Document:

exv10w1

 

Exhibit 10.1

First Amendment to Rights Agreement, dated November 1, 2000, between

NiSource Inc. and Mellon Investor Services LLC, f/k/a ChaseMellon Shareholder

Services, L.L.C., as rights agent

THIS FIRST AMENDMENT (“First Amendment”), is dated November 28, 2006, and amends that certain
Rights Agreement, dated November 1, 2000, between NiSource Inc. (“NiSource”) and Mellon Investor
Services LLC, f/k/a ChaseMellon Shareholder Services, L.L.C., as rights agent (the “Rights Agent”).

Background

	A.	 	NiSource and the Rights Agent entered into that certain Rights Agreement, dated November 1,
2000 (the “Rights Agreement”).
	 
	B.	 	Under Section 27 of the Rights Agreement, prior to the Distribution Date (as defined in the
Rights Agreement), NiSource may supplement or amend the Rights Agreement without the approval
of any holders of certificates representing Common Stock and Rights (as defined in the Rights
Agreement).
	 
	C.	 	The Distribution Date has not occurred.
	 
	D.	 	NiSource and the Rights Agent desire to amend the Rights Agreement as provided in this First
Amendment.

Agreement

NOW, THEREFORE, in consideration of the promises and the mutual agreements set forth in this
First Amendment, NiSource and the Rights Agent agree as follows:

	1.	 	Amendment of Section 7(a). Section 7(a) is deleted in its entirety and replaced with the
following:

(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at any
time after the Distribution Date, upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly and properly executed,
to the Rights Agent at the office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth of a share of Preferred Stock as to which
the Rights are exercised, at or prior to the Close of Business on the earliest of
(i) November 29, 2006 (the “Final Expiration Date”), (ii) the date on which the
Rights are redeemed pursuant to Section 23, (iii) consummation of a transaction
pursuant to Section 13(g) (such earliest date being herein referred to as the
“Expiration Date”) or (iv) the time at which such Rights are exchanged pursuant to
Section 24.

	2.	 	Effectiveness. This First Amendment shall be effective on November 28, 2006.

 

 

	3.	 	Counterparts. This First Amendment may be executed in any number of counterparts and each
such counterpart shall for all purposes be deemed to be an original, and all such counterparts
together constitute but one and the same instrument.

Intending to be bound, NiSource and the Rights Agent have executed this First Amendment as of
November 28, 2006.

NiSource Inc.

	 	 	 
	By:  	/s/
Gary W. Pottorff
 	 
	 	Vice President, Administration and Corporate
Secretary	 
	 
	Mellon Investor Services LLC, f/k/a ChaseMellon Shareholder Services, L.L.C.
	 
	By:  	/s/
Thomas Blatchford
 	 
	 	Client Relationship Executiveexv10w2

 

Exhibit 10.2

November 28, 2006

Mr. Gary L. Neale

Chairman

NiSource Inc.

801 E. 86th Avenue

Merrillville, IN 46410

Dear Gary:

     This letter agreement will modify the terms of the letter agreement between us dated May 20,
2005 governing your compensation as a non-employee director and Chairman of the Board of Directors
of NiSource Inc. This amendment reflects your desire and the Board’s agreement that you resign as
Chairman at the conclusion of the November 2006 Board of Directors meeting and not stand for
reelection to the Board of Directors at the Annual Meeting of Shareholders in 2007.

     This amendment amends and restates the paragraphs of the May 20, 2005 letter agreement
captioned “Term”, “Compensation”, and “Early Termination”. In all other respects the provisions of
the May 20, 2005 letter agreement will remain in full force and effect.

     The amended and restated provisions are set forth below:

     Term. The initial term of this letter agreement will be from July 1, 2005 through May
8, 2007.

     Compensation. You will be compensated at a rate of $50,000 per calendar quarter, or
part thereof, through November 28, 2006 payable in arrears within ten days after the close of each
such quarter and by a final payment of $100,000 on January 3, 2007.

     Early Termination. Notwithstanding the other provisions of this letter agreement, in
the event of your death, or disability, or the termination of this letter agreement by mutual
understanding, compensation, service credit and any other benefits will be provided on a pro rata
basis, through the date of your death or disability or such termination, as applicable.

     Upon your acceptance and execution of this amendment it will become a binding agreement
between you and NiSource Inc.

 

 

	 	 	 	 	 
	 	Sincerely,

NiSOURCE INC.

