributions to all other plans, contracts or arrangements of all Related Companies exceed the Contribution Dollar Limit for the Employee's taxable year beginning in the Plan Year. 3.2 Changing a Contribution Election A Participant who is an Eligible Employee may change his or her Employee Pre-Tax Contribution election as of the first day of any month in such manner and with such advance notice as prescribed by the Administrator, and such election change shall be effective with the first payroll paid after such date. A Participant's Contribution election made as a percentage of Pay shall automatically apply to Pay increases or decreases. 3.3 Revoking and Resuming a Contribution Election A Participant may revoke his or her Employee Pre-Tax Contribution election at any time in such manner and with such advance notice as prescribed by the Administrator, and such revocation shall be effective with the first payroll paid after such date. A Participant who is an Eligible Employee may resume Employee Pre-Tax Contributions by making a new election at the same time in which a Participant may change his or her election in such manner and WITH SUCH ADVANCE NOTICE as prescribed by the Administrator, and such election shall be effective with the first payroll paid after such date. 3.4 Contribution Percentage Limits The Administrator may establish and change from time to time, in writing, without the necessity of amending the Plan 14 and Trust, the minimum, if applicable, and maximum Employee Pre-Tax Contribution percentages, prospectively or retrospectively (for the current Plan Year), for all Participants. In addition, the Administrator may establish any lower percentage limits for Highly Compensated Employees as it deems necessary to satisfy the tests described in Section 12. As of the Effective Date, the Employee Pre-Tax Contribution maximum percentage is 15%. Irrespective of the limits that may be established by the Administrator in accordance with the paragraph above, in no event shall the Contributions made by or on behalf of a Participant for a Plan Year exceed the maximum allowable under Code section 415. 3.5 Refunds When Contribution Dollar Limit Exceeded A Participant who makes Employee Pre-Tax Contributions for a calendar year to the Plan and comparable contributions to any other qualified defined contribution plan in excess of the Contribution Dollar Limit may notify the Administrator in writing by the following March 1(or as late as April 14 if allowed by the Administrator) that an excess has occurred. in this event, the amount of the excess specified by the Participant, adjusted for investment gain or loss, shall be refunded to him or her by the April 15 following the year of deferral and shall not be included as an Annual Addition (as defined in Section 13.1) under Code section 415 for the year contributed. The excess amounts shall first be taken from unmatched Employee Pre-Tax Contributions and then from matched Employee Pre-Tax Contributions. Any Employer Contributions attributable to refunded excess Employee Pre- Tax Contributions as described in this Section, adjusted for investment gain or loss, shall be forfeited and used to reduce future Contributions to be made by an Employer as soon as administratively feasible. Refunds shall not include investment gain or loss for the period between the end of the applicable calendar year and the date of distribution. 3.6 Timing, Posting and Tax Considerations Participants' Contributions, other than Rollover Contributions, may only be made through payroll deduction. Such amounts shall be paid to the Trustee in cash and posted to each Participant's Account(s) as soon as such amounts can reasonably be separated from the Employer's general assets and balanced against the specific amount made on behalf of each Participant. In no event, however, shall such amounts be paid to the Trustee more than 90 days after the date amounts are deducted from a Participant's Pay, except that effective February 3, 1997, "15 business days following the end of the month that includes the date amounts are deducted 15 from a Participant's Pay (or as that maximum period may be otherwise extended by ERISA)" shall be substituted for the preceding reference to "90 days after the date amounts are deducted from a Participant's Pay". Employee Pre-Tax Contributions shall be treated as Contributions made by an Employer in determining tax deductions under Code section 404(a). 4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS 4.1 Rollover Contributions The Administrator may authorize the Trustee to accept a Rollover Contribution in cash, directly from an Eligible Employee or as a Direct Rollover from another qualified plan on behalf of the Eligible Employee, even if he or she is not yet a Participant. The Employee shall be responsible for providing satisfactory evidence, in such manner as prescribed by the Administrator, that such Rollover Contribution qualifies as a rollover contribution, within the meaning of Code section 402(c) or 408(d)(3)(A)(ii). Such amounts received directly from an Eligible Employee must be paid to the Trustee in cash within 60 days after the date received by the Eligible Employee from a qualified plan or conduit individual retirement account. Notwithstanding the foregoing, Rollover Contributions may be made in cash and/or solely to an outstanding plan loan to the Participant which qualifies for exemption from ERISA's prohibited transaction rules under section 408(b)( 1) of ERISA and its applicable regulations and authority (including any successors thereto), provided that as the time of such Rollover Contribution loans are generally available to Participants under the terms of the Plan and provided further that any such receivable shall, as of the date the Rollover Contribution is received by the Plan, be subject to the same terms and conditions then in effect for loans granted under the Plan. If the Administrator later determines that an amount contributed pursuant to the above paragraph did not in fact qualify as a rollover contribution, within the meaning of Code section 402(c) or 408 (d)(3) (A)(ii), the balance credited to the Participant's Rollover Account shall immediately be (1) segregated from all other Plan assets, (2) treated as a nonqualified trust established by and for the benefit of the Participant, and (3) distributed to the Participant. Any such amount shall be deemed never to have been a part of the Plan. 16 4.2 Transfers From and To Other Qualified Plans The Administrator may instruct the Trustee to receive assets in cash or in kind directly from another qualified plan or to transfer assets in cash or in kind directly to another qualified plan; provided that receipt of a transfer shall not be directed if: (a) any amounts are not exempted by Code section 401(a)(11)(B) from the annuity requirements of Code section 417 unless the Plan complies with such requirements; or (b) any amounts include benefits protected by Code section 411(d)(6) which would not be preserved under applicable Plan provisions. The Trustee may refuse to receive any such transfer if: (a) the Trustee finds the in kind assets unacceptable; or (b) instructions for posting amounts to Participants' Accounts are incomplete. Such amounts shall be posted to the appropriate Accounts of Participants as of the date received by the Trustee. To the extent a receipt of a transfer includes Participant loans, such loans shall continue in effect subject to the terms and conditions in effect as of the date of the transfer or as otherwise agreed to by the Administrator. 5 EMPLOYER CONTRIBUTIONS 5.1 Employer Contributions (a) Frequency and Eligibility. For each period for which Participants" Contributions are made, the Employer shall make Employer Contributions on behalf of each Participant who contributed during the period, met the eligibility requirements of Section 2.1and who is eligible for Employer Contributions under his or her governing collective bargaining agreement as set forth in Schedules A through J. (b) Allocation Method. The Employer Contributions for each period shall be in an amount determined by and allocated in accordance with the governing collective bargaining agreement as set forth in Schedules A through J. (c) Timing, Medium and Posting. The Employer shall make each period's Employer Contribution in cash as soon as administratively feasible, and for purposes of 17 deducting such Contribution, not later than the Employer's federal tax filing date, including extensions, for the Employer's taxable year that ends with or within the Plan Year for which the Employer Contribution is made. Such amounts shall be paid to the Trustee and posted to each Participant's Employer Account once the total Employer Contribution received has been balanced against the specific amount to be credited to each Participant's Employer Account. 5.2 Plan Expenses Contributions Notwithstanding any other provision of the Plan to the contrary, expenses of the Plan and/or Trust (including, without limitation, administrative expenses for activities such as auditing the Plan, preparing and filing annual reports, preparing benefits statements and calculating accrued benefits, and providing notices to the Plan Participants and Beneficiaries) shall be paid from the assets of the Trust; provided, however, that the Employer, in its discretion, may elect to pay such expenses, in whole or in part, at any time and from time to time, and such payments, if any, by the Employer may be made by means of Employer Contributions to the Plan and or/direct payment to third parties, or otherwise; and provided, further, that no such election shall be deemed to be irrevocable or of continuing effect unless designated as such in writing by the Employer. 6 ACCOUNTING 6.1 Individual Participant Accounting The Administrator shall take such action as it deems appropriate with respect to accounting for individual Participants' interests in the Plan. Such actions may, but need not necessarily, include maintenance of an individual set of Accounts for each Participant in order to reflect transactions both by type of Account and investment medium; accounting for financial transactions at the individual Account level by posting each transaction to the appropriate Account of each affected Participant; maintenance of Participant Account values in shares for the Investment Funds and in dollars for the Sweep and Loan Accounts. At any point in time, the Account value shall be determined except where impracticable using the most recent Trade Date values provided by the Trustee. 6.2 Sweep Account is Transaction Account All transactions related to amounts being contributed to or distributed from the Trust shall be posted to each affected 18 Participant's Sweep Account. Any amount held in the Sweep Account shall be credited with interest up until the date on which it is removed from the Sweep Account. 6.3 Trade Date Accounting and lnvestment Cycle Participant Account values shall be determined as of each Trade Date. For any transaction to be processed as of a Trade Date, the Trustee must receive instructions for the transaction by the Sweep Date. Such instructions shall apply to amounts held in the Account on that Sweep Date. Financial transactions of the Investment Funds shall be posted to Participants" Accounts as of the Trade Date, based upon the Trade Date values provided by the Trustee, and settled on the Settlement Date. 6.4 Accounting for Investment Funds Investments in each Investment Fund shall be maintained in shares. The Trustee is responsible for determining the share values of each Investment Fund as of each Trade Date. To the extent an Investment Fund is comprised of collective investment funds offered by the Trustee or any other entity authorized to offer collective investment funds, the share values shall be determined in accordance with the rules governing such collective investment funds, which are incorporated herein by reference. All other share values shall be determined by the Trustee. The share value of each Investment Fund shall be based on the fair market value of its underlying assets. 6.5 Payment of Fees and Expenses Except to the extent Plan fees and expenses related to Account maintenance, transaction and Investment Fund management and maintenance, set forth below, are paid by the Employer directly, such fees and expenses shall be paid as set forth below. (a) Account Maintenance: Account maintenance fees and expenses, may include but are not limited to, administrative, Trustee, government annual report preparation, audit, legal, nondiscrimination testing and fees for any other special services. Account maintenance fees shall be charged to Participants on a per Participant basis provided that no fee shall reduce a Participant's Account balance below zero. (b) Transaction: Transaction fees and expenses, may include but are not limited to, periodic installment payment, and Investment Fund election change and loan fees. Transaction fees shall be charged to the Participant's 19 Account involved in the transaction provided that no fee shall reduce a Participant's Account balance below zero. (c) Investment Fund Management and Maintenance: Management and maintenance fees and expenses related to the Investment Funds shall be charged at the Investment Fund level and reflected in the net gain or loss of each Investment Fund. The Company may determine that the Employers pay a lower portion of the fees and expenses allocable to the Accounts of Participants who are no longer Employees or who are not Beneficiaries, unless doing so would result in discrimination prohibited under Code section 401(a)(4) or a significant detriment prohibited by Code section 411(a)(11). As of the Effective Date, a breakdown of which Plan fees and expenses shall generally be borne by the Trust (and charged to individual Participants' Accounts or charged at the Investment Fund level and reflected in the net gain or loss of each Investment Fund) and those that shall be paid by the Employer is set forth in Appendix B, which may be changed from time to time by the Company, in writing, without the necessity of amending the Plan and Trust. The Trustee shall have the authority to pay any such fees and expenses, which remain unpaid by the Employer for 60 days, from the Trust. 6.6 Accounting for Participant Loans Participant loans shall be held in a separate Loan Account of the Participant and accounted for in dollars as an earmarked asset of the borrowing Participant's Account. 6.7 Error Correction The Administrator may correct any errors or omissions in the administration of the Plan by restoring any Participant's Account balance with the amount that would be credited to the Account had no error or omission been made. Funds necessary for any such restoration shall be provided through payment made by the Employer, or by the Trustee to the extent the error or omission is attributable to actions or inactions of the Trustee. 6.8 Participant Statements The Administrator shall provide Participants with statements of their Accounts as soon after the end of each quarter of the Plan Year as administratively feasible. 20 6.9 Special Accounting During Conversion Period The Administrator and Trustee may use any reasonable accounting methods in performing their respective duties during any Conversion Period. This includes, but is not limited to, the method for allocating net investment gains or losses and the extent, if any, to which contributions received by and distributions paid from the Trust during this period share in such allocation. 6.10 Accounts for Alternate Payees A separate Account shall be established for an Alternate Payee entitled to any portion of a Participant's Account under a ODRO as of the date and in accordance with the directions specified in the ODRO. In addition, a separate Account may be established during the period of time the Administrator, a court of competent jurisdiction or other appropriate person is determining whether a domestic relations order qualifies as a ODRO. Such a separate Account shall be valued and accounted for in the same manner as any other Account. (a) Distributions Pursuant to ODROs. If a ODRO so provides, the portion of a Participant's Account payable to an Alternate Payee may be distributed, in a form permissible under Section 11, to the Alternate Payee at any time beginning as soon as practicable after the ODRO determination is made, regardless of whether the Participant is entitled to a distribution from the Plan at such time. The Alternate Payee shall be provided the notice prescribed by Code section 402(f). (b) Participant Loans. Except to the extent required by law, an Alternate Payee, on whose behalf a separate Account has been established, shall not be entitled to borrow from such Account. If a ODRO specifies that the Alternate Payee is entitled to any portion of the Account of a Participant who has an outstanding loan balance, all outstanding loans shall generally continue to be held in the Participant's Account and shall not be divided between the Participant's and Alternate Payee's Accounts. (c) Investment Direction. Where a separate Account has been established on behalf of an Alternate Payee and has not yet been distributed, the Alternate Payee may direct the investment of such Account in the same manner as if he or she were a Participant. (d) Alternate Payee's Death. In the event the Alternate Payee dies before his or her entire interest under the Plan has been distributed, the remaining portion of such interest will be distributed in a single lump sum 21 cash payment to the beneficiary designated by the Alternate Payee. For this purpose, the term "beneficiary" means any individual or entity named by the Alternate Payee in a written notice filed with the Administrator, or in the absence of any such notice, the Alternate Payee's estate. 