-----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, MRazk472VxscLNXVyds8UC5WfygAIzRVgq/LEBC3f1PFi9cpXhBLCCfkodpfYwuB 54DB/Fzq6P+hBfrCH7aJ7w== /in/edgar/work/0000895813-00-000452/0000895813-00-000452.txt : 20001031 0000895813-00-000452.hdr.sgml : 20001031 ACCESSION NUMBER: 0000895813-00-000452 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20001030 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: 748109 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: 748110 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 333-33896-01 ========================================================================= SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ POST-EFFECTIVE AMENDMENT NO. 1 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 Amount of Title of each class of to be offering price aggregate registration securities to be registered registered per share (1) offering price (1) fee --------------------------- ---------- ------------- ----------------- ------------ Common Shares, $.01 par value (including 821,000 (1) (1) (1) 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 Registrants hereby amend 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 be effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become 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 the Registration Statement on Form S-4 (File No. 333-33896), effective _____, 2000 by filing this Post-Effective Amendment No. 1 on Form S-3 relating to 821,000 common shares of the Company, $.01 par value per share (including associated preferred purchase rights) (the "Common Shares"), issuable under the NiSource Inc. Tax Deferred Savings Plan (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 821,000 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. 821,000 Shares Common Shares, $.01 Par Value NISOURCE INC. TAX DEFERRED SAVINGS PLAN This Prospectus relates to common shares of New NiSource Inc. which may be offered and sold under the NiSource Inc. Tax Deferred Savings Plan (the "Plan") to Plan participants who ceased to be employees of New NiSource Inc. and its subsidiaries 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . 5 NISOURCE INC. TAX DEFERRED SAVINGS PLAN PROSPECTUS. . . . . . . . . 7 APPENDIX DATED OCTOBER, 2000 TO SUMMARY PLAN DESCRIPTION DATED JANUARY, 2000 . . . . . . . . . . . . . . . . . . . . . . . . 7 NISOURCE INC. TAX DEFERRED SAVINGS PLAN SUMMARY PLAN DESCRIPTION DATED JANUARY, 2000 . . . . . . . . . . . . . . . . . . . . . 11 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 PLAN AT A GLANCE . . . . . . . . . . . . . . . . . . . . . . . . . 11 ELIGIBILITY AND ENROLLMENT . . . . . . . . . . . . . . . . . . . . 12 Who Is Eligible . . . . . . . . . . . . . . . . . . . . . . . 12 When Participation Begins . . . . . . . . . . . . . . . . . . 13 Breaks In Service and Transfers to Ineligible Status . . . . . 13 HOW THE 401(k) PLAN WORKS . . . . . . . . . . . . . . . . . . . . . 13 Before-Tax Contributions . . . . . . . . . . . . . . . . . . . 14 An Example . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Matching Contributions . . . . . . . . . . . . . . . . . . . . 15 After-Tax Contributions . . . . . . . . . . . . . . . . . . . 16 Changing Your Contributions . . . . . . . . . . . . . . . . . 16 Naming a Beneficiary . . . . . . . . . . . . . . . . . . . . . 16 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Limitations on Contributions . . . . . . . . . . . . . . . . . 17 Rollover Contributions . . . . . . . . . . . . . . . . . . . . 17 "Top-Heavy" Provisions . . . . . . . . . . . . . . . . . . . . 18 INVESTING YOUR 401(k) ACCOUNTS . . . . . . . . . . . . . . . . . . 18 Changing Your Investments . . . . . . . . . . . . . . . . . . 18 Statement of Account . . . . . . . . . . . . . . . . . . . . . 19 WITHDRAWALS AND LOANS WHILE YOU ARE EMPLOYED . . . . . . . . . . . 19 Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . 19 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 RECEIVING YOUR BENEFITS . . . . . . . . . . . . . . . . . . . . . . 22 Benefit Distribution . . . . . . . . . . . . . . . . . . . . . 22 Federal Tax Consequences of Participation in the Plan . . . . 23 Income Tax Withholding . . . . . . . . . . . . . . . . . . . . 25 OTHER THINGS YOU SHOULD KNOW . . . . . . . . . . . . . . . . . . . 25 2 Plan Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . 25 Plan Administration . . . . . . . . . . . . . . . . . . . . . 25 Plan Number . . . . . . . . . . . . . . . . . . . . . . . . . 26 Maximum Contributions . . . . . . . . . . . . . . . . . . . . 26 Effect on Other Benefits . . . . . . . . . . . . . . . . . . . 26 Right to Employment Not Implied . . . . . . . . . . . . . . . 26 No Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 26 Spendthrift Provision . . . . . . . . . . . . . . . . . . . . 27 Unclaimed Funds . . . . . . . . . . . . . . . . . . . . . . . 27 Applying for Benefits . . . . . . . . . . . . . . . . . . . . 27 Official Plan Documents . . . . . . . . . . . . . . . . . . . 28 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . 29 Your Rights Under ERISA . . . . . . . . . . . . . . . . . . . 29 ADDITIONAL INFORMATION RELATING TO THE INVESTMENT FUNDS . . . . . . 30 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . 30 Purchases and Contributions of Common Stock for the Common Stock Fund . . . . . . . . . . . . . . . . . . . . 31 Resales of Common Stock . . . . . . . . . . . . . . . . . . . 31 Results of Recent Performance of the Investment Funds . . . . 31 AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 32 LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . 33 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . 33 PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . 34 DESCRIPTION OF COMMON SHARES . . . . . . . . . . . . . . . . . . . 34 EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 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. 3 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 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 4 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. 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. 5 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; 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. 6 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 incorporated by reference or provided 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. NISOURCE INC. TAX DEFERRED SAVINGS PLAN PROSPECTUS The prospectus for the Plan includes (i) the Appendix dated October, 2000 to the Summary Plan Description dated January, 2000, and (ii) the Summary Plan Description dated January, 2000. 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 NISOURCE INC. TAX DEFERRED SAVINGS PLAN Appendix dated October, 2000 to Summary Plan Description dated January, 2000 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, NiSource Inc. ("NiSource") and Columbia Energy Group ("Columbia") merged to form a new company, New NiSource Inc. (the "Company"). Effective November __, 2000, New NiSource changed its name from New NiSource Inc. to NiSource Inc. Upon 7 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 NiSource and the Company by the Funds. Neither NiSource nor the Company has made any independent review of the accuracy of this information and, accordingly, makes no warranty or representation concerning this information. Performance information 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). FIDELITY RETIREMENT MONEY MARKET PORTFOLIO ------------------------------------------ The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 5.43%, 5.36%, 5.04% and 4.06% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and product description, copies of which can be obtained from Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. FIDELITY INTERMEDIATE BOND FUND ------------------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 7.57%, 7.32%, 0.96% and 5.07% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. 8 FIDELITY GROWTH & INCOME PORTFOLIO ---------------------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 30.17%, 28.31%, 10.42% and 4.63% for 1997, 1998, 1999 and year to date through August 31, 2000; respec- tively. Additional information is included in its annual report and prospectus, copies of which can be obtained from the Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. FIDELITY MAGELLAN FUND ---------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 26.59%, 33.63%, 24.05% and 5.81% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from the Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. FIDELITY OVERSEAS FUND ---------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 10.92%, 12.84%, 42.89% and -5.73% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from the Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. FIDELITY SMALL CAP SECTOR ------------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 27.25%, -7.39%, 14.10% and 12.93% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from the Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. FIDELITY PURITAN FUND --------------------- The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 22.35%, 16.59%, 2.86% and 4.35% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from the Fidelity 9 Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. SPARTAN U.S. EQUITY INDEX FUND ------------------------------ The Fund has experienced annual returns, after deduction for Fund expenses and asset based fees, of 33.04%, 28.48%, 20.66% and 4.03% for 1997, 1998, 1999 and year to date through August 31, 2000; respectively. Additional information is included in its annual report and prospectus, copies of which can be obtained from the Fidelity Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone (800) 835-5091. 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 821,000 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. 10 NOTE: REFERENCES IN THIS DOCUMENT TO NISOURCE AND NISOURCE COMMON SHARES NOW REFER TO THE COMPANY AND THE COMPANY'S COMMON SHARES. NISOURCE INC. TAX DEFERRED SAVINGS PLAN --------------------------------------- SUMMARY PLAN DESCRIPTION ----------------------- Dated January, 2000 INTRODUCTION Your NiSource Inc. Tax Deferred Savings Plan (401(k)) is designed to work with your Pension Plan to provide you with retirement income. The 401(k) Plan is a tax-deferred savings plan. That means that you pay no income taxes on the before-tax amounts you contribute to the Plan until you make a withdrawal from the Plan. So the 401(k) Plan is a tax-deferred way to invest money today to shape your financial well- being for tomorrow. The 401(k) Plan gives you the chance to make regular contributions directly from your paycheck before taxes are applied to your pay. The before-tax money you contribute to the 401(k) Plan goes into an account that is managed on your behalf by the Fidelity Investment, a firm that specializes in investment fund management. Your before-tax contributions will be distributed among nine different investment funds, according to the directions you provide. Among the investment choices you have is the NiSource Inc. Common Stock Fund. If you choose to invest your before-tax contributions in NiSource Inc. Common Stock, NiSource Inc. (the "Company"), will match your before-tax contribution. This means the Company contributes $.10 for every $.90 of your before-tax amounts that you invest in the Common Stock Fund. This feature gives you more investment power for your dollar. In addition to before-tax contributions, you may contribute a certain amount of your after-tax pay to a separate 401(k) Plan account. And you can roll over funds from any other eligible tax-qualified retirement account into a 401(k) Plan rollover account. This Summary Plan Description provides a detailed description of the terms and conditions of the 401(k) Plan effective as of January 1,2000. PLAN AT A GLANCE This section gives you a brief description of the 401(k) Plan. Be sure to read the more detailed sections that follow to be certain that you understand how the Plan works. 11 You can contribute money to the 401(k) Plan in a variety of ways. You can make contributions directly from your paycheck or you can also roll over any money you have invested in another eligible retirement plan. 401(k) ACCOUNTS The main advantage of the 401(k) Plan is that you can make contributions on a before tax basis. This means you can have money deducted from your pay before taxes are applied, reducing your taxable income. You do not have to pay taxes on your before-tax contribution amount until you make a withdrawal from the 401(k) Plan. If you invest your before-tax contributions in the NiSource Inc. Common Stock Fund, you will have a matching contribution account into which the Company will deposit its matching contributions. The Company matching contribution is $.10 for every $.90 of before-tax contributions you invest in the NiSource Inc. Common Stock Fund. The matching contribution is also invested in the Common Stock Fund. Separate accounts are maintained for any after-tax or rollover contributions you may have. 401(k) INVESTMENT OPTIONS Under the 401(k) Plan, you have nine investment fund choices for your before-tax contributions, your after-tax contributions and your rollover contributions. You must specify the funds in which you wish to invest your contributions. You cannot make any contributions to the Plan until you specify your investment choices. Your investment choices are: * Magellan Fund (a stock fund) * NiSource Inc. Common Stock Fund * Intermediate Bond Fund * Overseas Fund * Retirement Money Market Portfolio * Fidelity Puritan Fund * Fidelity Small Cap Sector * Spartan vs Equity Index Fund * Growth and Income Portfolio ELIGIBILITY AND ENROLLMENT ONCE ENROLLED, YOU CAN RECEIVE BENEFITS UNDER THE PLAN IF YOU ARE AN ACTIVE SALARIED OR NON-EXEMPT EMPLOYEE OF THE COMPANY OR AN AFFILIATE THAT ADOPTS THE PLAN. WHO IS ELIGIBLE The provisions of the Plan apply to you if you are an active employee of the Company or an affiliate that has adopted the Plan, on whose behalf contributions are made under the Federal Insurance Contribution 12 Act, and are not a bargaining unit employee, on or after January 1, 2000. You become eligible on the first day of the calendar quarter following your date of hire. WHEN PARTICIPATION BEGINS Once eligible, you can enroll in the 401(k) Plan at any time by submitting a completed enrollment form to the H.R. Support Services. Your participation will begin on the first day of the calendar quarter (January 1, April 1, July 1, or October 1) following the date the H.R. Support Services processes your form. To ensure that your participation begins on the first day of the designated calendar quarter, you should submit your enrollment form by the 15th day of the month immediately before the first day of the calendar quarter in which you wish to begin participation. BREAKS IN SERVICE AND TRANSFERS TO INELIGIBLE STATUS If you end employment after completing the eligibility requirements and are later rehired by the Company, you are eligible to participate in the Plan on the first day of any calendar quarter following reemployment. If you become ineligible because of a transfer into a bargaining unit, your participation in the 401(k) Plan ends automatically. You maintain rights to your account balances, as of the date of transfer, but you may not make any additional contributions to your accounts. You can rejoin the Plan if you return to a non-bargaining unit position. If you are rehired or you return to a non-bargaining unit position, you can complete a new form and return it to the H.R. Support Services. Though you may rejoin the 401(k) Plan at any time, your contributions will not resume until the first day of the calendar quarter immediately following the date your form is processed. HOW THE 401(k) PLAN WORKS THE 401(K) PLAN GIVES YOU AN OPPORTUNITY TO INVEST MONEY NOW TO ENSURE SOME LEVEL OF FINANCIAL INCOME FOR YOUR RETIREMENT. YOU CAN INVEST YOUR BEFORE-TAX, AFTER-TAX AND ROLLOVER CONTRIBUTIONS IN ANY OF NINE INVESTMENT FUNDS WHICH MAY GROW THROUGHOUT YOUR EMPLOYMENT. The following five-step look at the 401(k) Plan illustrates what you need to consider in order to get the most out of the Plan and how the Plan works for you. 1. You must determine how much you wish to contribute each pay period. There is a minimum and a maximum amount you can contribute on a before-tax or after-tax basis. These limits are described in detail under the sections "Before-Tax Con- 13 tributions" and "After-Tax Contributions" on pages 5 and 6. 2. You must determine how much money to have deducted from your paycheck before taxes are applied. This is the amount that will be deposited in your before-tax contribution account. 3. Your taxable pay is reduced by the amount of your before-tax contributions, which means you pay less in taxes. 4. You must examine the nine investment choices and decide where to invest your before-tax, after-tax and rollover contributions. If you opt to invest in the NiSource Inc. Common Stock Fund, the Company will match your before-tax contributions by depositing $.10 for every $.90 of before- tax contributions you invest in the Common Stock Fund. The Company matching contribution is also invested in NiSource Inc. Common Stock Fund. 5. Your savings and earnings continue to be tax deferred until you withdraw funds from your accounts. The earliest age at which you can make withdrawals without incurring any tax penalty is 59-1/2 although applicable income taxes will be payable. You can access the money in your before-tax contribution account before age 59-1/2 if you leave the Company or have an eligible hardship as described in detail on pages 11 and 12. However, you will have to pay any applicable income taxes and penalties under these circumstances. You can access your after-tax and rollover contributions at any time as described on page 11. You may also borrow against your account as described in detail on pages 12 and 13. BEFORE-TAX CONTRIBUTIONS You may elect to have money deducted from each paycheck before taxes are applied to your pay. The chief advantages of before-tax contributions are that your taxable income is reduced and your contributions earn and grow tax-free until you take withdrawals. The following example shows the advantages of before-tax contributions. 14 AN EXAMPLE With the Without 401(k) Plan 401(k) Plan ----------- ----------- Savings for Savings for Retirement Retirement Your Pay $30,000 $30,000 401(k) Plan Before-Tax Contribution -2,000 - 0 TAXABLE PAY $28,000 $30,000 FICA Tax -2,295 -2,295 Federal Income Tax -3,240 -3,540 Retirement Savings Deposit - 0 -2,000 TAKE-HOME PAY $22,465 $22,165 THIS EXAMPLE USES 1995 FEDERAL INCOME TAX RATES AND ASSUMES THAT YOU ARE SINGLE, WITH NO DEPENDENTS. IT CONSIDERS ONLY FEDERAL INCOME TAXES AND FICA TAXES; YOU COULD SAVE EVEN MORE IN STATE AND LOCAL TAXES. The maximum amount you can contribute annually as before-tax and after-tax contributions is 20% of your compensation up to $170,000 of compensation (which amount is adjusted periodically). You can also elect to make before-tax contributions from (1) lump sum amounts payable instead of vacation days in accordance with the Company's vacation policy, and (2) unused credits under the Company's cafeteria plan. Your maximum before-tax contribution is subject to annual limits imposed by the Internal Revenue Code. In 2000, the annual limit is $10,500. This amount is adjusted periodically. Your before- tax contributions must be at least $10 per pay period. MATCHING CONTRIBUTIONS A special feature of the 401(k) Plan is the matching contribution account. When you choose to invest your before-tax contributions in the NiSource Inc. Common Stock Fund, the Company matches a portion of your before-tax contributions. The matching contribution is intended to encourage you to save aggressively for your retirement. For every $.90 of your before-tax contributions you invest in the NiSource Inc. Common Stock Fund, the Company contributes $.10. This means you can purchase $1.00 worth of NiSource Inc. Common Stock through the Plan for every $.90 of your before-tax contributions to the Plan. 15 The matching amount is invested in the Common Stock Fund and must remain in that Fund. Only new before-tax contributions invested in the Common Stock Fund receive matching Company contributions. Transfers from other investment funds to the Common Stock Fund and after-tax and rollover contributions do not receive any Company matching contributions. AFTER-TAX CONTRIBUTIONS You also can make after-tax contributions of up to 10% of your compensation. Your after-tax contributions must be at least $10 per pay period. Your after-tax contributions do not receive matching Company contributions. One advantage of after-tax contributions is that you may make withdrawals from your after-tax contributions account without satisfying hardship requirements. The sum of your before-tax contributions and after-tax contributions may not exceed 20% of pay each pay period. CHANGING YOUR CONTRIBUTIONS You may increase or decrease the amount of your before-tax and after- tax contributions as of the first day of any calendar quarter as long as you submit written notice to the H.R. Support Services at least 15 days before the start of that calendar quarter. You may stop your contributions as soon as practicable after you notify the H.R. Support Services in writing. NAMING A BENEFICIARY You should select a person or persons to receive your Plan accounts if you die before receiving a full distribution. To do so, you must complete and submit a beneficiary form to the H.R. Support Services. Any subsequent beneficiary designation will nullify a previous designation. However, if you are married, you cannot name someone other than your spouse as a beneficiary without the written consent of your spouse. Such written consent must be witnessed by a notary public. Spousal consent is not necessary if you name your spouse as the primary beneficiary, or if you have no spouse or are abandoned by your spouse. If you have no beneficiary, outlive all beneficiaries, or have an illegal or ineffective beneficiary designation, your benefit, if you die, will be paid to the following: - your spouse, or if none - your descendants, per stirpes<*>, or if none <*>Children of the deceased descendant 16 - your father and mother, in equal parts, or if none - your brothers and sisters, in equal parts, or if none - your estate The Tax Deferred Savings Plan Committee that administers the Plan will have the final word on determining the identity of any of your beneficiaries. Any payment made to your beneficiaries releases the Committee and the Company from all obligations under the Plan. VESTING You are always 100% vested in the balance of your 401(k) Plan accounts. That means you are entitled to receive your total account balances, after leaving the Company. You can withdraw your before-tax contributions after age 59-1/2 or in the case of a hardship and you can withdraw your after-tax and rollover contributions at any time. LIMITATIONS ON CONTRIBUTIONS All amounts contributed to your 401(k) Plan accounts annually (your before-tax contributions, your after-tax contributions and Company matching contributions) are limited by the Internal Revenue Code to 25% of your compensation or $30,000, whichever is less. Any reduction in your contributions required by this limit will be taken first from your after-tax contributions. Your before-tax contributions will then be reduced next and, if necessary, any Company matching contributions will be reduced. Rollover contributions are not included for purposes of this limitation. The Internal Revenue Code also sets limits on the amount of before-tax and after tax contributions made annually by highly-compensated employees, based on the amount of before-tax and after-tax contributions made by non-highly compensated employees. There are similar limits on Company matching contributions. If these limits are not met, excess contributions and any interest earned on them will be returned to highly compensated employees. You will be notified if you are affected by these limits. ROLLOVER CONTRIBUTIONS If you receive a distribution from any other qualified retirement plan, you can contribute any portion of this distribution to a 401(k) Plan account within 60 days after you receive the distribution. Rollover contributions do not receive matching Company contributions. In order to make rollover contributions, you must complete and submit a rollover contribution form available at the H.R. Support Services. 