 	 
	 	By:  	/s/Robert C. Skaggs
 	 
	 	 	Robert C. Skaggs, President 	 
	 	 	 	 
	 

Accepted by and agreed to this 28th

day of November, 2006

/s/ Gary L. Neale                                        

Gary L. Neale

	 	 	 
	cc:

	 	Ian M. Rolland, Chairman
	 

	 	Corporate Governance Committee
	 
	 	 
	 

	 	Dr. Stephen C. Beering, Chairman
	 

	 	Officer Nomination and Compensation Committeeexv10w3

 

Exhibit 10.3

 

	 	 	 
	POLICY SUBJECT:

	 	Executive Severance Policy
	 
	 	 
	EFFECTIVE DATE:

	 	June 1, 2002
	 
	 	 
	REVISED:

	 	November 28, 2006

	1.	 	Purpose. The NiSource Executive Severance Policy (“Policy”) was established to
provide Severance Pay and other benefits to terminated executive-level employees of NiSource
Inc. and certain subsidiaries and affiliate corporations (“Company”) who satisfy the terms of
the Policy. Benefits under the Policy shall be in lieu of any benefits available under the
NiSource Severance Policy or any other severance plan or policy maintained by the Company or
any Affiliate; provided however that benefits will not be payable under the Policy if the
relevant termination of employment results in the employee being eligible for a payment under
a Change in Control and Termination Agreement. The Policy is amended and restated effective
November 28, 2006.
	 
	2.	 	Administration. The Policy is administered by the Officer Nomination and
Compensation Committee of the Board of Directors of the Company (“Committee”). The Committee
has the complete discretion and authority with respect to the Policy and its application. The
Committee reserves the right to interpret the Policy, prescribe, amend and rescind rules and
regulations relating to it, determine the terms and provisions of severance benefits and make
all other determinations it deems necessary or advisable for the administration of the Policy.
The determination of the Committee in all matters regarding the Policy shall be conclusive
and binding on all persons. The Committee may delegate any of its duties under the Policy to
the Senior Vice President of Human Resources.
	 
	3.	 	Scope. The Policy will apply to all full-time or part-time regular, non-union
employees of the Company and each of its affiliated entities (collectively, “Affiliates” and
each an “Affiliate”) whose job scope level, as established by the Company, is D2 (or its
equivalent) or above (“Participants”).
	 
	4.	 	Eligibility for Severance Pay. A Participant becomes entitled to receive severance
pay (“Severance Pay”) only if he or she is terminated by an Affiliate for any of the following
reasons, and the conditions described in Section 5 below are met:

	 	(a)	 	The Participant’s position is eliminated due to a reduction in force or other
restructuring.
	 
	 	(b)	 	The Participant’s position is required by the Company to relocate more than 50
miles from its current location and the Participant chooses not to relocate.

 

 

	 	(c)	 	The Participant’s employment is constructively terminated. Constructive
termination means (1) the scope of the Participant’s position is changed materially or
(2) the Participant’s base pay is reduced by a material amount or (3) the Participant’s
opportunity to earn a bonus under a short-term cash incentive compensation plan of the
Affiliates is materially reduced or is eliminated, and, in any such event, the
Participant chooses not to remain employed in such position. If a Participant does not
assert constructive termination within 14 days of being informed of a change described
in (1), (2) or (3) above, in a written instrument delivered to the Senior Vice
President of Human Resources, such change will not be deemed a constructive
termination. The decision as to whether such a change constitutes constructive
termination shall be made by the Committee, not the Participant. If the Participant
disagrees, the Participant must follow the claims procedure set forth in Section 14.

	5.	 	Conditions to Receipt of Benefits.

	 	(a)	 	Severance Pay is not available to a Participant otherwise eligible for
Severance Pay who transfers to another position with any Affiliate.
	 
	 	(b)	 	Severance Pay is not available to a Participant whose position is eliminated
due to (1) the sale of the Affiliate which employs the Participant on the date of
termination or (2) the outsourcing of work, where in either such event the purchaser of
the Affiliate or the outsourcing service provider makes an offer of employment to the
Participant that, if it were an Affiliate, would not constitute “constructive
termination” as described in Section 4(c).
	 
	 	(c)	 	During the period in which a Participant is entitled to consider the execution
of the release described in Section 6, or during such other period as is otherwise
agreed to by the Company and the Participant, he or she may be required to complete
unfinished business projects and be available for discussions regarding matters
relative to the Participant’s duties.
	 