7 INVESTMENT FUNDS AND ELECTIONS 7.1 Investment Funds Except for Participants" Sweep and Loan Accounts and any unallocated funds invested in interest bearing deposits (which may include interest bearing deposits of the Trustee) and/or money market type assets or funds, pending allocation to Participants" Accounts or disbursement to pay Plan fees and expenses, the Trust shall be maintained in various Investment Funds. The Administrator shall select the Investment Funds offered to Participants and may change the number or composition of the Investment Funds, subject to the terms and conditions agreed to with the Trustee. As of the Effective Date, a list of the Investment Funds offered under the Plan is set forth in Appendix A, which may be changed from time to time by the Administrator, in writing, and as agreed to by the Trustee, without the necessity of amending the Plan and Trust. The Administrator may set a maximum percentage of the total election that a Participant may direct into any specific Investment Fund, which maximum, if any, as of the Effective Date is set forth in Appendix A, which may be changed from time to time by the Administrator, in writing, without the necessity of amending the Plan and Trust. 7.2 Responsibility for Investment Choice Each Participant shall direct the investment of all of his or her Accounts. Each Participant shall be solely responsible for the selection of his or her Investment Fund choices. No fiduciary with respect to the Plan is empowered to advise a Participant as to the manner in which his or her Accounts are to be invested, and the fact that an Investment Fund is offered shall not be construed to be a recommendation for investment. During any Conversion Period, Trust assets may be held in any investment vehicle permitted by the Plan, as directed by the Administrator, irrespective of prior Participant investment elections. 22 7.3 Investment Fund Elections A Participant shall provide his or her initial investment election upon becoming a Participant and may change his or her investment election at any time in accordance with procedures established by the Administrator and the Trustee. A Participant shall make his or her investment election in any combination of one or any number of the Investment Funds offered in accordance with the procedures established by the Administrator and Trustee. Investment elections received by the Trustee by the Sweep Date shall be effective on the following Trade Date. 7.4 Default if No Valid Investment Election The Administrator shall specify an Investment Fund for the investment of that portion of a Participant's Account which is not yet held in an Investment Fund and for which no valid investment election is on file. The Investment Fund specified as of the Effective Date is set forth in Appendix A, which may be changed from time to time by the Administrator, in writing, without the necessity of amending the Plan and Trust. 7.5 Investment Fund Election Change Fees A reasonable processing fee may be charged directly to a Participant's Account for Investment Fund election changes in excess of a specified number per year as determined by the Administrator. 8 VESTING 8.1 Fully Vested Accounts A Participant shall be fully vested in all Accounts at all times. 9 PARTICIPANT LOANS 9.1 Participant Loans Permitted Loans to Participants and Beneficiaries are permitted pursuant to the terms and conditions set forth in this Section, except that a loan shall not be permitted to a Participant who is no longer an Employee or to a Beneficiary, unless such Participant on Beneficiary is otherwise a party in interest (as defined in ERISA section 3(14)). 23 9.2 Loan Application, Note and Security A Participant shall apply for any loan in such manner and with such advance notice as prescribed by the Administrator. Each loan shall be evidenced by a promissory note, secured only by the portion of the Participant's Account from which the loan is made, and the Plan shall have a lien on this portion of his on hen Account. 9.3 Spousal Consent A Participant is not required to obtain Spousal Consent in order to borrow from his or her Account under the Plan. 9.4 Loan Approval The Administrator, on the Trustee, if otherwise authorized by the Administrator and agreed to by the Trustee, is responsible for determining that a loan request conforms to the requirements described in this Section and granting such request. 9.5 Loan Funding Limits, Account Sources and Funding Order The loan amount must meet all of the following limits as determined as of the Sweep Date the loan is processed and shall be funded from the Participant's Accounts as follows: (a) Plan Minimum Limit. The minimum amount for any loan is $1,000. (b) Plan Maximum Limit, Account Sources and Funding Order. Subject to the legal limit described in (c) below, the maximum a Participant may borrow, including the aggregate outstanding balances of existing Plan loans, is 100% of the following of the Participant's Accounts in the priority order as follows: Employee Pre-Tax Account Employer Account Prior Company Account Rollover Account Prior After-Tax Account (c) Legal Maximum Limit. The maximum a Participant may borrow, including the aggregate outstanding balances of existing Plan loans, is 50% of his on her vested Account balance, not to exceed $50,000. However, the $50,000 maximum is reduced by the Participant's highest aggregate outstanding Plan loan balance during the 12- month period ending on the day before the Sweep Date as of which the loan is made. For purposes of this 24 paragraph, the qualified plans of all Related Companies shall be treated as though they are pant of the Plan to the extent it would decrease the maximum loan amount. 9.6 Maximum Number of Loans A Participant may have a maximum of two loans outstanding at any given time. 9.7 Source and Timing of Loan Funding A loan to a Participant shall be made solely from the assets of his or her own Account. The available assets shall be determined first by Account and then within each Account used for funding a loan, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the loan is processed. The loan shall be funded on the Settlement Date following the Trade Date as of which the loan is processed. The Trustee shall make payment to the Participant as soon thereafter as administratively feasible. 9.8 Interest Rate The interest rate charged on Participant loans shall be a fixed reasonable rate of interest, determined from time to time by the Administrator, which provides the Plan with a return commensurate with the prevailing interest rate changed by persons in the business of lending money for loans which would be made under similar circumstances. As of the Effective Date, the interest rate is determined as set forth in Appendix C, which may be changed from time to time by the Administrator, in writing, without the necessity of amending the Plan and Trust. 9.9 Loan Payment Substantially level amortization shall be required of each loan with payments made at least monthly, generally through payroll deduction. Loans may be prepaid in full on in part at any time. The Participant may choose the loan repayment period, not to exceed 5 years. 9.10 Loan Payment Hierarchy Loan principal payments shall be credited to the Participant's Accounts in the inverse of the order used to fund the loan. Loan interest shall be credited to the Participant's Accounts in direct proportion to the principal 25 payment. Loan payments are credited to the Investment Funds based upon the Participant's current investment election for new Contributions. 9.11 Repayment Suspension The Administrator may agree to a suspension of loan payments for up to 12 months for a Participant who is on a Leave of Absence without pay. During the suspension period, interest shall continue to accrue on the outstanding loan balance. At the expiration of the suspension period all outstanding loan payments and accrued interest thereon shall be due unless otherwise agreed upon by the Administrator. 9.12 Loan Default A loan is treated as in default if a scheduled loan payment is not made at the time required. A Participant shall then have a grace period to cure the default before it becomes final. Such grace period shall be for a period that does not extend, beyond the last day of the calendar quarter following the calendar quarter in which the scheduled loan payment was due on such lessen on greater maximum period as may later be authorized by Code section 72(p). In the event a default is not cured within the grace period, the Administrator may direct the Trustee to report the outstanding principal balance of the loan and accrued interest thereon as a taxable distribution to the Participant. As soon as a Plan withdrawal or distribution to such Participant would otherwise be permitted, the Administrator may instruct the Trustee to execute upon its security interest in the Participant's Account by distributing the note to the Participant. 9.13 Call Feature The Administrator shall have the night to call any Participant loan once a Participant's employment with all Related Companies has terminated, unless he on she is otherwise a party in interest (as defined in ERISA section 3(14)), or if the Plan is terminated. 10 IN-SERVICE WITHDRAWALS 10.1 In-Service Withdrawals Permitted In-service withdrawals to a Participant who is an Employee are permitted pursuant to the terms and conditions set forth in this Section and pursuant to the terms and conditions set forth in Section 11 with regard to an in-service withdrawal 26 made in accordance with a Participant's Required Beginning Date. 10.2 In-Service Withdrawal Application and Notice A Participant shall apply for any in-service withdrawal in such manner and with such advance notice as prescribed by the Administrator. The Participant shall be provided the notice prescribed by Code section 402(f). Code sections 401(a)(11) and 417 do not apply to in-service withdrawals under the Plan. An in-service withdrawal may commence less than 30 days after the aforementioned notice is provided, if: (a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notice to consider his or her option to elect or not elect a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which constitutes an Eligible Rollover Distribution; and (b) the Participant after receiving such notice, affirmatively elects a Direct Rollover for all or a portion, if any, of his or her in-service withdrawal which constitutes an Eligible Rollover Distribution or alternatively elects to have all or a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof. Notwithstanding the foregoing, effective for hardship withdrawals made after January 1, 1999, that portion of a Participant's hardship withdrawal attributable to Employee Pre-Tax Contributions shall not constitute an Eligible Rollover Distribution. 10.3 Spousal Consent A Participant is not required to obtain Spousal Consent in order to receive an in-service withdrawal under the Plan. 10.4 In-Service Withdrawal Approval The Administrator, or the Trustee, if otherwise authorized by the Administrator and agreed to by the Trustee, is responsible for determining whether an in- service withdrawal request conforms to the requirements described in this Section and granting such request. 27 10.5 Payment Form and Medium The form of payment for an in-service withdrawal shall be a single lump sum and payment shall be made in cash. With regard to the portion of an in-service withdrawal representing an Eligible Rollover Distribution, a Participant may elect a Direct Rollover for all or a portion of such amount. 10.6 Source and Timing of In-Service Withdrawal Funding An in-service withdrawal to a Participant shall be made solely from the assets of his or her own Account and shall be based on the Account values as of the Trade Date the in- service withdrawal is processed. The available assets shall be determined first by Account and then within each Account used for funding an in-service withdrawal, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes his or her Loan Account balance) as of the Trade Date on which the in-service withdrawal is processed. The in-service withdrawal shall be funded on the Settlement Date following the Trade Date as of which the in-service withdrawal is processed. The Trustee shall make payment to the Participant or on behalf of the Participant as soon thereafter as administratively feasible. 10.7 Hardship Withdrawals (a) Requirements. A Participant who is an Employee may request the withdrawal of up to the amount necessary to satisfy a financial need including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal. Only requests for withdrawals (1) on account of a Participant's "Deemed Financial Need", and (2) which are "Deemed Necessary" to satisfy the financial need shall be approved. (b) "Deemed Financial Need". An immediate and heavy financial need relating to: (1) the payment of unreimbursed medical care expenses (described under Code section 213(d)) incurred (or to be incurred) by the Employee, his or her spouse or dependents (as defined in Code section 152); (2) the purchase (excluding mortgage payments) of the Employee's principal residence; 28 (3) the payment of unreimbursed tuition, related educational fees and room and board for up to the next 12 months of post-secondary education for the Employee, his or her spouse or dependents (as defined in Code section 152); (4) the payment of amounts necessary for the Employee to prevent losing his or her principal residence through eviction or foreclosure on the mortgage; or (5) any other circumstance specifically permitted under Code section 401(k)(2)(B)(i)(IV). (c) "Deemed Necessary". A withdrawal is "Deemed Necessary" to satisfy the financial need only if the withdrawal amount does not exceed the financial need and all of these conditions are met: (1) the Employee has obtained all possible withdrawals (other than hardship withdrawals) and nontaxable loans available from the Plan and all other plans maintained by Related Companies; (2) the Administrator shall suspend the Employee from making any contributions to the Plan and all other qualified and nonqualified plans of deferred compensation and all stock option or stock purchase plans maintained by Related Companies for 12 months from the date the withdrawal payment is made; and (3) the Administrator shall reduce the Contribution Dollar Limit for the Employee with regard to the Plan and all other plans maintained by Related Companies, for the calendar year next following the calendar year of the withdrawal by the amount of the Employee's Employee Pre-Tax Contributions for the calendar year of the withdrawal (d) Account Sources and Funding Order. All available amounts must first be withdrawn from a Participant's Prior After-Tax Account. The remaining withdrawal shall come from the following of the Participant's Accounts, in the priority order as follows: Rollover Account Employer Account Prior Company Account Employee Pre-Tax Account 29 The amount that may be withdrawn from a Participant's Pre-Tax Account shall not include any amounts attributable to earnings after the start of the first Plan Year beginning after December 31, 1988. (e) Minimum Amount. There is no minimum amount for a hardship withdrawal. (f) Permitted Frequency. There is no restriction on the number of hardship withdrawals permitted to a Participant. (g) Suspension from Further Contributions. Upon making a hardship withdrawal, a Participant may not make additional Employee Pre-Tax Contributions (or additional contributions to all other qualified and nonqualified plans of deferred compensation and all stock option or stock purchase plans maintained by Related Companies), for a period of 12 months from the date the withdrawal payment is made. 10.8 Prior After-Tax Account Withdrawals (a) Requirements. A Participant who is an Employee may make a Prior After-Tax Account withdrawal. (b) Account Sources and Funding Order. The withdrawal shall come from a Participant's Prior After-Tax Account. (c) Minimum Amount. There is no minimum amount for an Prior After-Tax Account withdrawal. (d) Permitted Frequency. The maximum number of Prior After- Tax Account withdrawals permitted to a Participant in any 12-month period is one. (e) Suspension from Further Contributions. A Prior After- Tax Account withdrawal shall not affect a Participant's ability to make or be eligible to receive further Contributions. 