IROQUOIS PIPELINE OPERATING COMPANY
                           SUPPLEMENTARY PENSION PLAN

                              Article I. The Plan

         1.1 Establishment of Plan. Iroquois Pipeline Operating Company ("IPOC")
and Iroquois Gas Transmission System ("IGTS") (collectively referred to herein
as the "Company") hereby establishes a Supplementary Pension Plan for the
benefit of certain management and highly compensated employees of IPOC and other
Employing Companies. The Plan is effective as of January 1, 1998. For purposes
of this Plan, an "Employing Company" means any company which has adopted this
Plan and has also adopted the Iroquois Pipeline Operating Company Cash Balance
Retirement Plan (the "Qualified Plan").

         1.2 Purpose of Plan.

         (a) The purpose of this Plan is to provide benefits to management and
highly compensated employees of IPOC and other Employing Companies whose
benefits under the Qualified Plan ("Qualified Plan Benefit") are limited by
Section 415 of the Internal Revenue Code of 1986, as amended (the "Code") and/or
by the limitations on compensation that can be taken into account in calculating
qualified plan benefits under Section 401(a)(17) of the Code. The limitations
under Sections 415 and 401(a)(17) of the Code are collectively referred to
herein as "Benefit Limitations". This Plan is intended to provide such employees
and their Beneficiaries with benefits equal to the difference between what their
Qualified Plan Benefits would be absent the Benefit Limitations, and what their
Qualified Plan Benefits would be with the imposition of the Benefit Limitations.

         (b) The Plan is also intended to provide certain key management
employees, namely the President, Chief Financial Officer, and Director of
Engineering of IPOC, with the credit for their past service with TransCanada
Pipelines Limited (and any of its affiliates) prior to the transfer of their
employment to IPOC ("Past Service Credit for Certain Key Employees"). This Plan
is intended to provide such employees and their Beneficiaries with benefits
equal to the difference between what their Qualified Plan Benefit would be
absent the Past Service Credit, and what their Qualified Plan Benefits would be
with the Past Service Credit.

         1.3 Mature of Plan. This Plan is divisible into two components: (a)
that portion which provides for benefits in excess of the Code Section 415
limits and, therefore, is intended to qualify for the exemption from the
Employee Retirement Income Security Act (ERISA) as an "excess benefit plan"; (b)
and that portion which provides for benefits in excess of Code Section
441(a)(17) limits and Past Service Credit, which is intended to be a
supplemental executive retirement plan for management and highly compensated
employees.

                            Article II. Eligibility

         2.1 Any Employee who is eligible to receive a Qualified Plan Benefit
from IPOC or an Employing Company, the amount of which is reduced (i) by reason
of the application of a Benefit Limitation (as previously defined) or (ii) by
the denial of Past Service Credit for Certain

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Key Employees (as previously defined) shall be eligible to receive a
Supplementary Pension Benefit as provided in this Plan.

                             Article III. Benefits

         3.1 Amount of Benefit. The Supplementary Pension Benefit payable to a
Participant hereunder shall be calculated in the form of a single life annuity,
commencing at the Participant's Normal Retirement Date (as defined in the
Qualified Plan), and shall be a monthly amount equal to the difference between
(a) and (b) below:

                  (a) the monthly amount of the Qualified Plan Benefit to which
         the Participant would have been entitled had such benefit been
         calculated without regard to the Benefit Limitations imposed by
         Sections 415 and 401(a)(17) of the Code and also, in the case of the
         President, Chief Financial Officer and Director of Engineering of IPOC,
         had the monthly amount of the Qualified Plan Benefit been calculated
         taking into account the Past Service Credit for Certain Key Employees
         as defined in Section 1.2(a); and

                  (b) the monthly amount of the Qualified Retirement Plan
         Benefit actually payable to the Participant.

The amounts described in (a) and (b) shall be calculated as of the date that the
Participant terminates service with the IPOC and all other Employing Companies,
in the form of a single life annuity payable over the lifetime of the
Participant commencing at his Normal Retirement Date. In the event that the
Participant commences benefits prior to his Normal Retirement Date, such
Supplemental Pension Benefit shall be Actuarially Equivalent in value to the
Supplementary Pension commencing at his Normal Retirement Date.

