Document:

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                                                                  EXHIBIT 10.19

                             NIPSCO INDUSTRIES, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

               AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 1, 1994

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                             NIPSCO INDUSTRIES, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

               AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 1, 1994

                                    ARTICLE I

                                     Purpose

     Effective as of December 23, 1982, and as subsequently amended as of
January 1, 1989, Northern Indiana Public Service Company adopted the Northern
Indiana Public Service Company Supplemental Executive Retirement Plan. Effective
as of January 1, 1991, NIPSCO Industries, Inc. (the "Company") adopted the
NIPSCO Industries, Inc. Supplemental Executive Retirement Plan (the "Plan"), to
benefit the Company by providing key executives and employees with additional
security in order to aid the Company in retaining its present management and,
should circumstances require it, to aid the Company in attracting additions to
management. The Company, by providing such additional benefits, expects key
executives and employees to be available for consulting assignments to the
Company after retirement, at the Company's request. The Plan was amended and
restated, effective January 1, 1993 in order to clarify certain provisions. The
Plan is being further amended and restated effective September 1, 1994.

     It is intended that the Plan be exempt from the reporting and disclosure
requirements of Title 1 of the Employee Retirement Income Security Act of 1974
because it is an unfunded plan maintained by an employer for the purpose of
providing benefits for a select group of management or highly compensated
employees.

                                   ARTICLE II

                                   Definitions

2.1  Definitions: Where the following words or phrases appear in the Plan, they
     shall have the respective meanings set forth in the following Sections of
     this Article, unless the context clearly indicates to the contrary.

2.2  Principal Entities:

     a.   Plan: NIPSCO Industries, Inc. Supplemental Executive Retirement Plan.

     b.   Company: NIPSCO Industries, Inc., and its subsidiaries and affiliates
          that adopt the Plan for the benefit of key employees, or its successor
          or successors.

     c.   NIPSCO Pension Plan: NIPSCO Industries, Inc. and Northern Indiana
          Public Service Company Pension Plan Provisions Pertaining to Salaried
          and Non-Exempt Employees, as amended from time to time.

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     d.   Committee: The Committee appointed by the Company to administer the
          Plan.

     e.   Participant: An employee or retiree participating in the Plan in
          accordance with the provisions of Article III.

2.3  Other Definitions:

     a.   Pension: A series of monthly amounts that are payable to a person who
          is entitled to receive benefits under the Plan.

     b.   Retirement: A Participant's Normal or Early Retirement.

     c.   Normal Retirement: Termination of employment for reasons other than
          death or disability after a Participant has: (1) attained age 62
          years; or (2) attained age 60 years and completed at least 25 years of
          Service, except as otherwise provided.

     d.   Early Retirement: Termination of employment for reasons other than
          death or disability after the Participant both has attained age 55 and
          completed at least ten (10) years of Service, but before the
          Participant's Normal Retirement, except as otherwise provided.

     e.   Service: A Participant's or employee's employment or service with the
          Company, as defined in the NIPSCO Pension Plan, or such other
          employment or service date as determined by the Board of Directors of
          the Company.

     f.   Compensation: As defined in the NIPSCO Pension Plan, but disregarding
          the definition of Taxable Compensation and the limitations required by
          Code Section 401(a)(17). In addition, for purposes of this Plan,
          bonuses shall be considered in full as compensation and not limited to
          50% of base pay.

     g.   Final Average Compensation: The result obtained by dividing the total
          Compensation paid to a Participant during a considered period by the
          number of months for which such Compensation was received. The
          considered period shall be the sixty (60) consecutive calendar months
          within the last 120 months of service which produces the highest
          result.

     h.   Primary Social Security Benefit: The monthly amount available to a
          Participant at age 65 (or at Retirement, if later) under the
          provisions of title II of the Social Security Act in effect at the
          time of termination of employment, assuming the following:

          (1)  The Participant attained age 65 in the year of Retirement, and

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          (2)  The Participant earned maximum taxable wages under Section
               3121(a)(1) of the Code in all years prior to the year of
               Retirement. A Participant's Primary Social Security Benefit Will
               be deducted in accordance with Article IV, even though he may not
               be receiving or may not be eligible to receive Social Security
               benefits.

     i.   Code: The Internal Revenue of Code of 1986, as amended.

                                   ARTICLE III

                                  Participation

The Board of Directors of the Company shall select which key employees of the
Company will participate in the Plan. In accordance with Article I (Purpose), it
is intended that officers and certain other employees be eligible for
participation.

After the Board of Directors of the Company approves participation for an
individual, the Company will provide the individual with a notice of
participation in the Plan and a description of the Plan.

