Document:

exv10w20

Exhibit 10.20

NISOURCE INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

As Amended and Restated Effective January 1, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I PURPOSE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1 Affiliate
	 	 	2	 
	2.2 Benefits Committee
	 	 	2	 
	2.3 Board
	 	 	2	 
	2.4 Code
	 	 	2	 
	2.5 Committee
	 	 	2	 
	2.6 Company
	 	 	2	 
	2.7 Compensation
	 	 	2	 
	2.8 Disability or Disabled
	 	 	2	 
	2.9 Early Retirement
	 	 	3	 
	2.10 Final Average Compensation
	 	 	3	 
	2.11 NiSource Pension Plan
	 	 	3	 
	2.12 Normal Retirement
	 	 	3	 
	2.13 Participant
	 	 	3	 
	2.14 Pension
	 	 	3	 
	2.15 Pension Restoration Plan
	 	 	3	 
	2.16 Plan
	 	 	3	 
	2.17 Post-2004 Benefit
	 	 	3	 
	2.18 Pre-2005 Benefit
	 	 	3	 
	2.19 Primary Social Security Benefit
	 	 	4	 
	2.20 Qualified Pension Plan
	 	 	4	 
	2.21 Retirement
	 	 	4	 
	2.22 Service
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III PARTICIPATION
	 	 	4	 
	 
	 	 	 	 
	ARTICLE IV SUPPLEMENTAL RETIREMENT PENSION
	 	 	4	 
	 
	 	 	 	 
	4.1 Applicability
	 	 	4	 
	4.2 Supplemental Retirement Pension
	 	 	4	 
	4.3 Reduction for Early Retirement
	 	 	5	 
	4.4 Separation from Service Prior to Early Retirement
	 	 	6	 
	4.5 Supplemental Disability Pension
	 	 	6	 
	4.6 Supplemental Spouse Pension
	 	 	7	 
	4.7 Retiree Death Benefit
	 	 	8	 
	4.8 Cost of Living Adjustment
	 	 	8	 
	4.9 Separate Agreement
	 	 	8	 
	 
	 	 	 	 
	ARTICLE V SUPPLEMENTAL RETIREMENT ACCOUNT
	 	 	8	 
	 
	 	 	 	 
	5.1 Applicability
	 	 	8	 
	5.2 Supplemental Retirement Account
	 	 	8	 
	5.3 Supplemental Credits
	 	 	8	 

i

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	5.4 Separation from Service
	 	 	9	 
	5.5 Death
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VI DISTRIBUTIONS
	 	 	9	 
	 
	 	 	 	 
	6.1 Pre-2005 Benefit
	 	 	9	 
	6.2 Post-2004 Benefit
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VII MISCELLANEOUS
	 	 	12	 
	 
	 	 	 	 
	7.1 Plan Financing
	 	 	12	 
	7.2 Non-Compete and Related Provisions
	 	 	12	 
	7.3 Nonguarantee of Employment
	 	 	13	 
	7.4 Nonalienation of Benefits
	 	 	13	 
	7.5 Plan Amendment or Termination
	 	 	13	 
	7.6 Indemnification
	 	 	14	 
	7.7 Action by Company
	 	 	14	 
	7.8 Protective Provisions
	 	 	15	 
	7.9 Governing Law
	 	 	15	 
	7.10 Notice
	 	 	15	 
	7.11 Successors
	 	 	15	 
	7.12 Actuarial Assumptions
	 	 	15	 
	7.13 Tax Savings
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VIII CHANGE IN CONTROL
	 	 	16	 
	 
	 	 	 	 
	8.1 Change in Control
	 	 	16	 
	8.2 Potential Change in Control
	 	 	18	 
	8.3 Additional Service and Compensation Upon Change in Control
	 	 	19	 
	8.4 Waiver of Service and Age Requirements Upon Change in Control
	 	 	19	 
	8.5 Funding of Plan Benefits Upon Potential Change in Control
	 	 	19	 
	8.6 Plan Administration and Amendment Upon a Change in Control
	 	 	20	 
	8.7 Committee Discretion to Pay Lump Sum After a Change in Control
	 	 	20	 
	8.8 Lump Sum Election
	 	 	20	 
	8.9 Definitions
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IX PLAN ADMINISTRATION: THE COMMITTEE
	 	 	21	 
	 
	 	 	 	 
	9.1 General Powers, Rights and Duties
	 	 	21	 
	9.2 Information Required by Committee
	 	 	22	 
	9.3 Committee Decision Final
	 	 	22	 
	9.4 Claims Procedure
	 	 	22	 

ii

 

NISOURCE INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

As Amended and Restated Effective January 1, 2010

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, and was further amended and restated
effective September 1, 1994. The Plan was further amended and restated effective June 1, 2002 to
reflect the name change of the Company to NiSource Inc. and to make other administrative and
technical changes. The Plan was further amended, effective January 1, 2004, to reflect changes in
the structure of benefits under the Plan. The Plan was again amended and restated, effective
January 1, 2005, to comply with Internal Revenue Code Section 409A with respect to benefits earned
under the Plan from and after January 1, 2005. Benefits under the Plan earned and vested prior to
January 1, 2005 shall be administered without giving effect to Code Section 409A, and guidance and
regulations thereunder. The Plan was again amended and restated, effective January 1, 2008, to
incorporate special transition relief under Internal Revenue Service Notice 2007-86 to allow
Participants to elect to change the time and form of payment of certain Post-2004 Benefits. The
Plan is further amended and restated, effective January 1, 2010, to clarify how certain
supplemental death benefits will be paid to Participants who have reached Retirement.

     It is intended that the Plan be exempt from the reporting and disclosure requirements of Title
I 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

     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.

     2.1 Affiliate. Any corporation that is a member of a controlled group of corporations
(as defined in Code Section 414(b)) that includes the Company; any trade or business (whether or
not incorporated) that is under common control (as defined in Code Section 414(c)) with the
Company; any organization (whether or not incorporated) that is a member of an affiliated service
group (as defined in Code Section 414(m)) that includes the Company; any leasing organization, to
the extent that its employees are required to be treated as if they were employed by the Company
pursuant to Code Section 414(n) and the regulations thereunder; and any other entity required to be
aggregated with the Company pursuant to regulations under Code Section 414(o). An entity shall be
an Affiliate only with respect to the existing period as described in the preceding sentence.

     2.2 Benefits Committee. The NiSource Benefits Committee.

     2.3 Board. The Board of Directors of NiSource Inc.

     2.4 Code. The Internal Revenue of Code of 1986, as amended.

     2.5 Committee. The Officer Nomination and Compensation Committee of the Board, which
has certain specific duties with respect to the Plan.

     2.6 Company. NiSource Inc. and its subsidiaries and affiliates that adopt the Plan
for the benefit of key employees, or its successor or successors.

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

     2.8 Disability or Disabled. A Participant has a Disability or is Disabled if he or
she has a condition that (a) causes a Participant to be unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, (b) causes a Participant, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, to receive income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the Company or an
Affiliate or (c) causes a Participant to be eligible to receive Social Security disability
payments.

2

 

     2.9 Early Retirement. Separation from Service for reasons other than death or
Disability after the Participant has both attained age 55 and completed at least 10 years of
Service, but before the Participant’s Normal Retirement, except as otherwise provided.

     2.10 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 60 consecutive calendar months
within the last 120 months of service that produces the highest result.

     2.11 NiSource Pension Plan. The NiSource Salaried Pension Plan, as amended from time
to time.

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

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

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

     2.15 Pension Restoration Plan. Pension Restoration Plan for NiSource Inc. and
Affiliates, as amended from time to time.

     2.16 Plan. NiSource Inc. Supplemental Executive Retirement Plan.

     2.17 Post-2004 Benefit. The portion of a Participant’s Supplemental Retirement
Pension or Supplemental Retirement Account, as applicable, equal to the present value, determined
as of a Participant’s date of separation from Service after December 31, 2004, of the excess of
such benefit or account balance to which a Participant would be entitled under the Plan if he or
she voluntarily separated from Service without cause after December 31, 2004 over his or her
Pre-2005 Benefit and received a full payment of benefits from the Plan on the earliest possible
date allowed under the Plan following the separation from Service, pursuant to Articles IV and V,
calculated from and after January 1, 2005 to the date of separation from Service.

     2.18 Pre-2005 Benefit. The portion of a Participant’s Supplemental Retirement Pension
or Supplemental Retirement Account, as applicable, equal to the present value of the benefit or
account balance, determined as of December 31, 2004, to which a Participant would be entitled under
the Plan if he or she voluntarily separated from Service without cause on December 31, 2004 and
received a full payment of benefits from the Plan on the earliest possible date allowed under the
Plan following separation from Service, pursuant to Articles IV and V, calculated as of December
31, 2004.

3

 

     2.19 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 separation from Service, assuming the following:

	 	(a)	 	The Participant attained age 65 in the year of Retirement, and
	 
	 	(b)	 	The Participant earned maximum taxable wages under Code Section 3121(a)(1) 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 or she may not
be receiving or may not be eligible to receive Social Security benefits.

     2.20 Qualified Pension Plan. The NiSource Pension Plan and any other tax-qualified
defined benefit pension plan maintained by the Company or any Affiliate.

     2.21 Retirement. A Participant’s Normal or Early Retirement.

     2.22 Service. A Participant’s or employee’s employment or service with the Company,
as defined in the NiSource Pension Plan, or such other employment or service date as determined by
the Board.

ARTICLE III

Participation

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

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

ARTICLE IV

Supplemental Retirement Pension

     4.1 Applicability. This Article IV shall apply to each Participant or former
Participant who first participated in the Plan prior to January 23, 2004.

