Exhibit 10.24
May 14, 2008
CONFIDENTIAL
Mr. Stephen P. Smith
7809 Lambton Park Road
New Albany, Ohio 43054

Re:   Offer of Employment

Dear Steve:
This letter serves as our offer to you for employment as Executive Vice
President and Chief Financial Officer of NiSource, Inc. The terms of your offer
are as follows:
1. Commencement: You will be employed as Executive Vice President beginning
June 1, 2008 and as Chief Financial Officer on August 4, 2008. Until such time
as you become Chief Financial Officer, you will perform only those services as
are mutually agreed upon by you and the President and Chief Executive Officer of
NiSource Inc.
2. Position: You will report to the President and Chief Executive Officer of
NiSource Inc.
3. Other Positions: You may continue to serve on the Board of Directors of
Natural Resource Partners, L.P. and as a member of the Audit Committee of the
Board of Directors of Natural Resources Partners, L.P.
4. Compensation: Your annual base salary will be $500,000, payable in
installments not less frequently than monthly. Your annual base salary may be
adjusted periodically.
5. Benefits: While you are employed by NiSource Inc., you will be entitled to
participate in all benefit plans, including without limitation, any health, life
and disability insurance plans, qualified and nonqualified retirement and
pension plans, or any other plan or benefit generally afforded to similarly
situated executives of NiSource Inc.
6. Sign-On Bonus: To compensate you for the loss of a prorated portion of the
annual bonus from your prior employer, you will receive a sign-on bonus of
$150,000, payable in a lump-sum by June 30, 2008.
7. Short-Term Incentive: You will be entitled to an annual incentive opportunity
under the NiSource Inc. Corporate Incentive Plan (“Corporate Incentive Plan”).
This annual incentive opportunity will be based on a target equal to 65% of your
annual base salary, with a range from 32.5% to 97.5% of your annual base salary.
The payment of the short-term incentive is dependent upon Company performance,
your own performance, and your status as an employee in good standing.
Notwithstanding the foregoing:

 

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a. You will be guaranteed an annual incentive opportunity in 2008 equal to not
less than the “target” level but prorated based on the number of months
remaining in the performance period after June 1, 2008;
b. You will be guaranteed an annual incentive opportunity in 2009 and 2010 equal
to not less than the “target” level; and
c. Your annual incentive opportunity for the first 5 months of 2011 is
guaranteed to equal not less than 5/12 of the “target” level with the incentive
opportunity for the remaining months in the performance period calculated under
the Corporate Incentive Plan.
8. Long-Term Incentive:
a. You will be entitled to participate in the NiSource Inc. 1994 Long Term
Incentive Plan, as amended and restated effective January 1, 2005 (the “LTIP”),
in an amount and structure comparable to other executives of NiSource Inc. and
as approved by the Officer Nomination and Compensation Committee of the Board of
Directors and the NiSource Inc. Board of Directors.
b. For each fiscal year beginning after June 1, 2008, you shall receive an award
with a value of at least $600,000 under the LTIP (or such successor or other
plan as may be adopted by NiSource Inc.), to the extent that NiSource Inc.
grants awards to other executives.
c. To compensate you for the loss of a portion of your long term incentive award
from your prior employer, you will also receive a grant of contingent stock
pursuant to the LTIP. The number of shares to be granted will be determined by
dividing $600,000 by the fair market value of one common share of NiSource Inc.
on the date of grant. Vesting of the contingent stock shall be based solely on
the passage of time and the contingent stock shall vest in 1/3 increments on
December 31, 2008, December 31, 2009 and December 31, 2010 and fully
transferable shares of NiSource Inc. common stock will be delivered to you upon
such vesting.
9. Bonus Payments: As additional compensation for the loss of a portion of your
long term incentive award from your prior employer, you will receive the
following payments during your employment with the Company: $135,000 on
December 31, 2008, $135,000 on December 31, 2009, and $135,000 on December 31,
2010. Notwithstanding the foregoing, in the event of your death any unpaid
amounts shall be settled in cash within 30 days after the date of your death.
10. Change in Control: NiSource Inc. will enter into a Change in Control
Agreement with you on substantially the same terms and in substantially the same
form as set forth in the Change in Control Agreement attached as Exhibit A.
11. Severance:
a. If, other than in connection with a change in control, NiSource Inc.
terminates your employment for any reason, other than for “cause” (as defined
below), or you terminate your