10.9 Rollover Account Withdrawals (a) Requirements. A Participant who is an Employee may make a Rollover Account withdrawal. (b) Account Sources and Funding Order. The withdrawal shall come from a Participant's Rollover Account. (c) Minimum Amount. There is no minimum amount for a Rollover Account withdrawal. 30 (d) Permitted Frequency. The maximum number of Rollover Account withdrawals permitted to a Participant in any 12 month period is one. (e) Suspension from Further Contributions. A Rollover Account withdrawal shall not affect a Participant's ability to make or be eligible to receive further Contributions. 10.10 Prior Company Account Plus Withdrawals (a) Requirements. A Participant who is an Employee may make a Prior Company Account Plus withdrawal. (b) Account Sources and Funding Order. The withdrawal shall come from the Participant's Accounts, in the priority order as follows, except that the Participant may instead choose to have amounts taken from his or her Prior After-Tax Account first: Rollover Account Prior Company Account Prior After-Tax Account (c) Minimum Amount. There is no minimum amount for a Prior Company Account Plus withdrawal. (d) Permitted Frequency. The maximum number of Prior Company Account Plus withdrawals permitted to a Participant in any 12-month period is one. (e) Suspension from Further Contributions. A Prior Company Account Plus withdrawal shall not affect a Participant's ability to make or be eligible to receive further Contributions. 10.11 Over Age 59 1/2 Withdrawals (a) Requirements. A Participant who is an Employee and over age 59 1/2 may make an Over Age 59 1/2 withdrawal. (b) Account Sources and Funding Order. The withdrawal shall come from the following of the Participant's Accounts, in the priority order as follows, except that the Participant may instead choose to have amounts taken from his on hen Prior After-Tax Account first: Rollover Account Employee Pre-Tax Account Employer Account Prior Company Account Prior After-Tax Account 31 (c) Minimum Amount. There is no minimum amount for an Over Age 59 1/2 withdrawal. (d) Permitted Frequency. The maximum number of Oven Age 59 1/2 withdrawals permitted to a Participant in any 12- month period is one. (e) Suspension from Further Contributions. An Over Age 59 1/2 withdrawal shall not affect a Participant's ability to make or be eligible to receive further Contributions. 11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S REQUIRED BEGINNING DATE 11.1 Benefit Information, Notices and Election A Participant, on his on her Beneficiary in the case of his on her death, shall be provided with information regarding all optional times and forms of distribution available under the Plan, including the notices prescribed by Code sections 402(f) and 411(a)(11). Subject to the other requirements of this Section, a Participant, or his or her Beneficiary in the case of his on her death, may elect, in such manner and with such advance notice as prescribed by the Administrator, to have his or her vested Account balance distributed beginning upon any Settlement Date following the Participant's termination of employment with all Related Companies and a reasonable period of time during which the Administrator shall process, and inform the Trustee of, the Participant's termination or, if earlier, at the time of the Participant's Required Beginning Date. Notwithstanding the foregoing, if a Participant's termination of employment with all Related Companies does not constitute a separation from service for purposes of Code section 401(k)(2)(B)(i)(l) or otherwise constitute an event set forth under Code section 401(k)(10)(A)(ii) or (iii) as described in Section 19.3, the portion of a Participant's Account subject to the distribution rules of Code section 401(k) may not be distributed until such time as he or she separates from service for purposes of Code section 401(k)(2)(B)(i)(l) or, if earlier, upon such other event as described in Code section 401(k)(2)(B) and as provided for in the Plan. Code sections 401(a)(11) and 417 do not apply to distributions under the Plan. A distribution may commence less than 30 days after the aforementioned notices are provided, if: 32 (a) the Participant is clearly informed that he or she has the right to a period of at least 30 days after receipt of such notices to consider the decision as to whether to elect a distribution and if so to elect a particular form of distribution and to elect on not elect a Direct Rollover for all on a portion, if any, of his or her distribution which constitutes an Eligible Rollover Distribution; and (b) the Participant after receiving such notices, affirmatively elects a distribution and a Direct Rollover for all on a portion, if any, of his or her distribution which constitutes an Eligible Rollover Distribution or alternatively elects to have all on a portion made payable directly to him or her, thereby not electing a Direct Rollover for all or a portion thereof. 11.2 Spousal Consent A Participant is not required to obtain Spousal Consent in order to receive a distribution under the Plan. 11.3 Payment Form and Medium Except to the extent otherwise provided by Section 11.4, a Participant may elect to be paid in any of these forms: (a) a single lump sum; (b) a portion paid in a lump sum, and the remainder paid later (partial payment); or (c) periodic installments over a period not to exceed the life expectancy of the Participant and his on her Beneficiary. Distributions shall be made in cash, except to the extent a distribution consists of a loan call as described in Section 9. Alternatively, a Participant may elect that a distribution in the form of a lump sum payment be made in the form of whole shares of Company Stock and cash in lieu of fractional shares (to the extent the distribution consists of amounts from the Company Stock Fund). With regard to the portion of a distribution representing an Eligible Rollover Distribution, a Distributee may elect a Direct Rollover for all or a portion of such amount. 11.4 Distribution of Small Amounts If, after a Participant's employment with all Related Companies ends, the Participant's vested Account balance is 33 $5,000 or less, the Participant's benefit shall be paid as a single lump sum as soon as administratively feasible in accordance with procedures prescribed by the Administrator. 11.5 Source and Timing of Distribution Funding A distribution to a Participant shall be made solely from the assets of his or hen own Account and shall be based on the Account values as of the Trade Date the distribution is processed. The available assets shall be determined first by Account and then within each Account used for funding a distribution, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund as of the Trade Date on which the distribution is processed. The distribution shall be funded on the Settlement Date following the Trade Date as of which the distribution is processed. The Trustee shall make payment to the Participant or on behalf of the Participant as soon thereafter as administratively feasible. 11.6 Latest Commencement Permitted In addition to any other Plan requirements and unless a Participant elects otherwise, his on her benefit payments shall begin not later than 60 days after the end of the Plan Year in which he or she attains his or her Normal Retirement Date or retires, whichever is later. However, if the amount of the payment or the location of the Participant (after a reasonable search) cannot be ascertained by that deadline, payment shall be made no later than 60 days after the earliest date on which such amount on location is ascertained but in no event later than the Participant's Required Beginning Date. A Participant's failure to elect in such manner as prescribed by the Administrator to have his or her vested Account balance distributed, shall be deemed an election by the Participant to defer his on her distribution but in no event shall his on her benefit payments commence later than his on hen Required Beginning Date. With regard to a Participant who is an Employee and who commenced benefit payments in accordance with Code section 401(a)(9) as in effect prior to January 1, 1997, and who is not a 5% Owner, he on she may, but is not required to, discontinue such benefit payments until he on she is otherwise required to again commence benefit payments in accordance with Code section 401(a)(9) as in effect for calendar years commencing after December 31, 1996. A Participant who elects to discontinue such benefit payments 34 in accordance with the preceding sentence shall thereby render his or hen existing payment election and, if applicable, any Spousal Consent to such election, as void and a new election including, if applicable, Spousal Consent to such new election, shall be required subject to the provisions of Section 11 at the time he or she is required to again commence benefit payments in accordance with Code section 401(a)(9) as in effect for calendar years commencing after December 31, 1996. Notwithstanding any provision of the Plan to the contrary, distributions may be made pursuant to the terms of any method of distribution elected by an Employee who was a Participant prior to January 1, 1984, in accordance with the terms of the Plan as in effect immediately prior to that date, provided that the election shall remain in effect only until revoked and (if revoked) may not later be reinstated. If benefit payments cannot begin at the time required because the location of the Participant cannot be ascertained (after a reasonable search), the Administrator may, at any time thereafter, treat such person's Account as forfeited subject to the provisions of Section 18.6. 11.7 Payment Within Life Expectancy The Participant's payment election must be consistent with the requirement of Code section 401(a)(9) that all payments are to be completed within a period not to exceed the lives or the joint and last survivor life expectancy of the Participant and his or her Beneficiary. The life expectancies of a Participant and his or hen Beneficiary, if such Beneficiary is his or her spouse, may be recomputed annually. 11.8 Incidental Benefit Rule The Participant's payment election must be consistent with the requirement that, if the Participant's spouse is not his on hen sole primary Beneficiary, the minimum annual distribution for each calendar year, beginning with the calendar year preceding the calendar year that includes the Participant's Required Beginning Date, shall not be less than the quotient obtained by dividing (a) the Participant's vested Account balance as of the last Trade Date of the preceding year by (b) the applicable divisor as determined under the incidental benefit requirements of Code section 401(a)(9). 35 11.9 Payment to Beneficiary Payment to a Beneficiary must either (i) be completed by the end of the calendar year that contains the fifth anniversary of the Participant's death or (ii) begin by the end of the calendar year that contains the first anniversary of the Participant's death and be completed within the period of the Beneficiary's life on life expectancy, except that: (a) If the Participant dies after his on hen Required Beginning Date, payment to his or her Beneficiary must be made at least as rapidly as provided in the Participant's distribution election; (b) If the surviving spouse is the Beneficiary, payments need not begin until the later of (i) the end of the calendar year that includes the first anniversary of the Participant's death, or (ii) the end of the calendar year in which the Participant would have attained age 70 1/2 and must be completed within the spouse's life or life expectancy; and (c) If the Participant and the surviving spouse who is the Beneficiary die (i) before the Participant's Required Beginning Date and (ii) before payments have begun to the spouse, the spouse shall be treated as the Participant in applying these rules. 11.10 Beneficiary Designation Each Participant may complete a beneficiary designation form indicating the Beneficiary who is to receive the Participant's remaining Plan interest at the time of his on her death and such designation may be changed at any time. However, a Participant's spouse shall be the sole primary Beneficiary unless the designation includes Spousal Consent for another Beneficiary. If no proper designation is in effect at the time of a Participant's death or if the Beneficiary does not survive the Participant, the Beneficiary shall be, in the order listed, the: (a) Participant's surviving spouse; (b) Participant's children, in equal shares, (or if a child does not survive the Participant, and that child leaves issue, the issue shall be entitled to that child's share, by night of representation); or (c) Participant's estate. 36 12 ADP AND ACP TESTS 12.1 Contribution Limitation Definitions The following definitions are applicable to this Section 12 (where a definition is contained in both Sections 1 and 12, for purposes of Section 12 the Section 12 definition shall be controlling): (a) "ACP" on "Average Contribution Percentage". The Average Percentage calculated using Contributions allocated to Participants as of a date within the Plan Year. (b) "ACP Test". The determination of whether the ACP is in compliance with the Basic or Alternative Limitation for a Plan Year (as defined in Section 12.2). (c) "AD P" or "Average Deferral Percentage". The Average Percentage calculated using Deferrals allocated to Participants as of a date within the Plan Year. (d) "ADP Test". The determination of whether the ADP is in compliance with the Basic or Alternative Limitation for a Plan Year (as defined in Section 12.2). (e) "Average Percentage". The average of the calculated percentages for Participants within the specified group. The calculated percentage refers to either the "Deferrals" on "Contributions" (as defined in this Section) made on each Participant's behalf for the Plan Year, divided by his or her Compensation. (Employee Pre-Tax Contributions to the Plan on comparable contributions to plans of Related Companies which must be refunded solely because they exceed the Contribution Dollar Limit are included in the percentage for the HCE Group but not for the NHCE Group.) (f) "Contributions" (i) shall include Employer Contributions and (ii) may include Employee Pre-Tax Contributions, but with regard to (ii), only to the extent that (1) the Administrator elects to use them, (2) they are not used or counted in the ADP Test, and (3) they otherwise satisfy the requirements as prescribed under Code section 401(IN) permitting treatment as Contributions for purposes of the ACP Test. (g) "Current Year Testing Method". The use of the Plan Year's ADP for the Plan Year's NHCE Group for purposes of performing the Plan Year's ADP Test and/on the use 37 of the Plan Year's ACP for the Plan Year's NHCF Group for purposes of performing the Plan Year's ACP Test. (h) "Deferrals" shall include Employee Pre-Tax Contributions. (i) "Family Member". For Plan Years commencing before January 1, 1997, an Employee who is, at any time during the Plan Year or Lookback Year, a spouse, lineal ascendant or descendant, or spouse of a lineal ascendant or descendant of (1) an active or former Employee who at any time during the Plan Year or Lookback Year is a 5% Owner (within the meaning of Code section 414(q)(3)), or (2) an HCE who is among the 10 Employees with the highest Compensation for such Year. (j) "HCE" or "Highly Compensated Employee". For Plan Years commencing before January 1, 1997, with respect to all Related Companies, an Employee who (in accordance with Code section 414(q)): (1) Was a 5% Owner (within the meaning of Code section 414(q)(3)) at any time during the Lookback Year or Plan Year; (2) Received Compensation during the Lookback Year (on in the Plan Year if among the 100 Employees with the highest Compensation for such year) in excess of (i) $75,000 (as adjusted for such year pursuant to Code sections 414(q)(1) and 415(d)), or (ii) $50,000 (as adjusted for such year pursuant to Code sections 414(q)(1) and 415(d)) in the case of a member of the "top-paid group" (within the meaning of Code section 414(q)(4)) for such year, provided, however, that if the conditions of Code section 414(q)(12)(B)(ii) are met, the Company may elect for any Plan Year to apply clause (i) by substituting $50,000 for $75,000 and not to apply clause (ii); (3) Was an officer of a Related Company and received Compensation during the Lookback Year (or in the Plan Year if among the 100 Employees with the highest Compensation for such year) that is greater than 50% of the dollar limitation in effect under Code section 415(b)(1)(A) and (d) for such year (or if no officer has Compensation in excess of that threshold, the officer with the highest Compensation), provided that the number of officers shall be limited to 50 Employees (or, if less, the greater of three Employees or 10% of the Employees); or 38 (4) Was a Family Member at any time during the Lookback Year or Plan Year, in which case the Deferrals, Contributions and Compensation of the HCE and his or hen Family Members shall be aggregated and they shall be treated as a single HCE. A former Employee shall be treated as an HCE if (1) such former Employee was an HCE when he or she separated from