     4.2 Supplemental Retirement Pension. Upon Normal Retirement, a Participant shall
receive 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 (excluding any
supplements related to eligibility for a Social Security benefit) the Participant is eligible to

4

 

receive under (1) either the FAP Benefit or the Account Balance Option of the NiSource Pension
Plan, or any other Qualified Pension Plan and (2) the Pension Restoration Plan.

	 	(a)	 	The sum of:

	 	(i)	 	1.7% of the Participant’s Final Average Compensation multiplied
by the Participant’s Service to a maximum of 30 years; plus
	 
	 	(ii)	 	0.6% of the Participant’s Final Average Compensation multiplied
by the Participant’s Service in excess of 30 years.

	 	(b)	 	The sum of:

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

	 	(ii)	 	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;

	 	(iii)	 	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 receive a monthly Supplemental Retirement Pension
in a reduced amount (as described in Section 4.3 below).

     4.3 Reduction for Early Retirement. A Participant who experiences a separation from
Service prior to Normal Retirement, but after Early Retirement, shall receive a monthly
Supplemental Retirement Pension in an amount determined in accordance with Section 4.2 above, but
reduced as follows: (1) by 6% for each of the first two (2) years and 4% for each of the next five
years that commencement of the Participant’s Supplemental Retirement Pension precedes the date that
the Participant would attain age 62; or (2) if the Participant had completed 25 years of Service at
the time of his or her separation, by 6% for the first year and 4% for each of the next four years
that commencement of the Participant’s Supplemental Retirement Pension precedes the date that the
Participant would attain age 60, with a pro rata reduction for any fraction of a year.

     Payment of the Participant’s monthly reduced Supplemental Retirement Pension shall normally
commence within 45 days following a separation from Service, or, if later, within such timeframe
permitted under Code Section 409A, and guidance and regulations thereunder. Notwithstanding the
preceding sentence, a Participant may elect to defer the commencement of the portion of his or her
reduced Supplemental Retirement Pension that constitutes the Pre-2005 Benefit to any date between
Early Retirement and attainment of age 62 by a written election delivered to the Benefits Committee
on or before the last day of the calendar year preceding the calendar year of Early Retirement. A
Participant may elect to defer the commencement of the portion of his or her reduced Supplemental
Retirement Pension that constitutes the Post-2004

5

 

Benefit to any date between Early Retirement and attainment of age 62 by a written election
delivered to the Benefits Committee only if such election (i) constitutes a delay in payment or
change in the form of payment, (ii) does not take effect until at least 12 months after the date on
which the election is made, (iii) defers the first payment with respect to which such new election
is effective for a period of not less than five years from the date such payment would otherwise
have been made, and (iv) is not made less than 12 months prior to the date of the first scheduled
payment.

     4.4 Separation from Service Prior to Early Retirement. Upon separation from Service
prior to Early Retirement, a Participant shall receive a monthly Supplemental Retirement Pension,
calculated on a single-life basis equal to the excess, if any, of the single-life pension the
Participant would be eligible to receive under either the FAP Benefit option or the Account Balance
Option of the NiSource Pension Plan, or any other Qualified Pension Plan, if the limitations
required by Code Sections 401(a)(17) and 415, or any other limitation imposed by the Code, the
limitation on bonuses to 50% of base pay and the potential limitations relating to Taxable
Compensation were not applied, reduced by the single-life pension the Participant is eligible to
receive under (1) either such option of the NiSource Pension Plan, or any other Qualified Pension
Plan and (2) the Pension Restoration Plan.

     Payment of the Pre-2005 Benefit to a Participant or his or her beneficiary in accordance with
this Section shall commence on the same date as the pension under the NiSource Pension Plan or any
other Qualified Pension Plan. Payment of the Post-2004 Benefit to a Participant or his or her
beneficiary in accordance with this Section, shall commence within 45 days after (i) the
Participant attains (or would have attained) age 62, if the Participant has not completed at least
25 years of Service, or (ii) if the Participant has completed at least 25 years of Service, the
Participant attains (or would have attained) age 60, or, if later, within such timeframe permitted
under Code Section 409A, and guidance and regulations thereunder.

     4.5 Supplemental Disability Pension. If a Participant becomes Disabled while in the
active employment of the Company prior to age 65, the Participant shall be eligible for a monthly
Supplemental Disability Pension commencing on the date the Disability begins and continuing to the
first to occur of the Participant’s death or attainment of 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 any long term disability plan maintained by the Company or any Affiliate.

	 	(a)	 	The sum of:

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

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

6

 

	 	(b)	 	The sum of:

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

	 	(ii)	 	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;
less

	 	(iii)	 	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 4.2, based on Service the Participant would have had if the Participant
had continued working for the Company or an Affiliate to age 65, the Participant’s Final Average
Compensation at the time he or she 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 NiSource Pension Plan, or any other Qualified Pension Plan,
and the Pension Restoration Plan, determined at the time he or she became Disabled.

     4.6 Supplemental Spouse Pension. Upon the death of a Participant in active employment
or while receiving a Supplemental Disability Pension, his or her surviving 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 or her monthly Supplemental Retirement Pension
in the form of a reduced 50% joint and survivor Pension, with his or her spouse as the
contingent annuitant, terminated employment (on the date of his or her 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 NiSource Pension Plan, or any other Qualified Pension Plan, the
Supplemental Spouse Pension payable under this Section shall be reduced by the amount of benefit
under the NiSource Pension Plan, or any other Qualified

7

 

Pension Plan, and the Pension Restoration Plan that the spouse is (or would have been)
entitled to receive.

     4.7 Retiree Death Benefit. Upon the death of a Participant who has reached Retirement
(including a former Participant who reached Retirement and was paid his or her benefits under this
Plan), a lump sum death benefit equal to 50% of his or her retiree group life insurance coverage
shall be paid to such Participant’s spouse or other beneficiaries designated with respect to such
coverage.

     4.8 Cost of Living Adjustment. For Participants in the FAP Benefit of the NiSource
Pension Plan, the benefits payable under Sections 4.2 through 4.7 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 or an Affiliate under the NiSource Pension Plan, or any other Qualified
Pension Plan.

     4.9 Separate Agreement. Notwithstanding Sections 2.7 and 2.22, each Participant who
first becomes eligible to participate in the Plan on and after January 1, 2004 and prior to January
23, 2004 shall have his or her Supplemental Retirement Pension determined based upon his or her
Service and Compensation as set forth in a separate, written agreement, if any, between the Company
and such Participant.

ARTICLE V

Supplemental Retirement Account

     5.1 Applicability. This Article V shall apply to each Participant who first
participates in the Plan on and after January 23, 2004.

     5.2 Supplemental Retirement Account. A Participant’s Supplemental Retirement Account
is a notional account equal to the sum of his or her Compensation Credits, Supplemental Credits, if
any, and Interest Credits. Compensation Credits shall be credited to a Participant’s Supplemental
Retirement Account as of the last day of each Plan Year beginning on or after January 1, 2004 equal
to five percent of the Participant’s Compensation for such Plan Year. Supplemental Credits, if
any, shall be credited pursuant to Section 5.3. Interest Credits shall be calculated in the same
manner and shall be credited to a Participant’s Supplemental Retirement Account at the same time as
provided under the NiSource Pension Plan or any other Qualified Pension Plan.

     5.3 Supplemental Credits. The Committee, subject to approval of the Board, may
authorize Supplemental Credits to a Participant’s Supplemental Retirement Account in such amounts
and at such times, and subject to such specific terms and provisions, as authorized by the
Committee.

8

 

     5.4 Separation from Service. Upon separation from Service, for any reason other than
death, with five or more years of Service, unless a shorter period is provided in a separate,
written agreement between the Company and the Participant and approved by the Board, a Participant
shall receive the balance of his or her Supplemental Retirement Account distributed in accordance
with Sections 6.1 and 6.2 within 45 days after such separation from Service, or, if later, within
such timeframe permitted under Code Section 409A, and guidance and regulations thereunder.

     5.5 Death. Upon the death of a Participant prior to final distribution of his or her
Supplemental Retirement Account after completing five or more years of Service, unless a shorter
period is provided in a separate, written agreement between the Company and the Participant and
approved by the Board, the Participant’s beneficiary, designated in such manner as provided by the
Committee, shall receive the balance of the Participant’s Supplemental Retirement Account
distributed in accordance with Sections 6.1 and 6.2. If the Participant designates multiple
beneficiaries, he or she shall designate the percentage, in whole numbers, allocated to each such
beneficiary.

     If any Participant fails to designate a beneficiary in the manner provided above, if the
designation is void or if the beneficiary designated by a deceased Participant dies before the
Participant or before complete distribution of the Participant’s benefits, the Participant’s
beneficiary shall be the person in the first of the following classes in which there is a survivor:

	 	(a)	 	The Participant’s spouse;
	 
	 	(b)	 	The Participant’s children in equal shares, except that if any of the children
predeceases the Participant but leaves issue surviving, then such issue shall take, by
right of representation, the share the parent would have taken if living;
	 
	 	(c)	 	The Participant’s estate.