         3.2 Actuarial Equivalency. A Supplemental Pension Benefit which is
payable in any form other than a straight life annuity over the lifetime of the
Participant, or which commences at any time prior to the Participant's Normal
Retirement Date, shall be the actuarial equivalent of the Supplemental
Retirement Benefit set forth in 3.1 above as determined using the same actuarial
assumptions and adjustments as those specified it! the Qualified Plan with
respect to determination of the Qualified Plan.

                        Article IV. Payment of Benefits.

         4.1 Commencement and Form of Benefits.

         (a) Supplementary Pension Benefits payable hereunder shall be paid
commencing at the same time and in the same form as that in which the Qualified
Plan Benefit is payable to the Participant. If the Participant elects an
actuarially equivalent form of benefit payment with respect to his Qualified
Plan Benefits (with, if applicable, the consent of his surviving Spouse), that
same form of payment shall apply to payment of his Supplementary Pension
Benefit.

         (b) Notwithstanding (a) above, an election made by a Participant under
the Qualified Plan with respect to the timing and form of his Qualified Plan
Benefit (with the valid consent of his Spouse where required) shall not be
effective with respect to the timing and form of payment of Supplemental
Benefits under this Plan unless such election is approved by the Plan

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Administrator. If the Plan Administrator does not approve such election, then
the form of payment and date for commencement of the Participant's Supplemental
Retirement Benefits shall be selected by the Plan Administrator in its sole
discretion.

         4.2 Death Benefits.

         (a) The Beneficiary of a Participant who dies after commencing regular
monthly benefits under Section 4.1 of this Plan shall receive a death benefit
under this Plan only if the form selected by, or in force with respect to, the
Participant under the Qualified Plan provides for a death benefit. For purposes
of this Plan, a Participant's Beneficiary shall be the Beneficiary designated to
receive death benefits under the Qualified Plan.

         (b) If a Participant dies prior to commencement of his Qualified Plan
Benefits under circumstances in which he or she is entitled to a non-forfeitable
portion of his or her accrued benefit under the Qualified Plan, then a
supplemental death benefit shall be payable under this Plan equal to the
difference between

                  (i) the Actuarially Equivalent value of the Qualified Plan
         Benefit to which the Beneficiary would have been entitled had such
         benefit been calculated without regard to the Benefit Limitations
         imposed by Sections 415 and 401(a)(17) of the Code and also, in the
         case of the President, Chief Financial Officer, and Director of
         Engineering of IPOC, had the monthly amount of the Qualified Plan
         Benefit been calculated taking into account Past Service Credit for
         Certain Key Employees as defined in Section 1.2(a); and

                  (ii) the Actuarially Equivalent value of the Qualified
         Retirement Plan Benefit actually payable to the Beneficiary with
         respect to the Participant.

         (c) For any death benefits payable in accordance with Section 4.2(b),
the form of payment shall be:

                  (i) a single lump sum, if the Participant's Spouse is not the
         Beneficiary, or

                  (ii) an annuity for the life of the Participant's surviving
         Spouse, if the Participant's Spouse is the Beneficiary; provided,
         however, that in the sole discretion of the Plan Administrator, the
         Actuarially Equivalent value of such benefit may be paid in a single
         sum. For purposes of this Plan, the term "Spouse" shall mean the
         individual to whom a Participant is validly married, as evidenced by a
         marriage certificate issued in accordance with state law. Common law
         marriages shall not be recognized under the Plan, and no individual
         shall be or become entitled to benefits under this Plan solely on
         account of a common law marriage. A Participant's Beneficiary under
         this Plan shall be the same Beneficiary as is selected by the
         Participant under the Qualified Plan.

         4.3 Benefit Upon a Change of Control.

         (a) Lump Sum Payment Upon a Change of Control. Notwithstanding any
other provision of the Plan, upon a Change in Control, each Participant covered
by the Plan shall automatically be paid a lump sum amount in cash by the Company
which, together with the payment, if any, under a Rabbi or other trust
arrangement established by the Company to make

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payments hereunder in the event of a Change in Control, would provide the
Participant with the same Supplemental Pension benefit as he would have received
under this Plan based on the benefits accrued to the Participant hereunder as of
the date of the Change in Control. Payment under this Section shall not in and
of itself terminate the Plan, but such payment shall be taken into account in
calculating benefits under the Plan which may otherwise become due the
Participant thereafter.

         (b) No Divestment Upon a Change of Control. If a Participant is removed
from participation in the Plan after a Change of Control has occurred, in no
event shall his years of Benefit Service accrued prior to such removal, and the
benefit accrued prior thereto, be adversely affected.