                                   ARTICLE IV

                                  Plan Benefits

4.1  Supplemental Retirement Pension: Upon Normal Retirement, a Participant
     shall be eligible for a monthly Supplemental Retirement Pension calculated
     on a single-life basis equal to the larger of (a) or (b) below, reduced in
     each case by the single-life pension the Participant is eligible to receive
     under the NIPSCO Pension Plan.

     a.   The sum of:

     (1)  1.7% of the Participant's Final Average Compensation multiplied by the
          Participant's Service to a maximum of 30 years; plus

     (2)  0.6% of the Participant's Final Average Compensation multiplied by the
          Participant's Service in excess of 30 years.

     b.   The sum of:

     (1)  3% of the Participant's Final Average Compensation multiplied by the
          Participant's Service to a maximum of 20 years; plus

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     (2)  0.5% of the Participant's Final Average Compensation multiplied by the
          Participant's Service in excess of 20 years, to a maximum of 30 years;

     (3)  less 5% of the Participant's Primary Social Security Benefit,
          multiplied by the Participant's Service to a maximum of 20 years.

     Upon Early Retirement, a Participant shall be eligible for a monthly
     Supplemental Retirement Pension in a reduced amount (as described in
     Section 4.2 below).

4.2  Reduction for Early Retirement: A Participant who terminates employment
     prior to Normal Retirement, but after Early Retirement, shall be eligible
     for a monthly Supplemental Retirement Pension in an amount determined in
     accordance with Section 4.1 above, but reduced as follows: (i) by six
     percent (6%) for each of the first two (2) years and four percent (4%) for
     each of the next five (5) years that commencement of the Participant's
     Supplemental Retirement Pension precedes the date that the Participant
     would attain age 62 years; or (ii) if the Participant had completed 25
     years of Service at the time of his termination, by six percent (6%) for
     the first year and four percent (4%) for each of the next four (4) years
     that commencement of the Participant's Supplemental Retirement Pension
     precedes the date that the Participant would attain age 60 years, with a
     pro rata reduction for any fraction of a year.

4.3  Termination of Employment Prior to Early Retirement: Upon termination of
     employment prior to Early Retirement, a Participant shall be eligible for a
     monthly Supplemental Retirement Pension, calculated on a single-life basis
     equal to the excess, if any, of the pension the Participant would be
     eligible to receive under the NIPSCO Pension Plan, if the limitations
     required by Code Sections 401(a)(17) and 415, the limitation on bonuses to
     50% of base pay and the potential limitations relating to Taxable
     Compensation were not applied, over the pension the Participant is eligible
     to receive under the NIPSCO Pension Plan, and commencing on the same date
     as the pension under the NIPSCO Pension Plan.

4.4  Supplemental Disability Pension: If a Participant becomes disabled (as
     determined by the Committee) while in the active employment of the Company
     prior to age 65, the Participant shall be eligible for a monthly
     Supplemental Disability Pension to age 65, calculated on a single-life
     basis, and equal to the larger of (a) or (b) below, reduced in each case by
     the basic benefit the Participant is eligible to receive under the
     long-term group disability insurance coverage provided under the NIPSCO
     options benefit plan.

     a.   The sum of:

          (1)  1.7% of the Participant's Final Average Compensation multiplied
               by the Participant's Service to a maximum of 30 years, plus

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          (2)  0.6% of the Participant's Final Average Compensation multiplied
               by the Participant's Service in excess of 30 years.

     b.   The sum of:

          (1)  3% of the Participant's Final Average Compensation multiplied by
               the Participant's Service to a maximum of 20 years; plus

          (2)  0.5% of the Participant's Final Average Compensation multiplied
               by the Participant's Service in excess of 20 years, to a maximum
               of 30 years;

          (3)  less 5% of the Participant's Primary Social Security Benefit,
               multiplied by the Participant's Service to a maximum of 20 years.

     After age 65, the Participant shall be eligible for a monthly Supplemental
     Retirement Pension in accordance with Section 4.1, based on Service the
     Participant would have had if the Participant had continued working to age
     65, the Participant's Final Average Compensation at the time he became
     disabled, the Primary Social Security Benefit determined at the time the
     Participant became disabled, and the single-life pension the Participant is
     entitled to receive at age 65 from the NIPSCO Pension Plan, determined at
     the time he became disabled.

4.5  Supplemental Spouse Pension: Upon the death of a Participant in active
     employment, his or her spouse, if any, shall be eligible to receive a
     monthly Supplemental Spouse Pension equal to the greater of:

     a.   25% of the Participant's Final Average Compensation; or

     b.   the monthly amount that would have been payable to such surviving
          spouse if the Participant had elected payment of his monthly
          Supplemental Retirement Pension in the form of a reduced 50% joint and
          survivor pension, with his spouse as the contingent annuitant,
          terminated employment (on the date of his actual death) and then died
          immediately prior to the commencement of payments.

     The Supplemental Spouse Pension shall commence in the month next following
     the month of the Participant's death and continue for the life of such
     spouse. In the event that the Supplemental Spouse Pension calculated under
     option a. of this Section will provide a greater benefit to the spouse
     immediately following the Participant's death, but option b. of this
     Section will provide a greater monthly benefit as of the date the
     Participant would have attained age 55, the amount of monthly Supplemental
     Spouse Pension payable to the surviving spouse shall be: (1) calculated and
     payable under option a. during the period immediately following the
     Participant's death; and (2) recalculated and payable according to option
     b. beginning on the date the Participant would have attained age 55.
     Beginning on the earliest date that the surviving spouse could have begun
     receiving a benefit under the NIPSCO Pension Plan, the Supplemental Spouse
     Pension payable under this Section shall be reduced by the amount of
     benefit under the NIPSCO Pension Plan that the spouse is (or would have
     been) entitled to receive.