ARTICLE VI

Distributions

     6.1 Pre-2005 Benefit. This Section 6.1 applies only to a Pre-2005 Benefit.

	 	(a)	 	Form of Payment. Notwithstanding Sections 4.2, 4.3 and 4.4, a
Participant shall receive distribution of his or her Pre-2005 Benefit, pursuant to
Articles IV or V, in the same form as his or her distribution under the NiSource
Pension Plan, computed in the same manner as in the NiSource Pension Plan, or under any
other Qualified Pension Plan, computed in the same manner as in such Qualified Pension
Plan. Any election under the NiSource Pension Plan or any other Qualified Pension Plan
shall apply to his or her Pre-2005 Benefit pursuant to the preceding sentence only if
it is made by written instrument delivered to the

9

 

	 	 	 	Benefits Committee at least 30 days prior to the date of such distribution. If such
election is not so made at least 30 days prior to the date of distribution of his or
her Pre-2005 Benefit, the Participant’s Pre-2005 Benefit shall be paid as a 50%
joint and survivor Pension if such Participant is married, or as a single-life
Pension if such Participant is unmarried. If a Participant who makes an election
pursuant to this subsection 6.1(a) at least 30 days prior to the date of
distribution dies prior to distribution pursuant to such election, such election
shall be revoked and the provisions of Article IV and subsection 6.1(b) shall apply.
	 
	 	(b)	 	Small Benefit Amounts. At the discretion of the Committee, the present
value of any Pre-2005 Benefit payable under the Plan that does not exceed $5,000 may be
paid to the Participant or his or her surviving spouse or other designated beneficiary
in quarterly, semi-annual or annual installments, or in a single lump sum.

     6.2 Post-2004 Benefit. This Section 6.2 applies only to a Post-2004 Benefit.

	 	(a)	 	Form of Payment. The Post-2004 Benefit shall be payable in a form
available under the NiSource Pension Plan, computed in the same manner as in the
NiSource Pension Plan, or under any other Qualified Pension Plan, computed in the same
manner as in such Qualified Pension Plan, as elected by a Participant by written notice
delivered to the Benefits Committee on or before December 31, 2005. Notwithstanding
the preceding sentence, in the case of an employee who first becomes a Participant on
or after January 1, 2005, the aforementioned election with respect to a Post-2004
Benefit shall be made by written notice delivered to the Benefits Committee within 30
days after the date the Participant first becomes eligible to participate in the Plan
and such election shall be effective with respect to Compensation related to services
to be performed subsequent to the election; provided, however, that a Participant shall
not be considered first eligible if, on the date he or she becomes a Participant, he or
she participates in any other nonqualified plan of the same category (account balance
or nonaccount balance, as applicable), which is subject to Code Section 409A,
maintained by the Company or any Affiliate. If payment in the form of an annuity is
elected, the annuity type shall be elected by the Participant at the time he or she
makes the election described in the first or second sentence of this paragraph from
among those annuities available at that time under the NiSource Pension Plan or under
any other Qualified Pension Plan. If a Participant fails to elect a form of
distribution, the Participant’s Post-2004 Benefit shall be payable in a lump sum.
	 
	 	 	 	If a Participant who makes an election pursuant to this subsection 6.2(a) dies prior
to distribution pursuant to such election, such election shall be revoked and the
provisions of Article IV and subsection 6.2(b) shall apply.
	 
	 	 	 	Any change in an election of a form of distribution available under the NiSource
Pension Plan or any other Qualified Pension Plan shall apply to his or her

10

 

	 	 	 	Post-2004 Benefit pursuant to the preceding paragraph only if it is made by written
instrument delivered to the Benefits Committee and if (i) such new election does not
take effect until at least 12 months after the date on which the election is made,
(ii) the first payment with respect to which such new election is effective is
deferred for a period of not less than five (5) years from the date such payment
would otherwise have been made, and (iii) such new election is not made less than 12
months prior to the date of the first scheduled payment; provided, however, that an
election to change from one type of annuity payment to a different, actuarially
equivalent, type of annuity payment shall not be considered a change to the method
of payment for purposes of applying the restrictions in clauses (i), (ii) and (iii).
	 
	 	 	 	Notwithstanding the preceding paragraph of this Section 6.2(a), a Participant may
change an election with respect to the form of payment of a Post-2004 Benefit,
without regard to the restrictions imposed under the preceding paragraph, on or
before December 31, 2006; provided that such election (i) applies only to amounts
that would not otherwise be payable in calendar year 2006, and (ii) shall not cause
an amount to be paid in calendar year 2006 that would not otherwise be payable in
such year. Additionally, a Participant may change an election with respect to the
form of payment of a Post-2004 Benefit, without regard to the restrictions imposed
under the preceding paragraph, on or before December 31, 2007; provided that such
election (i) applies only to amounts that would not otherwise be payable in calendar
year 2007, and (ii) shall not cause an amount to be paid in calendar year 2007 that
would not otherwise be paid in such year. Additionally, a Participant may change an
election with respect to the form of payment of a Post-2004 Benefit, without regard
to the restrictions imposed by the preceding paragraph, on or before December 31,
2008; provided that such election (i) applies only to amounts that would not
otherwise be payable before January 1, 2009, and (ii) shall not cause an amount to
be paid in calendar year 2007 or 2008 that would not otherwise be paid in such
years.
	 
	 	(b)	 	Specified Employees. Notwithstanding any other provision of the Plan,
in no event can a payment of a Post-2004 Benefit, pursuant to Article IV or Section
5.4, to a Participant who is a Specified Employee of the Company or an Affiliate, at a
time during which the Company’s capital stock or capital stock of an Affiliate is
publicly traded on an established securities market, in the calendar year of his or her
separation from Service be made before the date that is six months after the date of
the Participant’s separation from Service with the Company and all Affiliates, unless
such separation is due to his or her death or Disability.
	 
	 	 	 	A Participant shall be deemed to be a Specified Employee for purposes of this
paragraph (b) if he or she is in job category C2 or above with respect to the
Company or any Affiliate that employs him or her; provided that if at any time the
total number of employees in job category C2 and above is less than 50, a Specified
Employee shall include any person who meets the definition of Key

11

 

	 	 	 	Employee set forth in Code Section 416(i) without reference to paragraph (5). A
Participant shall be deemed to be a Specified Employee with respect to a calendar
year if he or she is a Specified Employee on September 30th of the preceding
calendar year. If a Specified Employee will receive payments hereunder in the form
of installments or an annuity, the first payment made as of the date six months
after the date of the Participant’s separation from Service with the Company and all
Affiliates shall be a lump sum, paid as soon as practicable after the end of such
six-month period, that includes all payments that would otherwise have been made
during such six-month period. From and after the end of such six month period, any
such installment or annuity payments shall be made pursuant to the terms of the
applicable installment or annuity form of payment.

ARTICLE VII

Miscellaneous

     7.1 Plan Financing. Except as set forth below in this Section and in Section 8.5,
benefits under the Plan shall be paid from the general assets of the Company. To the extent any
Participant or surviving spouse or other designated beneficiary 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 has entered into a trust agreement
(“Trust Agreement”) whereby the Company agrees to contribute to a trust (“Trust”) for the purpose
of accumulating assets to assist the Company in fulfilling its obligations to Participants and
surviving spouses or other designated beneficiaries hereunder. Such Trust includes the provision
that all assets of the Trust shall be subject to the creditors of the Company in the event of its
insolvency.

     7.2 Non-Compete and Related Provisions. Benefits under the Plan may be forfeited if:

	 	(a)	 	A Participant, while employed by the Company or within a period of three years
after the Participant’s separation from Service for any reason, including Retirement
(the “Restrictive Period”), engages in activity or employment that directly or
indirectly competes with the business of the Company or its Affiliates, 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 or its Affiliates to terminate employment
with the Company or its Affiliates, and become employed by, any person, firm,
partnership, corporation, trust or other entity that provides commodities, products or
services to customers of the Company or its Affiliates of the same type as commodities,
products or services provided by the Company or its Affiliates (the “Restrictive
Covenant”). The foregoing Restrictive Covenant shall not prohibit a Participant from
owning

12

 

	 	 	 	directly or indirectly capital stock or similar securities 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 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 or its Affiliates, unless such action or statement is retracted to the
Company’s satisfaction after the Participant is notified regarding such action or
statement.

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

     7.4 Nonalienation of Benefits. Neither a Participant, nor a surviving spouse or other
designated beneficiary may assign or transfer any benefits under the Plan.

     7.5 Plan Amendment or Termination. The Committee may amend any provision of the Plan.
In addition, the Chief Executive Officer of the Company may amend any provision of the Plan,
except for Articles III, IV and V, which may only be amended by the Committee. The Committee may
terminate the Plan at any time, except that any benefits that are payable due to a Retirement,
death, Disability, or other separation from Service 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 surviving spouse) of all or any portion of
any Supplemental Retirement Benefit, Supplemental Disability Pension, Supplemental Spouse Pension,
or Supplemental Retirement Account, the payment of which has commenced prior to the effective date
of such amendment or termination, or which would be payable if the Participant experienced a
separation from Service for any reason on such effective date. Upon termination of the Plan,
distribution of a Participant’s Supplemental Retirement Benefits, Supplemental Disability Pension,
Supplemental Retirement Account, or Supplemental Spouse Pension shall be made to the Participant or
his or her surviving spouse or beneficiary in the manner and at the time described in Articles IV,
V and VI of the Plan. In addition, no additional Supplemental Retirement Benefits, Supplemental
Disability Pension, Supplemental Spouse Pension, or Compensation Credits or Supplemental Credits
under a Supplemental Retirement Account, shall be earned after termination of the Plan, except as
provided in Section 8.3.

13

 

     7.6 Indemnification.

	 	(a)	 	Limitation of Liability. Notwithstanding any other provision of the
Plan or the Trust, none of the Company, any member of the Committee, nor an individual
acting as an employee or agent of any of them, shall be liable to any Participant or
former Participant, or any surviving spouse or other designated beneficiary 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
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 or her receipt of personal profit or
advantage to which he or she 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.

     7.7 Action by Company. Any action required of, or permitted by, the Company under the
Plan shall be by resolution of the Committee, or by a person or persons authorized by resolution of
the Committee.