service, or (2) such former Employee was an HCE in service at any time after attaining age 55. The determination of who is an HCE, including the determinations of the number and identity of Employees in the top-paid group, the top 100 Employees and the number of Employees treated as officers shall be made in accordance with Code section 414(q). For Plan Years commencing after December 31, 1996, with respect to all Related Companies, an Employee who (in accordance with Code section 414(q)): (1) Was a 5% Owner (within the meaning of Code section 414(q)(2)) at any time during the Plan Year or the preceding Plan Year; on (2) Received Compensation during the preceding Plan Year in excess of $80,000 (as adjusted for such Year pursuant to Code sections 414(q)(1) and 415(d)): A former Employee shall be treated as an HCE if (1) such former Employee was an HCE when he or she separated from service, or (2) such former Employee was an HCE in service at any time after attaining age 55. The determination of who is an HCE and the determination of the number and identity of Employees in the top-paid group shall be made in accordance with Code section 414(q). (k) "HCE Group" and "NHCE Group". With respect to all Related Companies, the respective group of HCEs and NHCEs who are eligible to have amounts contributed on their behalf for the respective Plan Year, including Employees who would be eligible but for their election not to participate or to contribute, or because their Pay is greater than zero but does not exceed a stated minimum. (1) If the Related Companies maintain two or more plans which are subject to the ADP or ACP Test and 39 are considered as one plan for purposes of Code sections 401(a)(4) on 410(b), all such plans shall be aggregated and treated as one plan for purposes of meeting the ADP and ACP Tests, provided that the plans may only be aggregated if they have the same plan year. (2) If an HCE is covered by more than one cash or deferred arrangement, on more than one arrangement permitting employee or employer matching contributions, maintained by the Related Companies, all such plans shall be aggregated and treated as one plan (other than those plans that may not be permissively aggregated) for purposes of calculating the separate percentage for the HCE which is used in the determination of the Average Percentage. For purposes of the preceding sentence, if such plans have different plan years, the plans are aggregated with respect to the plan years ending with or within the same calendar year. (3) For Plan Years commencing before January 1, 1997, if an HCE, who is one of the top 10 paid Employees or a 5% Owner, has any Family Members, the Deferrals, Contributions and Compensation of such HCE and his on her Family Members shall be combined and treated as a single HCE. Such amounts for all other Family Members shall be removed from the NHCE Group percentage calculation and be combined with the HCE"s. (I) "Lookback Year". For each Plan Year commencing before January 1, 1997, pursuant to Code section 414(q), the Company elects as the Lookback Year the calendar year immediately preceding such Plan Year. (m) "Multiple Use Test". The test described in Section 12.5 which a Plan must meet where the Alternative Limitation (described in Section 12.2) is used to meet both the ADP and ACP Tests. (n) "N H CE" on "Non-Highly Compensated Employee". An Employee who is not a HCE. (o) "Prior Year Testing Method". The use of the preceding Plan Year's ADP for the preceding Plan Year's NHCE Group for purposes of performing the Plan Year's ADP Test and/or the use of the preceding Plan Year's ACP for the preceding Plan Year's NHCE Group for purposes of performing the Plan Year's ACP Test. 40 12.2 ADP and ACP Tests For Plan Years commencing before January 1, 1997, for each Plan Year, the Current Year Testing Method shall be used and the ADP and ACP for the HCE Group must meet either the Basic or Alternative Limitation when compared to the respective ADP and ACP for the NHCE Group, defined as follows: (a) Basic Limitation. The HCE Group Average Percentage may not exceed 1.25 times the NHCE Group Average Percentage. (b) Alternative Limitation. The HCE Group Average Percentage is limited by reference to the NHCE Group Average Percentage as follows: THEN THE MAXIMUM HCE IF THE NHCE GROUP GROUP AVERAGE AVERAGE PERCENTAGE IS: PERCENTAGE IS: Less than 2% 2 times NHCE Group Average % 2% to 8% NHCE Group Average % pIus 2% More than 8% NA - Basic Limitation applies For Plan Years commencing after December 31, 1996, for each Plan Year, the Prior Year Testing Method shall be used and the ADP and ACP for the HCE Group must meet either the Basic or Alternative Limitation when compared to the respective preceding Plan Year's ADP and ACP for the preceding Plan Year's NHCE Group, defined as follows: (a) Basic Limitation. The HCE Group Average Percentage may not exceed 1.25 times the NHCE Group Average Percentage. (b) Alternative Limitation. The HCE Group Average Percentage is limited by reference to the NHCE Group Average Percentage as follows: 41 THEN THE MAXIMUM HCE IF THE NHCE GROUP GROUP AVERAGE AVERAGE PERCENTAGE IS: PERCENTAGE IS: Less than 2% 2 times NHCE Group Average % 2% to 8% NHCE Group Average % pIus 2% More than 8% NA - Basic Limitation applies Alternatively, the Company may elect to use the Current Year Testing Method and the ADP and/or ACP for the HCE Group must meet either the Basic or Alternative Limitation as defined above when compared to the respective Plan Year's ADP and/on ACP for the Plan Year's NHCE Group. If a Current Year Testing Method election is made, such election may not be changed except as provided by the Code. 12.3 Connection of ADP and ACP Tests for Plan Years Commencing Before January 1, 1997 For Plan Years commencing before January 1, 1997, for each Plan Year, if the ADP or ACP Tests are not met, the Administrator shall determine, no later than the end of the next Plan Year, a maximum percentage to be used in place of the calculated percentage for all HCEs that would reduce the ADP and/or ACP for the HCE Group by a sufficient amount to meet the ADP and ACP Tests. ADP and/or ACP corrections shall be made in accordance with the leveling method as described below. (a) ADP Correction. The HCE with the highest Deferral percentage shall have his or her Deferral percentage reduced to the lesser of the extent required to meet the ADP Test on to cause his or her Deferral percentage to equal that of the HCE with the next highest Deferral percentage. The process shall be repeated until the ADP Test is met. To the extent an HCE"s Deferrals were determined to be reduced as described in the paragraph above, Employee Pre-Tax Contributions shall, by the end of the next Plan Year, be refunded to the HCE in an amount equal to the actual Deferrals minus the product of the maximum percentage and the HCE's Compensation, except that such amount to be refunded shall be reduced by Employee Pre- Tax Contributions previously refunded because they exceeded the Contribution Dollar Limit. The excess amounts shall first be taken from unmatched Employee 42 Pre-Tax Contributions and then from matched Employee Pre-Tax Contributions. Any Employer Contributions attributable to refunded excess Employee Pre-Tax Contributions as described in this Section, adjusted for investment gain on loss for the Plan Year to which the excess Pre-Tax Contributions relate, shall be forfeited and used as described in Section 8 on to reduce future Contributions to be made by an Employer as soon as administratively feasible. (b) ACP Correction. The HCE with the highest Contribution percentage shall have his or her Contribution percentage reduced to the lesser of the extent required to meet the ACP Test on to cause his or her Contribution percentage to equal that of the HCE with the next highest Contribution percentage. The process shall be repeated until the ACP Test is met. To the extent an HCE's Contributions were determined to be reduced as described in the paragraph above, Employer Contributions shall, by the end of the next Plan Year, be refunded to the HCE. (c) Investment Fund Sources. Once the amount of excess Deferrals and/or Contributions is determined, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes his or her Loan Account balance) as of the Trade Date on which the correction is processed. (d) Family Member Correction. To the extent any reduction is necessary with respect to an HCE and his on her Family Members that have been combined and treated for testing purposes as a single Employee, the excess Deferrals and Contributions from the ADP and/or ACP Test shall be prorated among each such Participant in direct proportion to his or hen Deferrals or Contributions included in each Test. 12.4 Connection of ADP and ACP Tests for Plan Years Commencing After December 31, 1996 For Plan Years commencing after December 31, 1996, for each Plan Year, if the ADP or ACP Test are not met, the Administrator shall determine, no later than the end of the next Plan Year, a maximum percentage to be used in place of the calculated percentage for all HCES that would reduce the ADP and/or ACP for the HCE Group by a sufficient amount to meet the ADP and ACP Tests. 43 With regard to each HCE whose Deferral percentage and/or Contribution percentage is in excess of the maximum percentage, a dollar amount of excess Deferrals and/or excess Contributions shall then be determined by (i) subtracting the product of such maximum percentage for the ADP and the HCE's Compensation from the HCE's actual Deferrals and (ii) subtracting the product of such maximum percentage for the ACP and the HCE's Compensation from the HCE's actual Contributions. Such amounts shall then be aggregated to determine the total dollar amount of excess Deferrals and/on excess Contributions. ADP and/or ACP corrections shall be made in accordance with the leveling method as described below. (a) ADP Connection. The HCE with the highest Deferral dollar amount shall have his on her Deferral dollar amount reduced in an amount equal to the lesser of the dollar amount of excess Deferrals for all HCES on the dollar amount that would cause his or her Deferral dollar amount to equal that of the HCE with the next highest Deferral dollar amount. The process shall be repeated until the total of the Deferral dollar amount reductions equals the dollar amount of excess Deferrals for all HCES. To the extent an HCE's Deferrals were determined to be reduced as described in the paragraph above, Employee Pre-Tax Contributions shall, by the end of the next Plan Year, be refunded to the HCE, except that such amount to be refunded shall be reduced by Employee Pre- Tax Contributions previously refunded because they exceeded the Contribution Dollar Limit. The excess amounts shall first be taken from unmatched Employee Pre-Tax Contributions and then from matched Employee Pre-Tax Contributions. Any Employer Contributions attributable to refunded excess Employee Pre-Tax Contributions as described in this Section, adjusted for investment gain or loss for the Plan Year to which the excess Employee Pre-Tax Contributions relate, shall be forfeited and used to reduce future Contributions to be made by an Employer as soon as administratively feasible. (b) ACP Correction. The HCE with the highest Contribution dollar amount shall have his or her Contribution dollar amount reduced in an amount equal to the lesser of the dollar amount of excess Contributions for all HCES or the dollar amount that would cause his or her Contribution dollar amount to equal that of the HCE with the next highest Contribution dollar amount. The process shall be repeated until the total of the 44 Contribution dollar amount reductions equals the dollar amount of excess Contributions for all HCES. To the extent an HCE's Contributions were determined to be reduced as described in the paragraph above, Employer Contributions shall, by the end of the next Plan Year, be refunded to the HCE as of the end of the Plan Year being tested. (c) Investment Fund Sources. Once the amount of excess Deferrals and/or Contributions is determined, amounts shall first be taken from the Sweep Account and then taken by Investment Fund in direct proportion to the market value of the Participant's interest in each Investment Fund (which excludes his or hen Loan Account balance) as of the Trade Date on which the connection is processed. 12.5 Multiple Use Test If the Alternative Limitation (defined in Section 12.2) is used to meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group must also comply with the requirements of Code section 401(m)(9). Such Code section requires that the sum of the ADP and ACP for the HCE Group (as determined after any corrections needed to meet the ADP and ACP Tests have been made) not exceed the sum (which produces the most favorable result) of: (a) the Basic Limitation (defined in Section 12.2) applied to either the ADP or ACP for the NHCE Group, and (b) the Alternative Limitation applied to the other NHCE Group percentage. 12.6 Connection of Multiple Use Test If the multiple use limit is exceeded, the Administrator shall determine a maximum percentage to be used in place of the calculated percentage for all HCES that would reduce either or both the ADP or ACP for the HCE Group by a sufficient amount to meet the multiple use limit. Any excess shall be corrected in the same manner that excess Deferrals or Contributions are corrected. 12.7 Adjustment for Investment Gain on Loss Any excess Deferrals or Contributions to be refunded to a Participant in accordance with this Section 12 shall be adjusted for investment gain on loss. Refunds shall not include investment gain or loss for the period between the 45 end of the applicable Plan Year and the date of distribution. 12.8 Testing Responsibilities and Required Records The Administrator shall be responsible for ensuring that the Plan meets the ADP Test, and if applicable, the ACP Test and the Multiple Use Test, and that the Contribution Dollar Limit is not exceeded. The Administrator shall maintain records which are sufficient to demonstrate that the ADP Test, and if applicable, the ACP Test and the Multiple Use Test, have been met for each Plan Year for at least as long as the Employer's corresponding tax year is open to audit. 12.9 Separate Testing (a) Multiple Employers: The determination of HCES, NHCEs, and the performance of the ADP Test, and if applicable, the ACP Test and the Multiple Use Test, and any corrective action resulting therefrom, shall be conducted separately with regard to the Employees of each Employer (and its Related Companies) that is not a Related Company with respect to the other Employer(s): (b) Collective Bargaining Units: The performance of the ADP Test, and if applicable, the ACP Test and the Multiple Use Test, and any corrective action resulting therefrom, shall be conducted separately with regard to Employees who are eligible to participate in the Plan as a result of a collective bargaining agreement. In addition, testing may be conducted separately, at the discretion of the Administrator and to the extent permitted under Treasury regulations, with regard to any group of Employees for whom separate testing is permissible under such regulations. 13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS 13.1 "Annual Addition" Defined The sum for a Plan Year of all (i) contributions (excluding rollover contributions) allocated to the Participant's Account and his or her account in all other defined contribution plans maintained by any Related Company, (ii) amounts allocated to the Participant's individual medical account (within the meaning of Code section 415(l)(2)) which is part of a defined benefit plan maintained by any Related Company, and (iii) if the Participant is a key employee (within the meaning of Code section 419A(d)(3)) for the applicable or any prior Plan Year, amounts attributable to post-retirement medical benefits allocated to his or hen 46 separate account under a welfare benefit fund (within the meaning of Code section 419(e)) maintained by any Related Company. The Plan Year refers to the year to which the allocation pertains, regardless of when it was allocated. The Plan Year shall be the Code section 415 limitation year. 13.2 Maximum Annual Addition A Participant's Annual Addition for any Plan Year shall not exceed the lesser of (i) 25% of his or her Compensation or (ii) $30,000 (as adjusted for cost of living increases pursuant to Code section 415(d)); provided, however, that clause (i) shall not apply to Annual Additions described in clauses (ii) and (iii) of Section 13.1. 13.3 Avoiding an Excess Annual Addition If, at any time during a Plan Year, the allocation of any additional Contributions would produce an excess Annual Addition for such year, Contributions to be made for the remainder of the Plan Year shall be limited to the amount needed for each affected Participant to receive the maximum Annual Addition. 