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4.6  Optional Forms of Payment: In lieu of the single-life pension described in
     Section 4.1, a Participant may elect to receive a reduced 50% joint and
     survivor pension with his or her spouse as the contingent annuitant. The
     reduction in the Participant's pension will be computed in the same manner
     as in the NIPSCO Pension Plan.

4.7  Retiree Death Benefit: Upon the death of a retired Participant, a lump-sum
     death benefit equal to 50% of his or her retiree group life insurance shall
     be paid to the retiree's beneficiary.

4.8  Cost of Living Adjustment: The benefits payable under Sections 4.1 through
     4.6 shall be increased in the same percentage and at the same time as cost
     of living adjustments are made to the pensions of salaried employees of the
     Company under the NIPSCO Pension Plan.

4.9  Small Benefit Amounts: At the discretion of the Committee, small benefits
     may be paid in quarterly, semi-annual or annual installments, or in a
     single lump sum.

                                    ARTICLE V

                                  Miscellaneous

5.1  Plan Financing: Except as set forth below, benefits under this Plan shall
     be paid from the general assets of the Company. To the extent any
     Participant acquires a right to receive payments hereunder, such right
     shall be no greater than the right of any other unsecured creditor of the
     Company. Notwithstanding the foregoing, the Company shall enter into a
     trust agreement ("Trust Agreement") whereby the Company shall agree to
     contribute to a trust ("Trust") for the purpose of accumulating assets to
     assist the Company in fulfilling its obligations to Participants hereunder.
     Such Trust shall include the provision that all assets of the Trust shall
     be subject to the creditors of the Company in the event of insolvency.

5.2  Non-Compete and Related Provisions: Benefits under this Plan may be
     forfeited if:

     a.   A Participant, while employed by the Company or within a period of
          three (3) years after the Participant's termination of employment for
          any reason, including Retirement (the "Restrictive Period"), engages
          in activity or employment that directly or indirectly competes with
          the business of the Company, including, but not by way of limitation,
          by directly or indirectly owning, managing, operating, controlling,
          financing, or by directly or indirectly serving as an employee,
          officer or director of or consultant to, or by soliciting or inducing,
          or attempting to solicit or induce, any employee or agent of the
          Company to terminate employment with the Company, and become employed
          by, any person, firm, partnership, corporation, trust or other entity
          that provides commodities, products or services to customers of the
          Company of the same type as commodities, products or services provided
          by the Company (the "Restrictive Covenant"). The foregoing Restrictive
          Covenant shall not prohibit a Participant from owning directly or
          indirectly capital stock or similar securities

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          which are listed on a securities exchange or quoted on the National
          Association of Securities Dealers Automated Quotation System which do
          not represent more than one percent (1%) of the outstanding capital
          stock of any such entity; or

         b.       A Participant performs any action or makes any statement that
                  is detrimental to the Company, unless such action or statement
                  is retracted to the Company's satisfaction after the
                  Participant is notified regarding such action or statement.

5.3  Nonguarantee of Employment: Participation in the Plan does not limit the
     right of the Company to discharge any individual with or without cause.

5.4  Nonalienation of Benefits: A Participant may not assign or transfer any
     benefits under this Plan.

5.5  Plan Amendment or Termination: The Chairman of the Board of Directors may
     amend any provision of this Plan except for Article III and Article IV,
     which may only be amended by the Company. The Company may terminate the
     Plan at any time, except that any benefits that are payable due to a
     retirement, death or disability occurring prior to the amendment or
     termination shall not be reduced or discontinued. No amendment or
     termination of the Plan shall directly or indirectly deprive any current or
     former Participant (or beneficiary) of all or any portion of any
     Supplemental Retirement Benefit or surviving spouse benefit, the payment of
     which has commenced prior to the effective date of such amendment or
     termination, or which would be payable if the Participant terminated
     employment for any reason on such effective date. Upon termination of the
     Plan, distribution of Supplemental Retirement Benefits and any surviving
     spouse benefits shall be made to Participants, spouses or beneficiaries in
     the manner and at the time described in Article IV of the Plan. No
     additional Supplemental Retirement Benefits shall be earned after
     termination of the Plan, except as provided in Section 6.3.

5.6  Indemnification:

     a.   Limitation of Liability: Notwithstanding any other provision of the
          Plan or the Trust, none of the Company or any 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 eligible 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.

     b.   Indemnity: The Company shall indemnify and hold harmless each member
          of the Committee, or any employee of the Company or any individual
          acting as an employee or agent of either of them (to the extent not
          indemnified or saved harmless

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          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 made in
          good faith pursuant to the provisions of the Plan, including expenses
          reasonably incurred in the defense of any claim relating thereto 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 the person is entitled to be
          indemnified by the Company pursuant to this paragraph.

     c.   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
          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.