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employment with NiSource Inc. for “good reason” (as defined below), you will be
entitled to receive the following severance benefits on the date of termination:

  1)   A lump-sum payment equal to your annual base salary, as then in effect;  
  2)   A lump-sum payment equal to your prorated annual incentive opportunity
under the Corporate Incentive Plan at the “target” level; and     3)   A
lump-sum payment equal to 130% of the cost of continuation coverage premiums for
continued participation by you and your dependents for a period of 1 year in any
group health, dental, vision or other welfare benefit plan for which continued
participation is available under Section 4980B of the Internal Revenue Code of
1986, as amended (“Code”), and Sections 601 through 609 of the Employee
Retirement Income Security Act of 1974, as amended.

In addition, to the severance benefits described above,

  4)   A payment in the amount of the value of any of the contingent stock
described in Section 8 (c) that has not vested as of the date of your
termination shall be paid in a lump-sum within 30 days following the date of
your termination;     5)   Any unpaid bonus described in Section 9 shall be paid
in a lump-sum within 30 days following the date of your termination; and     6)
  You shall be entitled to receive reasonable outplacement services beginning on
the date of termination and continuing until the earlier of the date you accept
other employment or 12 months thereafter.

b. For purposes of this letter, “cause” shall mean: 1) your conviction of any
crime involving dishonesty, fraud, or breach of trust; 2) your commission of any
willful act constituting fraud or breach of fiduciary duty to the Company and
its shareholders which has a significant adverse impact on the Company; 3) any
act or omission by you that causes a regulatory body with jurisdiction over the
Company to demand or recommend that you be removed or suspended from any
position in which you serve with the Company; 4) your willful and material
violation of the Company’s policies or 5) your substantial nonperformance of
your material duties and responsibilities (other than due to partial or total
incapacity) for a period of 10 days following written notice by the Company to
you of such nonperformance.
c. For purposes of this letter, “good reason” means the occurrence of any of the
following: 1) a material diminution in your base compensation or incentive
compensation opportunity; 2) a material diminution in your authority, duties, or
responsibilities; 3) a material change in the geographic location at which you
are required to perform services; or 4) any material breach of this letter by
NiSource Inc., its successors, subsidiaries or assigns.
You are required to provide written notice to NiSource Inc. within 45 days of
the initial existence of the condition constituting good reason, and NiSource
Inc. shall have 30 days from the giving

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of this written notice in which to remedy the condition constituting good reason
and not be required to pay the compensation and benefits described above. If you
fail to provide such written notice within the period described above, then you
will be deemed to have consented to such condition and NiSource Inc. shall have
no obligation to pay the compensation and benefits described above with respect
to such condition.
12. Vacation: You will be entitled to four weeks of paid vacation each year. For
2008, your vacation will be prorated based on the number of months remaining in
the fiscal year after June 1, 2008.
13. Location: Your principal office will be located in Columbus, Ohio.
14. Relocation: In the event your principal office changes, you will be entitled
to relocation assistance under the NiSource Inc. relocation assistance policy
for a period of two years beginning on the date your principal office changes.
Any reimbursement for relocation expenses in any year may not affect the amount
of relocation expenses eligible for reimbursement in any other year, and
reimbursement must be made by December 31 of the year following the year in
which the expense was incurred.
15. Section 409A: NiSource Inc. intends that this letter and the benefits
provided herein comply with the requirements of Section 409A of the Code and, to
the maximum extent permitted by law, shall interpret and administer this letter
and the benefits provided herein consistent with this intent.
16. NiSource Policies. You are expected to familiarize yourself with and observe
all Company policies. Following your acceptance of this offer and during the
course of your employment with the Company, you will have access to confidential
and proprietary information of the Company. You agree to maintain the
confidentiality of such information, before, during and after your employment.
17. Dispute Resolution: Should there be any dispute as to the meaning or
application of this letter, both parties agree to submit the dispute to binding
arbitration under the standard employment rules of the American Arbitration
Association. This letter shall be construed in accordance with the laws of the
State of Indiana.

         
 
  Sincerely,    
 
  /s/ Robert C. Skaggs, Jr.
 
Robert C. Skaggs, Jr.
President and Chief Executive Officer
NiSource Inc.    

ACCEPTED AND ACKNOWLEDGED

     
     /s/ Stephen P. Smith
 
Stephen P. Smith
   

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