         (c) Change of Control Define. For purposes of the Plan, a "Change in
Control" shall be deemed to have occurred if

                  (i) a person, partnership, joint venture, corporation or other
         entity, or two or more of any of the foregoing acting as a group (or a
         `person' within the meaning of Sections 13(d)(3) and 14(d)(2) of the
         Securities Exchange Act of 1934, as amended (the "Act"), other than the
         Company, a majority-owned subsidiary of the Company or an employee
         benefit plan maintained or contributed to by the Company), becomes the
         `beneficial owner' (as defined in Rule 13d-3 of the Act) of more than
         65% of the then outstanding voting stock of IPOC or more than 65% of
         the partnership interests of IGTS; or

                  (ii) the stockholders of IPOC approve a merger or
         consolidation of IPOC with any other corporation, other than (a) a
         merger or consolidation which would result in the voting securities of
         IPOC outstanding immediately prior thereto continuing to represent
         (either by remaining outstanding or by being converted into voting
         securities of the surviving entity) more than 80% of the combined
         voting power of the voting securities of IPOC or such surviving entity
         outstanding immediately after such merger or consolidation, or (b) a
         merger or consolidation effected to implement a recapitalization of
         IPOC (or similar transaction) in which no "person" (as previously
         defined ) acquires more than 65% of the combined voting power of IPOC's
         then outstanding securities; or

                  (iii) the stockholders of IPOC (or the partners of IGTS)
         approve a plan of complete liquidation of IPOC or IGTS or an agreement
         for the sale or disposition by IPOC or IGTS of all or substantially all
         of the IPOC's or IGTS's assets.

         (d) Arbitration. Any dispute or controversy arising under or in
connection with the Plan subsequent to a Change in Control shall be settled
exclusively by arbitration in Connecticut, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.

                               Article V. Funding

         5.1 Unfunded Plan. This Plan shall be unfunded. All payments under this
Plan shall be made from the general assets of the Company and any participating
Employing Companies.

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No provision shall at any time be made with respect to segregating any assets of
an Employing Company for payment of benefits hereunder. No Participant,
surviving Spouse or any other Beneficiary shall have any interest in any
particular assets of the Company or an Employing Company by reason of the right
to receive a benefit under this Plan and shall have the rights only of a general
unsecured creditor of the Company and its affiliates with respect to any rights
under the Plan. Nothing in the foregoing shall prevent the Company from
establishing a Rabbi Trust under this Plan in accordance with IRS Revenue
Procedure 92-64.

         5.2 Liability for Payment. The Company and each participating Employing
Company shall pay the benefits provided under this Plan with respect to
Participants who are employed, or were formerly employed by it during their
participation in the Plan. In the case of a Participant who was employed by more
than one Employing Company, the Committee shall allocate the cost of such
benefits among such Employing Companies in such manner as it deems equitable.
The obligations of the Employing Company shall not be funded in any manner.

         5.3 Anti-alienation. No Participant or Beneficiary shall have the right
to assign, transfer, encumber or otherwise subject to any lien any payment or
any other interest under this Plan, nor shall such payment or interest be
subject to attachment, execution or levy of any kind.

                        Article VI. Plan Administration

         6.1 Plan Administrator. The Company hereby appoints the Human Resources
Committee of the Board of Directors of IPOC as the Plan Administrator (the "Plan
Administrator" or "Committee"). Any person, including, but not limited to, the
directors, shareholders, officers and employees of IPOC, shall be eligible to
serve on the Committee. Any person so appointed shall signify his acceptance by
undertaking the duties assigned. Any member of the Committee may resign by
delivering written resignation to the Company. The Company may also remove any
member of the Committee by delivery of a written notice of removal, which shall
take effect upon delivery or on a date specified. Upon resignation or removal of
a Committee member, the Company shall promptly designate in writing such other
person or persons as a successor.

         6.2 Allocation and Delegation. The Committee members may allocate the
responsibilities among themselves, and shall notify the Company in writing of
such action and the responsibilities allocated to each member.

         6.3 Powers, Duties and Responsibilities. The Plan Administrator shall
have all power to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, in accordance with the terms of the Plan.
The Plan Administrator shall have the absolute discretion and power to determine
all questions arising in connection with the administration, interpretation and
application of the Plan. Any such determination by the Plan Administrator shall
be conclusive and binding upon all persons. The Plan Administrator may correct
any defect or reconcile any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purposes of the Plan;
provided, however, that such interpretation or construction shall be done in a
non-discriminatory manner and shall be consistent with the intent of the Plan.