5.7  Action by Company: Any action required or permitted of the Company under
     the Plan shall be by resolution of its Board of Directors or by a duly
     authorized committee of its Board of Directors, or by a person or persons
     authorized by resolution of its Board of Directors or such committee.

                                   ARTICLE VI

                                Change in Control

6.1  Change in Control: A Change in Control shall be deemed to take place on the
     occurrence of any of the following events:

     a.   The acquisition by an entity, person or group (including all
          Affiliates or Associates of such entity, person or group) of
          beneficial ownership, as that term is defined in Rule 13d-3 under the
          Securities Exchange Act of 1934, of capital stock of the Company
          entitled to exercise more than thirty percent (30%) of the outstanding
          voting power of all capital stock of the Company entitled to vote in
          elections of directors ("Voting Power");

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     b.   The effective time of (i) a merger or consolidation of the Company
          with one or more other corporations as a result of which the holders
          of the outstanding Voting Power of the Company immediately prior to
          such merger or consolidation (other than the surviving or resulting
          corporation or any Affiliate or Associate thereof) hold less than
          fifty percent (50%) of the Voting Power of the surviving or resulting
          corporation, or (ii) a transfer of thirty percent (30%) of the Voting
          Power, or a Substantial Portion of the Property, of the Company other
          than to an entity of which the Company owns at least fifty percent
          (50%) of the Voting Power; or

     c.   The election to the Board of Directors of the Company of candidates
          who were not recommended for election by the Board of Directors of the
          Company in office immediately prior to the election, if such
          candidates constitute a majority of those elected in that particular
          election.

     d.   For purposes of this Article, the term: (1) "Affiliates and
          Associates" shall have the meaning given it in Rule 12b-2 under the
          Securities Exchange Act of 1934; and (2) "Substantial Portion of the
          Property of the Company" shall mean fifty percent (50%) of the
          aggregate book value of the assets of the Company and its Affiliates
          and Associates as set forth on the most recent balance sheet of the
          Company, prepared on a consolidated basis, by its regularly employed,
          independent, certified public accountants.

     e.   Notwithstanding the foregoing, a Change in Control shall not be deemed
          to take place with respect to a Participant by virtue of any
          transaction in which the Participant is a participant in a group
          effecting an acquisition of the Company and, after such acquisition,
          the Participant holds an equity interest in the entity that has
          acquired the Company.

6.2  Potential Change in Control: A "Potential Change in Control" shall include
     any of the following:

     a.   The delivery to the Company by any "person," as defined in Section
          13(d) (3) of the Act, of a statement containing the information
          required by Schedule 13-D under the Act, or any amendment to any such
          statement, that shows that such person has acquired, directly or
          indirectly, the beneficial ownership of (i) more than twenty percent
          (20%) of any class of equity security of the Company entitled to vote
          as a class in the election or removal from office of directors, or
          (ii) more than twenty percent (20%) of the voting power of any group
          of classes of equity securities of the Company entitled to vote as a
          single class in the election or removal from office of directors.

     b.   The Company becomes aware that preliminary or definitive copies of a
          proxy statement and information statement or other information have
          been filed with the Securities and Exchange Commission pursuant to
          Rule 14a-6, Rule 14c-5, or Rule 14f-1 under the Act relating to a
          proposed change in control of the Company.

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     c.   The delivery to the Company pursuant to Rule 14d-3 under the Act of a
          Tender Offer Statement relating to equity securities of the Company.

     d.   The Board of Directors of the Company adopts a resolution to the
          effect that for purposes of this Trust a Potential Change in Control
          has occurred.

6.3  Additional Service and Compensation Upon Change in Control: With respect to
     a Participant who, pursuant to contract with the Company, is entitled to
     compensation from the Company for an additional 36 months in the event
     that, within 24 months after a Change in Control, the Participant's
     employment is terminated by the Company for any reason other than Good
     Cause, or the Participant terminates employment with the Company for Good
     Reason, such Participant's years of Service under Section 2.3 and
     Supplemental Retirement Pension under Section 4.1 of the Plan shall be
     calculated as if the Participant had continued in employment with the
     Company for an additional 36 months, at the rate of Compensation in effect
     immediately prior to his employment termination; provided that, in no event
     shall the counting of a Participant's Compensation during this 36 month
     period reduce his Final Average Compensation figure below its highest level
     prior to the Participant's termination of employment.

6.4  Waiver of Service and Age Requirements Upon Change in Control: A
     Participant whose employment is terminated upon or after a Change in
     Control, but prior to Early Retirement shall be eligible for the
     Supplemental Retirement Pension specified in Section 4.1, rather than the
     Supplemental Retirement Pension specified in Section 4.3, commencing at
     Normal Retirement, except that the Participant may elect to begin receiving
     such Supplemental Retirement Pension at any time after attaining age 55
     years, subject to the reduction specified in Section 4.2.