17 "TOP-HEAVY" PROVISIONS If the current value of the account balances of certain Company owners and executives exceeds 60 percent of the total account balances in any plan year, the Plan is considered "top-heavy". While the Plan is not currently top-heavy and is not expected to become top-heavy, certain special rules will apply if it ever becomes top-heavy. INVESTING YOUR 401(k) ACCOUNTS Separate accounts are maintained for your before-tax, after-tax and Company matching contributions, as well as for any rollover contributions you make. You can invest your contributions, other than the Company matching contribution, in one or more of the following funds: * Magellan Fund (a stock fund) * NiSource Inc. Common Stock Fund * Intermediate Bond Fund * Overseas Fund * Growth and Income Portfolio * Fidelity Puritan Fund * Retirement Money Market Portfolio * Fidelity Small Cap Sector * Spartan Vs Equity Index Fund You can invest all of your contributions into one fund or invest them among any combination of the nine investment funds. If you invest your before-tax contribution in the NiSource Inc. Common Stock Fund, the Company contributes a matching contribution of $.10 for every $.90 of your before-tax contribution you invest in the Common Stock Fund. Matching contributions are invested in the Common Stock Fund. Contributions invested in the NiSource Inc. Common Stock Fund will be used to purchase NiSource Inc. Common Stock on the open market. Contributions to the other investment funds will be invested in mutual funds managed by the Fidelity Group. The Committee reserves the right to change, at any time, the investment funds available under the 401(k) Plan. CHANGING YOUR INVESTMENTS Allowing you to change your investments gives you the flexibility to adjust your investment strategy to match changes in your circumstances or your long-term financial outlook. At any time, you can reallocate your existing investment fund balances in an amount that is at least $250, or the balance of your account from which the transfer is made, whichever is less, by calling Fidelity at 1-800-835-5091. Most changes will be made on the next business day. However, transfers into or out of the NiSource Inc. Common Stock Fund are effective on the first business day of the next calendar quarter, provided Fidelity 18 is notified on any business day between the 16th and the last day of the month preceding the start of a quarter. Fidelity will stop taking calls at 4:00 p.m. eastern time on the last business day in this period. Changes in the investment of new contributions are made by notifying Fidelity as follows: 1. Changes made during the first 15 days of any calendar month are effective on the trading date occurring on or next following the 27th day of that month; and 2. Changes made on or after the 16th day of any calendar month are effective on the trading date occurring on or next following the 6th day of the next month. You cannot transfer any Company matching contributions to another fund. Matching contributions must remain invested in the NiSource Inc. Common Stock Fund. STATEMENT OF ACCOUNT Your accounts will be adjusted automatically on a daily basis. You will receive a quarterly summary of your accounts so you can keep track of your investment funds. The summary provides a complete report of your 401(k) Plan account activity during the quarter including: * sources and amounts of account deposits * amounts of account withdrawals and loans * earnings and fluctuation in market values on all accounts * final balance of all accounts as of the end of the calendar * quarter (March 31, June 30, September 30, December 31) WITHDRAWALS AND LOANS WHILE YOU ARE EMPLOYED WITHDRAWALS AFTER-TAX ACCOUNT AND ROLLOVER ACCOUNT The minimum withdrawal from your after-tax contribution account or your rollover account is the lesser of $1,000 or your entire after-tax contribution account or rollover account balance. You can make a request to withdraw money from your after-tax account or your rollover account at any time. The money will be withdrawn from your account at the end of the calendar month in which you make your request. You may make only one withdrawal in any 12-month period. 19 BEFORE-TAX ACCOUNT Because your before-tax contribution account is intended as a means for you to save for retirement, and you receive a tax break for contributing to that account, there are many restrictions on making a withdrawal from that account. You can withdraw money from your before-tax contribution account any time after you reach age 59-1/2. Distributions must be made before April 1 of the year following the year in which you reach age 70-1/2, provided that starting in 1997 you will not be required to withdraw your funds until you cease active employment unless you are a 5% owner of the Company or an affiliate. If you leave the Company, you can access the money in your before-tax contribution account, subject to any applicable taxes and penalties. Also, the Internal Revenue Code allows withdrawals from before-tax contributions before age 59-1/2 in the event of a financial hardship. You can withdraw only enough money to cover the expense of your financial hardship. Financial hardship is defined by the Internal Revenue Code as an immediate and substantial financial need. The following situations automatically qualify as legitimate needs: * Medical expenses for you, your spouse or your dependents; * Purchase of your principal residence (but not regular mortgage payments or home improvements); * Tuition and related educational fees for the next 12 months of post-secondary education for you, your spouse or your dependents; * Preventing foreclosure on or eviction from your principal residence, and * Amounts necessary to pay any federal, state or local income tax or penalties reasonably anticipated to result from the distribution. A distribution that is not for one of the specified reasons set forth in the preceding paragraph will be deemed due to a financial hardship if the Committee reasonably determines, based on written representations and evidence received from you, that the distribution is for a financial hardship, that the hardship cannot be met from other available resources of you, your spouse or children, and that the amount requested does not exceed the amount needed to meet the financial hardship. You must withdraw your entire after-tax contribution account before you can make a withdrawal from your before-tax contribution account. You must also borrow the full amount available to you under the Plan as a loan, providing such loan does not create an additional hardship, before making any hardship withdrawal. You cannot withdraw any 20 earnings on your before-tax contributions or any Company matching contributions or earnings on those contributions. Hardship withdrawals may not be made more frequently than once a year, except for tuition payments. Any hardship withdrawals you make will be treated as a taxable distribution. You must also pay a 10% excise tax for early withdrawal if you are under 59-1/2 and the distribution is not for medical reasons. IMPORTANT NOTE: You cannot make any contributions to this or any other Company plan, excluding health and welfare plans, during the 12- month period beginning with the date you receive your hardship distribution. LOANS The Plan also permits you to borrow against the value of your before- tax contribution and rollover contribution accounts. While taking a loan can meet important short-term needs, the biggest advantage of this feature is that you actually repay the loan and all interest to your accounts while you replenish your retirement savings. You can apply for a loan by filing a written application form with the Committee. You must be in the Plan at least one year to qualify for a loan. The loan application must be submitted by the first day of the month in order for the loan to become effective the following month. The maximum amount you can borrow is the smaller of 50% of your total account balance (other than your after-tax contribution account), or $50,000 reduced by the excess of (a) the highest outstanding balance during the one year period ending immediately preceding the date of the loan over (b) the outstanding balance on the date of the loan. The minimum loan amount is $1,000. Loans can be granted only once during any 12-month period, and you can have only one loan outstanding at any time. The Committee will establish the interest rate for all loans. This interest rate will be consistent with rates charged by lending institutions for loans made under similar situations and will apply for the entire term of the loan. Account Balance Maximum Amount of Loan --------------- ---------------------- Under $2,000 Loan not available $2,000 - $100,000 50% of your account balance Over $100,000 $50,000 (Subject to above limitation) The term of the loan depends upon its purpose. If your loan is used for the purchase of your principal residence, you may repay the loan over a period of up to 30 years. For all other loans, the repayment 21 period is limited to a maximum of five years. You repay all loans in equal installments through automatic after-tax payroll deductions. However, you can repay the loan in full at any time. Also, if your accounts become payable because of your retirement, disability, death or other termination of employment, your loan becomes due and payable in full and any unpaid balance is treated as a taxable distribution. Your loan will be considered in default if you make no payments for three consecutive months. If you do not repay the loan, the unpaid balance is treated as a taxable distribution. As you repay the loan, the interest and principal payments are transferred from your loan account under the Plan to your other Plan accounts and reinvested according to your current investment choices. You may continue to make before-tax and after-tax contributions to your accounts while your loan is outstanding. RECEIVING YOUR BENEFITS Active participation in your 401(k) Plan accounts ends immediately under any of the following circumstances: * you end Company employment; * you die; or * you become disabled BENEFIT DISTRIBUTION If you terminate employment, or become disabled, you can receive your account balances in a lump sum shortly after that event, or, if your total account balance exceeds $5,000, you can elect to defer distribution to a later date. In the event of your death, your beneficiary will receive a lump sum distribution of your account balances. Benefits will normally be paid to you in a lump sum as soon as practicable following the later of the date your application for benefits is submitted to the Company or the date of your termination or disability. However, you must receive distribution of your benefits within 120 days after you reach age 65 or terminate employment, whichever is later. If you are still actively employed at age 70-1/2, benefits will be paid by April 1 of the calendar year following the calendar year in which you reach age 70-1/2, provided that starting in 1997 you will not be required to receive a distribution until you cease active employment unless you are a 5% owner of the Company or an affiliate. 22 If your total account balance is $5,000 or less, a distribution will be made in one lump sum to you or your beneficiary within the period described in the preceding paragraph. At that point, you will no longer be a participant in the Plan. If your total account balance is greater than $5,000, you can elect to defer receiving your distribution until a date that cannot be later than the date you reach age 65 or die. If you defer a distribution you can request a subsequent distribution at any later date. All distributions are paid to you or your beneficiary in cash, unless you elect to receive shares of NiSource Inc. Common Stock based on the whole numbers of shares allocated to the NiSource Inc. Common Stock Fund for your account. FEDERAL TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN The Plan is operated as a qualified plan under Sections 401(a) and 401(k) of the Internal Revenue Code. As a result, the amount of your pay which you elect to defer under the Plan through before-tax contributions, the matching contributions made by the Company and any earnings on, or appreciation of, your Account balance are not subject to Federal income taxes until such amounts are withdrawn or distributed to you or your beneficiary. The amount of your before-tax contributions will, however, be included in your income in the year in which such amounts are earned for purposes of Social Security taxes. Distributions and withdrawals generally become taxable in the year in which you receive them. Distributions and withdrawals of after-tax contributions, however, are not subject to federal income tax, since such contributions were made from your pay on an after-tax basis. A distribution or withdrawal may be rolled over to a qualified retirement plan of another employer or to an individual retirement account or individual retirement annuity ("IRA") if the distribution is an "eligible rollover distribution" as defined in the Internal Revenue Code. In such event, the amount rolled over and earnings thereon are not subject to income tax until subsequently distributed to you or your Beneficiary. Any amount of an "eligible rollover distribution" that is not rolled over may be subject to a mandatory 20% withholding requirement (see "Income Tax Withholding" below). If a lump sum distribution includes shares of Common Stock, the excess, if any, of the fair market value of such Common Stock over the cost of the Common Stock to the Trustee is not subject to federal income tax at the time of distribution but generally will be subject to federal income tax when such Common Stock is subsequently sold. To the extent provided by the Internal Revenue Code, you may elect not to defer the tax on net unrealized appreciation in Common Stock until the year of disposition of such Common Stock, thus subjecting the entire distribution to federal income tax at the time of distribution. 23 An additional 10% excise tax will be imposed on any distribution or withdrawal received by you before you reach age 59-1/2 unless such distribution or withdrawal is (i) rolled over to another qualified plan or an IRA, (ii) made to a beneficiary after your death, (iii) made on account of your retirement due to disability (as defined in the Plan), (iv) made after separation from service after attainment of age 55, (v) made to you for payment of medical expenses that could be deducted on your tax return or (vi) made to an alternate payee pursuant to a qualified domestic relations order. The Internal Revenue Code also imposes a 15% excise tax on the portion of a lump sum distribution (i.e., a payment within one year of your entire balance) that exceeds a dollar limitation in a calendar year. Distributions from all tax-qualified plans and IRAs received in the same calendar year will be aggregated in calculating this tax. The 15% excise tax applies irrespective of your age at the time of distribution, but it does not apply to an excess distribution that is (i) rolled over into another qualified retirement plan or an IRA, (ii) made to an alternate payee under a qualified domestic relations order or (iii) made on account of your death (although an additional estate tax attributable to the excess distribution is due in the event of death). Notwithstanding the foregoing, the 15% excise tax will not apply to lump sum distributions received on or after January 1, 1997 and prior to January 1, 2000, however, the additional estate tax will continue to apply during those years. Amounts that are included in taxable income may qualify for 5-year forward averaging tax treatment if you receive the amount in a lump sum distribution prior to January 1, 2000 but after you reach age 59- 112 and you actively participated in the Plan for at least five years prior to the year in which the lump sum is distributed to you. Under a transitional rule, if you reached age 50 before January 1, 1986, you may make one election, without regard to the age 59-1/2 requirement, to use either 5-year forward averaging (using current tax rates) or 10-year forward averaging (using the 1986 tax rates) with respect to the lump sum distribution, if otherwise eligible. Five year forward averaging will not be available for distributions received on or after January 1, 2000. Before-tax and matching contributions made to the Plan by the Company on your behalf are deductible by the Company in the year in which the contributions are made. Prior to receiving a distribution of any amounts from the Plan, you will receive a statement from the Trustee to assist in determining your tax liability. The rules governing the Federal income taxation of a distribution are complex and are subject to change. Accordingly, you should seek the advice of a personal tax advisor in connection with a distribution. 24 INCOME TAX WITHHOLDING Most Plan distributions and withdrawals are subject to mandatory federal income tax withholding. The Trustee is required to withhold 20% of any "eligible rollover distribution", unless you elect to have the Trustee make a direct rollover of such distribution into another employer's qualified retirement plan that accepts rollovers or to an individual retirement account or an individual retirement annuity. A distribution or withdrawal is not an "eligible rollover distribution", and thus may not be rolled over, if it is (i) a series of substantially equal periodic installments over more than ten years, or over your life expectancy or the joint life expectancies of you and your beneficiary, (ii) a distribution of after-tax contributions, (iii) a required distribution due to attaining age 70-1/2 or (iv) a distribution made to a non-spousal beneficiary. If you request a distribution from the Common Stock Fund in the form of stock rather than cash, the portion of your Account in the Common Stock Fund will not be liquidated to pay the withholding tax; however, the applicable taxes will be withheld from any cash portion of the distribution. A distribution or withdrawal that is not an "eligible rollover distribution" is subject to voluntary federal income tax withholding, which means that you can request that no withholding tax be deducted from your distribution. OTHER THINGS YOU SHOULD KNOW PLAN SPONSOR The Plan sponsor is: NiSource Inc. 5265 Hohman Avenue Hammond, Indiana 46320 219/853-5200 PLAN ADMINISTRATION The Plan is administered by the Tax Deferred Savings Plan Committee appointed by the Board of Directors of the Company. The Committee interprets the Plan, selects investment advisors, authorizes benefit payments, considers any claims for benefits, resolves questions, and makes rules to assure the Plan is fair to all. The decisions of the Committee are final and binding on all parties. The Committee serves as the Plan Administrator under the Employee Retirement Income Security Act ("ERISA") and is responsible for maintaining records, filing reports, and distributing required information to Plan participants and beneficiaries. 25 Administrative expenses of the Plan, including fees of the Trustee, counsel, accountants, or other experts appointed under the Plan, will be paid out of the Trust to the extent not paid by the Company. Communications to the Committee should be addressed to: NiSource Inc., 5265 Hohman Avenue, Hammond, Indiana 46320 (Tel: 219/853-5200). The Plan and its records are kept on a calendar year basis. The agent for service of legal process is the Committee. Service of legal process may also be made on the Trustee for the Plan. PLAN NUMBER The Plan number is 002. The employer identification number of the Company is 35-1719974. MAXIMUM CONTRIBUTIONS By federal law, certain annual limits apply to employee contributions under the Plan alone, and under the Plan together with any other tax- qualified retirement plans maintained by the Company. These maximums will be explained by the Committee to any affected employee. EFFECT ON OTHER BENEFITS Pension benefits are not affected by your participation in the Plan. They will be based on the amount of your pay before any reduction of pay for before-tax contributions. Regular Social Security taxes, and wage credits for Social Security benefit purposes, apply to your before-tax and after-tax contributions. RIGHT TO EMPLOYMENT NOT IMPLIED Participation in the Plan does not create a right to be retained in the employ of the Company or any affiliate or interfere with the right of the Company or an affiliate to discharge a participant. It does not give the Company or an affiliate the right to require any participant to remain in its employ; nor does it interfere with a participant's right to terminate employment at any time. NO GUARANTEE None of the Trustee, the Committee or the Company in any way guarantees the Plan and Trust from loss. Nor do they guarantee the payment of any benefits which may become due to any person from the Plan and Trust. Nothing in the Plan or Trust will be deemed to give any participant, former participant or beneficiary an interest in any specific part of the Plan and Trust or any other interest except the right to receive benefits out of the Plan and Trust in accordance with the provisions of the Plan and Trust. 26 SPENDTHRIFT PROVISION Generally your interest in the Plan is not subject to sale, transfer, assignment, pledge, garnishment or other encumbrance by you, nor may your interest or right to receive distributions be taken voluntarily or involuntarily for the satisfaction of debts or other obligations or claims against you. However, as required by federal law, your accounts shall be subject to and payable in accordance with the applicable requirements of any "qualified domestic relations orders" issued by a court in connection with a divorce, marital or child support proceeding in which you are involved. In the event that such an order is received by the Committee, it shall direct the Trustee to make payment from your Plan accounts in accordance with that order. These payments can be made even if you are still employed. Such payments will be made subject to reasonable rules and regulations issued by the Committee regarding the time of payment pursuant to the order and the valuation of your accounts from which the payment is to be made. Your account balances will be reduced by the amount of any payment made pursuant to a qualified domestic relations order. If you borrow money from the Plan, the Trustee and the Committee will have all rights to collect upon this indebtedness as are granted pursuant to the provisions of the Plan and any agreements or documents that you execute in connection with the loan. UNCLAIMED FUNDS You must keep the Committee informed of your current address and the current addresses of your beneficiary or beneficiaries. None of the Company, the Committee or the Trustee shall be obligated to search for the whereabouts of any person. If your location is not made known to the Committee within three years after the date on which your accounts may first be distributed, distribution will be made as though you had died at the end of the three-year period. If within one more year after this three-year period has elapsed, or within three years after your actual death, the Committee is unable to locate any individual who would have received a distribution with respect to you under the Plan, the balance in your accounts under the Plan shall be deemed a forfeiture and used to reduce the Company matching contributions for the next plan year. Should you or your beneficiary later make a valid claim for any amount that has been forfeited, the benefits that have been forfeited shall be reinstated. APPLYING FOR BENEFITS To receive your benefits under the Plan, you must apply in writing on forms provided by the H.R. Support Services for that purpose. It is the responsibility of the person eligible for benefits to furnish the Committee with any information needed, including a current mailing address for benefit payments or correspondence. 27 OFFICIAL PLAN DOCUMENTS This Summary Plan Description contains the highlights of the NiSource Inc. Tax Deferred Savings Plan. All of your rights and benefits are described in the official Plan and Trust documents, which are controlling. The Plan is intended to be permanent, but NiSource Inc. reserves the right to amend or terminate the Plan. If the Plan is ever terminated, the full value of all accounts will be payable to participants pursuant to the terms of the Plan. The Plan is classified as a defined contribution plan. Therefore, it is not insured by the Pension Benefit Guaranty Corporation which only applies to pension plans classified as defined benefit plans under ERISA. The Plan is audited each year by an independent accounting firm. TRUSTEE The Trustee of the Plan is the Fidelity Management Trust Company, 82 Devonshire Street, Boston, Massachusetts 02109 (Tel: (617)570-7000) CLAIMS PROCEDURE If a claim for benefits by you or your beneficiary under the Plan is denied, either in whole or in part, the Committee will let the claimant know in writing within 90 days. If the claimant does not hear within 90 days, the claimant may treat the claim as if it had been denied. A notice of a denial of a claim will refer to a specific reason or reasons for the denial; will have specific references to the Plan provisions upon which the denial is based; will describe any additional material or information necessary for the claimant to perfect the claim and will explain why such material or information is necessary; and will have an explanation of the Plan's review procedure. The claimant will have 60 days after the date of the denial to ask for a review and a hearing. The claimant must file a written request with the Committee for a review. During this time the claimant may review pertinent documents and may submit issues and comments in writing. The Committee will have the discretion to decide whether a hearing is necessary. The Committee will have another 60 days in which to consider the claimant's request for review. If special circumstances require an extension of time for processing, the Committee will have an additional 60 days to answer the claimant. The claimant will receive a written notice if the extra days are needed. The claimant may submit in writing any document, issues and comments he may wish. The decision of the Committee will tell the claimant the specific reasons for its actions, and refer the claimant to the specific Plan provisions upon which its decision is based. 