	 	(d)	 	A Participant must return all Affiliate property and information to the
Affiliate.
	 
	 	(e)	 	A Participant must agree to pay all outstanding amounts owed to any Affiliate
and authorize the Affiliate to withhold any outstanding amounts from his or her final
paycheck and/or Severance Pay.

	6.	 	Amount of Severance Pay. The amount of Severance Pay to which a Participant is
entitled under the Policy is 52 weeks of base salary at the rate in effect on the date of
termination.
	 
	 	 	A Participant who is receiving benefits under a short term disability plan maintained by any
Affiliate will be entitled to Severance Pay at the end of the period of payment of short
term disability if, and only if, (1) he or she is not then eligible for benefits under a
long term disability plan maintained by an Affiliate, and (2) he or she is not offered
employment with an Affiliate that, in the discretion of the Committee, is comparable to that
held by the Participant at the time the applicable period of short term disability

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	 	 	commenced. A Participant will not be entitled to Severance Pay at the end of the period of
long term disability.

	 	 	Severance Pay will be paid to a Participant in one lump sum cash payment. Payment will be
made as soon as practicable after the last to occur of (1) the date of the Participant’s
termination of employment, (2) the effective date of the Participant’s release of (i) the
Affiliates, and their respective officers, directors and employees, from any and all
actions, suits, proceedings, claims and demands relating to the Participant’s employment
with the Affiliates and the termination thereof, and (ii) all rights and benefits required
under the NiSource Severance Policy or any other severance policy or plan maintained by any
Affiliate, and (3) the satisfaction of the conditions described in clauses (c), (d) and (e)
of Section 5. Severance Pay shall be reduced by applicable amounts necessary to comply with
federal, state and local income tax withholding requirements.

	7.	 	Benefits.

	 	(a)	 	Welfare Benefits. A Participant entitled to Severance Pay shall
receive, at the time of payment of Severance Pay, a lump sum payment equivalent to 130%
of 52-weeks of COBRA (as defined in Section 4980B of the Internal Revenue Code of 1986,
as amended, and Sections 601-609 of the Employee Retirement Income Security Act of
1974, as amended, or any successor sections) continuation coverage premiums in lieu of
any continued medical, dental, vision, and other welfare benefits offered by the
Company or any Affiliate. Such 52-week period of COBRA continuation coverage shall be
included as part of the period during which the Participant may elect continued group
health coverage under COBRA.
	 
	 	(b)	 	Outplacement Services. A Participant entitled to Severance Pay shall
receive outplacement services, selected by the Company at its expense, for a period
commencing on the date of termination of employment and continuing until the earlier to
occur of the Participant accepting other employment or 12 months thereafter.

	8.	 	Independent Contractor Status. A Participant who receives benefits pursuant to the
Policy shall not be eligible at any time after termination of employment to enter into a
consulting or independent contractor relationship with any Affiliate pursuant to which
relationship he or she shall perform the same or similar services, upon the same or similar
terms and conditions, as were applicable to such Participant on the date of termination of
employment.
	 
	9.	 	Death of Participant. If a Participant dies prior to receiving Severance Pay to
which he or she is entitled under the Policy, payment will be made to the representative of
his or her estate.
	 
	10.	 	Term of Policy. The term of the Policy, as amended and restated herein, will
commence on February 1, 2006 and will expire on December 31, 2007.

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	11.	 	Amendment or Termination.

	 	(a)	 	The Policy may be amended or terminated by the Committee at any time during its
term when, in its judgment, such amendment or termination is necessary or desirable.
No such termination or amendment will affect the rights of any Participant who is then
entitled to receive Severance Pay or other benefits under the Policy at the time of
such amendment or termination. The Policy can only be changed by written endorsement
by an officer of the Company and only when the Company attaches the written amendment
to the Policy. No agent or other employee, other than an officer of the Company, has
the authority to change or waive any provision of the Policy.
	 
	 	(b)	 	Severance benefits under the Policy are not intended to be a vested right.

	12.	 	Governing Law. The terms of the Policy shall, to the extent not preempted by federal
law, be governed by, and construed and enforced in accordance with, the laws of the State of
Indiana, including all matters of construction, validity and performance.
	 
	13.	 	Miscellaneous Provisions.

	 	(a)	 	Severance Pay and other benefits pursuant to the Policy shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge prior to actual receipt by a Participant, and any attempt to so anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge prior to such receipt
shall be void and no Affiliate shall be liable in any manner for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person entitled to any
Severance Pay or other benefits under the Policy.
	 