6.5  Funding of Plan Benefits Upon Change in Control: Upon a Potential Change in
     Control, the Committee shall identify the amount by which the present value
     of all benefits earned to date under the Plan (after offsets) exceeds the
     value of the applicable Trust assets, calculated using the Pension Benefit
     Guaranty Corporation immediate annuity interest rate as of the date of the
     Potential Change in Control, the 1983 GAM mortality tables, and the most
     valuable optional payment form (the "Full Funding Amount"), and the Company
     shall contribute such Full Funding Amount to the Trust. Each Participant's
     benefits for purposes of calculating present value shall be the highest
     benefit the Participant would have under the Plan within the six (6) months
     following a Potential Change in Control, assuming that the Participant's
     employment continues for six (6) months at the same rate of Compensation,
     and that the Participant receives any benefit enhancement provided by the
     Plan, or any other agreement, upon a Change in Control.

6.6  Plan Administration and Amendment Upon a Change in Control: Upon and after
     a Change in Control, the Company no longer shall have the power to appoint
     or remove members of the Committee, nor the power to approve legal counsel
     or actuaries employed by the Committee. Upon and after a Change in Control
     only the Committee members shall have the power to appoint or remove
     members. If, at any time after a Change in Control, all

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     members of the Committee have been removed or resigned, then all of the
     powers, rights and duties vested in the Committee by Article VII below
     shall be vested in the trustee of the Trust.

6.7  Committee Discretion to Pay Lump Sum After a Change in Control: Upon and
     after a Change in Control, the Committee may, in its sole discretion,
     distribute, or cause the trustee under the Trust to distribute, to a
     Participant the present value (determined in accordance with the
     assumptions in Section 6.5) of the Participant's Supplemental Retirement
     Pension, Supplemental Disability Pension, and any other benefit payable
     under this Plan, in a lump sum payment.

6.8  Definitions:

     a.   Good Cause: shall be deemed to exist if, and only if the Participant:
          (1) engages in acts or omissions constituting dishonesty, intentional
          breach of fiduciary obligation, intentional wrongdoing or malfeasance,
          in each case that results in substantial harm to the Company; or (2)
          is convicted of a criminal violation involving fraud or dishonesty.

     b.   Good Reason: shall exist if: (1) there is a significant change in the
          nature or scope of the Participant's authority or duties; (2) there is
          a significant reduction in the Participant's monthly rate of Base
          Salary or benefits; or (3) the Company changes by 100 miles or more,
          the principal location in which the Participant is required to perform
          services.

                                   ARTICLE VII

                       Plan Administration: The Committee

7.1  Committee Membership: The Company shall appoint a Committee to administer
     the Plan. A Committee member may resign at any time by giving thirty days'
     advance written notice to the Company and the other Committee members. The
     Company may remove a Committee member by giving advance written notice to
     him and the other Committee members.

7.2  General Powers, Rights and Duties: The committee has the following powers,
     rights and duties in addition to those given it elsewhere in the Plan:

     a.   To select a chairman and secretary, if it believes it advisable, who
          may, but need not, be Committee members.

     b.   To interpret the Plan and determine all questions arising in the
          administration, interpretation and application of the Plan, including,
          but not limited to the power to determine the rights or eligibility of
          employees or

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          Participants and their beneficiaries, and the amount of their
          respective benefits under the Plan, and to remedy ambiguities,
          inconsistencies or omissions.

     c.   To adopt such rules of procedure and regulations as in its opinion may
          be necessary for the proper and efficient administration of the Plan
          and as are consistent with the Plan.

     d.   To enforce the Plan and the rules and regulations, if any, adopted by
          the Committee as above.

     e.   To direct the trustee as respects benefit payments or other
          distributions from the Trust fund pursuant to the provisions of the
          Plan.

     f.   To furnish the Company with such information as may be required by it
          for tax or other purposes as respects the Plan.

     g.   To employ agents, attorneys, accountants, actuaries or other persons
          (who also may be employed by the Company) and to allocate or delegate
          to them such powers, rights and duties as the Committee may consider
          necessary or advisable to properly carry out the administration of the
          Plan, including maintaining the accounts of Participants, provided
          that such allocation or delegation, and the acceptance thereof by such
          agents, attorneys, accountants, actuaries or other persons, shall be
          in writing.

7.3  Manner of Action: During a period in which two or more Committee members
     are acting, the following provisions shall apply where the context admits:

     a.   A Committee member by writing may delegate any or all of his rights,
          powers, duties and discretion to any other Committee member, with the
          consent of the latter.

     b.   The Committee members may act by meeting, or by writing signed without
          meeting, and may sign any document by signing one document or concur
          rent documents.

     c.   An action or a decision of a majority of the Committee members as to a
          matter shall be as effective as if taken or made by all Committee
          members.

     d.   If, because of the number qualified to act, there is an even division
          of opinion among the Committee members as to a matter, the Company
          shall decide the matter; except that this provision shall not apply
          upon or after a Change in Control.

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     e.   The certificate of the secretary of the Committee or of a majority of
          the Committee members that the Committee has taken or authorized any
          action shall be conclusive in favor of any person relying on the
          certificate.