28 YOUR RIGHTS UNDER ERISA The Plan is subject to Title I of ERISA and thus is governed by the reporting, disclosure, participation, vesting and fiduciary responsibility rules of ERISA. It is also subject to the amendments of the Code set forth in Title II of ERISA and the provisions of Title Ill regarding jurisdiction, administration and enforcement. As a participant in the Plan, you are entitled to certain rights and protection under ERISA. ERISA provides that all Plan participants shall be entitled to: (i) Examine, without charge, at the Committee's office all Plan documents, including insurance contracts, collective bargaining agreements and copies of all documents filed by the Plan with the United States Department of Labor, such as detailed annual reports and Plan descriptions. (ii) Obtain copies of all Plan documents and other Plan information upon written request to the Committee. The Committee may make a reasonable charge for the copies. (iii) Receive a summary of the Plan's annual financial report. The Committee is required by law to furnish each participant with a copy of the summary annual report. (iv) Obtain a statement telling you whether you have a right to receive a benefit at normal retirement age (age 65) and, if so, what your benefits would be at normal retirement age if you stop working under the Plan now. If you do not have a right to a benefit, the statement will tell you how many more years you have to work to get a benefit. This statement must be requested in writing and is not required to be given more than once a year. The Committee 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 the 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. No one, including your employer or any other person, may fire 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 Committee review and reconsider your claim. Under ERISA there are steps you can take to enforce the above rights. For instance, if you request materials from the Committee and do not receive them within 30 days, you may file suit in a federal court. In such a case the court may require the Committee 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 Committee. If you have a claim for benefits 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 the Plan fiduciaries misuse the Plan"s money, or if you 29 are discriminated against for asserting your rights, you may seek assistance from the United States Department of Labor, or you may file suit in federal court. The court will decide who should pay the 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 these costs and fees, for example, if it finds your claim to be frivolous. If you have any questions about the Plan, you should contact the Committee. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest area office of the United States Labor-Management Services Administration, Department of Labor. ADDITIONAL INFORMATION RELATING TO THE INVESTMENT FUNDS INVESTMENT FUNDS The value of Accounts invested in an Investment Fund other than the Common Stock Fund will be net of any investment manager fees that may be charged with respect to that particular Fund. The prospectus for each Fund describes the fees and expenses associated with investing in that Fund. You will not be charged any fees or expenses with respect to investments in the Common Stock Fund. You may upon request obtain additional information about each Investment Fund (e.g., each Fund's operating expenses, the prospectus and financial statements of each Fund and a list of assets comprising each Fund). If you need additional information regarding the investment alternatives, or if you have any questions about your ERISA rights, you may contact: Human Resource Support Services Department, NiSource Inc. 5265 Hohman Avenue, Hammond, Indiana 46320. Equity securities in these Investment Funds, except for the Common Stock Fund, will be voted by the Trustee. If you have invested in the Common Stock Fund, you are entitled to exercise any voting or tender rights attributable to your participation in this Fund. In this regard, prior to any shareholders meeting at which the Common Stock is entitled to be voted, or if there is a tender offer made for the Common Stock, you will receive information from the Trustee with instructions how to exercise your voting or tender rights. If you do not exercise your voting rights, the Trustee will not vote the shares representing your portion of this Fund. If you do not exercise your tender rights, the shares representing your portion of this Fund will not be tendered. If you exercise your tender rights, the proceeds obtained when your shares of Common Stock are sold will be invested in the Investment Funds, other than the Common Stock Fund, in the same proportions as are set forth in an investment election made by you. Pending receipt of an investment election, the proceeds will be invested in the Fidelity Cash Reserves. 30 The Plan is intended to be a participant directed individual account plan as described in Section 404(c) of ERISA and the regulations found in 29 C.F.R. Section 2550.404c-1. Accordingly, fiduciaries of the Plan may be relieved of liability for any losses which are the direct and necessary result of investment instructions given by a participant or beneficiary. PURCHASES AND CONTRIBUTIONS OF COMMON STOCK FOR THE COMMON STOCK FUND The Common Stock is listed on the New York Stock Exchange. Purchases of shares of the Common Stock will normally be made as soon as practicable after the receipt by the Trustee of Company or Participant contributions which are to be invested in the Common Stock Fund. Purchases or sales of Common Stock will also normally be made as soon as practicable after the receipt of an election by a participant to transfer amounts to or from the Common Stock Fund. Each such purchase or sale will be made at the market price for Common Stock on the New York Stock Exchange at the time of such purchase or sale. RESALES OF COMMON STOCK There are generally no restrictions on the resale of Common Stock purchased for or contributed to the Common Stock Fund under the Plan unless such shares have been distributed to an employee who is deemed to be an "affiliate" of the Company at the time such employee resells such shares. An "affiliate" generally includes any control person or person who, directly or indirectly, has the power to direct or cause the direction of the management and policies of the Company, including any director, 10% shareholder of the Company, or officer of the Company who performs a policy-making function for the Company. An "affiliate" of the Company may resell Common Stock only pursuant to a registration statement or in accordance with Rule 144 or another available exemption under the Securities Act of 1933, as amended. In order to comply with Rule 144, a person is required, among other things, to sell his or her shares of Common Stock on the open market in brokers" transactions or in transactions with market makers. The number of shares sold within any three-month period also cannot exceed the greater of 1% of the then outstanding shares of Common Stock or the average weekly trading volume in Common Stock on all exchanges during the four calendar weeks preceding such sale. Adequate current public information concerning the Company must also be available at the time of such sale. RESULTS OF RECENT PERFORMANCE OF THE INVESTMENT FUNDS The following table sets forth certain information about the relative historical performance of each of the currently available Investment Funds (other than the Common Stock Fund) in which amounts credited to your Account may be invested. The information is taken from the prospectuses relating to such funds. Participants are advised that 31 past performance is not necessarily indicative of the future performance of these funds. TOTAL RETURN PERFORMANCE BASED ON NET ASSET VALUE (NET OF ALL FEES AND EXPENSES) WITH ALL DISTRIBUTIONS NAME OF FUND 1998 1997 1996 1995 ------------ ---- ---- ---- ---- Fidelity Retirement Money Market Portfolio 5.36% 5.43% 5.31% 5.79% Fidelity Intermediate Bond Fund 7.32% 7.57% 3.65% 12.81% Fidelity Growth & Income Portfolio 28.31% 30.17% 20.02% 35.38% Fidelity Magellan Fund 33.63% 26.59% 11.69% 36.82% Fidelity Overseas Fund 12.84% 10.92% 13.10% 9.06% Fidelity Small Cap Sector -7.39% 27.25% 13.63% 26.63% Fidelity Puritan Fund 16.59% 22.35% 15.15% 21.46% Spartan U.S. Equity Index Fund 28.48% 33.04% 22.73% 37.18% The following table provides information concerning the performance of the Common Stock in the preceding three fiscal years. Participants are advised that past performance is not necessarily indicative of the future performance of the Common Stock. NISOURCE INC. COMMON STOCK PERFORMANCE* AS OF STOCK PRICE RETURN ----- ---------- ------ 12/31/94 $14.875 14.6% 12/31/95 $19.125 15.5% 12/31/96 $19.813 15.9% 12/31/97 $24.719 16.1% 12/31/98 $30.437 16.1% *Performance return information includes dividends paid on the Common Stock during the fiscal year. AVAILABLE INFORMATION The Company has filed a Registration Statement on Form S-8 (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") covering up to 250,000 of the Common Stock, together with the associated preferred share purchase rights, to be offered and sold under the Plan. The following documents, which have 32 been previously filed by the Company or the Plan, are incorporated by reference in the Registration Statement and this Prospectus: (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998; (b) The Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1998, June 30, 1998 and September 30, 1998; and (c) The description of the Common Stock contained in the Company's Registration Statement on Form 8-B, filed with the Commission on November 25, 1987. All documents subsequently filed by the Company and/or the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered by the Registration Statement have been sold or which deregisters all securities then remaining unsold, shall also be deemed incorporated by reference in the Registration Statement and this Prospectus and to be a part thereof from the date of filing of such documents. 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 or this Prospectus, 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. Requests for copies of such documents should be directed to Shareholder Services, NiSource Inc., 5265 Hohman Avenue, Hammond, Indiana 46320 (Telephone: 1-800-348- 6466). LIMITATION OF LIABILITY Neither the Company, NiSource, Columbia, nor any of their agents (including NiSource or Columbia 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. 33 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 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. 34 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 35 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 36 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, 37 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. 38 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) 39 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 October 27, 2000 ----------------------- Vice President, Chief Stephen P. Adik Financial Officer and Treasurer (Principal Accounting Officer) /s/ Steven C. Beering* Director October 27, 2000 ------------------------- Steven C. Beering 40 /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 *By: /s/ Stephen P. Adik ------------------------ Stephen P. Adik Attorney-in-Fact 41 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 NiSource Inc. Tax Deferred Savings Plan. 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. 42 EX-4 2 0002.txt EXHIBIT 4.1 ----------- NIPSCO INDUSTRIES, INC. TAX DEFERRED SAVINGS PLAN (Amended and Restated as of January 1, 1989) TABLE OF CONTENTS ARTICLE PAGE ARTICLE I GENERAL . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . 1 2.1 ACCOUNT OR ACCOUNT BALANCE . . . . . . . . . . . . . . 1 2.2 AFFILIATE . . . . . . . . . . . . . . . . . . . . . . . 2 2.3 AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . 2 2.4 BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . 2 2.5 CODE . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.6 COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . 2 2.7 COMPENSATION . . . . . . . . . . . . . . . . . . . . . 2 2.8 COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 3 2.9 DISABILITY . . . . . . . . . . . . . . . . . . . . . . 3 2.10 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . 3 2.11 EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . 3 2.12 EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . 4 2.13 ENTRY DATE . . . . . . . . . . . . . . . . . . . . . . 4 2.14 HIGHLY COMPENSATED EMPLOYEE . . . . . . . . . . . . . . 4 2.15 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 5 2.16 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . 5 2.17 PARTICIPANT . . . . . . . . . . . . . . . . . . . . . . 5 2.18 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 5 2.19 PLAN QUARTER . . . . . . . . . . . . . . . . . . . . . 5 2.20 PLAN YEAR . . . . . . . . . . . . . . . . . . . . . . . 5 2.21 PRE-TAX CONTRIBUTION . . . . . . . . . . . . . . . . . 5 2.22 PRIOR PLAN . . . . . . . . . . . . . . . . . . . . . . 5 2.23 ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . 5 2.24 TRUST (OR TRUST FUND) . . . . . . . . . . . . . . . . . 6 2.25 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 6 2.26 VALUATION DATE . . . . . . . . . . . . . . . . . . . . 6 ARTICLE III PARTICIPATION . . . . . . . . . . . . . . . . . . 6 3.1 PARTICIPATION . . . . . . . . . . . . . . . . . . . . . 6 3.2 PARTICIPATION UPON REEMPLOYMENT . . . . . . . . . . . . 6 3.3 CHANGE IN JOB CLASSIFICATION . . . . . . . . . . . . . 6 3.4 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 7 3.5 LEAVE OF ABSENCE . . . . . . . . . . . . . . . . . . . 7 ARTICLE IV CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 8 4.1 PRE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . 8 4.2 SALARY REDUCTION AGREEMENT . . . . . . . . . . . . . . 8 4.3 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . 9 4.4 AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . 9 4.5 MAXIMUM CONTRIBUTIONS . . . . . . . . . . . . . . . . . 9 4.6 ROLLOVERS . . . . . . . . . . . . . . . . . . . . . . . 9 4.7 INVESTMENT INSTRUCTIONS . . . . . . . . . . . . . . . . 10 - i - ARTICLE V LIMITATIONS ON CONTRIBUTIONS AND BENEFITS . . . . . . . 10 5.1 MAXIMUM DOLLAR LIMITATION ON PRE-TAX CONTRIBUTIONS . . 10 5.2 LIMITATIONS UNDER CODE SECTION 415 . . . . . . . . . . 10 5.3 NONDISCRIMINATION REQUIREMENTS - Definitions . . . . . 13 5.4 401(K) TESTS FOR PRE-TAX CONTRIBUTIONS . . . . . . . . 13 5.5 CORRECTION OF EXCESS CONTRIBUTIONS . . . . . . . . . . 14 5.6 401(M) TESTS FOR AFTER-TAX CONTRIBUTIONS AND MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 15 5.7 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS . . . . . 16 5.8 MULTIPLE USE OF ALTERNATIVE LIMITATION . . . . . . . . 17 ARTICLE VI ALLOCATIONS AND INVESTMENTS . . . . . . . . . . . 19 6.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE . . . . . . . . . . 19 6.2 ESTABLISHMENT OF SUBACCOUNTS . . . . . . . . . . . . . 19 6.3 ACCOUNT ADJUSTMENTS . . . . . . . . . . . . . . . . . . 19 6.4 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 20 6.5 INVESTMENT DIRECTED BY PARTICIPANTS . . . . . . . . . . 20 6.6 INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . 20 ARTICLE VII BENEFITS . . . . . . . . . . . . . . . . . . . . . 21 7.1 TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . 21 7.2 DISABILITY . . . . . . . . . . . . . . . . . . . . . . 21 7.3 DEATH . . . . . . . . . . . . . . . . . . . . . . . . . 21 7.4 PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . 21 7.5 DESIGNATION OF BENEFICIARY . . . . . . . . . . . . . . 23 7.6 ROLLOVER DISTRIBUTIONS . . . . . . . . . . . . . . . . 24 7.7 MINIMUM DISTRIBUTION LIMITATIONS . . . . . . . . . . . 25 ARTICLE VIII WITHDRAWALS AND LOANS . . . . . . . . . . . . . . 27 8.1 DISTRIBUTION AT AGE 59-1/2 . . . . . . . . . . . . . . 27 8.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 27 8.3 HARDSHIP WITHDRAWALS . . . . . . . . . . . . . . . . . 27 8.4 LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . 29 ARTICLE IX TRUST FUND . . . . . . . . . . . . . . . . . . . . 31 ARTICLE X ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 32 10.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration . . . . . . . . . . . . . . . 32 10.2 APPOINTMENT OF COMMITTEE . . . . . . . . . . . . . . . 33 10.3 COMMITTEE POWERS AND DUTIES . . . . . . . . . . . . . . 33 10.4 RULES AND DECISIONS . . . . . . . . . . . . . . . . . . 33 10.5 COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . 34 10.6 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . 34 10.7 FACILITY OF PAYMENT . . . . . . . . . . . . . . . . . . 35 10.8 LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . 35 10.9 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . 35 10.10 SEVERABILITY . . . . . . . . . . . . . . . . . . . 35 - ii - ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . 36 11.1 ACTION BY COMPANY . . . . . . . . . . . . . . . . . . . 36 11.2 NONGUARANTEE OF EMPLOYMENT . . . . . . . . . . . . . . 36 11.3 NONGUARANTEE OF BENEFITS . . . . . . . . . . . . . . . 36 11.4 RIGHTS TO TRUST ASSETS . . . . . . . . . . . . . . . . 36 11.5 INTEREST NONTRANSFERABLE . . . . . . . . . . . . . . . 36 11.6 NONFORFEITABILITY OF BENEFITS . . . . . . . . . . . . . 37 11.7 CONTROLLING LAW . . . . . . . . . . . . . . . . . . . . 37 ARTICLE XII AMENDMENTS AND TERMINATION . . . . . . . . . . . . 37 12.1 AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . 37 12.2 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . 38 12.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS . . . . . . . 38 12.4 LIQUIDATION OF THE TRUST FUND . . . . . . . . . . . . . 38 12.5 MANNER OF DISTRIBUTION . . . . . . . . . . . . . . . . 38 ARTICLE XIII TOP HEAVY PROVISIONS . . . . . . . . . . . . . . . 38 13.1 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . 38 13.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 38 13.3 DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . 41 13.4 MINIMUM BENEFIT . . . . . . . . . . . . . . . . . . . . 41 13.5 NON-DUPLICATION OF MINIMUM BENEFIT . . . . . . . . . . 42 13.6 TOP HEAVY LIMITATION . . . . . . . . . . . . . . . . . 42 13.7 TRANSITION RULE . . . . . . . . . . . . . . . . . . . . 42 13.8 VESTING . . . . . . . . . . . . . . . . . . . . . . . . 42 ARTICLE XIV PLAN ADOPTION . . . . . . . . . . . . . . . . . . 43 14.1 ADOPTION PROCEDURE . . . . . . . . . . . . . . . . . . 43 14.2 JOINT EMPLOYERS . . . . . . . . . . . . . . . . . . . . 43 14.3 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 43 14.4 WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . 43 14.5 SUPERSEDED PLANS . . . . . . . . . . . . . . . . . . . 43 - iii - NIPSCO INDUSTRIES, INC. TAX DEFERRED SAVINGS PIAN ARTICLE I GENERAL 1.1 PURPOSE Effective May 1, 1984, the Northern Indiana Public Service Company (the "Company") established the Northern Indiana Public Service Company Tax Deferred Savings Plan to encourage savings and provide tax-effective compensation for Participants (as defined herein). It was amended and restated effective January 1, 1989 in order to meet the requirements of the Tax Reform Act of 1986 and to change the name to the NIPSCO Industries, Inc. Tax Deferred Savings Plan (the "Prior Plan"). It has been further amended and restated effective January 1, 1989 (except as otherwise indicated) in order to meet all additional statutory and regulatory requirements applicable thereto. This document sets forth the provisions of such Plan and is intended to comply with Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended, and regulations thereunder, and all other currently applicable statutory and regulatory requirements. Except wherever otherwise provided herein, the provisions of this Plan shall apply only to Participants who are actively employed on or after January 1, 1989. Except where otherwise provided, the rights and benefits, if any, of any Participant who terminated employment prior to January 1, 1989, or who is or will be receiving benefits under the Prior Plan, shall be determined solely on the basis of the Prior Plan provisions in effect on the date his employment with the Company and all Affiliates terminated. 1.2 CONSTRUCTION The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender and the singular shall be deemed to include the plural unless the context clearly indicates to the contrary. The words "hereof," "herein," "hereunder" and other similar compounds of the word "here" shall mean and refer to the entire Plan and not to any particular provision or Article. ARTICLE II DEFINITIONS Where the following words and phrases appear in this Plan, they shall have the respective meanings set forth below, unless the context clearly indicates to the contrary. 2.1 ACCOUNT OR ACCOUNT BALANCE The total assets of the combination of each Participant's Pre-tax Contribution Account, After-tax Contribution Account, Matching Contribution Account, and Rollover Account held in accordance with Section 6.2 of the Plan. 2.2 AFFILIATE Any corporation that is a member of a controlled group of corporations (as defined in Section 414(b) of the Code) that includes the Company; any trade or business (whether or not incorporated) that is under common control (as defined in Section 414(c) of the Code) with the Company; any organization (whether or not incorporated) that is a member of an affiliated service group (as defined in Section 414(m) of the Code) that includes the Company; any leasing organization, to the extent that its employees are required to be treated as if they were employed by the Company pursuant to Section 414(n) of the Code and the regulations thereunder; and any other entity required to be aggregated with the Company pursuant to regulations under Section 414(o) of the Code. An entity shall be an Affiliate only with respect to the existing period as described in the preceding sentence. 2.3 AFTER-TAX CONTRIBUTIONS The contributions made to the Trust in accordance with Section 4.4 of the Plan and allocated to an "After-tax Contribution Account" pursuant to Section 6.2 of the Plan. 2.4 BENEFICIARY A person or persons designated by a Participant in accordance with the provisions of Section 7.5 to receive any death benefit that may be payable under this Plan. 2.5 CODE The Internal Revenue Code of 1986, as amended, and any regulations thereunder. 2.6 COMMITTEE The persons appointed to assist in the administration of the Plan in accordance with Section 10.2. 2.7 COMPENSATION The aggregate basic annual salary or wage, bonus, overtime, sick pay and shift differential paid to a Participant by an Employer for personal services as defined under Code Section 415(c)(3), including Pre-tax Contributions and Code Section 125 deferrals. However, for purposes of applying the limitations under Code Section 415 as described in Section 5.2 of the Plan, Compensation shall not include Pre-tax Contributions and Code Section 125 deferrals. For purposes of Article V and purposes of determining who is a Highly Compensated Employee, the Company shall have the right to use any adjustments or alternative definitions of compensation as the Internal Revenue Service may provide by regulation under Code Section 414(s). In no event shall the Compensation of a Participant taken into account under the Plan for any Plan Year commencing after December 31, 1988 and prior to January 1, 1994, exceed $200,000 (or such greater amount provided pursuant to Section 401(a)(17) of the Code). In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, for Plan Years beginning on or after January 1, 1994, the annual Compensation of each Participant taken into account under the Plan shall not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit is $150,000, as adjusted by the Commissioner 2 of Internal Revenue for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which Compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. For Plan Years beginning on or after January 1, 1994, any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 annual compensation limit set forth in this paragraph. If Compensation for any prior determination period is taken into account in determining a Participant's benefits accruing in the current Plan Year, the Compensation for that prior determination period is subject to the OBRA '93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the Plan Year beginning on January 1, 1994, the OBRA '93 annual compensation limit is $150,000. 