	 	(b)	 	Nothing contained in the Policy shall confer upon any individual the right to
be retained in the service of any Affiliate, nor limit the right of any Affiliate to
discharge or otherwise deal with any individual without regard to the existence of the
Policy.
	 
	 	(c)	 	The Policy shall at all times be entirely unfunded. No provision shall at any
time be made with respect to segregating assets of any Affiliate for payment of any
Severance Pay or other benefits hereunder. No employee or any other person shall have
any interest in any particular assets of any Affiliate by reason of the right to
receive Severance Pay or other benefits under the Policy, and any such employee or any
other person shall have only the rights of a general unsecured creditor of an Affiliate
with respect to any rights under the Policy.

	14.	 	Claims Procedure. If a claim for benefits under the Policy by a Participant or his
or her beneficiary 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 of the claim; will have specific references to the
Policy provisions upon which the denial is based; will describe any additional material or

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	 	 	information necessary for the claimant to perfect the claim and explain why such material
information is necessary; and will have an explanation of the Policy’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 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 may 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 or she may wish. The decision of the Committee will
tell the claimant the specific reasons for its actions, and refer the claimant to the
specific Policy provisions upon which its decision is based.

	15.	 	Rights Under ERISA. Each Participant in the Policy is entitled to certain rights and
protection under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
ERISA provides that all Policy Participants shall be entitled to:

	 	(a)	 	Examine, without charge, at the Company’s office all Policy documents.
	 
	 	(b)	 	Obtain copies of all Policy documents and other Policy information upon written
request to the Committee. The Committee may make a reasonable charge for the copies.

	 	 	In addition to creating rights for Policy Participants, ERISA imposes duties upon the people
who are responsible for the operation of an employee benefit plan. The people who operate
the Policy, called “fiduciaries” of the Policy, have a duty to do so prudently and in the
interest of the Policy Participants and beneficiaries. No one, including the
Company, any affiliate or any other person, may fire a Participant or otherwise discriminate
against a Participant in any way to prevent him or her from obtaining a benefit or
exercising his or her rights under ERISA. If a Participant’s claim for a benefit is denied
in whole or in part, he or she must receive a written explanation of the reason for the
denial. A Participant has the right to have the Committee review and reconsider his or her
claim. Under ERISA, there are steps a Participant can take to enforce the above rights.
For instance, if a Participant requests materials from the Committee and does not receive
them within thirty (30) days, he or she may file suit in a federal court. In such a case
the court may require the Committee to provide the materials and pay the Participant up to
$110 a day until the Participant receives the materials, unless the materials were not sent
because of reasons beyond the control of the Committee. If a Participant has a claim for
benefits, which is denied or ignored, in whole or in part, he or she may file suit in a
state or federal court. If it should happen that the Policy fiduciaries misuse the Policy’s
money, or if a Participant is discriminated against for asserting his or her rights, he or
she may ask assistance from the United States Department of Labor, or he or she may file
suit in a federal court. The court will decide who should pay the court costs and legal
fees. If the Participant is successful, the court may order the person he or she has sued
to pay these costs and fees. If the Participant loses, the court may order him or her to
pay these costs and fees, for example, if it finds his or her claim to be frivolous.

5

 

	 	 	If a Participant has questions about the Policy, he or she should contact the Committee. If
a Participant has any questions about this statement or about his or her rights under ERISA,
he or she should contact the nearest Area Office of the United States Labor-Management
Services Administration, Department of Labor.

	16.	 	Policy Facts:

	 	 	 
	Company:	 	NiSource Inc.
	Address:	 	801 E. 86th Avenue
	 	 	Merrillville, Indiana 46410
	Plan Name:

	 	NiSource Executive Severance Policy
	Type of Plan:

	 	Severance Policy-Welfare Benefits Plan
	Policy Year:

	 	Calendar year
	Employer Identification Number (EIN):

	 	35-1719974
	Policy Administrator:

	 	Officer Nomination and Compensation Committee of NiSource Inc.
	Business Address:

	 	801 E. 86th Avenue

Merrillville, Indiana 46410
	Agent for Service of Legal Process:

	 	Officer Nomination and Compensation

Committee of NiSource Inc.
	(Address)

	 	801 E. 86th Avenue

Merrillville, Indiana 46410

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