7.4  Information Required by Committee: The Company shall furnish the Committee
     with such data and information as the Committee may deem necessary or
     desirable in order to administer the Plan. The records of the Company as to
     an employee's or Participant's period or periods of employment, termination
     of employment and the reason therefor, reemployment and Compensation will
     be conclusive on all persons unless determined to the Committee's
     satisfaction to be incorrect. Participants and other persons entitled to
     benefits under the Plan also shall furnish the committee with such
     evidence, data or information as the Committee considers necessary or
     desirable to administer the Plan.

7.5  Committee Decision Final: Subject to applicable law, and the provisions of
     Section 7.6, any interpretation of the provisions of the Plan and any
     decision on any matter within the discretion of the Committee made by the
     Committee in good faith shall be binding on all persons. To the extent not
     inconsistent with this Plan, all definitions, terms and provisions set
     forth in the NIPSCO Pension Plan, including with respect to the
     administrative powers and duties of the Committee, the expenses of
     administration, and the procedures for filing claims, also shall be
     applicable with respect to this Plan.

7.6  Claims Procedure: In the event that a Participant (or beneficiary) makes a
     claim for benefits under the Plan to the Committee and such claim is denied
     in whole or in part by the Committee, the Committee will notify the
     Participant (or beneficiary) of the denial. Such notification will be made
     in writing, within 90 days of the date the claim is received by the
     Committee. The notification will include: (i) the specific reasons for the
     denial; (ii) specific reference to the Plan provisions upon which the
     denial is based; (iii) a description of any additional information
     necessary for the claimant to perfect the claim and an explanation of why
     such material or information is necessary; and (iv) an explanation of the
     applicable review procedures.

     The Participant (or beneficiary) has 60 days from the date he receives
     notice of a claim denial to file a written request for review of the denial
     with the Committee. The Committee will review the claim denial and inform
     the Participant (or beneficiary) in writing of its decision within 60 days
     of the date the claim review request is received by the Committee. This
     decision will be final.

                                      -13-<PAGE>   1
                                                                    EXHIBIT 10.5

                         SUPPLEMENTAL ESOP BENEFIT PLAN

                                       OF

                                CFS BANCORP, INC.

                                       AND

                        CITIZENS FINANCIAL SERVICES, FSB

     This Supplemental ESOP Excess Benefit Plan ("Plan") of CFS Bancorp, Inc.
(the "Company") and Citizens Financial Services, FSB (the "Bank") is adopted
effective as of May 17, 1999. The Plan is established and maintained by the
Company and the Bank for the purpose of permitting the officers listed in
Appendix A attached hereto (which may be amended by the Company and/or the Bank
from time to time hereafter) who will be participating in the CFS Bancorp, Inc.
Employee Stock Ownership Plan (the "ESOP") to receive allocations representing
shares of common stock of the Company pursuant to this Plan in excess of the
number of shares of common stock of the Company which are allocable to their
accounts within the ESOP ("ESOP Allocation") under the limitation imposed by
Sections 401(a)(17), 414 and 415 of the Internal Revenue Code of 1986, as
amended, or as a result of the maximum amount of compensation which may be taken
into consideration for the purposes of the ESOP.

     The Plan is an unfunded plan maintained for the purpose of providing
deferred compensation for selected officers of the Company and the Bank, each of
whom is a member of a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").

     Accordingly, the Company and the Bank hereby adopts the Plan pursuant to
the terms and provisions set forth below:

                                    ARTICLE I

                                   DEFINITIONS

     In addition to those terms defined above, the following terms shall have
the meanings hereinafter set forth whenever used herein:

     1.1. "Board" means the Boards of Directors of the Company and the Bank.

     1.2. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any regulations relating thereto.

                                       1
<PAGE>   2

     1.3. "Company Common Stock" means shares of common stock of the Company.

     1.4. "ESOP Allocation" means the number of shares allocable to the
individual account of a participant in the ESOP pursuant to Article IV of the
ESOP.

     1.5. "Participant" means a salaried employee of the Company and/or the Bank
who is a participant in the ESOP, who is a member of a select group of
management or highly compensated employees within the meaning of Section 201 (2)
of the ERISA and who is selected by the Board to participate in the Plan.

     1.6. "Plan Year" means the 12-consecutive-month period ending December 31
of each year.

     1.7. "Stock Unit" means a bookkeeping unit used for the purpose of
crediting amounts to the account of a Participant, each such Stock Unit being
equivalent to one (1) share of Company Common Stock.

     1.8. "Supplemental ESOP Allocation" shall mean the number of Stock Units
allocated to a Participant's account pursuant to Section 3.1 of the Plan.

     1.9. Words in the masculine gender shall include the feminine and the
singular shall include the plural, and vice versa, unless qualified by the
context. Any headings used herein are included for ease of reference only, and
are not to be construed so as to alter the terms hereof.

                                   ARTICLE II

                                   ELIGIBILITY

     A salaried employee of the Company and/or the Bank who is eligible to
receive the benefit of an ESOP Allocation, the total amount of which is reduced
by reason of the limitation on the amount of compensation which may be taken
into account for the purpose of calculating allocations pursuant to Sections
401(a)(17), 414 and 415 of the Code shall be eligible to be selected by the
Boards of Directors of the Company and the Bank to participate in the Plan.