14

 

     7.8 Protective Provisions. A Participant shall cooperate with the Company by
furnishing any and all information requested by the Company and its Affiliates in order to
facilitate the payment of benefits hereunder, and by taking such physical examinations as the
Company and its Affiliates may deem necessary and taking such other action as may be requested by
the Company and its Affiliates.

     7.9 Governing Law. The provisions of the Plan shall be construed and interpreted
according to the laws of the State of Indiana, except as preempted by federal law.

     7.10 Notice. Any notice required or permitted under the Plan shall be sufficient if
in writing and hand delivered or sent by registered or certified mail. Such notice shall be deemed
as given as of the date of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification. Mailed notice to the Committee shall be
directed to the Company’s address. Mailed notice to a Participant, a surviving spouse or other
designated beneficiary shall be directed to the individual’s last known address in the Company’s
records.

     7.11 Successors. The provisions of the Plan shall bind and inure to the benefit of
the Company, its Affiliates and their successors and assigns. The term successors as used herein
shall include any corporate or other business entity that shall, whether by merger, consolidation,
purchase, or otherwise, acquire all or substantially all of the business and assets of the Company,
and successors of any such corporation or other business entity.

     7.12 Actuarial Assumptions. Unless otherwise provided in the Plan, all actuarial
adjustments necessary to determine the amount, form or timing of any distribution shall be based on
the same actuarial assumptions used for the pension a Participant is eligible to receive under the
NiSource Pension Plan.

     7.13 Tax Savings.

	 	(a)	 	Notwithstanding anything to the contrary contained in the Plan, (1) in the
event that the Internal Revenue Service prevails in its claim that benefits under the
Plan constitute taxable income to a Participant, his or her spouse or other designated
beneficiary, for any taxable year, prior to the taxable year in which such benefits are
distributed to him or her, or (2) in the event that legal counsel satisfactory to the
Company and the applicable Participant, his or her spouse or other designated
beneficiary, renders an opinion that the Internal Revenue Service would likely prevail
in such a claim, the Pre-2005 Benefit, to the extent constituting taxable income, shall
be immediately distributed to the Participant, his or her spouse or other designated
beneficiary. For purposes of this Section, the Internal Revenue Service shall be
deemed to have prevailed in a claim if such claim is upheld by a court of final
jurisdiction, or, if based upon an opinion of legal counsel satisfactory to the Company
and the Participant, his or her spouse or other designated beneficiary, the Plan fails
to appeal a decision of the Internal Revenue Service, or a court of applicable
jurisdiction, with respect to such claim to an

15

 

	 	 	 	appropriate Internal Revenue Service appeals authority or to a court of higher
jurisdiction within the appropriate time period.
	 
	 	(b)	 	Notwithstanding anything to the contrary contained in the Plan, (1) in the
event that the Internal Revenue Service prevails in its claim that benefits under the
Plan constitute taxable income under Code Section 409A, and guidance and regulations
thereunder, to a Participant, his or her spouse or other designated beneficiary, for
any taxable year prior to the taxable year in which such benefits are distributed to
him or her, or (2) in the event that legal counsel satisfactory to the Company and the
applicable Participant, his or her spouse or other designated beneficiary, renders an
opinion that the Internal Revenue Service would likely prevail in such a claim, the
Post-2004 Benefit or Supplemental Spouse Pension, to the extent constituting taxable
income, shall be immediately distributed to the Participant, his or her spouse or other
designated beneficiary. For purposes of this Section, the Internal Revenue Service
shall be deemed to have prevailed in a claim if such claim is upheld by a court of
final jurisdiction, or, if based upon an opinion of legal counsel satisfactory to the
Company and the Participant, his or her spouse or other designated beneficiary, the
Plan fails to appeal a decision of the Internal Revenue Service, or a court of
applicable jurisdiction, with respect to such claim to an appropriate Internal Revenue
Service appeals authority or to a court of higher jurisdiction within the appropriate
time period.

ARTICLE VIII

Change in Control

     8.1 Change in Control. A “Change in Control” shall be deemed to take place on the
occurrence of either a “Change in Ownership,” “Change in Effective Control” or a “Change of
Ownership of a Substantial Portion of Assets,” as defined below:

	 	(a)	 	Change in Ownership. A Change in Ownership of the Company occurs on
the date that any one person, or more than one Person Acting as a Group (as defined
below), acquires ownership of stock of the Company that, together with stock held by
such person or group, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company. However, if any one person or more than one
Person Acting as a Group, is considered to own more than 50% of the total fair market
value or total voting power of the stock of the Company, the acquisition of additional
stock by the same person or persons is not considered to cause a Change in Ownership of
the Company, as applicable (or to cause a Change in Effective Control of the Company).
An increase in the percentage of stock owned by any one person, or Persons Acting as a
Group, as a result of a transaction in which the Company acquires its stock in exchange
for property s be treated as an acquisition of stock. This paragraph (a) applies only

16

 

	 	 	 	when there is a transfer of stock of the Company (or issuance of stock of the
Company) and stock in the Company remains outstanding after the transaction.
	 
	 	(b)	 	Change in Effective Control. A Change in Effective Control of the
Company occurs on the date that either —

	 	(i)	 	Any one person, or more than one Person Acting as a Group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Company possessing 35% or more of the total voting power of the stock of the
Company; or

	 	(ii)	 	a majority of members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or
election,

	 	 	 	In the absence of an event described in paragraph (i) or (ii), a Change in Effective
Control of the Company will not have occurred.
	 
	 	 	 	Acquisition of additional control. If any one person, or more than one
Person Acting as a Group, is considered to effectively control the Company, the
acquisition of additional control of the Company by the same person or persons is
not considered to cause a Change in Effective Control of the Company (or to cause a
Change in Ownership of the Company).
	 
	 	(c)	 	Change of Ownership of a Substantial Portion of Assets. A Change of
Ownership of a Substantial Portion of Assets occurs on the date that any one person, or
more than one Person Acting as a Group, acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or persons)
assets from the Company that have a total gross fair market value equal to or more than
40% of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. For this purpose, gross fair
market value means the value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities associated with such
assets.
	 
	 	 	 	Transfers to a related person. There is no Change in Control when there is
a transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer. A transfer of assets by the Company is not treated
as a Change of Ownership of a Substantial Portion of Assets if the assets are
transferred to —

	 	(i)	 	A shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to its stock;

17

 

	 	(ii)	 	An entity, 50% or more of the total value or voting power of
which is owned, directly or indirectly, by the Company;

	 	(iii)	 	A person, or more than one Person Acting as a Group, that
owns, directly or indirectly, 50% or more of the total value or voting power of
all the outstanding stock of the Company; or

	 	(iv)	 	An entity, at least 50% of the total value or voting power of
which is owned, directly or indirectly, by a person described in paragraph
(iii).

	 	 	 	A person’s status is determined immediately after the transfer of the assets. For
example, a transfer to a corporation in which the Company has no ownership interest
before the transaction, but which is a majority-owned subsidiary of the Company
after the transaction is not treated as a Change of Ownership of a Substantial
Portion of Assets of the Company.
	 
	 	(d)	 	Persons Acting as a Group. Persons shall not be considered to be
acting as a group solely because they purchase or own stock of the same corporation at
the same time or as a result of the same public offering. However, persons shall be
considered to be acting as a group if they are owners of a corporation that enters into
a merger, consolidation, purchase or acquisition of stock, or similar business
transaction with the Company. If a person, including an entity, owns stock in both
corporations that enter into a merger, consolidation, purchase or acquisition of stock,
or similar transaction, such shareholder is considered to be acting as a group with
other shareholders in a corporation prior to the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation.

     8.2 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 Securities Exchange Act of 1934 (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 (1) 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 (2) 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

18

 

	 	 	 	Rule 14f-1
under the Act relating to a proposed change in control of the Company.
	 
	 	(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 adopts a resolution to the effect that for purposes of the Plan a
Potential Change in Control has occurred.

     8.3 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 after a Change in Control the Participant’s
employment is terminated by the Company or an Affiliate under circumstances described in the
contract, such Participant’s years of Service under Article II, and Supplemental Retirement Pension
under Section 4.2 or Supplemental Retirement Account under Section 5.2, as applicable, 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 or her employment
termination; provided that, in no event shall the counting of a Participant’s Compensation during
this 36-month period reduce his or her Final Average Compensation figure below its highest level
prior to the Participant’s separation from Service.

     8.4 Waiver of Service and Age Requirements Upon Change in Control. A Participant who
separates from service within 24 months following a Change in Control for any reason other than a
termination by the Company for Good Cause, but prior to Early Retirement, shall be eligible for the
Supplemental Retirement Pension specified in Section 4.2, rather than the Supplemental Retirement
Pension specified in Section 4.4, commencing at Normal Retirement. Notwithstanding the previous
sentence, such a Participant may elect to begin receiving the portion of his or her Supplemental
Retirement Pension that constitutes his or her Pre-2005 Benefit pursuant to this Section 8.4 at any
time after attaining age 55 years, subject to the reduction specified in Section 4.3. Such
election shall have no effect on the distribution of his or her Post-2004 Benefit at his or her
Normal Retirement Date.

     8.5 Funding of Plan Benefits Upon Potential 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 then fair market 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 months following a Potential Change in Control, assuming that the Participant’s
employment continues for six 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.

19

 

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

     8.7 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 or a surviving spouse, the present value
(determined in accordance with the assumptions in Section 7.12) of the Participant’s Pre-2005
Benefit, or the portion of Supplemental Disability Pension or the surviving spouse’s Supplemental
Spouse Pension attributable to his or her Pre-2005 Benefit, payable under the Plan in a lump sum
payment. The Committee shall distribute, or cause the trustee under the Trust to distribute, the
present value of the Participant’s Post-2004 Benefit.