13.4 Correcting an Excess Annual Addition Upon the discovery of an excess Annual Addition to a Participant's Account (resulting from a reasonable error in determining a Participant's compensation or the maximum permissible amount of his or her elective deferrals (within the meaning of Code section 402(g)(3)), or other facts and circumstances acceptable to the Internal Revenue Service), the excess amount (adjusted to reflect investment gains) shall first be returned to the Participant to the extent of his or her Employee Pre-Tax Contributions (however to the extent Employee Pre-Tax Contributions were matched, the applicable Employer Contributions shall be forfeited in proportion to the returned matched Employee Pre-Tax Contributions) and the remaining excess, if any, shall be forfeited by the Participant and used to reduce future Contributions to be made by an Employer as soon as administratively feasible. 13.5 Correcting a Multiple Plan Excess If a Participant, whose Account is credited with an excess Annual Addition, received allocations to more than one defined contribution plan, the excess shall be corrected by reducing the Annual Addition to the Plan only after all possible reductions have been made to the other defined contribution plans. 47 13.6 "Defined Benefit Fraction" Defined The fraction, for any Plan Year, where the numerator is the "projected annual benefit" and the denominator is the greater of 125% of the "protected current accrued benefit" or the normal limit which is the lesser of (i) 125% of the dollar limitation in effect under Code section 415(b)(1)(A) for the Plan Year or (ii) 140% of the amount which may be taken into account under Code section 415(b)(1)(B) for the Plan Year, where a Participant's: (a) "projected annual benefit" is the annual benefit provided by the plan determined pursuant to Code section 415(e)(2)(A), and (b) "protected current accrued benefit" in a defined benefit plan in existence (1) on July 1, 1982, shall be the accrued annual benefit provided for under Public Law 9 7-248, section 235(g)(4), as amended, or (2) on May 6, 1986, shall be the accrued annual benefit provided for under Public Law 99-514, section 1106(i)(3). 13.7 "Defined Contribution Fraction" Defined The fraction where the numerator is the sum of the Participant's Annual Addition for each Plan Year to date and the denominator is the sum of the "annual amounts"' for each year in which the Participant has performed service with a Related Company. The "annual amount" for any Plan Year is the lesser of (i) 125% of the dollar limitation in effect under Code section 415(c)(1)(A) (determined without regard to subsection (c)(6)) for the Plan Year or (ii) 140% of the amount which may be taken into account under Code section 415(c)(1)(B) for the Plan Year, where: (a) each Annual Addition is determined pursuant to the Code section 415 rules in effect for such Plan Year, and (b) the numerator is adjusted pursuant to Public Law 97- 248, section 235(g)(3), as amended, or Public Law 99- 514, section 1106(i)(4). 13.8 Combined Plan Limits and Correction The sum of a Participant's Defined Benefit Fraction and Defined Contribution Fraction for any Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan Year, the Participant's benefit under any defined benefit plan (to the extent it has not been distributed or used to purchase an annuity contract) shall be limited so 48 that the combined fraction does not exceed 1.0 before any defined contribution limits shall be enforced. For Plan Years commencing after December 31, 1999, the provisions of the preceding paragraph shall no longer be effective. 14 TOP HEAVY RULES 14.1 Top Heavy Definitions When capitalized, the following words and phrases have the following meanings when used in this Section: (a) "Aggregation Group". The group consisting of each qualified plan of the Related Companies (1) in which a Key Employee is a participant or was a participant during the determination period (regardless of whether such plan has terminated), or (2) which enables another plan in the group to meet the requirements of Code sections 401(a)(4) or 410(b). The Administrator may also treat any other qualified plan of the Related Companies as part of the group if the resulting group would continue to meet the requirements of Code sections 401(a)(4) and 410(b) with such plan being taken into account. (b) "Determination Date". For any Plan Year, the last Trade Date of the preceding Plan Year or, in the case of the Plan's first Plan Year, the last Trade Date of that Plan Year. (c) "Key Employee"'. A current or former Employee (or his or her Beneficiary) who at any time during the five year period ending on the Determination Date was: (1) an officer of a Related Company whose Compensation (i) exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and (ii) places him or her within the following highest paid group of officers: 49 NUMBER OF EMPLOYEES NOT EXCLUDED UNDER CODE SECTION NUMBER OF 41414(Q)(5) HIGHEST PAID OFFICERS INCLUDED Less than 30 3 30 to 500 10% of the number of Employees not excluded under Code section 414(q)(5) More than 500 50 (2) a 5% Owner, (3) a 1% Owner whose Compensation exceeds $150,000, or (4) a 0.5% Owner who is among the 10 Employees owning the largest interest in a Related Company and whose Compensation exceeds the amount in effect under Code section 415(c)(1)(A). (d) "Plan Benefit". The sum as of the Determination Date of (1) an Employee's Account, (2) the present value of his or her other accrued benefits provided by all qualified plans within the Aggregation Group, and (3) the aggregate distributions made within the five year period ending on such Date. For this purpose, the present value of the Employee's accrued benefit in a defined benefit plan shall be determined by the method that is used for benefit accrual purposes under all such plans maintained by the Related Companies or, if there is no such single method used under all such plans, as if the benefit accrues no more rapidly than the slowest rate permitted by the fractional accrual rule in Code section 411(b)(1)(C). Plan Benefits shall exclude rollover contributions and similar transfers made after December 31; 1983 as provided in Code section 416(g)(4)(A). (e) "Top Heavy". The Plan's status when the Plan Benefits of Key Employees account for more than 60% of the Plan Benefits of all Employees who have performed services at any time during the five year period ending on the Determination Date. The Plan Benefits of Employees who were, but are no longer, Key Employees (because they have not been an officer or Owner during the five year period), are excluded in the determination. 50 14.2 Special Contributions (a) Minimum Contribution Requirement. For each Plan Year in which the Plan is Top Heavy, the Employer shall not allow any contributions (other than a Rollover Contribution from a plan maintained by a non Related Company) to be made by or on behalf of any Key Employee unless the Employer makes a contribution (other than contributions made by an Employer in accordance with a Participant's salary deferral election or contributions made by an Employer based upon the amount contributed by a Participant) on behalf of all Participants who were Eligible Employees as of the last day of the Plan Year in an amount equal to at least 3% of each such Participant's Taxable Income. (b) Overriding Minimum Benefit. Notwithstanding the preceding paragraph, contributions shall be permitted on behalf of Key Employees if the Employer also maintains a defined benefit plan which automatically provides a benefit which satisfies the Code section 416(c)(1) minimum benefit requirements, including the adjustment provided in Code section 416(h)(2)(A), if applicable. If the Plan is part of an Aggregation Group under which a Key Employee is receiving a benefit and no minimum contribution is provided under any other plan, a minimum contribution of at least 3% of Taxable Income shall be provided to the Participants specified in the preceding paragraph. In addition, the Employer may offset a defined benefit minimum by contributions (other than contributions made by an Employer in accordance with a Participant's salary deferral election or contributions made by an Employer based upon the amount contributed by a Participant) made to the Plan. 14.3 Adjustment to Combined Limits for Different Plans For each Plan Year in which the Plan is Top Heavy, 100% shall be substituted for 125% in determining the Defined Benefit Fraction and the Defined Contribution Fraction. For Plan Years commencing after December 31, 1999, the provisions of the preceding sentence shall no longer be effective. 15 PLAN ADMINISTRATION 15.1 Plan Delineates Authority and Responsibility Plan fiduciaries include the Administrator, the Committee and/or the Trustee, as applicable, whose specific duties are delineated in the Plan and Trust. In addition, Plan 51 fiduciaries also include any other person to whom fiduciary duties or responsibilities are delegated by the Administrator, Committee, or Trustee, provided however that no such delegation shall be effective unless made in writing and signed by the fiduciary whose duties or responsibilities are being delegated. Any person or group may serve in more than one fiduciary capacity with respect to the Plan. To the extent permitted under ERISA section 405, no fiduciary shall be liable for a breach by another fiduciary. 15.2 Fiduciary Standards Each fiduciary shall: (a) discharge his or her duties in accordance with the Plan and Trust to the extent they are consistent with ERISA; (b) use that degree of care, skill, prudence and diligence that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (c) act with the exclusive purpose of providing benefits to Participants and their Beneficiaries, and defraying reasonable expenses of administering the Plan; (d) diversify Plan investments, to the extent such fiduciary is responsible for directing the investment of Plan assets, so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (e) treat similarly situated Participants and Beneficiaries in a uniform and nondiscriminatory manner. 15.3 Company's Benefits Committee is ERISA Plan Administrator The Benefits Committee maintained by the Company is the Administrator of the Plan (within the meaning of ERISA section 3(16)) and is responsible for compliance with all reporting and disclosure requirements, except those that are explicitly the responsibility of the Trustee under applicable law. The Administrator and/or Committee shall have any necessary authority to carry out such functions through the actions of the Administrator, its authorized representatives and/or the Committee. 15.4 Administrator Duties The Administrator shall have the discretionary authority to construe the Plan and Trust, other than the provisions that govern the rights and responsibilities of the Trustee and to 52 do all things necessary or convenient to effect the intent and purposes thereof, whether or not such powers are specifically set forth in the Plan and Trust. Actions taken in good faith by the Administrator shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. In addition to the duties listed elsewhere in the Plan and Trust, the Administrator's authority shall include, but not be limited to, the discretionary authority to: (a) determine who is eligible to participate, if a contribution qualifies as a rollover contribution, the allocation of Contributions, and the eligibility for loans, in-service withdrawals and distributions; (b) provide each Participant with a summary plan description no later than 90 days after he or she has become a Participant (or such other period permitted under ERlSA section 104(b)(1)), as well as informing each Participant of any material modification to the Plan in a timely manner; (c) make a copy of the following documents available to Participants during normal work hours: the Plan and Trust (including subsequent amendments), all annual and interim reports of the Trustee related to the entire Plan, the latest annual report and the summary plan description; (d) determine the fact of a Participant's death and of any Beneficiary's right to receive the deceased Participant's interest based upon such proof and evidence as it deems necessary; (e) establish and review at least annually a funding policy bearing in mind both the short-run and long-run needs and goals of the Plan and, to the extent Participants may direct their own investments, the funding policy shall focus on which Investment Funds are available for Participants to use; and (f) adjudicate claims pursuant to the claims procedure described in Section 18.9. 15.5 Advisors May be Retained The Administrator may retain such agents and advisors (including attorneys, accountants, actuaries, consultants, record keepers, investment counsel and administrative assistants) as it considers necessary to assist it in the performance of its duties. The Administrator shall also comply with the bonding requirements of ERISA section 412. 53 15.6 Delegation of Administrator Duties The Administrator may appoint a Committee to administer the Plan on its behalf. In the event that such a Committee is appointed, the Administrator shall provide the Trustee with the names and specimen signatures of any persons authorized to serve as Committee members and act as or on its behalf. Any Committee member appointed by the Administrator shall serve at the pleasure of the Administrator, but may resign by written notice to the Administrator. Committee members shall serve without compensation from the Plan for such services provided however, that members' reasonable expenses may be reimbursed in accordance with Section 15.8. Except to the extent that the Administrator otherwise provides, any delegation of duties to the Committee shall carry with it the full discretionary authority of the Administrator to complete such duties. Except for instances in which a Committee has been duly appointed and its member(s) is/are available for the performance of duties delegated to the Committee by the Administrator all references to "Committee" in this Plan and Trust shall be deemed to refer to the Administrator. 15.7 Committee Operating Rules (a) Actions of Majority. Any act delegated by the Administrator to the Committee may be done by a majority of its members. The majority may be expressed by a vote at a meeting or in writing without a meeting, and a majority action shall be equivalent to an action of all Committee members. (b) Meetings. The Committee shall hold meetings upon such notice, place and times as it determines necessary to conduct its functions properly. (c) Reliance by Trustee. The Committee may authorize one or more of its members to execute documents on its behalf and may authorize one or more of its members or other individuals who are not members to give written direction to the Trustee in the performance of its duties. The Committee shall provide such authorization in writing to the Trustee with the name and specimen signatures of any person authorized to act on its behalf. The Trustee shall accept such direction and rely upon it until notified in writing that the Committee has revoked the authorization to give such direction. The Trustee shall not be deemed to be on notice of any change in the membership of the Committee, parties authorized to direct the Trustee in the performance of its duties, on the duties delegated to and by the Committee until notified in writing. 54 (d) Modification of Operating Rules. The Administrator may modify or terminate, in whole or in part, the foregoing operating rules at any time and from time to time. Any such modification or termination shall not constitute or require an amendment of the Plan and Trust. 15.8 Fees and Expenses The Administrator will establish and maintain (or cause to be established and maintained) for the Plan one or more Plan Expense Account(s) for the purpose of paying, and/or reimbursing the Administrator and/or the Committee, the Company and any other third party as the Administator or Committee may deem appropriate, for payment of, expenses reasonably incurred in the administration and operation of the Plan. 15.9 Company Not A Fiduciary The Company is the settlor of the Plan and is not, nor shall it be deemed to be, a fiduciary of the Plan except to the extent, if any, that it (i) exercises discretionary authority or discretionary control respecting management of the Plan, (ii) exercises any authority or control respecting management or disposition of the Plan's assets, or (iii) otherwise satisfies the definition of fiduciary with respect to the Plan for purposes of Section 3(21)(A) of ERISA. Without limiting the foregoing, the Company shall retain all rights, powers and privileges of settlor with respect to the Plan (and any underlying trust), including without limitation, the right expressly conferred upon the Company under the terms of this Plan. 16 MANAGEMENT OF INVESTMENTS 16.1 Trust Agreement All Plan assets shall be held by the Trustee in trust, in accordance with those provisions of the Plan and Trust which relate to the Trustee, for use in providing Plan benefits and paying Plan fees and expenses not paid directly by the Employer. Plan benefits shall be drawn solely from the Trust and paid by the Trustee as directed by the Administrator. Notwithstanding the foregoing, the Company may appoint, with the approval of the Trustee, another trustee to hold and administer Plan assets which do not meet the requirements of Section 16.2. 