2.8 COMPANY The Northern Indiana Public Service Company, a corporation organized and existing under the laws of the State of Indiana, or its successor or successors. 2.9 DISABILITY Any Participant who receives long-term disability benefits from the Company or who receives Social Security disability payments is presumptively disabled for purposes of this Plan. 2.10 EFFECTIVE DATE The date the amended and restated Plan became effective which is January 1, 1989. 2.11 EMPLOYEE Any person who is employed by the Employer on a full- time basis (40 or more hours per week on a regular basis), and on whose behalf contributions are being made by such Employer under the Federal Insurance Contribution Act and who is not included in a unit of employees covered by an agreement between employee representatives and any Employer, unless the collective bargaining agreement provides that such Employees are entitled to participate in the Plan or unless the Employer otherwise directs in a written instrument submitted to the Trustee. Notwithstanding the provisions of this Section 2.11, a person who is not employed by an Employer, but who performs services for an Employer pursuant to an agreement between an Employer and a leasing organization, shall be considered a "leased employee" after such person performs such services for a twelve-month period and the services are of a type historically performed by Employees. A person who is considered a leased employee of an Employer shall not be considered an Employee for purposes of the Plan. If a leased employee subsequently became an Employee and thereafter participates in the Plan, he shall receive credit for participation under Article III, for his period of employment as a leased employee, except to the extent 3 that Section 414(n)(5) of the Code was satisfied with respect to such Employee while he was a leased employee. 2.12 EMPLOYER NIPSCO Industries, Inc., the Company and each Affiliate that adopts the Plan with the consent of NIPSCO Industries, Inc., pursuant to the provisions of Article XIV. 2.13 ENTRY DATE The first day of each Plan Quarter. 2.14 HIGHLY COMPENSATED EMPLOYEE Any present or former Employee who, during the current or immediately preceding year: (a) was a 5 percent owner of an Employer; (b) received annual Compensation from an Employer of more than $75,000 (as adjusted under Code Section 414(q)); (c) received annual Compensation from an Employer of more than $50,000 (as adjusted under Code Section 414(q) and was in the top-paid 20% of the Employees; or (d) was an officer of an Employer receiving annual Compensation greater than 50% of the limitation then in effect under Code Section 415(b)(1)(A); provided that for purposes of this subparagraph (d), no more than 50 Employees of an Employer (or if lesser, the greater of 3 Employees or 10 percent of the Employees) shall be treated as officers. If an Employee described in subparagraph (b), (c) or (d) during the current Plan Year was not described in subparagraph (b), (c) or (d) during the preceding Plan Year, such individual shall not be a Highly Compensated Employee unless the Employee is one of the highest paid 100 highly compensated Employees in the current Plan Year. If an Employee is, during a determination year or immediately preceding year, a family member of either a 5 percent owner who is an active or former employee or a Highly Compensated Employee who is one of the 10 most Highly Compensated Employees ranked on the basis of Compensation paid by the Employer during such year, then the family member and the 5 percent owner or top-ten Highly Compensated Employee shall be aggregated. In such case, the family member and the 5 percent owner or top-ten Highly Compensated Employees shall be treated as a single Employee receiving Compensation and Plan contributions or benefits equal to the sum of such compensation and contributions or benefits of the family member and 5 percent owner or top-ten Highly Compensated Employee. For purposes of this section, family member includes the spouse, lineal ascendants or descendants of the Employee or former Employee and the spouses of such lineal ascendants and descendants. The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the top- 4 paid group, the top 100 Employees, the number of Employees treated as officers and the Compensation that is considered, will be made in accordance with section 414(q) of the Code and the regulations thereunder. An Employer for any Plan Year may elect to identify Highly Compensated Employees based upon only the current Plan Year to the extent permitted by Section 414(q) of the Code and regulations issued thereunder. 2.15 INVESTMENT FUNDS The funds in which a Participant may direct the Trustee to invest the assets of his Account, as described in Section 6.4 of the Plan. 2.16 MATCHING CONTRIBUTIONS Contributions made to the Trust by an Employer on behalf of eligible Participants, as described under Section 4.3 and allocated to a Participant's "Matching Contributions Account" in accordance with Section 6.2. 2.17 PARTICIPANT An Employee participating in the Plan in accordance with Section 3.1. and any former Employee who has an Account Balance under the Plan that has not been paid in full. Notwithstanding the preceding sentence, only actively employed Participants, other than anyone on an unpaid leave of absence, may contribute Pre-tax or After- tax Contributions pursuant to Article IV. In any event, an Employee who has deposited a Rollover Contribution pursuant to Section 4.6 of the Plan shall be deemed a Participant to the extent that the provisions of the Plan apply to the Rollover Account of such Employee. 2.18 PLAN The NIPSCO Industries, Inc. Tax Deferred Savings Plan as of the Effective Date, and as may hereafter be further amended. 2.19 PLAN QUARTER The three month calendar period beginning on January 1, April 1, July 1, or October 1 of each Plan Year. 2.20 PLAN YEAR The twelve month period commencing on January 1 and ending on December 31. 2.21 PRE-TAX CONTRIBUTION A contribution made to the Trust in accordance with Section 4.1 of the Plan and allocated to a "Pre-tax Contribution Account" in accordance with Section 6.2 of the Plan. 2.22 PRIOR PLAN The Northern Indiana Public Service Company Tax Deferred Savings Plan, as in effect prior to January 1, 1989. 2.23 ROLLOVER CONTRIBUTIONS The contributions made to the Trust under Section 4.6, and allocated to a "Rollover Account" as described in Section 6.2 of the Plan, including a 1989 rollover contribution from the Northern Indiana Public Service Company Employee Stock Ownership Plan. 5 2.24 TRUST (OR TRUST FUND) Any and all assets held under the Plan by the Trustee maintained in accordance with the terms of the trust agreement, as from time to time amended, that constitutes a part of this Plan. 2.25 TRUSTEE The corporation, person or persons, bank or trust company, authorized by the Company to perform custodial and investment functions with respect to the Trust. 2.26 VALUATION DATE The close of each business day. ARTICLE III PARTICIPATION 3.1 PARTICIPATION An Employee who was eligible to participate in the Prior Plan will continue to be eligible to participate in this Plan. Each other Employee will become eligible to participate in this Plan on the date he completes six months of continuous employment with an Employer, beginning on his Employment Commencement Date subject to the provisions of Sections 3.2 and 3.3. Once an Employee becomes eligible to participate, he will remain eligible as long as he remains an Employee, subject to the provisions of Sections 3.2 and 3.3, and he may become a Participant as of the first Entry Date following the date he first becomes eligible or any Entry Date thereafter by completing a form as described in Section 4.2 or Section 4.4. An Employee who became a Participant shall remain a Participant until he or his Beneficiary is paid his entire Account Balance following his Severance Date, except that any Participant who is on an unpaid leave of absence shall not be able to make Pre-tax Contributions or After-tax Contributions to the Plan during his unpaid leave of absence. 3.2 PARTICIPATION UPON REEMPLOYMENT A Participant who incurs a Break in Service shall be eligible to participate on his Reemployment Commencement Date and may become a Participant on the first Entry Date following his Reemployment Commencement Date. Any other Employee must meet the eligibility requirements of Section 3.1. 3.3 CHANGE IN JOB CLASSIFICATION In the event that a Participant becomes ineligible to participate in this Plan because his job classification is one that makes him ineligible under Section 2.11, he shall continue to have all rights of participation in the Plan as to his Account Balance, except that he shall not be eligible to make Pre- tax Contributions or After-tax Contributions to the Plan. If an Employee's job classification changes such that he meets the definition of Employee under Section 2.11, he shall become eligible to participate in the Plan on the date his change in status becomes effective, and may become a Participant on the first Entry Date 6 following his change in status or any Entry Date pursuant to the procedures of the Plan. 3.4 DEFINITIONS Where the following words or phrases appear in this Article III, they shall have the meanings set forth below: a. BREAK IN SERVICE A 12 consecutive month period commencing on an individual's Severance Date and ending on his Reemployment Commencement Date. b. EMPLOYMENT COMMENCEMENT DATE The first day on which an individual first performs an Hour of Service for an Employer. c. HOUR OF SERVICE Each hour for which an individual is paid or entitled to payment from an Employer for the performance of duties and for reasons other than for the performance of duties, including each hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by an Employer, determined and credited in accordance with the Department of Labor Regulation Section 2530.200b-2. d. REEMPLOYMENT COMMENCEMENT DATE The first day following an Employee's Severance Date in which he first performs an Hour of Service for an Employer. e. SEVERANCE DATE The earlier of: (1) the date on which an Employee quits, retires, is discharged or dies or; (2) the first anniversary of the first day of the period in which an Employee remains absent from service (with or without pay) for any reason other than quitting, retirement, discharge or death. Notwithstanding the prior sentence, the Severance Date of an individual who is absent from service beyond the first anniversary of the first day of absence by reason of a maternity or paternity absence as described in Code Section 410(a)(5)(E)(i) is the second anniversary of the first day of such absence. The period between the first and second anniversaries of the first day of absence is neither a period of service nor a Break in Service. 3.5 LEAVE OF ABSENCE Employment for purposes of this Article III shall include a leave of absence granted by an Employer to an Employee on and after August 5, 1993 pursuant to the Family and Medical Leave Act if the Employee returns to work for an Employer at the end of such leave of absence. 7 ARTICLE IV CONTRIBUTIONS 4.1 PRE-TAX CONTRIBUTIONS A Participant may elect to have his Employer make Pre-tax Contributions to the Trust on his behalf by executing a salary reduction agreement as described in Section 4.2. Prior to January 1, 1995, the amount of Pre-tax Contributions that may be made on behalf of a Participant for any designated period shall be deducted from his Compensation and shall equal such whole dollar amount, not less than $10.00 per pay period, as is designated by the Participant in the salary reduction agreement. On and after January 1, 1995, the amount of Pre-tax Contributions that may be made on behalf of a Participant for any designated period shall be deducted from his Compensation and shall equal either (1) such whole percentage of his Compensation, or (2) such whole dollar amount not less than $10.00 per pay period, as is designated by the Participant in the salary reduction agreement. The Participant may also elect in a separate writing to have his Employer contribute on his behalf, as a Pre-tax Contribution to the Trust, (a) any lump sum amount payable to the Participant in lieu of vacation days in accordance with the vacation policy of his Employer, or (b) any amount resulting from unused credits from a plan established by his Employer under Code Section 125. All Pre-tax Contributions made pursuant to the first two sentences of this Section shall be transmitted to the Trust within 30 days after the date on which such Pre-tax Contributions were deducted from the Participant's Compensation and all Pre-tax Contributions made pursuant to the third sentence of this Section shall be transmitted to the Trust within 30 days after the date on which such Pre-tax Contributions become available for transmission. All Pre-tax Contributions will be 100% vested and nonforfeitable at all times. 4.2 SALARY REDUCTION AGREEMENT The salary reduction agreement represents a legally binding agreement by a Participant with his Employer to accept a reduction in Compensation in consideration of a contribution to the Trust by such Employer on the Participant's behalf in the same amount. For each Plan Year a Participant may enter into such an agreement with his Employer by indicating his election according to the provisions of Section 4.1 on a form provided by the Employer. Subject to the provisions of Article V, such election shall remain in force until changed in writing by the Participant. A Participant may elect to (i) commence, (ii) resume, (iii) change or (iv) eliminate the amount of future Pre-tax Contributions made on his behalf effective as of each Entry Date by filing a written change in election with the Company at least 15 days prior to the applicable Entry Date. Any election made pursuant to this paragraph shall apply to any regular payroll check dated on or after the Entry Date in which the election becomes effective. A Participant may not change his election with respect to Pre-tax Contributions already made by payroll deduction. 8 4.3 MATCHING CONTRIBUTIONS Beginning January 1, 1991, each Employer shall make a Matching Contribution to the Trust on behalf of each of its Participants who elected to make Pre-tax Contributions pursuant to Section 4.1, and who elected to invest such Pre-tax Contributions in the Employer Common Stock Fund according to the provisions of Section 6.5. The amount of the Matching Contribution shall equal 1/9th of the amount of Pre-tax Contributions contributed to the Employer Common Stock Fund. All Matching Contributions shall be transmitted to the Trust within 30 days after the date on which the Contributions were made. All Matching Contributions will be 100% vested and nonforfeitable at all times. 4.4 AFTER-TAX CONTRIBUTIONS A Participant may elect to have the Company make After-tax Contributions to the Trust on his behalf by executing a written election for each Plan Year on a form furnished by the Company. Prior to January 1, 1995, such After-tax Contributions shall be in such whole dollar amounts, not less than $10.00 per pay period, as designated by the Participant, but not to exceed 10% of his Compensation for any pay period. On and after January 1, 1995, such After-tax Contributions shall be either (1) in such whole percentages of Compensation, or (2) in such whole dollar amounts not less than $10.00 per pay period, as designated by the Participant, but not to exceed 10% of his Compensation for any pay period. All After-tax Contributions shall be transmitted to the Trust within 30 days after the date on which the After-tax Contributions were deducted from the Participant's Compensation, and no later than 30 days following the end of the Plan Year in which such Contributions were made. All After-tax Contributions will be 100% vested and nonforfeitable at all times. 4.5 MAXIMUM CONTRIBUTIONS Notwithstanding anything in the Plan to the contrary, the sum of a Participant's Pre-tax Contributions made pursuant to Section 4.1 plus the Participant's After-tax Contributions made pursuant to Section 4.4 shall not exceed twenty percent (20%) of such Participant's Compensation. 4.6 ROLLOVERS Effective February 1, 1991, a Participant who has participated in any other qualified plan described in Section 401(a) of the Code shall be permitted, in accordance with such rules as established by the Committee, to make a Rollover Contribution to the Trust of an amount received by the Participant that is attributable to participation in such plan. A Rollover Contribution may be made only within 60 days following the date the Employee receives the distribution from such other plan (or within such additional period as may be provided under Section 408 of the Code if the Participant shall have made a timely deposit of the distribution in an individual retirement account). The Trustee may also receive directly from the trustee under such other plan all or any portion (as designated by such Employee in writing to the Committee) of the amount that would otherwise be distributable to the Participant by reason of his termination of participation in such other plan. Such Rollover Contribution shall be allocated to his Rollover Account, which may 9 include a 1989 Rollover Contribution from the Northern Indiana Public Service Company Employee Stock Ownership Plan. A Rollover Contribution may not be made to the Trust by a former Employee. 4.7 INVESTMENT INSTRUCTIONS Notwithstanding the preceding provisions of this Article, in no event may any contribution be made or authorized by a Participant unless such Participant has delivered investment instructions with respect to such contributions pursuant to the provisions of Section 6.5 on or prior to the date such contributions are authorized or delivered by the Participant. ARTICLE V LIMITATIONS ON CONTRIBUTIONS AND BENEFITS 5.1 MAXIMUM DOLLAR LIMITATION ON PRE-TAX CONTRIBUTIONS (a) In no event shall the sum of (i) a Participant's Pre-tax Contributions for any calendar year and (ii) any other "elective deferrals" as defined in Code Section 402(g)(3) for any calendar year, exceed $9,240 (as indexed under Code Section 402(g)). (b) In the event that the aggregate amount of Pre-tax Contributions by a Participant exceeds the maximum dollar limitation as determined under (a) above, the amount of such excess Pre-tax Contributions, increased by any income and decreased by any losses attributable thereto, shall be returned to the Participant no later than April 15th of the calendar year following the calendar year for which the Pre-tax Contributions were made. (c) Excess Pre-tax Contributions shall be adjusted for any income gains or losses pursuant to Section 402(g) of the Code, for the calendar year in which such Contributions occurred. 5.2 LIMITATIONS UNDER CODE SECTION 415 (a) Notwithstanding anything contained in this Plan to the contrary, the provisions of this Plan shall at all times comply with the limitations, adjustments and other requirements prescribed in Code Section 415 and the regulations thereunder, the terms of which are specifically incorporated herein by reference. In the case of a Participant covered by this Plan and a defined benefit plan sponsored by an Employer, the benefits provided by the defined benefit plan shall be reduced first in order to comply with Code Section 415 and the regulations thereunder. (b) ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS The amount of Annual Additions that may be credited to a Participant's Account 10 under this Plan, or that may be credited to such Participant under any other qualified plan, welfare benefit fund, (as defined in Code Section 419(e)), or an individual medical account, (as defined in Code Section 415 (1)(2)), maintained by an Employer, for any Limitation Year will not exceed the lesser of $30,000 (as increased by the Commissioner of Internal Revenue under Code Section 415(d)), or 25 percent of a Participant's Compensation (the "Maximum Permissible Amount"). If the foregoing limitation on allocations would be exceeded in any Limitation Year for any Participant as a result of (i) reasonable error in estimating such Participant's Compensation, (ii) reasonable error in determining the amount of elective deferrals within the meaning of Section 402(g)(3) of the Code (that may be made with respect to such Participant), or (iii) under such other limited facts and circumstances that the Commissioner of Internal Revenue (pursuant to Code Regulations Section 415-6(b)(6)) finds justify the availability of this paragraph (b), the After-tax Contributions and Pre-tax Contributions made by or with respect to such Participant shall be distributed to him, to the extent that any such distribution would reduce the amount in excess of the limits of this Section 5.2, and any amount in excess of the limits of this Section 5.2, remaining after such distribution shall be placed, unallocated to any Participant, in a Suspense Account. If a Suspense Account is in existence at any time during a particular Limitation Year, other than the Limitation Year described in the preceding sentence, all amounts in the Suspense Account must be allocated to the Participants' Accounts (subject to the limits of this Section 5.2) before any contributions which would constitute Annual Additions may be made to the Plan for that Limitation Year. The excess amount allocated pursuant to this Section 5.2(b) shall be used to reduce Matching Contributions for the next Limitation Year (and succeeding Limitation Years), as necessary, for that Participant. However, if that Participant is not covered by the Plan as of the end of the applicable Limitation Year, then the excess amounts must be held unallocated in the Suspense Account for the Limitation Year and allocated and reallocated in the next limitation year to all of the remaining Participants in the Plan. The Suspense Account will not share in the valuation of Participant's Accounts, and the allocation of earnings set forth in Section 6.3 of the Plan, and the change in fair market value and allocation of earnings attributable to the Suspense Account shall be allocated to the remaining Accounts hereunder as set forth in Section 6.3. (c) Prior to determining a Participant's actual Compensation for the Limitation Year, the Company may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimate of the Participant's Compensation for the Limitation Year uniformly determined for all Participants similarly situated. 11 (d) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year. (e) If pursuant to Sections 5.2(b) and (d) there is an Excess Amount, the excess will be disposed of by the Committee as follows: (i) If, the Participant is covered by the Plan at the end of the Limitation Year, After-tax Contributions, adjusted for earnings, gains and losses allocable thereto, will be returned to the Participant, to the extent they would reduce the Excess Amount. (ii) If, after the application of Section 5.2(e)(i), an Excess Amount still exists and the Participant is covered by the Plan at the end of the Limitation Year, Pre-tax Contributions, adjusted for earnings, gains and losses allocable thereto, will be returned to the Participant, to the extent they would reduce the Excess Amount. (iii) If, after the application of Sections 5.2(e)(i) and (ii), an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Suspense Account will be used to reduce Matching Contributions for such Participant in the next Limitation Year, and each succeeding Limitation Year, if necessary. (f) For purposes of this Section 5.2: (i) "Excess Amount" means for a Participant for each "Limitation Year" the excess, if any, of (i) the Annual Additions that would be credited to his Account under the terms of the Plan without regard to Code Section 415 over (ii) the maximum Annual Additions allowed under Code Section 415(c)(1)(A). (ii) "Annual Additions" means the sum of the following amounts credited to a Participant's Account for the Limitation Year: (1) Employer contributions, (2) Employee contributions, (3) Forfeitures, and (4) Amounts described in Section 415(l)(2) and 419(A)(d)(3) of the Code. (iii) "Limitation Year" means the Plan Year. 12 5.3 NONDISCRIMINATION REQUIREMENTS - Definitions For purposes of the remainder of this Article: (a) The "Actual Deferral Percentage" means the average of the actual deferral ratios, (calculated separately for each Eligible Employee) of the amount of Pre-tax Contributions actually made by the Eligible Employee for such Plan Year, to the Eligible Employee's Compensation for the period of time during such Plan Year that he participated in the Plan, rounded to the nearest one-hundredth of one percent. (b) The "Actual Contribution Percentage" means the average of the actual contribution ratios, (calculated separately for each Eligible Employee) of the amount of Matching Contributions actually made by an Employer for the Eligible Employee for such Plan Year, plus the amount of After-tax Contributions made by the Eligible Employee, during such Plan Year, to such Employee's Compensation for the period of time during such Plan Year in which he participated in the Plan, rounded to the nearest one- hundredth of one percent. (c) "Eligible Employee" means any Participant in the Plan and any Employee who would be eligible to make Pre-tax Contributions or After-tax Contributions to the Plan for a Plan Year, but for a suspension due to a distribution, or a failure to elect to participate in the Plan. (d) "Excess Contributions" means, with respect to any Plan Year, the excess of the aggregate amount of the Pre-tax Contributions actually made on behalf of Highly Compensated Employees for such Plan Year, over the maximum amount of such Contributions permitted under the limitations of Code Section 401(k)(3)(A)(ii). (e) "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of the aggregate amount of the After-tax Contributions and Matching Contributions actually made on behalf of Highly Compensated Employees for such Plan Year, over the maximum amount of such contributions permitted under the limitations of Code Section 401(m)(2)(A). (f) "Highly Compensated Eligible Employee" means an Eligible Employee who is a Highly Compensated Employee. 