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The Plan Administrator shall:

         (a) determine who is eligible to participate in this Plan and compute
the amount and kind of benefits to which any Participant shall be entitled
hereunder;

         (b) maintain all necessary records for the administration of the Plan;

         (c) interpret the provisions of the Plan and make and publish such
rules for regulation of the Plan as are consistent with the terms hereof,

         (d) assist any Participant regarding his rights, benefits or elections
available under the Plan; and

         (e) communicate to Participants and their Beneficiaries concerning the
provisions of the Plan.

         6.4 Records and Resorts. The Plan Administrator shall keep a record of
all actions taken and shall keep such other books of account, records and other
information that may be necessary for proper administration of the Plan. The
Plan Administrator shall file and distribute all reports that may be required by
the Internal Revenue Service, Department of Labor or others, as required by law.

         6.5 Appointment of Advisors. The Plan Administrator may appoint
accountants, actuaries, counsel, advisors and other persons that it deems
necessary or desirable in connection with the administration of the Plan.

         6.6 Majority Actions. The Committee shall act by a majority of their
numbers, but may authorize one or more of them to sign all papers on their
behalf.

         6.7 Indemnification of Members. The Company shall indemnify and hold
harmless any member of the Committee from any liability incurred in his or her
capacity as such for acts which he or she undertakes in good faith as a member
of such Committee.

         6.8 Construction of Plan Terms. Except as otherwise expressly provided
in this Plan, all terms and conditions of the Qualified Plan shall be applicable
to a Supplemental Pension Benefit payable hereunder.

                     Article VII. Termination and Amendment

         7.1 Amendment or Termination. IPOC may amend or terminate the Plan at
any time, in whole or in part, by action of its Board of Directors or any duly
authorized committee or officer, subject to the approval of the Management
Committee of IGTS. Any Employing Company may withdraw from participation in the
Plan at any time. No amendment or termination of the Plan or withdrawal
therefrom by an Employing Company shall adversely affect the vested benefits
payable hereunder to any Participant for service rendered prior to the effective
date of such amendment, termination or withdrawal.

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                          Article VIII. Miscellaneous

         8.1 Gender and Number. Whenever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where such would apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in another form in all cases where they
would so apply.

         8.2 Action by the Company. Whenever the Company under the terms of this
Plan is permitted or required to do or perform any act or thing, it shall be
done and performed by an officer or committee duly authorized by the Board of
Directors of IPOC, provided, however, that the amendment or termination of the
Plan shall be subject to the approval of the Management Committee of IGTS.

         8.3 Headings. The headings and subheadings of this Plan have been
inserted for convenience of reference only and shall not be used in the
construction of any of the provisions hereof.

         8.4 Uniformity and Non Discrimination. All provisions of this Plan
shall be interpreted and applied in a uniform nondiscriminatory manner.

         8.5 Governing Law. To the extent that state law has not been preempted
by the provisions of ERISA or any other laws of the United States heretofore or
hereafter enacted, this Plan shall be construed under the laws of the State of
Connecticut.

         8.6 Employment Rights. Nothing in this Plan shall confer any right upon
any Employee to be retained in the service of the Company or any of its
affiliates.

         8.7 Incompetency. In the event that the Plan Administrator determines
that a Participant is unable to care for his affairs because of illness or
accident or any other reason, any amounts payable under this Plan may, unless
claim shall have been made therefor by a duly appointed guardian, conservator,
committee or other legal representative, be paid by the Plan Administrator to
the spouse, child, parent or other blood relative or to any other person deemed
by the Plan Administrator to have incurred expenses for such Participant, and
such payment so made shall be a complete discharge of the liabilities of the
Plan therefor.

Dated: December 31, 1998      IROQUOIS PIPELINE OPERATING COMPANY


                              By:
                                  ----------------------------------------------
                                  Its President and Chief Executive Officer


                              By:
                                  ----------------------------------------------
                                  Its Vice President and Chief Financial Officer


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Dated: December 31, 1998        IROQUOIS GAS TRANSMISSION SYSTEM LIMITED
                                PARTNERSHIP, by its agent IROQUOIS PIPELINE
                                OPERATING COMPANY


                                By:
                                    --------------------------------------------
                                    Its President and Chief Executive Officer


                                By:
                                    --------------------------------------------
                                    Its


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