16.2 Investment Funds The Administrator is hereby granted authority to direct the Trustee to invest Trust assets in one or more Investment 55 Funds. The number and composition of Investment Funds may be changed from time to time, without the necessity of amending the Plan and Trust. The Trustee may establish reasonable limits on the number of Investment Funds as well as the acceptable assets for any such Investment Fund. Each of the Investment Funds may be comprised of any of the following: (a) shares of a registered investment company, whether or not the Trustee or any of its affiliates is an advisor to, or other service provider to, such company; (b) collective investment funds maintained by the Trustee, or any other fiduciary to the Plan, which are available for investment by trusts which are qualified under Code sections 401(a) and 501(a); (c) individual equity and fixed income securities which are readily tradable on the open market; (d) synthetic guaranteed investment contracts and guaranteed investment contracts issued by an insurance company and/or synthetic guaranteed investment contracts and bank investment contracts issued by a bank; (e) interest bearing deposits (which may include interest bearing deposits of the Trustee); and (f) Company Stock. Any Investment Fund assets invested in a collective investment fund shall be subject to all the provisions of the instruments establishing and governing such fund. These instruments, including any subsequent amendments, are incorporated herein by reference. 16.3 Authority to Hold Cash The Trustee shall have the authority to cause the investment manager of each Investment Fund to maintain sufficient deposit or money market type assets in each Investment Fund to handle the lnvestment Fund's liquidity and disbursement needs. Each Participant's and Beneficiary's Sweep Account, which is used to hold assets pending investment or disbursement, shall consist of interest bearing deposits (which may include interest bearing deposits of the Trustee) and/or money market type assets or funds. 16.4 Trustee to Act Upon Instructions The Trustee shall carry out instructions to invest assets in the Investment Funds as soon as practicable after such 56 instructions are received from the Administrator, Participants or Beneficiaries. Such instructions shall remain in effect until changed by the Administrator, Participants or Beneficiaries. 16.5 Administrator Has Right to Vote Registered Investment Company Shares The Administrator shall be entitled to vote proxies or exercise any shareholder rights relating to shares held on behalf of the Plan in a registered investment company. Notwithstanding the foregoing sentence, the authority to vote proxies and exercise shareholder rights related to such shares held in a Custom Fund is vested as provided otherwise in Section 16. 16.6 Custom Fund Investment Management The Administrator may designate, with the consent of the Trustee, an investment manager for any Investment Fund established by the Trustee solely for Participants of the Plan and, subject to Section 16.7, any other qualified plan of the Company or a Related Company (a "Custom Fund"). The investment manager may be the Administrator, Trustee or an investment manager pursuant to ERISA section 3(38). The Administrator shall advise the Trustee in writing of the appointment of an investment manager and shall cause the investment manager to acknowledge to the Trustee in writing that the investment manager is a fiduciary to the Plan. A Custom Fund shall be subject to the following: (a) Guidelines. Written guidelines, acceptable to the Trustee, shall be established for a Custom Fund. If a Custom Fund consists solely of collective investment funds or shares of a registered investment company (and sufficient deposit or money market type assets to handle the Custom Fund's liquidity and disbursement needs), its underlying instruments shall constitute the guidelines. (b) Authority of Investment Manager. The investment manager of a Custom Fund shall have the authority to vote or execute proxies, exercise shareholder rights, manage, acquire, and dispose of Trust assets. Notwithstanding the foregoing, if the Company provides for a Company Stock Fund, the authority to vote proxies and exercise shareholder rights related to shares of Company Stock held in the Company Stock Fund is vested as provided otherwise in Section 16. 57 (c) Custody and Trade Settlement. Unless otherwise agreed to by the Trustee, the Trustee shall maintain custody of all Custom Fund assets and be responsible for the settlement of all Custom Fund trades. For purposes of this Section, shares of a collective investment fund, shares of a registered investment company and synthetic guaranteed investment contracts and guaranteed investment contracts issued by an insurance company and/or synthetic guaranteed investment contracts and bank investment contracts issued by a bank, shall be regarded as the Custom Fund assets instead of the underlying assets of such instruments. (d) Limited Liability of Co-Fiduciaries. Neither the Administrator nor the Trustee shall be obligated to invest or otherwise manage any Custom Fund assets for which the Trustee or Administrator is not the investment manager nor shall the Administrator or Trustee be liable for acts or omissions with regard to the investment of such assets except to the extent required by ERISA. 16.7 Master Custom Fund The Trustee may establish, at the direction of the Administrator, a single Custom Fund (the "Master Custom Fund"), for the benefit of the Plan and any other qualified plan of the Company or a Related Company for which the Trustee acts as trustee pursuant to a plan and trust document that contains a provision substantially identical to this provision. The assets of the Plan, to the extent invested in the Master Custom Fund, shall consist only of that percentage of the assets of the Master Custom Fund represented by the shares held by the Plan. 16.8 Authority to Segregate Assets The Administrator may direct the Trustee to split an Investment Fund into two or more funds in the event any assets in the Investment Fund are illiquid or the value is not readily determinable. In the event of such segregation, the Administrator shall give instructions to the Trustee on what value to use for the split-off assets, and the Trustee shall not be responsible for confirming such value. 16.9 Maximum Permitted Investment in Company Stock If the Company provides for a Company Stock Fund, the Company Stock Fund shall be comprised of Company Stock and sufficient deposit or money market type assets to handle the Company Stock Fund's liquidity and disbursement needs. The 58 Company Stock Fund may be as large as necessary to comply with Participants' and Beneficiaries' investment elections. 16.10 Participants Have Right to Vote and Tender Company Stock Each Participant or Beneficiary shall be entitled to instruct the Trustee as to the voting or tendering of any full or partial shares of Company Stock held on his or her behalf in the Company Stock Fund. Prior to such voting or tendering of Company Stock, each Participant or Beneficiary shall receive a copy of the proxy solicitation or other material relating to such vote or tender decision and a form for the Participant or Beneficiary to complete which confidentially instructs the Trustee to vote or tender such shares in the manner indicated by the Participant or Beneficiary. Upon receipt of such instructions, the Trustee shall act with respect to such shares as instructed. With regard to shares for which the Trustee receives no voting or tendering instructions from Participants or Beneficiaries, the Administrator shall instruct the Trustee with respect to how to vote or tender such shares and the Trustee shall act with respect to such shares as instructed. 16. 11 Registration and Disclosure for Company Stock The Administrator shall be responsible for determining the applicability (and, if applicable, complying with) the requirements of the Securities Act of 1933, as amended, the California Corporate Securities Law of 1968, as amended, and any other applicable blue sky law. The Administrator shall also specify what restrictive legend or transfer restriction, if any, is required to be set forth on the certificates for the securities and the procedure to be followed by the Trustee to effectuate a resale of such securities. 17 TRUST ADMINISTRATION 17.1 Trustee to Construe Trust The Trustee shall have the discretionary authority to construe those provisions of the Plan and Trust that govern the rights and responsibilities of the Trustee and to do all things necessary or convenient to the administration of the Trust, whether or not such powers are specifically set forth in the Plan and Trust. Actions taken in good faith by the Trustee shall be conclusive and binding on all interested parties, and shall be given the maximum possible deference allowed by law. 59 17.2 Trustee To Act As Owner of Trust Assets Subject to the specific conditions and limitations set forth in the Plan and Trust, the Trustee shall have all the power, authority, rights and privileges of an absolute owner of the Trust assets and, not in limitation but in amplification of the foregoing, may: (a) receive, hold, manage, invest and reinvest, sell, tender, exchange, dispose of, encumber, hypothecate, pledge, mortgage, lease, grant options respecting, repair, alter, insure, or distribute any and all property in the Trust; (b) borrow money, participate in reorganizations, pay calls and assessments, vote or execute proxies, exercise subscription or conversion privileges, exercise options and register any securities in the Trust in the name of the nominee, in federal book entry form or in any other form as shall permit title thereto to pass by delivery; (c) renew, extend the due date, compromise, arbitrate, adjust, settle, enforce or foreclose, by judicial proceedings or otherwise, or defend against the same, any obligations or claims in favor of or against the Trust; and (d) lend, through a collective investment fund, any securities held in such collective investment fund to brokers, dealers or other borrowers and to permit such securities to be transferred into the name and custody and be voted by the borrower or others. 17.3 United States Indicia of Ownership The Trustee shall not maintain the indicia of ownership of any Trust assets outside the jurisdiction of the United States, except as authorized under ERISA section 404(b). 17.4 Tax Withholding and Payment (a) Withholding. The Trustee shall calculate and withhold federal (and, if applicable, state) income taxes with regard to any Eligible Rollover Distribution that is not paid as a Direct Rollover in accordance with the Participant's withholding election on as required by law if no election is made or the election is less than the amount required by law. With regard to any taxable distribution that is not an Eligible Rollover Distribution, the Trustee shall calculate and withhold federal (and, if applicable, state) income taxes in 60 accordance with the Participant's withholding election or as required by law if no election is made. (b) Taxes Due From Investment Funds. The Trustee shall pay from the Investment Fund any taxes or assessments imposed by any taxing or governmental authority on such Investment Fund or its income, including related interest and penalties. 17.5 Trust Accounting (a) Annual Report. Within 60 days (or other reasonable period) following the close of the Plan Year, the Trustee shall provide the Administrator with an annual accounting of Trust assets and information to assist the Administrator in meeting ERISA's annual reporting and audit requirements. (b) Periodic Reports. The Trustee shall maintain records and provide sufficient reporting-to allow the Administrator to properly monitor the Trust's assets and activity. (c) Administrator Approval. Approval of any Trustee accounting shall automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator. 17.6 Valuation of Certain Assets If the Trustee determines the Trust holds any asset which is not readily tradable and listed on a national securities exchange registered under the Securities Exchange Act of 1934, as amended, the Trustee may engage a qualified independent appraiser to determine the fair market value of such property, and the appraisal fees shall be paid from the Investment Fund containing the asset. 17.7 Legal Counsel The Trustee may consult with legal counsel of its choice, including counsel for the Employer or counsel of the Trustee, upon any question or matter arising under the Plan and Trust. When relied upon by the Trustee, the opinion of such counsel shall be evidence that the Trustee has acted in good faith. 61 17.8 Fees and Expenses The Trustee's fees for its services as Trustee shall be such as may be mutually agreed upon by the Company and the Trustee. Trustee fees and all reasonable expenses of counsel and advisors retained by the Trustee shall be paid in accordance with Section 6. 17.9 Trustee Duties and Limitations The Trustee's duties, unless otherwise agreed to by the Trustee, shall be confined to construing the terms of the Plan and Trust as they relate to the Trustee, receiving funds on behalf of and making payments from the Trust, safeguarding and valuing Trust assets, investing and reinvesting Trust assets in the Investment Funds as directed by the Administrator, Participants or Beneficiaries, and those duties as described in this Section 17. The Trustee shall have no duty or authority to ascertain whether Contributions are in compliance with the Plan, to enforce collection or to compute or verify the accuracy or adequacy of any amount to be paid to it by the Employer. The Trustee shall not be liable f-or the proper application of any part of the Trust with respect to any disbursement made at the direction of the Administrator. 18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION 18.1 Plan Does Not Affect Employment Rights The Plan does not provide any employment rights to any Employee. The Employer expressly reserves the right to discharge an Employee at any time, with or without cause, without regard to the effect such discharge would have upon the Employee's interest in the Plan. 18.2 Compliance With USERRA Notwithstanding any provision of the Plan to the contrary, effective October 13, 1996, with regard to an Employee who after serving in the uniformed services is employed on or after December 12, 1994, within the time required by USERRA, contributions shall be made and benefits and service credit shall be provided under the Plan with respect to his or her qualified military service (as defined in Code section 414(u)(5)) in accordance with Code section 414(u). Furthermore, notwithstanding any provision of the Plan to the contrary, Participant loan payments may be suspended during a period of qualified military service, provided, however, that the Administrator may direct that interest 62 shall continue to accrue on outstanding loan balances, subject to any applicable restrictions imposed by USERRA. 18.3 Limited Return of Contributions Except as provided in this Section 18.3, (i) Plan assets shall not revert to the Employer nor be diverted for any purpose other than the exclusive benefit of Participants and Beneficiaries and defraying reasonable expenses of administering the Plan; and (ii) a Participant's vested interest shall not be subject to divestment. As provided in ERISA section 403(c)(2), the actual amount of a Contribution or portion thereof made by the Employer (or the current value of such if a net loss has occurred) may revert to the Employer if: (a) such Contribution or portion thereof is made by reason of a mistake of fact; (b) a determination with respect to the initial qualification of the Plan under Code section 401(a) is not received and a request for such determination is made within the time prescribed under Code section 401(b) (the existence of and Contributions under the Plan are hereby conditioned upon such initial qualification); or (c) such Contribution or portion thereof is not deductible under Code section 404 (such Contributions are hereby conditioned upon such deductibility) in the taxable year of the Employer for which the Contribution is made. The reversion to the Employer must be made (if at all) within one year of the mistaken payment, the date of denial of qualification, or the date of disallowance of deduction, as the case may be. A Participant shall have no rights under the Plan with respect to any such reversion. 18.4 Assignment and Alienation As provided by Code section 401(a)(13) and to the extent not otherwise required by law, no benefit provided by the Plan may be anticipated, assigned or alienated, except to create, assign or recognize a right to any benefit with respect to a Participant pursuant to a ODRO, or to use Participant's vested Account Balance as security for a loan from the Plan, pursuant to Code section 4975. 