                                       2
<PAGE>   3

                                   ARTICLE III

                          SUPPLEMENTAL ESOP ALLOCATIONS

     A Participant in the Plan shall receive a Supplemental ESOP Allocation of
Stock Units each year at the same time that allocations of Company Common Stock
are made pursuant to the ESOP. The number of Stock Units allocable to a
Participant for any Plan Year shall be an amount equal to the difference between
(a) and (b) below:

          (a) The ESOP Allocation which would have been allocated to the
     Participant for the Plan Year, as determined by Article IV of the ESOP and
     the definition of "Compensation" in Section 1.10 of the ESOP without giving
     effect to the limitation imposed by Sections 401(a)(17), 414 and 415 of the
     Code on the maximum amount of compensation which may be taken into
     consideration for the purposes of the ESOP;

     LESS

          (b) The ESOP Allocation actually allocated to the account of the
     Participant in the ESOP for the Plan Year.

Supplemental ESOP Allocations made for the benefit of a Participant for any Plan
Year shall be credited to a bookkeeping account maintained under the Plan in the
name of each Participant.

                                   ARTICLE IV

                   INVESTMENT OF SUPPLEMENTAL ESOP ALLOCATIONS

     4.1 INVESTMENT OF FUNDS. Investment of amounts credited hereunder to the
account of a Participant shall be treated as if they were actually invested in
the ESOP account of the Participant and shall be credited with gains and losses
at the same time and in the same manner as is applicable to amounts invested in
the ESOP account of such Participant.

     4.2 FORMATION OF TRUST. In connection with the adoption of the Plan, the
Company and the Bank have elected to form a trust (the "Trust") in order to
permit contributions from the Company or the Bank to purchase and hold shares of
Company Common Stock and other assets, subject to compliance with all applicable
securities laws. If the Company and the Bank elect to contribute to the Trust to
fund their obligations under the Plan, a Participant shall have no right to
demand the transfer to him of stock or other assets from the Company and the
Bank or from such Trust. Any assets held in the Trust, including shares of
Company Common Stock, may be distributed to a Participant in payment of part or
all of the Company's and the Bank's obligations under the Plan.

                                       3
<PAGE>   4

                                    ARTICLE V

                             VESTING; DISTRIBUTIONS

     5.1. VESTING. The vested portion of a Participant's account shall be a
percentage of the total amount credited to the account determined on the basis
of the Participant's number of "Years of Service" (as defined in Section 1.58
(or any successor thereto) of the ESOP) according to the following schedule:

               Years of Service           Percentage
               ----------------           ----------

                 Less than 5                   0%
                     5                        100%

     In determining Years of Service for purposes of vesting under the Plan,
Years of Service with the Company or the Bank prior to adoption of this Plan
shall be included.

     Notwithstanding the above vesting schedule, a Participant shall be 100%
vested in his account upon attainment of "Normal Retirement Age" (as defined in
Section 1.35 (or any successor thereto) of the ESOP).

     5.2 DISTRIBUTION. The vested portion of amounts credited to a Participant's
account shall be distributed to a Participant at the same time, and in the same
manner and in the same form, as benefits shall be distributed from the ESOP
pursuant to Article VII of the ESOP.

     If a Participant should die before distribution of the vested portion of
his account pursuant to the Plan has been made to him, any remaining vested
amounts shall be distributed to his beneficiary in the method designated by the
Participant in a writing delivered to the Company and the Bank prior to his
death. If a Participant has not designated a beneficiary, or method of
distribution, or if no designated beneficiary is living on the date of
distribution, such vested amounts shall be distributed to those persons entitled
to receive distributions of the Participant's account under the ESOP and in the
same method as distribution is made under the ESOP.

                                       4
<PAGE>   5

                                   ARTICLE VI

                           ADMINISTRATION OF THE PLAN

     6.1. ADMINISTRATION BY THE COMPANY AND THE BANK. The Company and the Bank
shall be responsible for the general operation and administration of the Plan
and for carrying out the provisions thereof.

     6.2. GENERAL POWERS OF ADMINISTRATION. All provisions set forth in the ESOP
with respect to the administrative powers and duties of the Company and the
Bank, expenses of administration, and procedures for filing claims shall also be
applicable with respect to the Plan. The Company and the Bank shall be entitled
to rely conclusively upon all tables, valuations, certificates, opinions and
reports furnished by any actuary, accountant, controller, counsel or other
person employed or engaged by the Company and the Bank with respect to the Plan.

                                   ARTICLE VII

                            AMENDMENT OR TERMINATION

     7.1. AMENDMENT OR TERMINATION. The Company and the Bank reserve the right
to amend or terminate the Plan when, in the sole opinion of the Company and the
Bank, such amendment or termination is advisable. Any such amendment or
termination shall be made pursuant to a resolution of the Board and shall be
effective as of the date of such resolution.