     8.8 Lump Sum Election. Each calendar year, a Participant shall have the right to
elect to receive the present value (determined in accordance with the assumptions in Section 7.12)
of the portion of the Participant’s Supplemental Retirement Pension or the balance of the
Participant’s Supplemental Retirement Account that constitutes the Participant’s Pre-2005 Benefit
or the Participant’s Supplemental Disability Pension, in a lump sum if:

	 	(a)	 	a Change in Control occurs in the calendar year subsequent to the calendar year
in which the election is made; and

	 	(b)	 	(i)	 	within 24 months following the Change in Control any one of the payment
triggering conditions set forth in the Change in Control and Termination Agreement
between the Company and the Participant shall have occurred; or

	 	(ii)	 	if no Change in Control and Termination Agreement is in effect
between the Company and the Participant on the date of the Change in Control
and within 24 months following the Change in Control the employment of the
Participant with the Company is terminated by the Company for any reason other
than Good Cause or the Participant terminates his or her employment with the
Company for Good Reason.

Such election shall be irrevocable for the calendar year to which it applies. A distribution
pursuant to this Section 8.8 shall be made as soon as practicable following the Participant’s
separation from Service. Notwithstanding the preceding provisions of this Section 8.8, a
Participant had the right to make the election set forth in this Section at any time during the
first three (3) months of calendar year 2003 with respect to a Change in Control that occurred
during the last nine (9) months of calendar year 2003. Any such election was irrevocable for
calendar year 2003 and was subject to the other provisions of this Section 8.8.

20

 

     8.9 Definitions.

	 	(a)	 	“Good Cause” shall be deemed to exist if, and only if:

	 	(i)	 	the Participant engages in acts or omissions constituting
dishonesty, intentional breach of fiduciary obligation or intentional
wrongdoing or malfeasance, in each case that results in substantial harm to the
Company; or

	 	(ii)	 	the Participant is convicted of a criminal violation involving
fraud or dishonesty.

	 	(b)	 	“Good Reason” shall be deemed to exist if, and only if:

	 	(i)	 	there is a significant change in the nature or the scope of the
Participant’s authorities or duties;
	 
	 	(ii)	 	there is a significant reduction in the Participant’s monthly
rate of base salary, his or her opportunity to earn a bonus under an incentive
bonus compensation plan maintained by the Company or his or her benefits; or
	 
	 	(iii)	 	the Company changes by 100 miles or more the principal
location in which the Participant is required to perform services.

ARTICLE IX

Plan Administration: The Committee

     9.1 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 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 Participants, and
their surviving spouses and any other beneficiaries, and the amount of their respective
benefits under the Plan, and to remedy ambiguities, inconsistencies or omissions.
	 
	 	(b)	 	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.
	 
	 	(c)	 	To enforce the Plan and the rules and regulations, if any, adopted by the
Committee as above.

21

 

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

	 	(e)	 	To furnish the Company with such information as may be required by it for tax
or other purposes as respects the Plan.
	 
	 	(f)	 	To employ agents, attorneys, accountants, actuaries or other persons (who also
may be employed by the Company or an Affiliate) 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.

     9.2 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, separation from Service and the reason therefore, 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.

     9.3 Committee Decision Final. Subject to applicable law, and the provisions of
Section 9.4, 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 the Plan, all definitions, terms and provisions set
forth in the NiSource 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 the Plan.

     9.4 Claims Procedure. Claims for benefits under the Plan shall be made in writing to
the Committee. If the Committee wholly or partially denies a claim for benefits, the Committee
shall, within a reasonable period of time, but no later than 90 days after receiving the claim,
notify the claimant in writing of the denial of the claim. If the Committee fails to notify the
claimant in writing of the denial of the claim within 90 days after the Committee receives it, the
claim shall be deemed denied. A notice of denial shall be written in a manner calculated to be
understood by the claimant, and shall contain:

	 	(a)	 	the specific reason or reasons for denial of the claim;
	 
	 	(b)	 	a specific reference to the pertinent Plan provisions upon which the denial is
based;

22

 

	 	(c)	 	a description of any additional material or information necessary for the
claimant to perfect the claim, together with an explanation of why such material or
information is necessary; and
	 
	 	(d)	 	an explanation of the Plan’s review procedure.

     Within 60 days of the receipt by the claimant of the written notice of denial of the claim, or
within 60 days after the claim is deemed denied as set forth above, if applicable, the claimant may
file a written request with the Committee that it conduct a full and fair review of the denial of
the claimant’s claim for benefits, including the conducting of a hearing, if the Committee deems
one necessary. In connection with the claimant’s appeal of the denial of his or her benefit, the
claimant may review pertinent documents and may submit issues and comments in writing. The
Committee shall render a decision on the claim appeal promptly, but not later than 60 days after
receiving the claimant’s request for review, unless, in the discretion of the Committee, special
circumstances (such as the need to hold a hearing) require an extension of time for processing, in
which case the 60-day period may be extended to 120 days. The Committee shall notify the claimant
in writing of any such extension. The decision upon review shall (1) include specific reasons for
the decision, (2) be written in a manner calculated to be understood by the claimant, and (3)
contain specific references to the pertinent Plan provisions upon which the decision is based.

	[signature block follows on next page]

23

 

     IN WITNESS WHEREOF, the Company has caused this amendment and restatement of the NiSource Inc.
Supplemental Executive Retirement Plan to be executed in its name by its duly authorized officer,
effective as of January 1, 2010.

NISOURCE INC.

By: /s/ Robert Campbell                       

Date: 12/16/2010

24exv10w22

Exhibit 10.22

PENSION RESTORATION PLAN

FOR NISOURCE INC. AND AFFILIATES

As Amended and Restated Effective January 1, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I PURPOSE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	2	 
	 
	2.1 AB Account
	 	 	2	 
	2.2 AB Benefit
	 	 	2	 
	2.3 Affiliated Company
	 	 	2	 
	2.4 Basic Plans
	 	 	2	 
	2.5 Code
	 	 	2	 
	2.6 Committee
	 	 	2	 
	2.7 Company
	 	 	2	 
	2.8 DCP
	 	 	2	 
	2.9 Disability
	 	 	2	 
	2.10 Effective Date
	 	 	2	 
	2.11 Employee
	 	 	2	 
	2.12 Employer
	 	 	3	 
	2.13 ERISA
	 	 	3	 
	2.14 Limits
	 	 	3	 
	2.15 Participant
	 	 	3	 
	2.16 Plan
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III PARTICIPATION AND BENEFIT ACCRUAL
	 	 	3	 
	 
	3.1 Eligibility for Participation and Accrual of Benefit
	 	 	3	 
	3.2 Special Provisions for Participants with Basic Plan Benefits Accrued
Prior to 2004
	 	 	3	 
	3.3 Service Crediting
	 	 	4	 
	 
	 	 	 	 
	ARTICLE IV DETERMINATION OF BENEFIT AMOUNT
	 	 	4	 
	 
	4.1 Amount of Benefit — General Principle
	 	 	4	 
	4.2 Amount of Benefit For Participant Who Accrued a Benefit under a Basic
Plan Prior to Participating in the Plan on January 1, 2004
	 	 	5	 
	4.3 Form of Benefit Accrual
	 	 	6	 
	4.4 Conversion of Benefits
	 	 	6	 
	4.5 Opening Balance
	 	 	6	 
	4.6 Pay-Based Credits and Interest Credits
	 	 	7	 
	4.7 Protected Benefit
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V TIME AND METHOD OF PAYMENT OF BENEFIT
	 	 	8	 
	 
	5.1 Method of Payment
	 	 	8	 
	5.2 Timing of Payment
	 	 	9	 

i

 

	 	 	 	 	 
	 	 	Page	 
	5.3 Changes to the Form of Payment
	 	 	9	 
	5.4 Specified Employees
	 	 	9	 
	5.5 Interest and Mortality Assumptions
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VI ADMINISTRATION OF PLAN
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VII COMPANY’S RIGHT TO AMEND OR TERMINATE PLAN
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS PROVISIONS
	 	 	11	 
	 
	8.1 Unsecured General Creditor
	 	 	11	 
	8.2 Income Tax Payout
	 	 	11	 
	8.3 General Conditions
	 	 	11	 
	8.4 No Guaranty of Benefits
	 	 	11	 
	8.5 No Enlargement of Employee Rights
	 	 	11	 
	8.6 Spendthrift Provision
	 	 	12	 
	8.7 Applicable Law
	 	 	12	 
	8.8 Incapacity of Recipient
	 	 	12	 
	8.9 Unclaimed Benefit
	 	 	12	 
	8.10 Limitations on Liability
	 	 	12	 
	8.11 Claims Procedure
	 	 	13	 
	 
	 	 	 	 
	SCHEDULE A
	 	 	15	 

ii

 

PENSION RESTORATION PLAN

FOR NISOURCE INC. AND AFFILIATES

As Amended and Restated Effective January 1, 2010

ARTICLE I

PURPOSE

     The Columbia Gas System, Inc. adopted The Pension Restoration Plan for The Columbia Gas
System, Inc., as amended and restated effective March 1, 1997. The Plan was amended and restated,
effective January 1, 2002, by Columbia Energy Group, successor to Columbia Gas System, Inc., and
renamed the Pension Restoration Plan for the Columbia Energy Group. Effective January 1, 2004,
NiSource Inc., the parent company of Columbia Energy Group, assumed sponsorship of the Pension
Restoration Plan for Columbia Energy Group, renamed the Plan the Pension Restoration Plan for
NiSource Inc. and Affiliates, and broadened the Plan to allow participation by employees of
NiSource Inc. and Affiliated Companies from and after January 1, 2004. The Plan was further
amended and restated, effective January 1, 2005, to comply with Internal Revenue Code Section 409A
with respect to benefits earned under the Plan. The Plan was amended and restated again, effective
January 1, 2008, to revise certain election procedures. The Plan is now further amended and
restated, effective January 1, 2010, to clarify the calculation of benefits under the Plan and to
reflect Plan benefits parallel to the benefit structures under applicable Basic Plans, including
the AB Benefit.