63 18.5 Facility of Payment If a Plan benefit is due to be paid to a minor on if the Administrator reasonably believes that any payee is legally incapable of giving a valid receipt and discharge for any payment due him or her, the Administrator shall have the payment of the benefit, or any part thereof, made to the person (or persons or institution) whom it reasonably believes is caring for or supporting the payee, unless it has received due notice of claim therefore from a duly appointed guardian or conservator of the payee. Any payment shall to the extent thereof, be a complete discharge of any liability under the Plan to the payee. 18.6 Reallocation of Lost Participant's Accounts If the Administrator cannot locate a person entitled to payment of a Plan benefit after a reasonable search, the Administrator may at any time thereafter treat such person's Account as forfeited and use such amount to reduce future Contributions to be made by an Employer as soon as administratively feasible. If such person subsequently presents the Administrator with a valid claim for the benefit, such person shall be paid the amount treated as forfeited, plus the interest that would have been earned in the Sweep Account to the date of determination. The Administrator shall pay the amount through an additional amount contributed by the Employer. 18.7 Suspension of Certain Plan Provisions During Conversion Period Notwithstanding any provision of the Plan to the contrary, during any Conversion Period, in accordance with procedures established by the Administrator and the Trustee, the Administrator may temporarily suspend, in whole or in part, certain provisions under the Plan, which may include, but are not limited to, a Participant's right to change his or hen Contribution election, a Participant's right to change his or her investment election and a Participant's right to borrow or withdraw from his or her Account or obtain a distribution from his or her Account. 18.8 Suspension of Certain Plan Provisions During Other Periods Notwithstanding any provision of the Plan to the contrary, in accordance with procedures established by the Administrator and the Trustee, the Administrator may temporarily suspend a Participant's right to borrow or withdraw from his or her Account or obtain a distribution from his or her Account, if (i) the Administrator receives a domestic relations order and the Participant's Account is a 64 source of the payment for such domestic relations order, or (ii) if the Administrator receives notice that a domestic relations order is being sought by the Participant, his or her spouse, former spouse, child or other dependent (as defined in Code section 152) and the Participant's Account is a source of the payment for such domestic relations order. Such suspension may continue for a reasonable period of time (as determined by the Administrator) which may include the period of time the Administrator, a court of competent jurisdiction or other appropriate person is determining whether the domestic relations order qualifies as a ODRO. 18.9 Claims Procedure (a) Right to Make Claim. An interested party who disagrees with the Administrator's determination of his on her right to Plan benefits must submit a written claim and exhaust this claim procedure before legal recourse of any type is sought. The claim must include the important issues the - interested party believes support the claim. The Administrator, pursuant to the authority provided in the Plan, shall either approve or deny the claim. (b) Process for Denying a Claim. The Administrator's partial or complete denial of an initial claim must include an understandable, written response covering (1) the specific reasons why the claim is being denied (with reference to the pertinent Plan provisions) and (2) the steps necessary to perfect the claim and obtain a final review. (c) Appeal of Denial and Final Review. The interested party may make a written appeal of the Administrator's initial decision, and the Administrator shall respond in the same manner and form as prescribed for denying a claim initially. (d) Time Frame. The initial claim, its review, appeal and final review shall be made in a timely fashion, subject to the following time table: 65 DAYS TO ACTION RESPOND FROM LAST ACTION Administrator determines NA benefit 60 days Interested party files initial 90 days request 60 days Administrator's initial 60 days decision Interested party requests final review Administrator's final decision However, the Administrator may take up to twice the maximum response time for its initial and final review if it provides an explanation within the normal period of why an extension is needed and when its decision shall be forthcoming. 18.10 Construction Headings are included for reading convenience. The text shall control if any ambiguity or inconsistency exists between the headings and the text. The singular and plural shall be interchanged wherever appropriate. References to Participant shall include Alternate Payee and/or Beneficiary when appropriate and even if not otherwise already expressly stated. 18.11 Jurisdiction and Severability The Plan and Trust shall be construed, regulated and administered under ERISA and other applicable federal laws and, where not otherwise preempted, by the laws of the State of-New Jersey with respect to issues affecting the Trustee's responsibilities and by the laws of the Commonwealth of Massachusetts with respect to all other matters. If any provision of the Plan and Trust is or becomes invalid or otherwise unenforceable, that fact shall not affect the validity or enforceability of any other provision of the Plan and Trust. All provisions of the Plan and Trust shall be so construed as to render them valid and enforceable in accordance with their intent. 18.12 Indemnification by Employer The Employers hereby agree to indemnify all Plan fiduciaries against any and all liabilities resulting from any action or inaction, (including a Plan termination in which the Company 66 fails to apply for a favorable determination from the Internal Revenue Service with respect to the qualification of the Plan upon its termination), in relation to the Plan or Trust (i) including (without limitation) expenses reasonably incurred in the defense of any claim relating to the Plan or its assets, and amounts paid in any settlement relating to the Plan or its assets, but (ii) excluding liability resulting from actions or inactions made in bad faith, or resulting from the negligence or willful misconduct of the Trustee. The Company shall have the right, but not the obligation, to conduct the defense of any action to which this Section applies. The Plan fiduciaries are not entitled to indemnity from the Plan assets relating to any such action. 18.13 Effect of Collectively Bargained Schedules Notwithstanding anything contained herein to the contrary, in the event that any conflict arises between the terms of the Articles of this Plan, and the terms of one or more Schedules to this Plan, then the terms of the Schedule(s) shall govern with respect to the Participants covered by the affected Schedule(s), and their Beneficiaries, provided however, that no terms of any Schedule shall be enforced to the extent that such enforcement would adversely affect the qualified status of the Plan or Trust under sections 401(a) and 501(a) of the Code, respectively. 18.14 Release by Participants and Beneficiaries Except to the extent that it relieves the Administrator, the Committee or the Trustee from responsibility or liability for any responsibility, obligation or duty owing to the Plan or any Participant on Beneficiary, any payment to any Participant or to any person entitled to a benefit under the Plan, made in accordance with the provisions of the Plan, shall to the extent thereof be in full satisfaction of all claims against the Trustee and the Administrator, the Committee, any or all of whom may require such Participant or person, as a condition precedent to such payment, to execute a receipt and release therefor in such form as shall be determined by the Trustee, the Administrator or the Committee, as the case may be. 19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION 19.1 Amendment The Company reserves the right to amend the Plan and Trust at any time, to any extent and in any manner it may deem necessary or appropriate. The Company (and not the Trustee) shall be responsible for adopting any amendments necessary 67 to maintain the qualified status of the Plan and Trust under Code sections 401(a) and 501(a). If the Committee is acting as the Administrator in accordance with Section 1.5.6, it shall have the authority to adopt Plan and Trust amendments which have no substantial adverse financial impact upon any Employer or the Plan. All interested parties shall be bound by any amendment, provided that no amendment shall: (a) become effective unless it has been adopted in accordance with the procedures set forth in Section 19.5; (b) except to the extent permissible under ERISA and the Code, make it possible for any portion of the Trust assets to revert to an Employer or to be used for, or diverted to, any purpose other than for the exclusive benefit of Participants and Beneficiaries entitled to Plan benefits and to defray reasonable expenses of administering the Plan; (c) decrease the rights of any Participant to benefits accrued (including the elimination of optional forms of benefits) to the date on which the amendment is adopted, or if later, the date upon which the amendment becomes effective, except to the extent permitted under ERISA and the Code; nor (d) permit a Participant to be paid any portion of his or her Account subject to the distribution rules of Code section 401(k) unless the payment would otherwise be permitted under Code section 401(k). 19.2 Merger The Plan and Trust may not be merged or consolidated with, nor may its assets or liabilities be transferred to, another plan unless each Participant and Beneficiary would, if the resulting plan were then terminated, receive a benefit just after the merger, consolidation or transfer which is at least equal to the benefit which would be received if either plan had terminated just before such event. 19.3 Divestitures In the event of a sale by an Employer which is a corporation of: (i) substantially all of the Employer's assets used in a trade or business to an unrelated corporation, or (ii) a sale of such Employer's interest in a subsidiary to an unrelated entity or individual, lump sum distributions shall be permitted from the Plan, except as provided below, to Participants with respect to Employees who continue 68 employment with the corporation acquiring such assets or who continue employment with such subsidiary, as applicable. Notwithstanding the preceding paragraph, distributions shall not be permitted if the purchaser agrees, in connection with the sale, to be substituted as the Company as the sponsor of the Plan onto accept a transfer in a transaction subject to Code section 414(l)(1) of the assets and liabilities representing the Participants' benefits into a plan of the purchaser or a plan to be established by the purchaser. 19.4 Plan Termination and Complete Discontinuance of Contributions The Company may, at any time and for any reason, terminate the Plan in accordance with the procedures set forth in Section 19.5, or completely discontinue contributions. In the event of the Plan's termination, if no successor plan is established or maintained, lump sum distributions shall be made in accordance with the terms of the Plan as in effect at the time of the Plan's termination or as thereafter amended, provided that a post-termination amendment shall not be effective to the extent that it violates Section 19.1unless it is required in order to maintain the qualified status of the Plan upon its termination. The Trustee's and Employer's authority shall continue beyond the Plan's termination date until all Trust assets have been-liquidated and distributed. 19.5 Amendment and Termination Procedures The following procedural requirements shall govern the adoption of any amendment or termination (a "Change") of the Plan and Trust: (a) The Company may adopt any Change by action of its board of directors in accordance with its normal procedures. (b) The Committee, if acting as Administrator in accordance with Section 15.6, may adopt any Change within the scope of its authority provided under Section 19.1and in the manner specified in Section 15.7(a). (c) Any Change must be (1) set forth in writing, and (2) signed and dated by an executive officer of the Company or, in the case of a Change adopted by the Committee, at least one of its members. (d) If the effective date of any Change is not specified in the document setting forth the Change, it shall be effective as of the date it is signed by the last 69 person whose signature is required under clause (2) of paragraph (c) above, except to the extent that another effective date is necessary to maintain the qualified status of the Plan and Trust under Code sections 401(a) and 501(a). (e) No Change shall become effective until it is accepted and signed by the Trustee (which acceptance shall not unreasonably be withheld). 19.6 Termination of Employer's Participation Any Employer may, at any time and for any reason, terminate its Plan participation by action of its board of directors in accordance with its normal procedures. Written notice of such action shall be signed and dated by an executive officer of the Employer and delivered to the Company. If the effective date of such action is not specified, it shall be effective on, or as soon as reasonably practicable after, the date of delivery. Upon the Employer's request, the Company may instruct the Trustee and Administrator to spin off all affected Accounts and underlying assets into a separate qualified plan under which the Employer shall assume the powers and duties of the Company. Alternatively, the Company may continue to maintain the Accounts under the Plan. 19.7 Replacement of the Trustee The Trustee may resign as Trustee under the Plan and Trust or may be removed by the Company at any time upon at least 90 days written notice (on less if agreed to by both parties). In such event, the Company shall appoint a successor trustee by the end of the notice period. The successor trustee shall then succeed to all the powers and duties of the Trustee under the Plan and Trust. If no successor trustee has been named by the end of the notice period, the Company's chief executive officer shall become the trustee, or if he or she declines, the Trustee may petition the count for the appointment of a successor trustee. 19.8 Final Settlement and Accounting of Trustee (a) Final Settlement. As soon as administratively feasible after its resignation or removal as Trustee, the Trustee shall transfer to the successor trustee all property currently held by the Trust. However, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its accounts and expenses in connection with the settlement of its accounts or other fees or expenses payable by the 70 Trust. Any balance remaining after payment of such fees and expenses shall be paid to the successor trustee. (b) Final Accounting. The Trustee shall provide a final accounting to the Administrator within 90 days of the date Trust assets are transferred to the successor trustee. (c) Administrator Approval. Approval of the final accounting shall automatically occur 90 days after such accounting has been received by the Administrator, unless the Administrator files a written objection with the Trustee within such time period. Such approval shall be final as to all matters and transactions stated or shown therein and binding upon the Administrator. 71 APPENDIX A - INVESTMENT FUNDS I. Investment Funds Available The Investment Funds offered under the Plan as of the Effective Date include this set of daily valued funds: Stable Value Company Stock S&P 500 Stock AIM Constellation Templeton Foreign LifePath Series II. Default Investment Fund The default Investment Fund as of the Effective Date is the Stable Value Fund. Ill. Maximum Percentage Restrictions Applicable to Certain Investment Funds As of the Effective Date, there are no maximum percentage restrictions applicable to any Investment Funds. 72 APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES As of the Effective Date, payment of Plan fees and expenses shall be as follows: I. Investment Management Fees: These are paid by Participants in that management fees reduce the investment return reported and credited to Participants. II. Recordkeeping Fees: These are paid by Participants and are assessed monthly and billed/collected from Accounts quarterly. III. Loan Fees: A $3.50 per month fee is assessed and billed/collected quarterly from the Account of each Participant who has an outstanding loan balance for loans entered into on or after April 1, 1995, but that are set-up prior to migration to MLII., For loans entered into prior to April 1, 1995, these are paid by the Employer on a quarterly basis. For loans set-up after the migration to MLII, a one time $40.00 fee will be assessed and billed/collected from the Participant's Account at the time of the loan set-up. IV. Investment Fund Election Changes: Prior to the migration to MLII, for each investment fund election change by a Participant in excess of 10 changes per year, a $10 fee shall be assessed and billed/collected quarterly from the Participant's Account. On and after the migration to MLII there will be no limit and no fees assessed on the number of investment fund election changes by a Participant. V. Periodic Installment Payment Fees: A $3.00 per check fee shall be assessed and billed/collected quarterly -from the Account of each Participant for whom a check representing a periodic installment payment is issued. VI. Additional Fees Paid by Employer: All other Plan related fees and expenses shall be paid by the Employer. To the extent that the Administrator later elects that any such fees shall be borne by Participants, the fees shall be assessed against Participants' Accounts, and estimates of the fees shall be determined and reconciled, at least annually. 