5.4 401(K) TESTS FOR PRE-TAX CONTRIBUTIONS (a) GENERAL REQUIREMENTS The total amount of Pre-tax Contributions shall comply with either (1) or (2) below for each Plan Year: (1) The Actual Deferral Percentage for the Highly Compensated Eligible 13 Employees shall not exceed the Actual Deferral Percentage for all other Eligible Employees multiplied by 1.25; or (2) The Actual Deferral Percentage for Highly Compensated Eligible Employees shall not exceed the Actual Deferral Percentage of all other Eligible Employees multiplied by 2.0, provided that the Actual Deferral Percentage for the Highly Compensated Eligible Employees does not exceed that of all other Eligible Employees by more than two percentage points. (b) The Actual Deferral Percentage for the Plan Year for any Highly Compensated Eligible Employee who is eligible to make Pre- tax Contributions under two or more plans that are qualified under Section 401(a) or 401(k) of the Code and that are maintained by an Employer or an Affiliate, must be determined as if all such deferrals were made under a single plan; except that for Plan Years beginning after December 31, 1989, plans may be aggregated only if they have the same Plan Year. (c) The Actual Deferral Percentage of any Highly Compensated Eligible Employee (within the meaning of Section 414(q)(6)(B) of the Code), as determined in accordance with the preceding sentence, shall include the contributions of the family members of such Highly Compensated Eligible Employee. (d) In determining whether the requirements Section 5.4(a) of the Plan are met, the Committee may aggregate plans on any basis as permitted under Code Section 401(a)(4) and regulations thereunder. 5.5 CORRECTION OF EXCESS CONTRIBUTIONS (a) If the amount of Pre-tax Contributions made for Highly Compensated Eligible Employees in a Plan Year would not comply with either clause (1) or (2) in Section 5.4(a) above, then the Committee in its discretion may choose either (1), (2) or (3) below, or any combination in order to comply with such tests: (1) In determining the Actual Deferral Percentage of Eligible Employees, the Committee may treat Matching Contributions, other than Matching Contributions used to meet the test in Section 5.6(a), as Pre-tax Contributions; or (2) The Excess Contributions can, with the consent of the applicable Highly Compensated Eligible Employees, be recharacterized as After-tax Contributions solely for the purposes of Sections 5.4 and 5.6 of the Plan, within 2-1/2 months after the related Plan Year, but only to the extent 14 that it will not cause the limitations in Section 5.6(a) to be exceeded, or (3) The Excess Contributions for such Plan Year (including the income, gains and losses attributable to such Contributions as provided in (b) below) shall be distributed by the last day of the following twelve month period to Highly Compensated Eligible Employees on the basis of the respective portions of such Excess Contributions attributable to each Highly Compensated Eligible Employee, determined according to the following leveling method. Beginning with the class of Highly Compensated Eligible Employees that have the highest Actual Deferral Percentage, reduce the Actual Deferral Percentage of such Highly Compensated Eligible Employees to the extent required to cause such Actual Deferral Percentage to equal the Actual Deferral Percentage of the class of Highly Compensated Eligible Employees with the next highest Actual Deferral Percentage. This process is repeated until the Plan satisfies either of the tests in 5.4(a). In the event of the complete termination of the Plan during the Plan Year in which Excess Contributions arose, such distributions are to be made after termination of the Plan and before the close of the twelve month period that immediately follows such termination. Any distribution of Excess Contributions may be made without regard to any notice or consent requirements of the Plan. (b) The income, gains and losses allocable to Excess Contributions shall be the income, gains and losses attributable to such Excess Contributions for the Plan Year in which they occurred, determined pursuant to Section 401(k)(8) of the Code. (c) For purposes of this Section 5.5, a distribution occurring on or before the fifteenth day of the month will be treated as having been made as of the last day of the preceding month and a distribution occurring after such fifteenth day will be treated as having been made on the first day of the following month. 5.6 401(M) TESTS FOR AFTER-TAX CONTRIBUTIONS AND MATCHING CONTRIBUTIONS (a) GENERAL REQUIREMENTS The total amount of Matching Contributions as described in Section 4.3, except for any Matching Contributions used to satisfy the test in Section 5.4(a), plus the total amount of After-tax Contributions as described under Section 4.4, including any amount recharacterized as an After-tax Contribution under Section 5.5(a)(2) above shall comply with either (1) or (2) below for each Plan Year: 15 (1) The Actual Contribution Percentage for the Highly Compensated Eligible Employees shall not exceed the Actual Contribution Percentage for all other Eligible Employees multiplied by 1.25; or (2) The Actual Contribution Percentage for Highly Compensated Eligible Employees shall not exceed (i) the Actual Contribution Percentage of all other Eligible Employees multiplied by 2.0, provided that the Actual Contribution Percentage for the Highly Compensated Eligible Employees does not exceed that of all other Eligible Employees by more than two percentage points. (b) The Actual Contribution Percentage for the Plan Year for any Highly Compensated Eligible Employee who is eligible to receive Matching Contributions or to make After-tax Contributions under two or more plans that are qualified under Section 401(a) or 401(k) of the Code and that are maintained by an Employer or an Affiliate, must be determined as if all such Contributions were made under a single plan; except that for Plan Years beginning after December 31, 1989 plans may be aggregated only if they have the same Plan Year. (c) The Actual Contribution Percentage of any Highly Compensated Eligible Employee (within the meaning of Section 414(q)(6)(B) of the Code), as determined in accordance with the preceding sentence, shall include the Contributions of the family members of such Highly Compensated Eligible Employee. (d) In determining whether the requirements in Section 5.6(a) are met, the Committee may aggregate plans as permitted under Code Section 401(a)(4) and regulations thereunder. 5.7 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS (a) If the amount of Matching Contributions plus After-tax Contributions made for Highly Compensated Eligible Employees in a Plan Year would not comply with either clause (1) or (2) in Section 5.6(a) above, then the Committee in its discretion will choose either (1) or (2) below in order to comply with such tests: (1) The Pre-tax Contributions of nonhighly compensated Eligible Employees will be recharacterized as Matching Contributions to the extent necessary to comply with either clause (1) or (2) in Section 5.6(a), provided that the Section 401(k) test for Pre-tax Contributions (as described in Section 5.4(a)(1) or (2)) and the alternative limitation set forth in Section 5.8 will still be met both before and after such recharacterization; or 16 (2) The Excess Aggregate Contributions for such Plan Year (including any income, gains or losses attributable to such Contributions as provided in paragraph (b) below) shall be distributed by the last day of the following twelve month period to Highly Compensated Eligible Employees on the basis of the respective portions of such Excess Aggregate Contributions attributable to each Highly Compensated Eligible Employees, determined according to the following leveling method. Beginning with the class of Highly Compensated Eligible Employees that have the highest Actual Contribution Percentage, reduce the Actual Contribution Percentage of such Highly Compensated Eligible Employees to the extent required to cause their Actual Contribution Percentage to equal the Actual Contribution Percentage of the class of Highly Compensated Eligible Employees with the next highest Actual Contribution Percentage. This process is repeated until the Plan satisfies either of the tests in 5.6(a). In the event of the complete termination of the Plan during the Plan Year in which an Excess Aggregate Contribution arose, such distributions are to be made after termination of the Plan and before the close of the twelve month period that immediately follows such termination. Any distribution of Excess Aggregate Contributions may be made without regard to any notice or consent requirements of the Plan. (b) The income, gains and losses allocable to Excess Aggregate Contributions shall be such income, gains and losses attributable to such Excess Aggregate Contributions for the Plan Year in which they occurred, determined pursuant to Section 401(k)(8) of the Code. (c) For purposes of this Section 5.7, a distribution occurring on or before the fifteenth day of the month will be treated as having been made as of the last day of the preceding month and a distribution occurring after such fifteenth day will be treated as having been made on the first day of the following month. 5.8 MULTIPLE USE OF ALTERNATIVE LIMITATION (a) If the sum of: (i) the Actual Deferral Percentage of the entire group of Highly Compensated Eligible Employees, plus (ii) the Actual Contribution Percentage of Highly Compensated Eligible Employees 17 exceeds the limitation set forth in (b) below (the "Aggregate Limitation"), it shall be corrected as provided in (c) below. The determination of the Actual Deferral Percentage for Highly Compensated Eligible Employees and the Actual Contribution Percentage for Highly Compensated Eligible Employees shall be made after the determinations and corrections in Section 5.3 through 5.7 have been made. If plans have been aggregated as permitted under Sections 5.4(d) and 5.6(d), such plans may also be aggregated for purposes of this Section 5.8. (b) The Aggregate Limitation shall be the greater of (1) or (2) below (1) the sum of: (i) 1.25 multiplied by the lesser of: (A) the Actual Deferral Percentage for the group of nonhighly compensated Eligible Employees, or (B) the Actual Contribution Percentage for the group of nonhighly compensated Employees Plus (ii) 2 points plus the greater of (A) the Actual Deferral Percentage for the group of nonhighly compensated Eligible Employees, or (B) the Actual Contribution Percentage for the group of nonhighly compensated Eligible Employees, but not exceeding 200% of the greater of (A) or (B). (2) the sum of: (i) 1.25 multiplied by the greater of: (A) the Actual Deferral Percentage for the group of nonhighly compensated Eligible Employees, or (B) the Actual Contribution Percentage for the group of nonhighly compensated Eligible Employees Plus (ii) 2 points plus the lesser of: (A) the Actual Deferral Percentage for the group of nonhighly compensated Eligible Employees, or (B) the Actual Contribution Percentage for the group of nonhighly compensated Eligible Employees, but not exceeding 200% of the lesser of (A) or (B). (c) In accordance with Treasury Regulation Section 1.401(m)-2, as revised by IRS Revenue Procedure 89-65, the Committee may reduce 18 the Actual Deferral Percentage of Highly Compensated Eligible Employees by the leveling method described in Section 5.5(a)(3), or reduce the Actual Contribution Percentage of Highly Compensated Eligible Employees by the leveling method described in Section 5.7(a)(2), or by any other method allowed by the Internal Revenue Service in subsequent guidance. ARTICLE VI ALLOCATIONS AND INVESTMENTS 6.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE. All contributions to the Trust that are received by the Trustee, together with any earnings thereon, shall be held, managed and administered by the Trustee in accordance with the terms and conditions of this Plan and the Trust agreement. 6.2 ESTABLISHMENT OF SUBACCOUNTS (a) With respect to each Participant, the Committee shall maintain: (1) a Pre-tax Contribution Account to record any contributions made on behalf of a Participant as of the end of a Plan Year, (2) an After-tax Contribution Account to record any After-tax Contributions made on behalf of a Participant as of the end of a Plan Year, (3) a Matching Contribution Account to record Matching Contributions described under Section 4.3 made on behalf of a Participant as of the end of a Plan Year, and (4) a Rollover Account to record any Rollover Contributions made by a Participant pursuant to Section 4.6 of the Plan. (b) The maintenance of subaccounts under this Section 6.2 is for accounting purposes only. Any distribution to a Participant, or his Beneficiary under Section 7.4 shall be charged to the appropriate subaccounts of the Participant as of the date of the distribution. 6.3 ACCOUNT ADJUSTMENTS As of each Valuation Date the value of each Account shall be adjusted on the basis of their then fair market value in accordance with the following rules: (a) CONTRIBUTIONS All contributions made during each pay period (pursuant to Sections 4.1, 4.3, 4.4 or 4.6) shall be added to the proper Account of each Participant as of the Valuation Date received by the Trustee. (b) WITHDRAWALS Any withdrawal made pursuant to Section 8.3 may be made from any Investment Fund, based on the value as of Valuation Date on which the withdrawal is made, after adding the contributions in (a) above. 19 (c) EARNINGS, LOSSES AND LOAN REPAYMENTS As of each Valuation Date, the net earnings or losses shall be determined for each of the Investment Funds described in Section 6.4, adjusted for any costs or expenses payable from the Trust. The amount of such determination shall be allocated as of each Valuation Date to the subaccounts of Participants invested in the respective Investment Funds who had unpaid balances in their subaccounts on such date, but after first adding any loan repayments, any contributions, as described in (a) above, and after reducing each such beginning balance by any loans, and any withdrawals as specified in (b) above. (d) DISTRIBUTIONS Subject to Section 6.5, as of each Valuation Date, after (a), (b) and (c) above, any distributions that may be made from any Investment Fund shall be deducted from the proper subaccount of the Participant. 6.4 INVESTMENT FUNDS Contributions made under this Plan shall be deposited in the Trust for purposes of investment. The Trust may consist of four or more separate Investment Funds reflecting various types of investments that the Committee may from time to time designate, such as an Equity Fund, a Fixed Income Fund, a Money Market Fund, an Employer Common Stock Fund and a Growth and Income Fund. Notwithstanding any other provisions of the Plan, assets of the Trust may be invested in any collective investment fund or funds, including common and group trust funds presently in existence or hereafter established. The assets so invested shall be subject to all the provisions of the instruments establishing such funds as they may be amended from time to time, and which are hereby incorporated by reference. 6.5 INVESTMENT DIRECTED BY PARTICIPANTS The Trustees shall invest and reinvest the subaccounts (other than his Matching Contributions subaccount) as the Participant shall instruct the Committee, and according to the provisions of Section 6.6, by such means of instructions provided by the Committee. The instructions of a Participant shall remain in force until altered by him. As set forth in Section 4.7, no contributions may be authorized by or made for a Participant unless an investment instruction with respect to such contributions is provided by him prior to the date such contributions are authorized or delivered. A Participant shall not be allowed to withdraw all prior investment instructions unless simultaneous therewith he delivers new investment instructions. All amounts in all Matching Contribution subaccounts shall be invested in the Employer Common Stock Fund. 6.6 INVESTMENT OF CONTRIBUTIONS (a) Except as provided in subparagraph (c) below, a Participant may change his investment designation for new contributions (other than Matching Contributions) as follows: 20 (i) changes made during the first 15 days of any calendar month shall be effective on the valid trading date occurring on or next following the 27th day of that calendar month; and (ii) changes made on or after the 16th day of any calendar month shall be effective on the valid trading date occurring on or next following the 6th day of the next following calendar month. (b) A Participant may transfer portions of his existing subaccounts (other than his Matching Contributions Subaccount) among the permitted funds in any amount that equals or exceeds the lesser of (1) $250, and (2) the balance of the applicable existing subaccount from which the transfer is made. Any such transfer shall be effective as of the next following Valuation Date except as provided in subparagraph (c) below. (c) Changes in investment designation in the Employer Common Stock Fund may only be made effective as of the first business day of each Plan Quarter, except that any amounts attributable to Matching Contributions, including any earnings thereon, can never be transferred. ARTICLE VII BENEFITS 7.1 TERMINATION OF EMPLOYMENT If a Participant's employment with all Employers and Affiliates is terminated for any reason other than death or Disability, he shall be entitled to receive his entire Account Balance (reduced by any amount attributable to an outstanding loan made by the Participant pursuant to Section 8.4), subject to the provisions of Section 7.4. 7.2 DISABILITY Upon incurring a Disability, a Participant shall be entitled to receive his entire Account Balance (reduced by any amount attributable to an outstanding loan made by the Participant pursuant to Section 8.4), subject to the provisions of Section 7.4. 7.3 DEATH In the event a Participant's employment with all Employers and Affiliates is terminated because of death, the Participant's Beneficiary shall be entitled to receive his entire Account Balance (reduced by any amount attributable to an outstanding loan made by the Participant pursuant to Section 8.4), subject to the provisions of Section 7.4. 7.4 PAYMENT OF BENEFITS (a) FORM All amounts distributed from a Participant's Account following termination of employment shall be distributed in one 21 lump sum amount, in cash, or, if elected by the Participant or Beneficiary, in shares of Employer Common Stock based on the numbers of whole shares allocated to the Employer Common Stock Fund for the Participant. The Committee shall provide each recipient receiving such payment a notice which specifies certain information regarding the federal income tax treatment of Plan benefits. (b) COMMENCEMENT OF DISTRIBUTIONS Distributions to a Participant, or his Beneficiary, entitled to payments under the Plan shall commence as soon as practicable following the later of the date on which the elections specified in paragraph (a) above and (c) below occurs or the date of termination of employment, retirement, death, or upon incurring a Disability. Notwithstanding the foregoing, distributions shall commence no later than 120 days after the later of the Participant's 65th birthday or termination of employment, subject to the following rules: (i) Payments due under the Plan shall not be made later than April 1 of the calendar year following the year in which the Participant attains age 70-1/2. (ii) If the amount payable under the Plan to any Participant or Beneficiary is less than or equal to $3,500, the Committee will direct that such amount be paid in a lump sum, as soon as practicable, in full satisfaction and release of all further rights of the Participant or Beneficiary to receive any benefits under the Plan. (c) Notwithstanding the preceding provisions of this Section, if a Participant's Account Balance at the time for distribution exceeds $3,500, then neither such distribution nor any subsequent distribution shall be made to the Participant at any time prior to the first to occur of his 65th birthday and the date of his death without his written consent. The preceding sentence shall not apply with respect to the distribution of the Account Balance of a deceased Participant. A Participant who does not consent to a distribution shall be entitled to request a distribution of all of his Account Balance, at any time prior to the first to occur of his 65th birthday and the date of his death by written instrument delivered to the Committee at least 120 days prior to the Valuation Date as to which such requested distribution is to be determined. (d) If a distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, distribution of the Participant's Account may, pursuant to the preceding clauses of this paragraph, commence less than thirty (30) days after the notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that: 22 (1) the Committee clearly informs the Participant that the Participant has a right to a period of at least thirty (30) days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option); and (2) the Participant, after receiving the notice, affirmatively elects a distribution. 