     The purpose of the Plan is to provide for the payment of pension restoration benefits to
employees of the Employer, whose benefits under the Basic Plans are subject to the Limits, or
affected by deferrals into the DCP, so that the total pension benefits of such employees will be
determined on the same basis as is applicable to all other employees of the Employer. The Plan is
adopted solely (1) for the purpose of providing benefits to Participants in the Plan and their
Beneficiaries in excess of the Limits imposed on qualified plans by Code Sections 415 and
401(a)(17), and any other Code Sections, by restoring benefits to such Plan Participants and
Beneficiaries that are not available under the Basic Plans as a result of the Limits, and (2) for
the purpose of restoring benefits to Plan Participants and Beneficiaries that are no longer
available under the Basic Plans as a result of the Participant’s deferrals into the DCP. The
provisions of the Plan as stated herein apply only to Participants who actively participate in the
Plan on or after the Effective Date. Any Participant who retired or otherwise terminated
employment with the Company and Affiliated Companies prior to the Effective Date shall have his or
her rights determined under the provision of the Plan, as it existed when his or her employment
relationship terminated.

1

 

ARTICLE II

DEFINITIONS

Defined terms for the Plan follow in this Article II. Defined terms used herein in the Plan that
are not defined in this Article or elsewhere in the Plan but are defined in the Basic Plans shall
have the meanings assigned to them in the Basic Plans.

     2.1 AB Account. The hypothetical account created for a Participant under the Plan who has an AB Benefit
under a Basic Plan.

     2.2 AB Benefit. “AB Benefit” means a Participant’s AB I Benefit or AB II Benefit that is accrued for the
benefit of the Participant under a Basic Plan.

     2.3 Affiliated Company. “Affiliated Company” means an affiliate of NiSource Inc.

     2.4 Basic Plans. “Basic Plan(s)” means the tax-qualified defined benefit retirement plan(s) maintained by
the Company and Affiliated Companies listed on Schedule A, attached hereto.

     2.5 Code. “Code” means the Internal Revenue Code of 1986, as amended.

     2.6 Committee. “Committee” means the NiSource Benefits Committee.

     2.7 Company. “Company” means NiSource Inc.

     2.8 DCP. “DCP” means the Columbia Energy Group Deferred Compensation Plan, on or prior to December
31, 2003, and, thereafter, the NiSource Inc. Executive Deferred Compensation Plan.

     2.9 Disability. “Disability” means a condition that (a) causes a Participant to be unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months, (b) causes a Participant, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, to receive income replacement benefits for a period
of not less than three months under an accident and health plan covering Employees of the Company
or an Affiliated Company or (c) causes a Participant to be eligible to receive Social Security
disability payments.

     2.10 Effective Date. “Effective Date” means January 1, 2010, the date on which this amendment and restatement of
the Plan is effective. The Plan was originally effective March 1, 1997.

     2.11 Employee. “Employee” means any individual who is employed by an Employer on a basis that involves
payment of salary, wages or commissions.

2

 

     2.12 Employer. “Employer” means the Company or any Affiliated Company who maintains or adopts for its
Eligible Employees a Basic Plan.

     2.13 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     2.14 Limits. “Limits” means the limits imposed on the payment, accrual or calculation of tax-qualified
retirement plans by Code Sections 415 and 401(a)(17) and any other Code Sections.

     2.15 Participant. “Participant” means any Employee who is participating in the Plan in accordance with its
provisions.

     2.16 Plan. “Plan” means the Pension Restoration Plan for NiSource Inc. and Affiliates (formerly known
as the Pension Restoration Plan for the Columbia Energy Group, formerly known as the Pension
Restoration Plan for The Columbia Gas System, Inc.), as set forth herein.

ARTICLE III

PARTICIPATION AND BENEFIT ACCRUAL

     3.1 Eligibility for Participation and Accrual of Benefit. Except as provided in Section 3.2 below, each Employee of an Employer shall be eligible to
participate in the Plan as of the date he or she is eligible to participate in a Basic Plan. For
purposes of accruing a benefit under the Plan, each employee shall be eligible to accrue a benefit
under the Plan for any plan year in which his or her benefits under a Basic Plan are affected by
the Limits or by his or her deferrals under the DCP.

     The Committee (or its delegate) shall determine the eligibility of each Employee to
participate in the Plan based on information furnished by the Employer. Such determination shall
be within the discretion of the Committee (or its delegate) and shall be conclusive and binding
upon all persons as long as such determination is made pursuant to the Plan and applicable law.

     3.2 Special Provisions for Participants with Basic Plan Benefits Accrued Prior to
2004.

	 	(a)	 	Eligibility. As set forth in Article I, prior to January 1, 2004, only Employees of Columbia
Energy Group (or its predecessor) who had benefits under a Basic Plan affected by
the Limits, or by his or her deferrals under the DCP, participated in the Plan.
Pursuant to the extension of participation in the Plan as explained in Article I, on
or after January 1, 2004, each Employee meeting the participation requirements set
forth in Section 3.1 shall participate in the Plan as of January 1, 2004, and shall
be eligible to accrue a benefit under the Plan as of such date or, if

3

 

	 	 	 	later, as of the date that an Employee’s benefits under a Basic Plan are affected by
the Limits or by his or her deferrals under the DCP.
	 
	 	(b)	 	Benefit Accrual. With respect to any Participant who was first eligible to participate in the Plan
on January 1, 2004 in accordance with this Section, but who had accrued benefits
under a Basic Plan prior to such date, such Participant shall have benefits under
the Plan calculated in accordance with the Plan’s general provisions, except that
the Plan shall only consider the Participant’s Credited Service, Point Service,
Compensation or Accrued Benefit under the Basic Plan earned on or after the date
participation in the Plan begins (i.e., January 1, 2004), as further described in
Section 4.2, Section 4.4(b), Section 4.5(b) Section 4.6(b) and Section 4.7(b).

     3.3 Service Crediting. A Participant’s service used under the Basic Plan for purposes of determining eligibility
for any retirement benefit shall also be used for similar purposes under the Plan. For any
Participant described in Section 3.2, the Plan shall only consider such Participant’s Credited
Service (or, if applicable, Point Service) as of the date of participation in the Plan for purposes
of calculating the benefit under the Plan; however, the Plan shall continue to consider such
Participant’s Credited Service (or, if applicable, Point Service) under the Basic Plan for purposes
of determining early retirement eligibility or the application of the Pay-Based Credit scale for
the Participant as described in Section 4.6.

ARTICLE IV

DETERMINATION OF BENEFIT AMOUNT

     4.1 Amount of Benefit — General Principle. The benefit payable under the Plan to a Participant (or to his or her Beneficiary under a
Basic Plan) shall be equal to the excess (if any) of the benefit determined under subsection (a)
below over the benefit determined under subsection (b) below:

	 	(a)	 	The benefit that would have been payable under a Basic Plan to a Participant,
or to his or her Beneficiary, determined under a Basic Plan without regard to (i) the
Limits or (ii) the Participant’s deferrals into the DCP, if any.
	 
	 	(b)	 	The benefit actually payable to the Participant, or to his or her Beneficiary,
determined under a Basic Plan after applying the Limits and considering deferrals into
the DCP, if any.

     To the extent that the AB Benefit provisions of the Basic Plan apply to a Participant, such
Participant shall have an AB Account created and shall have his or her benefit under the Plan
calculated in accordance with the provisions of this Article IV. Specifically, such Participant

4

 

shall be subject to the conversion, Opening Balance, Pay-Based and Interest Credits and
Protected Benefit provisions provided under this Article.

     4.2 Amount of Benefit For Participant Who Accrued a Benefit under a Basic Plan Prior to
Participating in the Plan on January 1, 2004. Notwithstanding the foregoing, the calculation of the benefit payable under Section 4.1
above shall be limited for any Participant described in Section 3.2. For such Participants, the
benefit payable under the Plan shall be determined as follows:

	 	(a)	 	FAP Participant. For a Participant whose Accrued Benefit under a Basic
Plan is a FAP Benefit, the benefit payable under the Plan to the Participant, or to his
or her Beneficiary under the Basic Plan, shall be equal to the excess (if any) of the
benefit determined under paragraph (1) below over the benefit determined under
paragraph (2) below:

	 	(1)	 	The benefit that would have been payable under a Basic Plan to
a Participant, or to his or her Beneficiary determined under a Basic Plan,
considering only the Participant’s Credited Service and Compensation from and
after the date the Participant first becomes eligible to participate in the
Plan, determined without regard to (i) the Limits or (ii) the Participant’s
deferrals into the DCP, if any.
	 
	 	(2)	 	The benefit actually payable to the Participant, or to his or
her Beneficiary determined under a Basic Plan, calculated based upon the
Participant’s Credited Service and Compensation from and after the date the
Participant first becomes eligible to participate in the Plan, determined after
applying the Limits and considering deferrals into the DCP, if any.