73 APPENDIX C - LOAN INTEREST RATE As of the Effective Date, the interest rate charged on Participant loans shall be equal to the prime rate published in The Wall Street Journal at the time the loan is processed, plus 1%. If multiple prime rates are published in The Wall Street Journal, the prime rate selected shall be the rate closest to the last prime rate used for this purpose. The rate may be determined once for all loans made in a month, and the maturity may be determined to the nearest year. On and after the migration to MLII, the interest rate charged on Participant loans shall be provided by Merrill Lynch, shall be reviewed once each quarter and shall be equal to the prime rate published in the Wall Street Journal (Citibank Prime) on the last business day of each quarter, plus 1%. 74 APPENDIX D - ELIGIBLE EMPLOYEE As of the Effective Date, the collective bargaining units are: (a) Lawrence Division, International Brotherhood of Electrical Workers, Local No. 326 ("Local 326-Lawrence Employees") (b) Brockton Division, Utility Workers' Union of America, AFL-CIO, Local No. 273 ("Local 273-Brockton Operating Employees") (c) Brockton Division, Utility Workers' Union of America, AFL-CIO, Local No. 273 Clerical/Technical Unit ("Local 273-Brockton Clerical/Technical Employees") (d) Northern Utilities, Inc., Portland Division, Brotherhood of Utility Workers of New England, Incorporated, Local No. 341("Local 341-Portland Employees") (e) Granite State Gas Transmission, Inc., Brotherhood of Utility Workers of New England, Incorporated, Local No. 341("Local 341- Granite State Employees") (f) Springfield Division, United Steelworkers of America, AFL-CIO, Local No. 12026 ("Local 12026-Springfield Employees") (g) Springfield Division, International Brotherhood of Electrical Workers, Local No. 486 ("Local 486-Springfield Employees") (h) Northern Utilities, Inc., Portsmouth Division, United Steelworkers of America, AFLCIO-CLC, Local No. 12012-6 ("Local 12012-6-Portsmouth Employees") (i) EnergyUSA Brockton Propane Division, Oil, Chemical and Atomic Workers International Union AFL-CIO, Quincy Local 8-36 6 ("Local 8-366-EnergyUSA Employees") (j) EnergyUSA Northern Propane Division, United Steelworkers of America, AFL-CIOCLC, Amalgamated Local No. 12012-8 ("Local 12012- 8-EnergyUSA Employees") 75 SCHEDULE A - LOCAL 326 LAWRENCE EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the month following the completion of a 60 day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 326 Lawrence Employee and who (a) is not eligible to receive medical insurance coverage upon retirement or (b) would be otherwise eligible to receive medical coverage upon retirement but who in accordance with procedures prescribed by the Administrator made a one-time irrevocable election to waive his or her right to receive medical insurance coverage upon his or her retirement. Amount of Employer Contributions: 07/01/96 to 06/30/99: The Employer Contribution for each period shall total 100% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 2.5% of his or her Pay. 07/01/99 to 06/30/2002: The Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 76 SCHEDULE B - LOCAL 273 BROCKTON OPERATING EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. Eligibility for Employer Contribution: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 273 Brockton Operating Employee and who (a) is not eligible to receive medical insurance coverage upon retirement or (b) would be otherwise eligible to receive medical coverage upon retirement but who in accordance with procedures prescribed by the Administrator made a one-time irrevocable election to waive his or her right to receive medical insurance coverage upon his or her retirement. Amount of Employer Contributions: The Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 77 SCHEDULE C - LOCAL 273 BROCKTON CLERICAL/TECHNICAL EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. Eligibility for Employer Contribution: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 273 Brockton Clerical/Technical Employee and who (a) is not eligible to receive medical insurance coverage upon retirement or (b) would be otherwise eligible to receive medical coverage upon retirement but who in accordance with procedures prescribed by the Administrator made a one-time irrevocable election to waive his or her right to receive medical insurance coverage upon his or her retirement. Amount of Employer Contributions: The Employer Contribution for each period shall equal 100% of each Participant's Employee Pre-Tax Contributions for the period up to 1% of his or her Pay and 50% of each Participant's Employee Pre-Tax Contributions for the period on the next 5% of his or hen Pay, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 6% of his or her Pay. 78 SCHEDULE D - LOCAL 341 PORTLAND EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 341-Portland Employee and who (a) is not eligible to receive medical insurance coverage upon retirement or (b) would be otherwise eligible to receive medical coverage upon retirement but who in accordance with procedures prescribed by the Administrator made a one-time irrevocable election to waive his on her right to receive medical insurance coverage upon his or her retirement. Amount of Employer Contributions: The Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 79 SCHEDULE E - LOCAL 341 GRANITE STATE EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 341-Granite State Employee and who (a) is not eligible to receive medical insurance coverage upon retirement or (b) would be otherwise eligible to receive medical coverage upon retirement but who in accordance with procedures prescribed by the Administrator made a one-time irrevocable election to waive his or her right to receive medical insurance coverage upon his or her retirement. Amount of Employer Contributions:. The Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 80 SCHEDULE F - LOCAL 12026 SPRINGFIELD EMPLOYEES Employee Pre-Tax Contributions Eligibility: Prior to January 1, 2000: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. Effective January 1, 2000: First day of the next month after completing a 60 day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 12026 Springfield Employee. Amount of Employer Contributions: Prior to January 1, 2000, a Participant who is a Local 12026- Springfield Employee is not eligible for Employer Contributions. Effective January 1, 2000, for each period in which Participant Contributions are made, the Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contribution for the period, provided that no Employer Contribution sha!l be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 81 SCHEDULE G - LOCAL 486 SPRINGFIELD EMPLOYEES Employee Pre-Tax Contributions Eligibility: Prior to January 1, 2000: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. Effective January 1, 2000: First day of the next month after completing a 60 day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 486 Springfield Employee. Amount of Employer Contributions: Prior to January 1, 2000, a Participant who is a Local 486- Springfield Employee is not eligible for Employer Contributions. Effective January 1, 2000, for each period in which Participant Contributions are made, the Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contribution for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 82 SCHEDULE H - LOCAL 12012-6 PORTSMOUTH EMPLOYEES Employee Pre-Tax Contributions Eligibility: Prior to January 1, 2000: First day of the next month after completing a Period of Employment consisting of twelve consecutive months in which he or she is credited with at least 1,000 Hours of Service. Effective January 1, 2000: First day of the next month after completing a 60 day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 12012-6 Portsmouth Employee. Amount of Employer Contributions: Prior to January 1, 2000, a Participant who is a Local 12012-6 Portsmouth Employee is not eligible for Employer Contributions. Effective January 1, 2000, for each period in which Participant Contributions are made, the Employer Contribution for each period shall total 50% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 83 SCHEDULE I - LOCAL 8-366 ENERGYUSA BROCKTON PROPANE EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the next month after completing a 60 day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 8-366 EnergyUSA Brockton Propane Employee. Amount of Employer Contributions: Prior to January 1, 1999, a Participant who is a Local 8-366- EnergyUSA Brockton Propane Employee was not eligible for Employer Contributions. On or after January 1, 1999, the Employer Contribution for each period shall total 100% of the Participant's Employee Pre-Tax Contributions for the period up to 3.0% of his or her Pay and 50% of the Participant's Employee Pre-Tax Contributions for the period on the next 2.0% of his or her Pay, provided that no Employer Contribution shall be made based upon a Participant's Contributions in excess of 5% of his or her Pay. 84 SCHEDULE J - LOCAL 12012-8 ENERGYUSA NORTHERN PROPANE EMPLOYEES Employee Pre-Tax Contributions Eligibility: First day of the next month after completing a 60-day Period of Employment. Eligibility for Employer Contribution: First day of the next month after completing a 12-month eligibility period in which he or she is credited with at least 1,000 Hours of Service. For each period for which Participant Contributions are made, the Employer shall make Employer Contributions, as set forth below, on behalf of each Participant who is a Local 12012-8 EnergyUSA Northern Propane Employee. Amount of Employer Contributions: The Employer Contribution for each period shall equal 100% of the first 3% of each Participant's Employee Pre-Tax Contributions for the period, and 50% of the next 2% of each Participant's Employee Pre-Tax Contributions for the period, provided that no Employer Contribution shall be made, based upon a Participant's Contributions in excess of 5% of his or her Pay. 85 EX-5 3 0003.txt EXHIBIT 5 --------- October 27, 2000 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D. C. 20549-1004 RE: NEW NISOURCE INC. - REGISTRATION OF 160,500 COMMON SHARES ON FORM S-3 ------------------------------------------- Ladies and Gentlemen: We have acted as special counsel to New NiSource Inc., a Delaware corporation (the "Company"), in connection with the Company's filing of a Registration Statement on Form S-3 (the "Registration Statement") covering 160,500 common shares, $.01 par value per share (and the associated preferred share purchase rights) of the Company (the "Shares") to be issued under the Bay State Gas Company Savings Plan for Operating Employees (the "Plan"). In this connection we have made such investigation and have examined such documents as we have deemed necessary in order to enable us to render the opinion contained herein. Based upon the foregoing, we are of the opinion that (i) the written provisions of the current Plan document as amended comply with the applicable provisions of the Employee Retirement Income Security Act of 1974; and (ii) the Shares, when issued in accordance with the terms of the Plan, and pursuant to the Registration Statement, will be legally issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, SCHIFF HARDIN & WAITE By: /s/ Frederick L. Hartmann ------------------------------ Frederick L. Hartmann EX-23 4 0004.txt EXHIBIT 23.1 ------------ CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation by reference in this post-effective amendment No. 6 on Form S-3 to Form S-4 of our reports dated February 18, 2000 (except with respect to the Note "Announcement of Merger Agreement with Columbia Energy Group," as to which the date is February 28, 2000) included in or incorporated by reference in the annual report on Form 10-K for NiSource Inc. for the year ended December 31, 1999; our report dated May 2, 2000 included in the quarterly report on Form 10-Q for the period ended March 31, 2000; and our report dated August 9, 2000 included in the quarterly report on Form 10-Q for the period ended June 30, 2000; and to all references to our Firm included in this registration statement. /s/ Arthur Andersen LLP Chicago, Illinois October 24, 2000 EX-23 5 0005.txt EXHIBIT 23.2 ------------ CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS ----------------------------------------- As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report included in the Annual Report on Form 10-K of Columbia Energy Group for the year ended December 31, 1999 and to all references to our Firm in this Registration Statement. /s/ Arthur Andersen LLP New York, New York October 23, 2000 EX-24 6 0006.txt EXHIBIT 24.2 ------------ NISOURCE INC. (INDIANA) POWER OF ATTORNEY ----------------- Each director and officer of NiSource Inc., an Indiana corporation, whose signature appears below hereby constitutes and appoints Gary L. Neale and Stephen P. Adik, and each of them singly, his or her true and lawful attorneys with full power to them and each of them to execute in the name of such person and in the capacity or capacities indicated below one or more Registration Statements on Form S-3 and on Form S-8, including without limitation any such Registra- tion Statements filed as Post-Effective Amendments to the Registration Statement on Form S-4 of NiSource Inc. and New NiSource Inc. (Registration No. 333-33896), to register under the Securities Act common shares, $.01 par value (including associated preferred stock purchase rights), of New NiSource Inc., a Delaware corporation, that may be offered and sold under any one or all of the following plans (or successors to such plans): Columbia Savings Plan, Non-Employee Director Stock Incentive Plan of NiSource Inc., NiSource Inc. 1994 Long-Term Incentive Plan, NiSource Inc. 1988 Long-Term Incentive Plan, NiSource Inc. Tax Deferred Savings Plan, Northern Indiana Public Service Company Bargaining Unit Tax Deferred Savings Plan, Kokomo Gas & Fuel Co. Bargaining Unit Tax Deferred Savings Plan, IWC Resources Corporation Employee Thrift Plan and Trust, Employees' Profit Sharing and Salary Deferral Plan of SM&P Utility Resources, Inc., Bay State Gas Company Savings Plan for Operating Employees, Bay State Gas Company Employee Savings Plan and NiSource Inc. Employee Stock Purchase Plan and any similar plan or plans of NiSource Inc. or New NiSource Inc. and their subsidiaries, and, if appropriate, interests in any such plan or plans, and to file any amendments (including post- effective amendments) and supplements to any such Registration Statement or Post-Effective Amendment to Registration Statement necessary or advisable to enable the registrant to comply with the Securities Act and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments and supplements may make such other changes in the Registration Statement or Post-Effective Amendment to Registration Statement as such attorneys deem appropriate, including without limitation any subsequent registration statement for any such offering that may be filed under Rule 462(b) under the Securities Act. Name and Signature Title Date ------------------ ----- ---- /s/ Gary L. Neale Chairman, President and October 27, 2000 ----------------------- Chief Executive Officer Gary L. Neale /s/ Stephen P. Adik Senior Executive Vice October 27, 2000 ----------------------- President, Chief Stephen P. Adik Financial Officer and Treasurer (Principal Accounting Officer) /s/ Steven C. Beering Director October 27, 2000 ----------------------- Steven C. Beering /s/ Arthur J. Decio Director October 27, 2000 ----------------------- Arthur J. Decio /s/ Dennis E. Foster Director October 27, 2000 ----------------------- Dennis E. Foster /s/ James T. Morris Director October 27, 2000 ----------------------- James T. Morris /s/ Ian M. Rolland Director October 27, 2000 ----------------------- Ian M. Rolland /s/ John W. Thompson Director October 27, 2000 ----------------------- John W. Thompson /s/ Robert J. Welsh Director October 27, 2000 ----------------------- Robert J. Welsh /s/ Carolyn Y. Woo Director October 27, 2000 ----------------------- Carolyn Y. Woo /s/ Roger A. Young Director October 27, 2000 ----------------------- Roger A. Young -----END PRIVACY-ENHANCED MESSAGE-----