7.5 DESIGNATION OF BENEFICIARY (a) PROCEDURE Subject to the provisions of paragraph (b), each Participant may designate any person or person (who may be designated primarily, contingently or successively and who may be an entity other than a natural person) as his Beneficiary to whom his Plan benefits are paid if he dies before receipt of such benefits. Each designation shall be in a form prescribed by the Committee, and will be effective only when filed with the Committee during the Participant's lifetime. Each Beneficiary designation filed with the Committee will cancel all Beneficiary designations previously filed with the Committee. The revocation of a Beneficiary designation shall not require the consent of any designated Beneficiary except as provided in paragraph (b) below. (b) SPOUSAL CONSENT No Beneficiary designation shall be effective under the Plan unless the Participant's spouse consents in writing to such designation, and the spouse's signature is witnessed by a Plan representative or a notary public. Consequently, any Beneficiary designation previously made by a Participant shall be automatically revoked upon the marriage or remarriage of a Participant. A spouse's consent shall be valid under this Plan only with respect to the specified Beneficiary designated. If the Beneficiary is subsequently changed, a new consent by the spouse will be required unless the spouse's previous consent permits the Participant to change the designation without the spouse's further consent. Notwithstanding the above, spousal consent shall not be required if: (1) the spouse is designated as the sole primary Beneficiary by the Participant or (2) it is established to the satisfaction of the Committee that spousal consent cannot be obtained because there is no spouse or because the spouse cannot be located. If the spouse is legally incompetent to give consent, the spouse's legal guardian, even if the guardian is the Participant, may 23 give consent. Also if the Participant is legally separated or the Participant has been abandoned (within the meaning of local law) and the Participant has a court order to such effect, spousal consent is not required unless a Qualified Domestic Relations Order provides otherwise. (c) If a Participant fails to designate a Beneficiary, if such designation is for any reason illegal or ineffective, or if no Beneficiary survives the Participant, his benefits otherwise payable pursuant to this Section shall be paid: (1) to his surviving spouse, or if none, (2) to his descendants, PER STIRPES, or if none, (3) to his father and mother, in equal parts, or if none, (4) to his brothers and sisters, in equal parts, or if none, (5) to his estate. (d) The Committee may determine the identity of the distributees of any benefit payable under the Plan and in so doing may act and rely upon any information it may deem reliable upon reasonable inquiry, and upon any affidavit, certificate, or other paper believed by it to be genuine, and upon any evidence believed by it sufficient. Any payment made in accordance with this Section 7.5 shall be a complete discharge of obligations of the Committee and the Employers to the extent of such payment without regard to the application of any payment so made. 7.6 ROLLOVER DISTRIBUTIONS (a) This Section 7.6 applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee's election under this section, a Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. (b) Definitions. (i) "Eligible Rollover Distribution" is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any 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 24 life expectancies) of the Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (ii) "Eligible Retirement Plan" is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. (iii) "Distributee" includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. (D) "Direct Rollover" is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee. 7.7 MINIMUM DISTRIBUTION LIMITATIONS. Notwithstanding anything to the contrary contained elsewhere in the Plan: (i) The payment of benefits under the Plan to any Participant will: (A) be distributed to him not later than the Required Distribution Date (as defined in paragraph (iii), or (B) be distributed to him commencing not later than the Required Distribution Date in accordance with regulations prescribed by the Secretary of the Treasury over a period not extending beyond the life expectancy of the Participant or the joint life expectancy of the Participant and his Beneficiary. (ii) (A) If the Participant dies after distribution to him has commenced pursuant to subparagraph (i)(B) but before his entire interest in the Plan has been distributed to him, the remaining portion of that interest will be distributed at least as rapidly 25 as under the method of distribution being used under subparagraph (i)(B) at the date of his death. (B) If the Participant dies before distribution to him has commenced pursuant to subparagraph (i)(B), then, except as provided in paragraphs (ii)(C) and (ii)(D), his entire interest in the Plan will be distributed within five years after his death. (C) Notwithstanding the provisions of subparagraph (ii)(B), if the Participant dies before distribution to him has commenced pursuant to subparagraph (i)(B), and if any portion of his interest in the Plan is payable (I) to or for the benefit of a Beneficiary, (II) in accordance with regulations prescribed by the Secretary of the Treasury over a period not extending beyond the life expectancy of the Beneficiary, and (III) beginning not later than one year after the date of the Participant's death or such later date as the Secretary of the Treasury may prescribe by regulations, then the portion of his interest referred to in this subparagraph (ii)(C) shall be treated as distributed on the date on which such distributions begin. (D) Notwithstanding the provisions of subparagraphs (ii)(B) and (ii)(C), if the Beneficiary referred to in subparagraph (ii)(C) is the spouse of the Participant, then: (I) the date on which the distributions are required to begin under subparagraph (ii)(C)(III) shall not be earlier than the date on which the Participant would have attained age 70-1/2, and (II) if the spouse dies before the distributions to that spouse begin, then this subparagraph (ii)(D) shall be applied as if the spouse were the Participant. (iii) For purposes of this Section, the Required Distribution Date means April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2 provided, however, if the Participant attained age 70-1/2 in calendar year 1988, the Required Distribution Date means April 1, 1990, and further provided if the Participant attained age 70-1/2 prior to January 1, 1988, the Required Distribution Date means the April 1 following the later of the calendar year in which the Participant: (A) attains age 70-1/2, or (B) terminates service with all Employers and Affiliates, unless he is a 5% owner (as defined in Section 416 of the Code) of an Employer with respect to the Plan Year ending in the calendar year in which he attains age 70-1/2, in which case clause (B) shall not apply. (iv) For purposes of this Section, the life expectancy of a Participant and his spouse may be redetermined, but not more frequently than annually. This paragraph (iv) shall not apply in the case of a single life annuity. 26 ARTICLE VIII WITHDRAWALS AND LOANS 8.1 DISTRIBUTION AT AGE 59-1/2 A Participant may elect an in-service distribution of any amount up to his entire Account Balance on or after he has attained age 59-1/2, subject to the provisions of Section 7.4. 8.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS A Participant may, upon written request to the Committee, make withdrawals in cash from either his After-tax Contribution Account or his Rollover Contribution Account as of the end of any calendar month but only once in any twelve-month period. No such withdrawal shall be less than $1,000 in amount unless it is for the entire balance withdrawable. 8.3 HARDSHIP WITHDRAWALS (a) A Participant may withdraw all or any part of the amount credited to his Pre-tax Contribution Account (excluding on and after January 1, 1989, any earnings credited to his Pre-tax Contributions) to meet a financial hardship as described in this Section. Such withdrawals may not be made more frequently than once a year, except withdrawals for tuition payments may be made as indicated in clause (b)3. The Participant's request for a withdrawal shall be in writing on a form prescribed by the Committee. All rules governing withdrawal privileges shall be administered by the Committee in a uniform manner, and are subject to the claims procedure described in Section 10.6. (b) Financial hardship shall be determined in accordance with rules established by the Committee, and shall include the following list of events or circumstances: (1) The purchase (excluding mortgage payments) of a principal residence; (2) Medical expenses (described in Code Section 213(d)) previously incurred by the Participant, the Participant's spouse or any dependents of the Participant (as defined in Code Section 152) or necessary for any of those persons to obtain medical care described in Code Section 213(d); (3) Payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant, his spouse, his children or dependents; (4) The need to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage of the Participant's principal residence; 27 (5) Any other need as the Committee determines to be a hardship expressly specified in rules announced by the Commissioner of Internal Revenue issued under Section 401(k) of the Code; and (6) Amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution. (c) A distribution that is not for one of the specified reasons set forth in the preceding paragraph (b) will be deemed due to a financial hardship if the Committee reasonably determines, based on written representations and evidence received from the Participant, that the distribution is for a financial hardship and that the amount requested does not exceed the amount needed to meet the financial hardship. In making such determination, the Committee shall rely upon the Participant's written representation that the need cannot reasonably be relieved: (1) through reimbursement or compensation by insurance or otherwise; (2) by liquidation of the Participant's assets, including assets of his spouse or children to the extent available to him, to the extent liquidation of such assets will not itself create a financial need; (3) from amounts available from the Participant's After-tax Contribution Account; and (4) by other distributions or non-taxable (at the time of the loan), loans from plans maintained by the Employer and its Affiliates, or by any other employer, or by borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need. A need cannot reasonably be relieved by any action described in clauses (1) through (4) if the effect of such action would be to increase the amount of the need. (d) In no event may any distribution be made for a financial hardship pursuant to this Section unless the following conditions have been satisfied: (1) The Participant has first obtained all distributions, other than hardship distributions, and all non-taxable loans currently available under the Plan and all other plans maintained by the Employer and its Affiliates; (2) The Participant is prohibited from making any Pre-tax Contributions or After-tax Contributions to this Plan, or contributions to any other plan of the Employer or its 28 Affiliates (excluding health and welfare plans) during the 12 month period beginning with the date of receipt of a hardship distribution under this Section; and (3) The Participant is prohibited from making Pre-tax Contributions for his taxable year immediately following the taxable year of the hardship distribution in excess of the limit described in Section 5.1, reduced by the amount of the Participant's Pre-tax Contributions for the taxable year of the hardship distribution. 8.4 LOANS TO PARTICIPANTS (a) The Trustee may loan any Participant who has participated in the Plan for at least twelve months (and any former Participant who is a Party-in-Interest as defined in Section 3(14) of ERISA whose Account Balance has not been distributed), up to the amount described in paragraph (b) below, upon written application according to such rules as the Committee may from time to time establish that are hereby incorporated and made a part of this Plan, and subject to paragraphs (c) through (f) below. (b) The maximum amount of the loan, when added to the outstanding balance of all other loans made to the Participant from all qualified Plans maintained by the Employer and all Affiliates, shall not exceed the lesser of: (1) $50,000, reduced by the excess (if any) of: (A) the highest outstanding balance during the one- year period ending immediately preceding the date of the loan, over (B) the outstanding balance on the date of the loan, of all such loans from all such plans; (2) 50% of the amount to which the Participant would be entitled under such Participant's Pre-tax Contribution Account, Matching Contribution Account and Rollover Account maintained on behalf of the Participant under the Plan if he were to terminate his employment with all Employers and Affiliates on the date of the loan. (c) The minimum amount of the loan is at least $1,000. (d) Loans may not be made from any amount held in the Participant's Matching Contribution Account or his After-tax Contribution Account. (e) Each loan must be evidenced by a written note in a form approved by the Committee, shall bear interest at a reasonable rate commensurate with the interest rates charged by persons in 29 the business of lending money for loans that would be made under similar circumstances, and shall require substantially level amortization (with payments at least quarterly) over the term of the loan. The note shall be evidence of the Participant's indebtedness, which indebtedness shall be secured by such Participant's Account under the Plan in an amount not to exceed 50% of the present value of the Participant's Pre-tax Contribution Account, Matching Contribution Account and Rollover Account Balance as determined immediately after the origination of the loan to the Participant. (f) Each loan shall specify a repayment period that shall not extend beyond five years. However, a repayment period of up to 30 years may be established for a loan used to acquire any dwelling unit that within a reasonable amount of time is to be used (determined at the time the loan is made) as the principal residence of the Participant. (g) Each Participant shall agree to make loan repayments through automatic salary deductions throughout the repayment period. (h) A Participant may have only one outstanding loan at any given time and only one loan may be granted to a Participant in any twelve month period. An outstanding loan shall be considered in default if, at the end of three consecutive months, no loan payment has been made, except for any Participant on an unpaid leave of absence. A loan default of a Participant on an unpaid leave of absence shall not occur until 1 year following the date of the first delinquent payment. (i) The provisions of this Section 8.4 shall apply to former Participants who are Parties In Interest (as defined in Section 3(14) of ERISA) and who retain Account Balances in the Plan following termination of employment. Payments of principal and interest on a loan to such former Participant shall be made by personal check in equal quarterly (or more frequent) installments. A loan to a former Participant shall become payable in full on the date such Participant receives a final distribution of his Account Balance. (j) Each such loan shall be a first lien against the Account of the borrowing Participant. If (i) any portion of the loan is outstanding and (ii) an event occurs pursuant to which the Participant, his estate, or his Beneficiaries will receive a distribution from the Participant's Account under the provisions of the Plan, then the Participant, if living, shall pay to the Trustee an amount equal to the portion of the loan then outstanding, including all accrued interest thereon, and the Participant shall then receive the full amount of the distribution under the provisions of the Plan to which he is otherwise entitled. If the Participant is not then living, or if the Participant does not make full payment of the portion of the loan then outstanding within 90 days after the date of the event 30 pursuant to which the distribution is to be made, then such distribution, to the extent necessary to liquidate the unpaid portion of the loan, shall be made to the Trustee as payment on the loan. No distribution shall be made to a Participant, his estate, or his Beneficiaries in an amount greater than the excess of the portion of his Account otherwise distributable over the aggregate of the amounts owing with respect to such loan plus interest, if any, thereon, taking into consideration any portion of the loan paid by the Participant pursuant to the provisions of this paragraph. ARTICLE IX TRUST FUND All contributions made by an Employer under this Plan shall be paid to the Trustee and deposited in the Trust Fund. However, contributions made by an Employer are expressly conditioned upon the initial qualification of the Plan under the Internal Revenue Code, and are expressly conditioned upon the deductibility under Section 404 of the Internal Revenue Code. All assets of the Trust Fund, including investment income, shall be retained for the exclusive benefit of Participants and Beneficiaries and shall be used to pay benefits to such persons or to pay administrative expenses of the Plan and Trust Fund to the extent not paid by an Employer. No Employer shall have any right, title, or interest in or to the contributions made to the Trustee, and no part of the Trust Fund shall ever revert or be repaid to any Employer, either directly or indirectly, except as provided in Section 12.4. However, without regard to the foregoing provisions of this section: (a) If a contribution under the Plan is conditioned on initial qualification of the Plan under Section 401(a) of the Code, and the Plan receives an adverse determination with respect to its initial qualification, the Trustee shall, upon written request of an Employer, return to the Employer the amount of such contribution (increased by earnings attributable thereto and reduced by losses attributable thereto) within one calendar year after the date that qualification of the Plan is denied, provided that the application for the determination is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe; (b) If a contribution is conditioned upon the deductibility of the contribution under Section 404 of the Code, then, to the extent the deduction is disallowed, the Trustee shall, upon 31 written request of an Employer, return the contribution (to the extent disallowed) to the Employer within one year after the date the deduction is disallowed; (c) If a contribution or any portion thereof is made by an Employer by a mistake of fact, the Trustee shall, upon written request of the Employer, return the contribution or such portion to the Employer within one year after the date of payment to the Trustee; and (d) Earnings attributable to amounts to be returned to an Employer pursuant to subsection (b) or (c) above shall not be returned, and losses attributable to amounts to be returned pursuant to subsection (b) or (c) shall reduce the amount to be so returned. ARTICLE X ADMINISTRATION 10.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration The fiduciaries shall have only those specific powers, duties, responsibilities and obligations as are specifically given them under this Plan or the Trust. Each Employer shall have the sole responsibility for the Matching Contributions provided for under Section 4.3. The Company shall have the sole authority to appoint and remove the Trustee, and members of the Committee and to amend or terminate, in whole or in part, the Plan or the Trust. The Company shall have the responsibility for the administration of the Plan, with the assistance of the Committee, which responsibility is specifically described in the Plan and the Trust. The Trustee shall have the sole responsibility to perform custodial responsibilities with respect to the Trust and shall have the sole responsibility for the management of the assets held under the Trust, all as specifically provided in the Trust. Each fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan or the Trust, as the case may be, authorizing or providing for such direction, information, or action. Furthermore, each fiduciary may rely upon any such direction, information, or action of another fiduciary as being proper under the Plan or the Trust, and is not required under the Plan or the Trust to inquire into the propriety of any such direction, information, or action. It is intended under the Plan and the Trust that each fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities, and obligations under the Plan and the Trust and shall not be responsible for any act or failure to act of another fiduciary. No fiduciary guarantees the Trust Fund in any manner against investment loss or depreciation in asset value. 32 10.2 APPOINTMENT OF COMMITTEE A Committee consisting of from one to seven persons shall be appointed by and serve at the pleasure of the Board of Directors of the Company to assist in the administration of the Plan. All usual and reasonable expenses of the Committee may be paid in whole or in part by the Company, and any expenses not paid by the Company shall be paid by the Trustee out of the principal or income of the Trust Fund. Any members of the Committee who are Employees shall not receive compensation with respect to their services for the Committee. 10.3 COMMITTEE POWERS AND DUTIES The Committee shall have such duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following: (a) to construe and interpret the Plan in their complete discretion in a nondiscriminatory manner, decide all questions of eligibility and determine the amount, manner and time of payment of any benefits hereunder; (b) to prescribe procedures to be followed by Participants or Beneficiaries filing applications for benefits; (c) to prepare and distribute, in such manner as the Committee determines to be appropriate, information explaining the Plan; (d) to receive from the Employers and from Participants such information as shall be necessary for the proper administration of the Plan; (e) to furnish the Participants, upon request, such annual reports with respect to the administration of the Plan as are reasonable and appropriate; (f) to receive, review and keep on file (as it deems convenient or proper) reports of benefit payments by the Trustee and reports of disbursements for expenses directed by the Committee; (g) to appoint or employ individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal and actuarial counsel. 10.4 RULES AND DECISIONS The Committee may adopt such rules as it deems necessary, desirable or appropriate. All rules and decisions of the Committee shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Committee shall be entitled to rely upon information furnished by a Participant or Beneficiary, an Employer, the legal counsel of an Employer or the Trustee. Any determination by the Committee shall presumptively be conclusive and binding on all persons. The regularly kept records of the Company shall be conclusive and binding upon all persons with respect to an Employee's date and length of employment, time and amount of Compensation and the 33 manner of payment thereof, type and length of any absence from work and all other matters contained therein relating to Employees. 10.5 COMMITTEE ACTION The Committee may act at a meeting or in writing without a meeting. The Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs. All decisions of the Committee shall be made by the vote of the majority, including actions in writing taken without a meeting. By appropriate action the Committee may authorize one or more of its members to execute documents on its behalf, and the Trustee, upon written notification of such authorization, shall accept and rely upon such documents until notified in writing that such authorization has been revoked by the Committee. 10.6 CLAIMS PROCEDURE Claims for benefits under the Plan shall be made in writing to the Committee. If the Committee wholly or partially denies a claim for benefits, the Committee shall, within a reasonable period of time, but no later than 90 days after receiving the claim, notify the claimant in writing of the denial of the claim. If the Committee fails to notify the claimant in writing of the denial of the claim within 90 days after the Committee receives it, the claim shall be deemed denied. A notice of denial shall be written in a manner calculated to be understood by the claimant, and shall contain: (a) the specific reason or reasons for denial of the claim; (b) a specific reference to the pertinent Plan provisions upon which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim, together with an explanation of why such material or information is necessary; and (d) an explanation of the Plan's review procedure. Within 60 days of the receipt by the claimant of the written notice of denial of the claim, or within 60 days after the claim is deemed denied as set forth above, if applicable, the claimant may file a written request with the Committee that it conduct a full and fair review of the denial of the claimant's claim for benefits, including the conducting of a hearing, if the Committee deems one necessary. In connection with the claimant's appeal of the denial of his benefit, the claimant may review pertinent documents and may submit issues and comments in writing. The Committee shall render a decision on the claim appeal promptly, but not later than 60 days after receiving the claimant's request for review, unless, in the discretion of the Committee, special circumstances (such as the need to hold a hearing) require an extension of time for processing, in which case the sixty-day period may be extended to 120 days. The Committee shall notify the claimant in writing of any such extension. The decision upon review shall (i) include specific reasons for the decision, (ii) be written in a manner calculated to be understood by the 34 claimant, and (iii) contain specific references to the pertinent Plan provisions upon which the decision is based. 10.7 FACILITY OF PAYMENT Whenever, in the Committee's opinion, a person entitled to receive any payment of a benefit or installment thereof hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage his financial affairs, the Committee may direct the Trustee to make payments to such person or to his legal representative or to a relative or friend of such person for his benefit, or the Committee may direct the Trustee to apply the payment for the benefit of such person in such manner as the Committee considers advisable. Any payment of a benefit or installment thereof in accordance with the provisions of this Section shall be a complete discharge of any liability for the making of such payment under the provisions of the Plan. 10.8 LIMITATION OF LIABILITY Notwithstanding any other provision of the Plan or the Trust, no Employer nor member of the Committee, or an individual acting as an employee or agent of any of them, shall be liable to any Participant or former Participant, or any Beneficiary or spouse of any Participant or former Participant, for any claim, loss, liability or expense incurred in connection with the Plan or the Trust, except when the same shall have been judicially determined to be due to the willful misconduct of such person. 