	 	(b)	 	AB Participant. For a Participant whose Accrued Benefit under a Basic
Plan is an AB Benefit, the benefit payable under the Plan to the Participant, or to his
or her Beneficiary under a Basic Plan, shall be equal to the excess (if any) of the
benefit determined under paragraph (1) below over the benefit determined under
paragraph (2) below:

	 	(1)	 	The benefit that would have been payable under a Basic Plan to
a Participant or his or her Beneficiary, determined as if the Participant’s
Opening Balance under the Basic Plan was $0 as of the date the Participant
first becomes eligible to participate in the Plan, and considering only the
Participant’s Pay-Based Credits, Interest Credits and Compensation from and
after such date, and determined without regard to (i) the Limits or (ii) the
Participant’s deferrals into the DCP, if any.
	 
	 	(2)	 	The benefit actually payable under a Basic Plan to the
Participant, or to his or her Beneficiary, determined as if the Participant’s
Opening Balance under the Basic Plan was $0 as of the date the Participant
first becomes

5

 

	 	 	 	eligible to participate in the Plan, and considering only the Participant’s
Pay-Based Credits, Interest Credits and Compensation from and after such
date, and determined after applying the Limits and considering deferrals
into the DCP, if any.

     4.3 Form of Benefit Accrual. The form of benefit accrual for a Participant in the Plan shall be the form of benefit accrual
applicable for such Participant under the relevant Basic Plan.

     4.4 Conversion of Benefits. 

	 	(a)	 	In General. Upon the conversion of any Participant’s Accrued Benefit
in a Basic Plan from a FAP Benefit to an AB II Benefit or from an AB I Benefit to an AB
II Benefit, any benefit under the Plan shall, except as provided below, also be
converted upon such date according to the conversion procedures set forth in the
relevant Basic Plan, including determination of an Opening Balance.
	 
	 	(b)	 	Exception to the General Provision. Notwithstanding the foregoing,
with respect to any Participant in the Plan who is described in Section 3.2, such
Participant’s benefit under the Plan shall be converted according to the conversion
procedures in the relevant Basic Plan, provided that any consideration of Credited
Service and Compensation in the calculation of the Participant’s Opening Balance shall
be limited to Credited Service and Compensation earned from and after the date the
Participant first becomes eligible to participate in the Plan.

     4.5 Opening Balance. For purposes of determining the Opening Balance for Participants in the Plan, the following
provisions shall apply:

	 	(a)	 	In General. The Opening Balance shall be calculated using the same
methodology and factors as provided in the relevant Basic Plan. The Opening Balance
under the Plan shall be determined as the excess of the Opening Balance determined in
(1) below over the Opening Balance determined in (2) below:

	 	(1)	 	The Participant’s Opening Balance under the Basic Plan
determined without regard to (i) the Limits or (ii) the Participant’s deferrals
into the DCP, if any.
	 
	 	(2)	 	The Participant’s Opening Balance under the Basic Plan
determined after applying the Limits and considering deferrals into the DCP, if
any.

	 	(b)	 	Exception to the General Provision. For the purpose of determining the
Opening Balance for any Participant in the Plan who is described in Section 3.2, the
Opening Balance under the Plan shall be determined in accordance with Section
4.5(a) above, but considering a calculation of the Opening Balance under the Basic
Plan using only the Participant’s Credited Service (or, if applicable, Point

6

 

	 	 	 	Service) and Compensation from and after the date the Participant first becomes
eligible to participate in the Plan.

     4.6 Pay-Based Credits and Interest Credits. For purposes of determining Pay-Based Credits and Interest Credits under the Plan, the
following provisions shall apply:

	 	(a)	 	Pay-Based Credits Generally. Pay-Based Credits under the Plan shall be
calculated using the same methodology and factors as provided in the relevant Basic
Plan. Pay-Based Credits under the Plan shall be determined as the excess of the
Pay-Based Credits determined in (1) below over the Pay-Based Credits determined in (2)
below:

	 	(1)	 	The Participant’s Pay-Based Credits under the Basic Plan
determined without regard to (i) the Limits or (ii) the Participant’s deferrals
into the DCP, if any.
	 
	 	(2)	 	The Participant’s Pay-Based Credits under the Basic Plan
determined after applying the Limits and considering deferrals into the DCP, if
any.

	 	(b)	 	Exception to the General Pay-Based Credits Provision. For the purpose
of determining the Pay-Based Credits for any Participant in the Plan who is described
in Section 3.2, the Pay-Based Credits under the Plan shall be determined in accordance
with Section 4.6(a) above, but considering a calculation of Pay-Based Credits under the
Basic Plan using only Compensation from and after the date the Participant first
becomes eligible to participate in the Plan.
	 
	 	(c)	 	Interest Credits. Interest Credits under the Plan shall be calculated
using the same methodology and factors as provided in the relevant Basic Plan.

     4.7 Protected Benefit. Effective for any Participant terminating employment with the Employer on or after January
1, 2011, the benefit payable under the Plan may never be less than the benefit set forth in this
section. For purposes of determining the Protected Benefit under the Plan, the following
provisions shall apply:

	 	(a)	 	Protected Benefit Generally. The Protected Benefit under the Plan
shall be calculated using the same methodology and factors as provided in the relevant
Basic Plan. The Protected Benefit under the Plan shall be determined as the excess of
the benefit determined in (1) below over the benefit determined in (2) below:

	 	(1)	 	The Protected Benefit under the Basic Plan for the Participant,
or for his or her Beneficiary, determined without regard to (i) the Limits or
(ii) the Participant’s deferrals into the DCP, if any.

7

 

	 	(2)	 	The Protected Benefit under the Basic Plan for the Participant,
or for his or her Beneficiary, determined after applying the Limits and
considering deferrals into the DCP, if any.

	 	 	 	In accordance with the methodology provided in the applicable Basic Plan, a
Participant with an AB Benefit shall be entitled to benefit under the Plan equal to
the greater of (1) the AB Account under the Plan or (2) the sum of the AB Account
under the Plan (determined without regard to the Opening Balance calculation) plus
the portion of the FAP Benefit that is calculated in accordance with the Plan as of
the date of conversion to the AB Benefit as set forth in Section 4.4.
	 
	 	(b)	 	Exception to the General Protected Benefit Provision. For the purpose
of determining the Protected Benefit for any Participant in the Plan who is described
in Section 3.2, the Protected Benefit under the Plan shall be determined in accordance
with Section 4.7(a) above, but considering calculation of the Protected Benefit under
the Basic Plan using only Credited Service and Compensation from and after the date the
Participant first becomes eligible to participate in the Plan.

ARTICLE V

TIME AND METHOD OF PAYMENT OF BENEFIT

     5.1 Method of Payment.

	 	(a)	 	The benefit earned under the Plan shall be payable to a Participant in a form
available under the Basic Plan, as elected by the Participant by notice delivered to
the Committee on or before December 31, 2005. Notwithstanding the preceding sentence,
in the case of an Employee who becomes a Participant on or after January 1, 2005, the
aforementioned election with respect to a benefit shall be made no later than January
31 of the calendar year after the calendar year in which the Participant first becomes
eligible to participate in the Plan, and such election shall be effective with respect
to Compensation related to services to be performed subsequent to the election;
provided, however, that a Participant shall not be considered first eligible if, on the
date he or she becomes a Participant, he or she participates in any other nonqualified
plan of the same category that is subject to Code Section 409A, maintained by the
Company or an Affiliated Company.
	 
	 	(b)	 	If payment in the form of an annuity is elected, the annuity type shall be
elected by the Participant at the time he or she makes the election described in the
first or second sentence of subsection (a) above from among those annuities available
at that time under the Basic Plan. If a benefit hereunder is paid in an annuity form
other than a straight life annuity, the amount of the benefit under the Plan shall be

8

 

	 	 	 	reduced by the Basic Plan’s factors in effect at the time of such election for
payment in a form other than a straight life annuity. If payment in the form of a
lump sum is elected, the lump sum amount payable will be calculated in the same
manner and according to the same interest rates and mortality tables as under the
Basic Plan at the time of such election.
	 
	 	(c)	 	If the Participant fails to elect a form of payment as required under
subsections (a) and (b) above, the Participant’s benefit shall be payable in a lump
sum.

     5.2 Timing of Payment. A benefit payable in accordance with Section 5.1 will commence within 45 days after: (i) if
the Participant qualifies for Early Retirement under a Basic Plan, when the Participant separates
from service, or (ii) if the Participant does not qualify for Early Retirement under a Basic Plan,
the later of when the Participant separates from service or attains (or would have attained) age
65, or, if later, within such timeframe permitted under Code Section 409A, and guidance and
regulations thereunder.

     5.3 Changes to the Form of Payment. A Participant cannot change the form of payment of a benefit elected under Section 5.1 or
this Section 5.3 unless (i) such election does not take effect until at least 12 months after the
date on which the election is made, (ii) in the case of an election related to a payment not due to
the Participant’s Disability or death, the first payment with respect to which such new election is
effective is deferred for a period of not less than five years from the date such payment would
otherwise have been made, and (iii) any election related to a payment based upon a specific time or
pursuant to a fixed schedule may not be made less than 12 months prior to the date of the first
scheduled payment; provided, however, that an election to change from one type of annuity payment
to a different, actuarially equivalent, type of annuity payment shall not be considered a change to
the form of payment for purposes of applying the restrictions in clauses (i), (ii) and (iii).

     Notwithstanding the preceding paragraphs of this Section 5.3, a Participant may change an
election with respect to the form of payment of a benefit, without regard to the restrictions
imposed under the preceding paragraph, on or before December 31, 2006; provided that such election
(i) applies only to amounts that would not otherwise be payable in calendar year 2006, and (ii)
shall not cause an amount to be paid in calendar year 2006 that would not otherwise be payable in
such year.