     7.2. EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination of the
Plan shall directly or indirectly reduce the vested portion of any account held
hereunder as of the effective date of such amendment or termination. Upon
termination of the Plan, distribution of vested amounts credited to the account
of a Participant shall be made to the Participant or his beneficiary in the
manner and at the time described in Section 5.2 of the Plan. No additional
credits of ESOP Allocations shall be made to the account of a Participant and no
additional Years of Service (within the meaning of Section 5.1) shall be
credited after termination of the Plan, but the Company and the Bank shall
continue to credit gains and losses pursuant to Article IV until the vested
balance of his account has been fully distributed to the Participant or his
beneficiary.

                                       5
<PAGE>   6

                                  ARTICLE VIII

                               GENERAL PROVISIONS

     8.1. PARTICIPANT'S RIGHTS UNSECURED. The right of a Participant or his
designated beneficiary to receive a distribution hereunder shall be an unsecured
claim against the general assets of the Company and the Bank, and neither the
Participant nor a designated beneficiary shall have any rights in or against any
specific assets of the Company and the Bank.

     8.2. GENERAL CONDITIONS. Except as otherwise expressly provided herein, all
terms and conditions of the ESOP applicable to an ESOP Allocation will also be
applicable to an allocation of Stock Units pursuant to this Plan. Nothing in
this Plan shall operate or be construed in any way to modify, amend or affect
the terms and provisions of the ESOP.

     8.3. NO GUARANTEE OF BENEFITS. Nothing contained in the Plan shall
constitute a guaranty by the Company and the Bank or any other person or entity
that the assets of the Company and the Bank will be sufficient to pay any
benefit hereunder.

     8.4. NO ENLARGEMENT OF EMPLOYEE RIGHTS. No Participant shall have any right
to receive a distribution of contributions made under the Plan except in
accordance with the terms of the Plan. Establishment of the Plan shall not be
construed to give any Participant the right to be retained in the service of the
Company and the Bank.

     8.5. SPENDTHRIFT PROVISION. No interest of any person or entity in, or
right to receive a distribution under, the Plan 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
a distribution 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 for alimony, support, separate maintenance
and claims in bankruptcy proceedings.

     8.6. APPLICABLE LAW. The Plan shall be construed and administered under the
laws of the State of Indiana to the extent such laws are not superseded by
federal law.

     8.7. INCAPACITY OF RECIPIENT. If any person entitled to a distribution
under the Plan is deemed by the Company and the Bank to be incapable of
personally receiving and giving a valid receipt for such payment, then, unless
and until claim therefor shall have been made by a duly appointed guardian or
other legal representative of such person, the Company and the Bank may provide
for such payment or any part thereof to be made to any other person or
institution then contributing toward or providing for the care and maintenance
of such person. Any such payment shall be a payment for the account of such
person and a complete discharge of any liability of the Company, the Bank and
the Plan therefor.

                                       6
<PAGE>   7

     8.8. CORPORATE SUCCESSORS. The Plan shall not be automatically terminated
by a transfer or sale of assets of the Company and the Bank or by the merger or
consolidation of the Company and the Bank into or with any other corporation or
other entity, but the Plan shall be continued after such sale, merger or
consolidation only if and to the extent that the transferee, purchaser or
successor entity agrees to continue the Plan. In the event that the Plan is not
continued by the transferee, purchaser or successor entity, then the Plan shall
terminate subject to the provisions of Section 7.2.

     8.9. UNCLAIMED BENEFIT. Each Participant shall keep the Company and the
Bank informed of his current address and the current address of his designated
beneficiary. The Company and the Bank shall not be obligated to search for the
whereabouts of any person. If the location of a Participant is not made known to
the Company and the Bank within three (3) years after the date on which payment
of the Participant's account may first be made, payment may be made as though
the Participant had died at the end of the three-year period. If, within one
additional year after such three-year period has elapsed, or, within three years
after the actual death of a Participant, the Company or the Bank is unable to
locate any designated beneficiary of the Participant, then the Company and the
Bank shall have no further obligation to pay any benefit hereunder to such
Participant or designated beneficiary and such benefit shall be irrevocably
forfeited.

     8.10. LIMITATIONS ON LIABILITY. Notwithstanding any of the preceding
provisions of the Plan, neither the Company and the Bank nor any individual
acting as employee or agent of the Company and the Bank shall be liable to any
Participant, former Participant or other person for any claim, loss, liability
or expense incurred in connection with the Plan.

     IN WITNESS WHEREOF, CFS Bancorp, Inc. and Citizens Financial Services, FSB
have caused this Plan to be duly executed on this 17th day of  May, 1999.

                                           CFS BANCORP, INC.

Attest:

/s/ Monica F. Sullivan                     By /s/ Thomas F. Prisby
------------------------                     -------------------------
Secretary

                                           CITIZENS FINANCIAL SERVICES, FSB

Attest:

/s/ Monica F. Sullivan                      By /s/ James W. Prisby
--------------------                         -------------------------
Secretary

                                       7
<PAGE>   8

                                   APPENDIX A

     The Company and the Bank have designated the following persons as
Participants in its Supplemental ESOP Benefit Plan:

                                  Thomas F. Prisby

                                  James W. Prisby

                                  John T. Stephens

                                       8

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