10.9 INDEMNITY. The Company shall indemnify and hold harmless each member of the Committee, or any employee of an Employer or any individual acting as an employee or agent of any of them or of an Employer (to the extent not indemnified or saved harmless under any liability insurance or any other indemnification arrangement with respect to the Plan or the Trust) from any and all claims, losses, liabilities, costs and expenses (including attorneys' fees) arising out of any actual or alleged act or failure to act with respect to the administration of the Plan or the Trust, except that no indemnification or defense shall be provided to any person with respect to any conduct that has been judicially determined, or agreed by the parties, to have constituted willful misconduct on the part of such person, or to have resulted in his receipt of personal profit or advantage to which he is not entitled. In connection with the indemnification provided by the preceding sentence, expenses incurred in defending a civil or criminal action, suit or proceeding, or incurred in connection with a civil or criminal investigation, may be paid by the Company in advance of the final disposition of such action, suit, proceeding, or investigation, as authorized by the Committee in the specific case, upon receipt of an undertaking by or on behalf of the party to be indemnified to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Company pursuant to this paragraph. 10.10 SEVERABILITY. Each of the Sections contained in the Plan, and each provision in each Section, shall be enforceable independently of every other Section or provision in the Plan, and the invalidity or 35 unenforceability of any Section or provision shall not invalidate or render unenforceable any other Section or provision contained herein. If any Section or provision in a Section is found invalid or unenforceable, it is the intent of the parties that a court of competent jurisdiction shall reform the Section or provision to produce its nearest enforceable economic equivalent. ARTICLE XI MISCELLANEOUS 11.1 ACTION BY COMPANY Any action required or permitted to be taken by the Company under this Plan shall be by resolution of its Board of Directors, or by any person or persons duly authorized by resolution of said Board to take such action. 11.2 NONGUARANTEE OF EMPLOYMENT Nothing contained in this Plan shall be construed as a contract of employment between an Employer and any Employee, or as a right of any Employee to be continued in the employment of the Employer, or as a limitation of the right of an Employer to discharge any of its Employees, with or without cause. 11.3 NONGUARANTEE OF BENEFITS Nothing contained in the Plan or the Trust shall constitute a guaranty by an Employer, the Committee or the Trustee that the assets of the Trust Fund will be sufficient to pay any benefit under the Plan to any person. 11.4 RIGHTS TO TRUST ASSETS No Employee or Beneficiary shall have the right to, or interest in, any assets of the Trust Fund upon termination of his employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under the Plan to such Employee or Beneficiary out of the assets of the Trust Fund. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Trust Fund and none of the fiduciaries shall be liable therefor in any manner. 11.5 INTEREST NONTRANSFERABLE (a) Except as provided in this Section, no interest of any person or entity in, or right to receive distributions from, the Trust Fund shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or right to receive distributions be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims in bankruptcy proceedings. The Account of any Participant, however, shall be subject to and payable in accordance with the applicable requirements of any qualified 36 domestic relations order, as that term is defined in Section 414(p) of the Code, and the Committee shall direct the Trustee to provide for payment from a Participant's Account in accordance with such order and with the provisions of Section 414(p) of the Code and any regulations promulgated thereunder. A payment from a Participant's Account may be made to an alternate payee (as defined in Section 414(p)(8) of the Code) prior to the date the Participant reaches his earliest retirement age (as defined in Section 414(p)(4)(B) of the Code) if such payments are made pursuant to a qualified domestic relations order. All such payments pursuant to a qualified domestic relations order shall be subject to reasonable rules and regulations promulgated by the Committee respecting the time of payment pursuant to such order and the valuation of the Participant's Account or Accounts from which payment is made; provided, that all such payments are made in accordance with such order and Section 414(p) of the Code. An alternate payee shall receive his distribution in a lump sum payable within ninety (90) days after the date such qualified domestic relations order is received by the Committee. The balance of an Account that is subject to any qualified domestic relations order shall be reduced by the amount of any payment made pursuant to such order. (b) Notwithstanding the preceding paragraph of this Section, if any Participant borrows money from the Trustee pursuant to Section 8.4 of the Plan, the Trustee and the Committee shall have all rights to collect upon such indebtedness as are granted pursuant to Section 8.4 and any agreements or documents executed in connection with such loan. 11.6 NONFORFEITABILITY OF BENEFITS Subject only to the specific provisions of this Plan, nothing shall be deemed to divest a Participant during his lifetime of his right to the nonforfeitable benefit to which he becomes entitled in accordance with the provisions of this Plan. 11.7 CONTROLLING LAW Except to the extent superseded by the laws of the United States, the laws of the state of Indiana will be controlling in all matters relating to this Plan. ARTICLE XII AMENDMENTS AND TERMINATION 12.1 AMENDMENT OR TERMINATION The Company reserves the right to alter, amend, modify or revoke or terminate this Plan and any Trust that may be established by it that do not cause any part of the Trust Fund to be used for, or diverted to, any purpose other than for the exclusive benefit of Participants or their Beneficiaries; provided, however, that the Company may make any amendment it determines 37 necessary or desirable, with or without retroactive effect, to comply with applicable law. 12.2 MERGER OR CONSOLIDATION In the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each Participant or Beneficiary shall receive a benefit immediately after the merger, consolidation or transfer that is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation or transfer (if this Plan had then terminated). 12.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS In the event of a permanent discontinuance of contributions to the Plan by an Employer, the Accounts of all Participants employed by such Employer shall, as of the date of such discontinuance, be 100% vested and nonforfeitable. 12.4 LIQUIDATION OF THE TRUST FUND Upon termination of the Plan, the Accounts of all Participants affected thereby shall be fully vested, and the Committee may direct the Trustee: (a) to continue to administer the Trust Fund and pay Account Balances in accordance with Section 7.4 to Participants affected by the termination upon their termination of employment or to their Beneficiaries upon such a Participant's death, until the Trust Fund has been liquidated, or (b) to distribute the assets remaining in the Trust Fund, after payment of any expenses properly chargeable thereto, to Participants and Beneficiaries in proportion to their respective Account Balances. 12.5 MANNER OF DISTRIBUTION Upon termination of the Plan, distribution shall be made in cash or Employer Common Stock in a manner consistent with the requirements of Section 7.4. ARTICLE XIII TOP HEAVY PROVISIONS 13.1 GENERAL Notwithstanding anything herein to the contrary, the provisions of this Article XIII shall apply during any Top Heavy Plan Year. 13.2 DEFINITIONS For purposes of this Article XIII, the following terms shall have the meanings specified unless the context clearly indicates another meaning: (a) "Aggregate Account" as of the Determination Date means with respect to a Participant the sum of: (1) the entire amount in each of his Accounts as of the most recent Valuation Date occurring within a twelve (12) month period ending on the Determination Date; 38 (2) an adjustment for any contributions due as of the Determination Date. Such adjustment shall be the amount of any contributions actually made after the Valuation Date but before the Determination Date, except for the first Plan Year when such adjustment shall also reflect the amount of any contributions made after the Determination Date that are allocated as of a date in that first Plan Year; (3) any Plan distribution made within the Plan Year that includes the Determination Date or within the four preceding Plan Years. However, in the case of distributions made after the Valuation Date and prior to the Determination Date, such distributions are not included as distributions for top heavy purposes to the extent that such distributions are already included in the Participant's Aggregate Account Balance as of the Valuation Date. (4) any Employee contributions, whether voluntary or mandatory. (b) "Aggregation Group" means either a Required Aggregation Group or a Permissive Aggregation Group as hereinafter determined: (1) Required Aggregation Group: In determining a Required Aggregation Group hereunder, each plan of an Employer in which a Key Employee is a participant, and each other plan of an Employer which enables any plan in which a Key Employee participates to meet the requirements of Code Sec- tions 401(a)(4) or 410, will be required to be aggregated. Such group shall be known as a Required Aggregation Group. In the case of a Required Aggregation Group, each plan in the group will be considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy Group. No plan in the Required Aggregation Group will be considered a Top Heavy Plan if the Required Aggregation Group is not a Top Heavy Group. (2) Permissive Aggregation Group: The Employers may also include any other plan not required to be included in the Required Aggregation Group, provided the resulting group, taken as a whole, would continue to satisfy the provisions of Code Sections 401(a)(4) or 410. Such group shall be known as a Permissive Aggregation Group. In the case of a Permissive Aggregation Group, only a plan that is part of the Required Aggregation Group will be considered a Top Heavy Plan if the Permissive Aggregation Group is a Top Heavy Group. No plan in the Permissive Aggregation Group will be considered a Top Heavy Plan if the Permissive Aggregation Group is not a Top Heavy Group. 39 (3) Only those plans of the Employers in which the Determination Dates fall within the same calendar year shall be aggregated in order to determine whether such plans are Top Heavy Plans. (c) "Determination Date," as applied to any Plan Year, means the last day of the preceding Plan Year with respect to this Plan and each Aggregated Plan; provided, however, that the Present Value of Accrued Benefits for any defined benefit plan shall be determined as of the Top Heavy Valuation Date. In the case of the first Plan Year, the Determination Date shall be the last day of such Plan Year. (d) "Key Employee" means any Employee meeting the definition of "key employee" contained in Section 416(i)(1) of the Code and Treasury Regulations. (e) "Non-Key Employee" means any Employee who is not a Key Employee. (f) Present Value of Accrued Benefit: In the case of a defined benefit plan, a Participant's Present Value of Accrued Benefit shall be as determined under the provisions of such defined benefit plan. (g) "Super Top Heavy Plan" means that, as of the Determination Date, (1) the Present Value of Accrued Benefits of Key Employees or (2) the sum of the Aggregate Accounts of Key Employees under this Plan and any plan of an Aggregation Group, exceeds ninety percent (90%) of the Present Value of Accrued Benefits or the Aggregate Accounts of all Participants under this Plan and any plan of an Aggregation Group. (h) "Top Heavy Group" means an Aggregation Group in which, as of the Determination Date, the sum of: (1) the Present Value of Accrued Benefits of Key Employees under all defined benefit plans included in the group, and (2) the Aggregate Accounts of Key Employees under all defined contribution plans included in the group, exceeds sixty percent (60%) of a similar sum determined for all Participants. (i) "Top Heavy Plan" means, for any Plan Years, that, as of the Determination Date, (1) the Present Value of Accrued Benefits of Key Employees or (2) the sum of the Aggregate Accounts of Key Employees under this Plan and any plan of an Aggregation Group, exceeds sixty percent (60%) of the Present Value of Accrued Benefits or the Aggregate Accounts of all Participants under this Plan and any plan of an Aggregation Group. 40 (j) "Top Heavy Plan Year" means that, for a particular Plan Year, the Plan is a Top Heavy Plan. (k) "Top Heavy Valuation Date" means the most recent Valuation Date which is within a 12-month period ending on the Determination Date. 13.3 DETERMINATION OF TOP HEAVY STATUS (a) This Plan shall be a Top Heavy Plan for any Plan Year in which, as of the Determination Date, (1) the Present Value of Accrued Benefits of Key Employees or (2) the sum of the Aggregate Accounts of Key Employees under this Plan and any plan of an Aggregation Group, exceeds sixty percent (60%) of the Present Value of Accrued Benefits or the Aggregate Accounts of all Participants under this Plan and any plan of an Aggregation Group. If any Participant is a Non-Key Employee for any Plan Year, but such Participant was a Key Employee for any prior Plan Year, such Participant's Present Value of Accrued Benefit and/or Aggregate Account balance shall not be taken into account for purposes of determining whether this Plan is a Top Heavy Plan (or whether any Aggregation Group which includes this Plan is a Top Heavy Group). (b) This Plan shall be a Super Top Heavy Plan for any Plan Year in which, as of the Determination Date, (1) the Present Value of Accrued Benefits of Key Employees or (2) the sum of the Aggregate Accounts of Key Employees under this Plan and any plan of an Aggregation Group, exceeds ninety percent (90%) of the Present Value of Accrued Benefits or the Aggregate Accounts of all Participants under this Plan and any plan of an Aggregation Group. 13.4 MINIMUM BENEFIT (a) Notwithstanding the provisions of Article IV, for any Top Heavy Plan Year, a Non-Key Employee Participant shall be entitled to an allocation to his account equal to three percent (3%) of his Compensation; provided, however, that such allocation percentage shall not exceed the percentage at which Employer contributions (not attributable to a salary reduction or similar arrangement) are made (or required to be made) under the Plan for the Key Employee for whom the percentage is highest for the Plan Year. (b) For purposes of determining the percentage at which contributions are made for Key Employees: (1) the sum of contributions (including those attributable to a salary reduction or similar arrangement) and forfeitures made on behalf of each Key Employee shall be 41 divided by so much of his total Compensation for the Top- Heavy Plan Year as does not exceed $150,000 (or such other amount as may be prescribed by regulations under Section 416 of the Internal Revenue Code), and (2) all defined contribution plans of the Employers required to be aggregated under Section 416 (g)(2)(A)(i) shall be treated as one plan and the contributions thereunder aggregated as to each Key Employee. (c) For purposes of this Section only, Non-Key Employee Participants shall be those Participants who have not separated from service with an Employer by the end of the Top Heavy Plan Year and, in addition, shall also mean those Employees who have failed to complete 1,000 Hours of Service or the equivalent. A Non-Key Employee Participant will not be excluded from an allocation pursuant to this Section for a Plan Year merely because his Compensation is less than a stated amount or because he has declined to make Pre-tax Contributions for such Plan Year. 13.5 NON-DUPLICATION OF MINIMUM BENEFIT Notwithstanding the Minimum Benefit provision of Section 13.4, a Non-Key Employee who would otherwise be entitled to a minimum benefit under the top heavy provisions of any defined benefit plan maintained by the Employers but for his participation in this plan, shall, in lieu of such other defined benefit plan minimum benefit, be entitled to a minimum benefit under this Plan equal to five percent (5%) of his Compensation for each Top Heavy Plan Year in which he is Participant, up to a maximum of ten (10) Top Heavy Plan Years, and thereafter a minimum contribution equal to three percent (3%) of his Compensation for each additional Top Heavy Plan Year in which he is a Participant. 13.6 TOP HEAVY LIMITATION For any Top Heavy Plan Year, with respect to each Key Employee who is a Participant in both this Plan and any defined benefit plan included in a Top Heavy Group, the aggregate limit of 1.25% described in Section 5.2 shall be reduced to 1.00%. 13.7 TRANSITION RULE In the event the aggregate limit calculated pursuant to Section 5.2 shall be exceeded with respect to any individual for a Top Heavy Plan Year, there shall be no Employer contributions, forfeitures, voluntary nondeductible contributions, or benefit accruals for such individual until such time as the aggregate limit is not exceeded. 13.8 VESTING Notwithstanding the provisions of Section 7.3, for any Top Heavy Plan Year, any Participant who separates from the service of all Employers and all Affiliates shall have, as of the date thereof, a vested right to his entire Account Balance. 42 ARTICLE XIV PLAN ADOPTION 14.1 ADOPTION PROCEDURE With the written consent of NIPSCO Industries, Inc., any Affiliate may adopt the Plan and the Trust for its eligible employees by appropriate resolution, that shall specify the effective date of such adoption and that may contain such changes and variations in Plan terms as NIPSCO Industries, Inc. approves. Any such adoption shall be contingent upon a determination by the Internal Revenue Service that such resolution, in conjunction with this Plan and with the Trust, constitutes a qualified plan and trust under applicable provisions of the Code. An Employer adopting the Plan shall compile and submit all information required by the Trustee with reference to its Eligible Employees. 14.2 JOINT EMPLOYERS If an Employee receives Compensation simultaneously from more than one participating Employer, the total amount of such Compensation shall be considered for the purposes of the Plan as having been paid by one participating Employer and the respective participating Employers shall share proratably in contributions to the Plan on account of said Employee. 14.3 EXPENSES Each participating Employer shall pay such part of actuarial and other necessary expenses incurred in the administration of the Plan as the Trustee shall determine. 14.4 WITHDRAWAL A participating Employer may withdraw from the Plan at any time by giving written notice of its intention to NIPSCO Industries, Inc. and the Trustee prior to the effective date of withdrawal; provided, however that such withdrawal may be subject to the provisions of Article XII. 14.5 SUPERSEDED PLANS If an Employer adopting the Plan already maintains a pension plan covering employees who will be covered by the Plan, it may, with the consent of NIPSCO Industries, Inc., provide in its resolution adopting this Plan for the merger, restatement and continuation, without discontinuance or termination, of its plan by this Plan. 43 IN WITNESS WHEREOF, this Amendment and Restatement of the Plan is hereby executed on this 29th day of December, 1994, by the duly authorized officer of the Company, to be effective as of January 1, 1989. NORTHERN INDIANA PUBLIC SERVICE COMPANY By: /s/ Patrick J. Mulchay --------------------------------------- Its: Executive Vice President and Chief Operating Officer ---------------------------------------- 44 FIRST AMENDMENT TO NIPSCO INDUSTRIES, INC. TAX DEFERRED SAVINGS PLAN ------------------------- WHEREAS, Northern Indiana Public Service Company (the "Company") established the Northern Indiana Public Service Company Tax Deferred Savings Plan effective May 1, 1984 ("Plan"), and amended and restated the Plan effective January 1, 1989, as the NIPSCO Industries, Inc. Tax Deferred Savings Plan; and WHEREAS, the Company has reserved the right to amend the Plan; and WHEREAS, it is desirable to amend the Plan in certain respects; NOW THEREFORE, the Plan is hereby amended, effective January 1, 1989 (except where otherwise indicated), as follows: 1. The following sentences are added at the end of Section 2.7: In determining the Compensation of a Participant for purposes of the foregoing limitation set forth in Section 401(a)(17) of the Code, the rules of Section 414(q)(6) of the Code shall apply with respect to family members of the Participant, except that in applying such rules, the term "family" shall include only the spouse of the Participant and any lineal descendants of the Participant who have not attained age 19 before the close of the applicable Plan Year. If, as a result of the application of such rules, the adjusted limitation set forth in Section 401(a)(17) of the Code is exceeded, then the limitation shall be prorated among the affected individuals in proportion to each such individual's Compensation as determined under this section prior to the application of such limitation. 2. The first paragraph of Section 2.11 is amended, effective May 1, 1996, to read as follows: 2.11 EMPLOYEE. Any person who is employed by an Employer and on whose behalf contributions are being made by such Employer under the Federal Insurance Contribution Act and who is not included in a unit of employees covered by an agreement between employee representatives and any Employer unless the collective bargaining agreement provides that such Employees are entitled to participate in the Plan or unless the Employer otherwise directs in a written instrument submitted to the Trustee. 3. The last sentence of Section 2.11 is amended to read as follows: If a leased employee subsequently becomes an Employee and thereafter participates in the Plan, he shall receive credit for participation under Article III for his period of employment as a leased employee, except to the extent that the following requirements are satisfied with respect to such Employee while he was a leased employee: (a) the Employee was covered by a plan that was maintained by the leasing organization and that meets the requirements of the following sentence, and (b) leased employees do not constitute more than 20% of the work force of the Employer that consists of Employees who are not Highly Compensated Employees. A plan referred to in the preceding sentence must (a) be a money purchase pension plan with a nonintegrated employer contribution rate for each participant of at least 10% of compensation, (b) provide for full and immediate vesting, and (c) provide for immediate participation by each employee of the leasing organization (other than employees who perform substantially all of their services for the leasing organization). 4. The following sentence is added at the end of Section 2.14: For purposes of this Section, a former Employee shall be treated as a Highly Compensated Employee if: (a) such former Employee was a Highly Compensated Employee when he terminated employment with the Employer, or (b) such former Employee was a Highly Compensated Employee at any time after he attained the age of 55 years. 5. Clause (2) of paragraph e of Section 3.4 is amended to read as follows: 2. the first anniversary of the first day of the period in which an Employee remains absent from service (with or without pay) for any reason other than quitting, retirement, discharge or death). Notwithstanding the prior sentence, the Severance Date of an individual who is absent from service beyond the first anniversary of the first day 2 of absence by reason of a maternity or paternity absence is the second anniversary of the first day of such absence. The period between the first and second anniversaries of the first day of absence is neither a period of service nor a Break in Service. A maternity or paternity absence is the absence of an Employee from work for any period: (i) by reason of the pregnancy of the Employee; (ii) by reason of the birth of a child of the Employee; (iii) by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee; or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement. 6. The following paragraphs are added at the end of Section 5.4: (e) Pre-tax Contributions will be taken into account for purposes of determining the Actual Deferral Percentage of any Eligible Employee for a Plan Year only if such Pre- tax Contributions relate to Compensation that either (1) would have been received by the Eligible Employee in such Plan Year (but for the election to make the Pre-tax Contributions), or (2) is attributable to services performed by the Eligible Employee in such Plan Year and would have been received by the Eligible Employee within two and one- half months after the end of such Plan Year (but for the election to make such Pre-tax Contributions). (f) Pre-tax Contributions will be taken into account for purposes of determining the Actual Deferral Percentage of an Eligible Employee for a Plan Year only if such Pre-tax Contributions are allocated to the Pre-tax Contributions Account of the Eligible Employee as of a date that occurs within such Plan Year. For this purpose, Pre-tax Contributions are considered allocated as of a date within a Plan Year if the allocation is not contingent upon participation or performance of services after such date and the Pre-tax Contributions are actually paid to the Trustee no later than 12 months after the end of the Plan Year to which the Pre-tax Contributions relate. 