     5.4 Specified Employees. Notwithstanding any other provision of the Plan, in no event can a payment of a benefit to
a Participant who is a Specified Employee of the Company or an Affiliated Company, at a time during
which the Company’s capital stock or capital stock of an Affiliated Company is publicly traded on
an established securities market, in the calendar year of his or her separation from service, be
made before the date that is six months after the date of the Participant’s separation from service
with the Company and all Affiliated Companies, unless such separation is due to his or her death or
Disability.

     A Participant shall be deemed to be a Specified Employee for purposes of this Section 5.4 if
he or she is in a job category C2 or above with respect to the Company or Affiliated Company

9

 

that employs him or her; provided if at any time the total number of Employees in job category
C2 and above is less than 50, a Specified Employee shall include any person who meets the
definition of Key Employee set forth in Code Section 416(i) without reference to paragraph (5). A
Participant shall be deemed to be a Specified Employee with respect to a calendar year if he or she
is a Specified Employee on September 30th of the preceding calendar year. If a Specified Employee
will receive payments hereunder in the form of installments or an annuity, the first payment made
as of the date six months after the date of the Participant’s separation from service with the
Company and all Affiliated Companies shall be a lump sum, paid as soon as practicable after the end
of such six-month period, that includes all payments that would otherwise have been made during
such six-month period. From and after the end of such six month period, any such installment or
annuity payments shall be made pursuant to the terms of the applicable installment or annuity form
of payment.

     5.5 Interest and Mortality Assumptions. Determinations under the Plan shall be based on the interest and mortality assumptions used
in the applicable Basic Plan on the date of such determination.

ARTICLE VI

ADMINISTRATION OF PLAN

The Plan shall be administered by the Committee. In its discretion, the Committee may delegate to
any division or department of the Company the discretionary authority to make decisions regarding
Plan administration, within limits and guidelines from time to time established by the Committee.
The delegated discretionary authority shall be exercised by such division or department’s senior
officer, or his/her delegate. Within the scope of the delegated discretionary authority, such
officer or person shall act in the place of the Committee and his/her decisions shall be treated as
decisions of the Committee.

ARTICLE VII

COMPANY’S RIGHT TO AMEND OR TERMINATE PLAN

While the Company intends to maintain the Plan in conjunction with the Basic Plans, the Company, or
the Officer Nomination and Compensation Committee of the Board of Directors of the Company,
reserves the right to amend the Plan at any time and from time to time, or to terminate it at any
time for any reason; provided, however, that no amendment or termination of the Plan shall impair
or alter such right to a benefit that would have arisen under the Plan as it read before the
effective date of such amendment or termination to or with respect to any employee who has become a
Participant in the Plan before the effective date of such amendment or termination or with respect
to his or her Beneficiary. Upon termination of the Plan, distribution of Plan benefits shall be
made to Participants and Beneficiaries in the manner and at

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the time described in Article V of the Plan. No additional benefits shall be earned after
termination of the Plan.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

     8.1 Unsecured General Creditor. Participants and Beneficiaries shall be unsecured general creditors, with no secured or
preferential right to any assets of the Company, any other Employer, or any other party for payment
of benefits under the Plan. Obligations of the Company and each other Employer under the Plan
shall be an unfunded and unsecured promise to pay money in the future.

     8.2 Income Tax Payout. In the event that the Internal Revenue Service prevails in its claim that that any amount
of a Participant’s benefit payable pursuant to the Plan and held in the general assets of the
Company or any other Employer constitutes taxable income under Code Section 409A, and guidance and
regulations thereunder, to a Participant or his or her Beneficiary for any taxable year prior to
the taxable year in which such amount is distributed to him or her, or in the event that legal
counsel satisfactory to the Company and the applicable Participant or his or her Beneficiary
renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the
amount of such benefit held in the general assets of the Company or any other Employer, to the
extent constituting such taxable income, shall be immediately distributed to the Participant or his
or her Beneficiary. For purposes of this Section, the Internal Revenue Service shall be deemed to
have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or if the
Participant or Beneficiary, based upon an opinion of legal counsel satisfactory to the Company and
the Participant or his or her Beneficiary, fails to appeal a decision of the Internal Revenue
Service, or a court of applicable jurisdiction, with respect to such claim, to an appropriate
Internal Revenue Service appeals authority or to a court of higher jurisdiction within the
appropriate time period.

     8.3 General Conditions. Except as otherwise expressly provided herein, all terms and conditions of a Basic Plan
applicable to a Basic Plan benefit shall also be applicable to a benefit payable hereunder. Any
Basic Plan benefit shall be paid solely in accordance with the terms and conditions of the
applicable Basic Plan and nothing in the Plan shall operate or be construed in any way to modify,
amend or affect the terms and provisions of the Basic Plan.

     8.4 No Guaranty of Benefits. Nothing contained in the Plan shall constitute a guaranty by the Company or any other
Employer or any other entity or person that the assets of the Company or any other Employer will be
sufficient to pay any benefit hereunder.

     8.5 No Enlargement of Employee Rights. No Participant or Beneficiary shall have any right to a benefit under the Plan except in
accordance with the terms of the Plan. Establishment of the Plan shall not be construed to give
any Participant or Beneficiary the right to be retained in the service of the Company or any
Affiliated Company.

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     8.6 Spendthrift Provision. No interest of any person or entity in, or right to receive a benefit 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 benefit 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.

Notwithstanding the preceding paragraph, the benefit of any Participant shall be subject to and
payable in the amount determined in accordance with any qualified domestic relations order, as that
term is defined in ERISA Section 206(d)(3). The Committee shall provide for payment of such
benefit to an alternate payee (as defined in ERISA Section 206(d)(3)) as soon as administratively
possible following receipt of such order. Any federal, state or local income tax associated with
such payment shall be the responsibility of the alternate payee. The benefit that is subject to
any qualified domestic relations order shall be reduced by the amount of any payment made pursuant
to such order.

     8.7 Applicable Law. The Plan shall be construed and administered under the laws of the State of Indiana, except
to the extent preempted by applicable federal law.

     8.8 Incapacity of Recipient. If any person entitled to a benefit payment under the Plan is deemed by the Committee to be
incapable of personally receiving and giving a valid receipt for such payment, then, unless and
until claim therefore shall have been made by a duly appointed guardian or other legal
representative of such person, the Committee 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, any other Employer, the Committee and the
Plan therefore.

     8.9 Unclaimed Benefit. Each Participant shall keep the Committee informed of his or her current address and the
current address of his or her Beneficiaries. The Committee shall not be obligated to search for
the whereabouts of any person. If the location of a Participant is not made known to the Committee
within three years after the date on which payment of the Participant’s benefit 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 Committee is unable to locate any Beneficiary of the
Participant, then the Committee shall have no further obligation to pay any benefit hereunder to
such Participant, Beneficiary, or any other person and such benefit shall be irrevocably forfeited.

     8.10 Limitations on Liability. Notwithstanding any of the preceding provisions of the Plan, none of the Company, any other
Employer, or any individual acting as an employee, or agent at the direction of the Company or any
other Employer, or any member of the Committee, shall be liable to any Participant, former
Participant, Beneficiary, or any other person for any claim, loss, liability or expense incurred in
connection with the Plan.

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     8.11 Claims Procedure. Claims for benefits under the Plan shall be made in writing to the Committee. If the
Committee wholly or partially denies a claim for benefits, the Committee shall, within a reasonable
period of time, but no later than 90 days after receiving the claim, notify the claimant in writing
of the denial of the claim. If the Committee fails to notify the claimant in writing of the denial
of the claim within 90 days after the Committee receives it, the claim shall be deemed denied. A
notice of denial shall be written in a manner calculated to be understood by the claimant, and
shall contain:

	 	(a)	 	the specific reason or reasons for denial of the claim;
	 
	 	(b)	 	a specific reference to the pertinent Plan provisions upon which the denial is
based;
	 
	 	(c)	 	a description of any additional material or information necessary for the
claimant to perfect the claim, together with an explanation of why such material or
information is necessary; and
	 
	 	(d)	 	an explanation of the Plan’s review procedure.

Within 60 days of the receipt by the claimant of the written notice of denial of the claim, or
within 60 days after the claim is deemed denied as set forth above, if applicable, the claimant may
file a written request with the Committee that it conduct a full and fair review of the denial of
the claimant’s claim for benefits, including the conducting of a hearing, if the Committee deems
one necessary. In connection with the claimant’s appeal of the denial of his or her benefit, the
claimant may review pertinent documents and may submit issues and comments in writing. The
Committee shall render a decision on the claim appeal promptly, but not later than 60 days after
receiving the claimant’s request for review, unless, in the discretion of the Committee, special
circumstances (such as the need to hold a hearing) require an extension of time for processing, in
which case the 60-day period may be extended to 120 days. The Committee shall notify the claimant
in writing of any such extension. The decision upon review shall (i) include specific reasons for
the decision, (ii) be written in a manner calculated to be understood by the claimant, and (iii)
contain specific references to the pertinent Plan provisions upon which the decision is based.

[Signature block follows on next page]

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     IN WITNESS WHEREOF, NiSource Inc. has caused this amended and restated the Pension Restoration
Plan for NiSource Inc. and Affiliates to be executed in its name, by its duly authorized officer,
effective as of January 1, 2010.

	 	 	 	 	 
	 	NISOURCE INC.

 	 
	Date: 12/16/2010 	By:  	/s/ Robert Campbell
 	 

14

 

	 	 	 	 	 

SCHEDULE A

NiSource Salaried Pension Plan

NiSource Subsidiary Pension Plan

Columbia Energy Group Pension Plan

Bay State Gas Company Pension Plan

15

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