7. Clause (3) of paragraph (a) of Section 5.5 is amended to read as follows: 3 (3) The Excess Contributions for such Plan Year (including the income, gains and losses attributable to such Contributions as provided in paragraph (b) below), shall be distributed by the last day of the following twelve month period to Highly Compensated Eligible Employees on the basis of the respective portions of such Excess Contributions attributable to each Highly Compensated Eligible Employee, determined according to the following leveling method: the Actual Deferral Percentage of the Highly Compensated Eligible Employee with the highest Actual Deferral Percentage shall be reduced to the extent necessary to satisfy either of the tests set forth in paragraph (a) of Section 5.4, or to cause such Actual Deferral Percentage to equal the Actual Deferral Percentage of the Highly Compensated Eligible Employee with the next highest Actual Deferral Percentage. This process shall be repeated until the Plan satisfies either of the tests set forth in paragraph (a) of Section 5.4. Following completion of this process the amount of Excess Contributions for each Highly Compensated Eligible Employee shall be equal to the total of the Pre-tax Contributions and Matching Contributions taken into account in determining his Actual Deferral Percentage minus the product of the Highly Compensated Eligible Employee's reduced Actual Deferral Percentage and the Highly Compensated Eligible Employee's Compensation. 8. The following paragraphs are added at the end of Section 5.5: (d) The amount of Excess Contributions to be distributed to, or recharacterized with respect to, a Highly Compensated Eligible Employee for a Plan Year, shall be reduced by any Excess Contributions previously distributed to the Highly Compensated Eligible Employee for the taxable year of the Highly Compensated Eligible Employee ending with or within the same Plan Year, and Excess Contributions to be distributed to a Highly Compensated Eligible Employee for a taxable year of the Highly Compensated Eligible Employee shall be reduced by Excess Contributions previously distributed, or recharacterized with respect to, such Highly Compensated Eligible Employee for the Plan Year beginning in such taxable year. (e) Excess Contributions that are recharacterized pursuant to clause (2) of paragraph (a) of Section 5.5 shall be nonforfeitable and fully vested and shall be subject to the distribution limitations set forth in Section 8.5 that are applicable to Pre-tax Contributions. 9. Clause (2) of paragraph (a) of Section 5.7 is amended to read as follows: 4 (2) The Excess Aggregate Contributions for such Plan Year (including any income, gains or losses attributable to such Contributions as provided in paragraph (b) below) shall be distributed on the last day of the following twelve month period to Highly Compensated Eligible Employees on the basis of the respective portions of such Excess Aggregate Contributions attributable to each Highly Compensated Eligible Employee, determined according to the following leveling method: The Actual Contribution Percentage of the Highly Compensated Eligible Employee with the highest Actual Contribution Percentage shall be reduced to the extent necessary to satisfy either of the tests set forth in paragraph (a) of Section 5.6, or to cause such Actual Contribution Percentage to equal the Actual Contribution Percentage of the Highly Compensated Eligible Employee with the next highest Actual Contribution Percentage. This process shall be repeated until the Plan satisfies either of the tests set forth in paragraph (a) of Section 5.6. The amount of Excess Aggregate Contributions for a Plan Year shall be determined only after first determining the Excess Contributions that are recharacterized as After-tax Contributions pursuant to clause (2) of paragraph (a) of Section 5.5. The amount of Excess Aggregate Contributions to be distributed to each Highly Compensated Eligible Employee pursuant to this clause (2) for a Plan Year shall be distributed on a pro-rata basis from the After-tax Contributions made by such Highly Compensated Eligible Employee for such Plan Year and the Matching Contributions allocable to the Matching Contribution Account of the Highly Compensated Eligible Employee for such Plan Year. 10. The first sentence and the portion of the second sentence of paragraph (b) of Section 7.4 ending with the colon, are amended, effective May 1, 1996, to read as follows: Distributions to a Participant or his Beneficiary entitled to payments under the Plan shall commence as soon as practicable following the later of (1) the date on which the elections specified in paragraphs (a) above and (c) below occur, or (2) the date twelve months after the date of termination of employment, retirement, death, or occurrence of a Disability. Notwithstanding the foregoing, (1) a distribution will occur as soon as practicable after the date requested by a Participant or Beneficiary during the aforementioned twelve month period by written instrument delivered to the Committee, and (2) distributions shall commence no later than 60 days after the latest of the close of the Plan Year in which (a) the Participant attains the age of 65 years, (b) the tenth anniversary of the date on which the Participant commenced participation in the Plan 5 occurs, or (c) the date the Participant's termination of employment with the Employer occurs, subject to the following rules: 11. The first sentence of paragraph (c) of Section 7.4 is amended to read as follows: Notwithstanding the preceding provisions of this Section, if a Participant's Account Balance at the time for distribution, or at the time of any prior distribution, exceeds or exceeded $3,500, then neither such distribution nor any subsequent distribution shall be made to the Participant at any time prior to the first to occur of his 65th birthday and the date of his death without his written consent. 12. The following clause (v) is added at the end of Section 7.7: (v) All distributions under the Plan shall be made in accordance with the requirements of Section 401(a)(9) of the Code and the regulations issued thereunder, including the minimum distribution incidental benefit requirements of proposed Treasury Regulations Section 1.401(a)(9)-2. 13. The following sentence is added at the end of paragraph (g) of Section 8.4: The automatic salary deductions referred to in the preceding sentence shall be sufficient to amortize the principal and interest payments pursuant to the loan during the term thereof on a substantially level basis in equal quarterly (or more frequent) installments. 14. The following Section 8.5 is added at the end of Article VIII: 8.5 DISTRIBUTIONS FROM PRE-TAX CONTRIBUTION ACCOUNTS. Notwithstanding anything to the contrary contained elsewhere in the Plan, a Participant's Pre-tax Contribution Account shall not be distributable other than upon: (a) the Participant's separation from service, death or Disability; (b) termination of the Plan without establishment or maintenance of another defined contribution plan (other than an employee stock ownership plan as defined in Section 4975(e)(7) of the Code or a simplified employee plan as defined in Section 408(k) of the Code); (c) the date of the sale or other disposition by an Employer to an unrelated entity of substantially all of the 6 assets (within the meaning of Section 409(d)(2) of the Code) used by the Employer in a trade or business of the Employer where (i) the Participant is employed by such trade or business and continues employment with the entity acquiring such assets, and (ii) the Employer continues to maintain the Plan after the sale or other disposition. The sale of 85% of the assets used in the trade or business shall be deemed a sale of "substantially all" of the assets used in such trade or business; (d) the date of sale or other disposition by an Employer of the Employer's interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code) to an unrelated entity, where (i) the Participant is employed by such subsidiary and continues employment with such subsidiary following such sale or other disposition, and (ii) the Employer continues to maintain the Plan after the sale or other disposition; (e) the Participant's attainment of age 59-1/2; or (f) the Participant's hardship as defined in Section 8.3. Notwithstanding anything to the contrary contained herein, an event shall not be treated as described in clauses (b)(c) or (d) above with respect to any Participant, unless the Participant receives a lump sum distribution (as defined in Section 401(k)(10)(B)(ii) of the Code) by reason of the event. 15. Section 12.4 is amended to read as follows: 12.4 LIQUIDATION OF THE TRUST FUND. Upon termination or a partial termination of the Plan, the Accounts of all Participants affected thereby shall be fully vested, and the Committee may direct the Trustee: (a) to continue to administer the Trust Fund and pay Account Balances in accordance with Section 7.4 to each Participant affected by the termination or partial termination upon his termination of employment or to his Beneficiary upon such Participant's death, until the Trust Fund, or the portion thereof applicable to the Participants affected by the partial termination, has been liquidated, or (b) to distribute the assets remaining in the Trust Fund, or the portion thereof attributable to Participants affected by the partial termination, after payment of any expenses properly chargeable thereto, to 7 the applicable Participants and Beneficiaries in proportion to the respective Account Balances. 16. The first sentence of clause (2) of paragraph (b) of Section 13.2 is amended to read as follows: PERMISSIVE AGGREGATION GROUP: The Employers may also include any other Plan not required to be included in the Required Aggregation Group, provided the resulting group, taken as a whole, would continue to satisfy the provisions of Code Sections 401(a)(4) and 410. 17. The following clause (4) is added at the end of paragraph (b) of Section 13.2: (4) Plans referred to in clause (1) that shall be part of the Required Aggregation Group shall include any terminated plan that was maintained by an Employer within the last five years ending on the Determination Date for the applicable Plan Year, and that would, but for the fact that it terminated, be part of the Required Aggregation Group for such Plan Year. For this purpose, a terminated plan is one that has been formally terminated, has ceased crediting service for benefit accruals and vesting, and has been or is distributing all plan assets to participants or their beneficiaries as soon as administratively feasible. IN WITNESS WHEREOF, this First Amendment to the Plan has been adopted on this 26 day of June, 1996. NORTHERN INDIANA PUBLIC SERVICE COMPANY By:/s/ Gwen C. Johnson ------------------------------------------ Its: Vice President Human Resources ---------------------------------------- 8 AMENDMENT II TO NIPSCO INDUSTRIES, INC. TAX DEFERRED SAVINGS PLAN ------------------------- WHEREAS, Northern Indiana Public Service Company ("Company") adopted the NIPSCO Industries, Inc. Tax Deferred Savings Plan, as amended and restated as of January 1, 1989 ("Plan"); and WHEREAS, pursuant to the terms of the Plan, the Company deems it appropriate to further amend the Plan; NOW THEREFORE, the Company hereby amends the Plan, effective December 1, 1995, by the addition of the following paragraph to Section 8.4: (k) Notwithstanding the preceding provisions of this Section, any loan made to a Participant employed by the Information Technology Group of the Company, whose employment with the Company terminated on or about December 31, 1995 and who commenced employment with Integrated Systems Solutions Corporation on or about January 1, 1996, that is outstanding at the date of termination of employment with the Company, will not be payable in full at the date of such termination of employment. Any such loan shall continue in effect pursuant to the terms thereof, from and after the date of termination of employment and loan repayments of principal and interest shall be made by such Participant by personal check in equal quarterly (or more frequent) installments until such loan has been paid in full. No such Participant shall be entitled to receive any new loan pursuant to this Section from and after the date of such termination of employment. The balance of the Account of such Participant, except for the portion secured by such loan, shall be distributed pursuant to the applicable terms of the Plan. IN WITNESS WHEREOF, the Company has caused this Amendment II to be executed on its behalf by its duly authorized officer on this 12th day of September, 1996, effective as of December 1, 1995. NORTHERN INDIANA PUBLIC SERVICE COMPANY By: /s/ Gwen C. Johnson ------------------------------------------ AMENDMENT III TO NIPSCO INDUSTRIES, INC. TAX DEFERRED SAVINGS PLAN WHEREAS, Northern Indiana Public Service Company adopted the NIPSCO Industries, Inc. Tax Deferred Savings Plan, as amended and restated as of January 1, 1989 ("Plan"); and WHEREAS, pursuant to the terms of the Plan, the Plan has been subsequently amended and it is now appropriate to further amend the Plan; NOW THEREFORE, the Plan is hereby amended, effective January 1, 1997, by the addition of the following Article XV at the end thereof: ARTICLE XV PROFIT SHARING CONTRIBUTION 15.1 PROFIT SHARING CONTRIBUTION. Each Affiliate set forth on Schedule 1 attached hereto ("Participating Affiliate") shall, beginning on the applicable Effective Date set forth on Schedule 1, make a Profit Sharing Contribution to the Trust on behalf of each person employed by such Participating Affiliate and on whose behalf contributions are being made by such Participating Affiliate under the Federal Insurance Contribution Act and who is not included in a unit of employees covered by an agreement between employee representatives and the Participating Affiliate, unless the collective bargaining agreement provides that such employees are entitled to participate in the Profit Sharing Contribution ("Profit Sharing Participant"). The Committee from time to time may add additional Affiliates to the group of Participating Affiliates entitled to make Profit Sharing Contributions and to delete Participating Affiliates from such group. Any such additions and deletions shall be reflected in appropriate revisions to Schedule 1. Except as otherwise set forth herein, all of the applicable provisions of the Plan shall also apply with respect to Profit Sharing Contributions and the allocation, maintenance, investment and distribution of Profit Sharing Account Balances. If the Effective Date shown on Schedule 1 applicable to a Participating Affiliate is not the first day of a Plan Year, the initial Plan Year with respect to such Participating Affiliate for purposes of this Article shall begin on such Effective Date and end on the last day of the Plan Year. 15.2 AMOUNT OF PROFIT SHARING CONTRIBUTION. The Profit Sharing Contribution made by a Participating Affiliate for a Plan Year shall be a stated percentage (not to exceed 8%) of the Compensation of the Profit Sharing Participants of such Participating Affiliate entitled to receive allocations of such Profit Sharing Contribution for such Plan Year. The applicable percentage for each Participating Affiliate for each Plan Year shall be designated by the Committee, in its discretion exercised on a non-discriminatory basis, no later than the last day of the first quarter of the Plan Year following the Plan Year for which such percentage is applicable. For purposes of Profit Sharing Contributions, Compensation shall mean the aggregate basic annual salary or wage, incentive pay, overtime, and sick pay paid by the applicable Participating Affiliate to a Profit Sharing Participant, including Pre-tax Contributions and Code Section 125 deferrals, and excluding signing bonuses and unusual or extraordinary amounts of remuneration. Notwithstanding the preceding sentence, Compensation shall only include amounts paid by a Participating 2 Affiliate to a Profit Sharing Participant while he is employed by, and attributable to service with, the Participating Affiliate as a Profit Sharing Participant. In no event shall a Profit Sharing Contribution be made with respect to any Profit Sharing Participant for any Plan Year to the extent such Profit Sharing Contribution would cause the limitations of Code Section 415 to be exceeded for such Profit Sharing Participant for such Plan Year. 15.3 ALLOCATIONS. A Profit Sharing Contribution shall be allocated to the Profit Sharing Accounts maintained for the Profit Sharing Participants eligible to receive such allocations. A Profit Sharing Contribution shall be allocated as of the last day of the Plan Year to which such Profit Sharing Contribution is attributable, and shall be allocated to the applicable Profit Sharing Accounts during the first calendar quarter of the following Plan Year. A Profit Sharing Participant will be entitled to an allocation of a Profit Sharing Contribution for a Plan Year only if he is employed as a Profit Sharing Participant by the applicable Participating Affiliate on the last day of the applicable Plan Year, and only with respect to Compensation paid to him as a Profit Sharing Participant by the Participating Affiliate during such Plan Year. 15.4 VESTING. The Vested Percentage of each Profit Sharing Participant in his Profit Sharing Account Balance will be determined in accordance with the following formula: 3 YEARS OF SERVICE VESTED PERCENTAGE FORFEITABLE PERCENTAGE Less than 2 years 0% 100% 2 years or more 100% 0% The Vested Percentage of a Profit Sharing Participant's Profit Sharing Account shall in any event be 100% on the first to occur of (1) the date of his death, (2) the date his employment with the Company and all Affiliates terminates because of Disability, and (3) the date upon which the Plan is terminated or all contributions to the Plan by all Employers are permanently discontinued. For purposes of this section a Year of Service will be a full 12-month period commencing on the date on which a Profit Sharing Participant was hired by the Company or any Affiliate, and on each anniversary thereof. A Profit Sharing Participant shall receive credit for Years of Service while he is on an Authorized Leave of Absence, or while he is performing service in the Armed Forces of the United States if he has re-employment rights from such service under Federal or State law and complied with the requirements of these laws as to re-employment and is reemployed by the Company or any Affiliate. An Authorized Leave of Absence is any absence (with or without Compensation) authorized by the Company or any Affiliate under its standard personal practices, provided that all persons under similar circumstances must be treated alike in the granting of such Authorized Leaves of Absence, and provided further that the person returns within the period specified 4 in the Authorized Leave of Absence. An Authorized Leave of Absence shall include a leave of absence authorized by the Company or an Affiliate pursuant to the provisions of the Family and Medical Leave Act. If the employment of a Profit Sharing Participant with the Company and all Affiliates terminates after he completes two (2) Years of Service and he is subsequently reemployed at any time by the Company or an Affiliate, or if the employment of a Profit Sharing Participant with the Company and all Affiliates terminates before he completes two (2) Years of Service and he is subsequently reemployed by the Company or an Affiliate prior to the fifth (5th) anniversary of his date of termination of employment, his Years of Service both before and after his date of reemployment shall be credited for purposes of determining the Vested Percentage of his Profit Sharing Account Balance and in such event his Years of Service from and after his date of reemployment shall mean each full 12-month period of employment commencing on the date of his reemployment and on each anniversary thereof. If the employment of a Profit Sharing Participant with the Company and all Affiliates terminates before he completes two (2) Years of Service and he is subsequently reemployed by the Company or an Affiliate on or after the fifth (5th) anniversary of his date of termination of employment, only his Years of Service after his date of reemployment shall be credited for purposes of determining the Vested Percentage of his Profit Sharing Account Balance, and in such event his Years of Service from and after his date of reemployment shall mean each full 12-month period of 5 employment commencing on the date of his reemployment and on each anniversary thereof. 15.5 FORFEITURES. The Forfeitable Percentage of a Participant's Profit Sharing Account Balance shall be deemed a forfeiture for the Plan Year in which the Participant's employment with the Company and all Affiliates terminates, and shall be used to reduce the Profit Sharing Contribution allocated to the Profit Sharing Accounts of other Profit Sharing Participants of the applicable Participating Affiliate in the Plan Year in which such forfeiture occurs, and in subsequent Plan Years, to the extent necessary. If a former Profit Sharing Participant is reemployed by the Company or an Affiliate prior to the fifth (5th) anniversary of his date of termination of employment, the Forfeitable Percentage of his Profit Sharing Account Balance shall be restored to such Profit Sharing Account as of the date of reemployment, and shall thereafter be held, invested, administered and distributed together with Profit Sharing Contributions allocated to such Account from and after the date of reemployment. If a former Profit Sharing Participant is reemployed by the Company or an Affiliate, on or after the fifth (5th) anniversary of his date of termination of employment, the Forfeitable Percentage of his Profit Sharing Account Balance shall not be restored to such Profit Sharing Account. 15.6 INVESTMENTS. The Trustees shall invest and re-invest the Profit Sharing Account of a Profit Sharing Participant as such Profit Sharing Participant shall instruct the Committee with respect to his Pre-tax Contribution Account pursuant to the provisions of Sections 6 6.5 and 6.6. If a Pre-tax Contribution Account is not maintained for a Profit Sharing Participant, the Trustees shall invest and reinvest his Profit Sharing Account as he shall instruct the Committee pursuant to the provisions of Sections 6.5 and 6.6. The Profit Sharing Participant shall be entitled to direct the investment of his Profit Sharing Account among the same Investment Funds set forth in Section 6.4 in which he can direct the investment of his Pre-tax Contribution Account. 15.7 DISTRIBUTIONS. If a Profit Sharing Participant's employment with the Company and all Affiliates is terminated for any reason, including death or Disability, the Vested Percentage of his Profit Sharing Account Balance shall be distributed to him, or in the event of his death to his Beneficiary, in a lump sum pursuant to the provisions of Article VII applicable to the distribution of his other Account Balances. The provisions of Article VIII with respect to Participant loans, and distributions prior to termination of employment, shall not be applicable with respect to a Profit Sharing Account. IN WITNESS WHEREOF, NIPSCO Industries, Inc. has caused this Amendment III to be executed on its behalf, by its duly authorized officer, on this 10th day of February, 1998, effective as of January 1, 1997. NIPSCO INDUSTRIES, INC. By:/s/ Jeffrey W. Yundt -------------------------------- 7 SCHEDULE 1 NAME OF PARTICIPATING AFFILIATE EFFECTIVE DATE 1. NIPSCO Energy Services, Inc. January 1, 1997 2. NESI Energy Marketing, LLC January 1, 1997 3. Green Fuels, Inc. January 1, 1997 4. Crossroads Pipeline Company January 1, 1997 5. RIC, Inc. January 1, 1997 6. NI Product Development Company September 1, 1997 7. Parkway Engineering & Distributing Co., Inc. February 1, 1998 8. NESI Integrated Energy Resources, Inc. April 1, 1998 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 821,000 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 821,000 common shares, $.01 par value per share (and the associated preferred share purchase rights) of the Company (the "Shares") to be issued under the NiSource Inc. Tax Deferred Savings Plan (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. 1 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 Registration 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-----