Document:

exv10w6

Exhibit 10.6

SAVINGS RESTORATION PLAN

FOR NISOURCE INC. AND AFFILIATES

As Amended and Restated Effective January 1, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I PURPOSE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	2.1 Affiliated Company
	 	 	2	 
	2.2 Annual Addition
	 	 	2	 
	2.3 Basic Plan
	 	 	2	 
	2.4 Code
	 	 	2	 
	2.5 Committee
	 	 	2	 
	2.6 Company
	 	 	2	 
	2.7 DCP
	 	 	2	 
	2.8 Disability
	 	 	2	 
	2.9 Employee
	 	 	2	 
	2.10 Employer
	 	 	2	 
	2.11 ERISA
	 	 	2	 
	2.12 Interest
	 	 	3	 
	2.13 Limits
	 	 	3	 
	2.14 Participant
	 	 	3	 
	2.15 Plan
	 	 	3	 
	2.16 Plan Year
	 	 	3	 
	2.17 Post-2004 Benefit
	 	 	3	 
	2.18 Pre-2005 Benefit
	 	 	3	 
	2.19 Supplemental Savings Account
	 	 	3	 
	2.20 Unforeseeable Emergency
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III ELIGIBILITY
	 	 	4	 
	 
	 	 	 	 
	3.1 Eligibility
	 	 	4	 
	3.2 Notice of Eligibility to Participants
	 	 	4	 
	3.3 Method of Becoming a Participant
	 	 	4	 
	3.4 Continuation of Participation
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV SUPPLEMENTAL SAVINGS ACCOUNT
	 	 	5	 
	 
	 	 	 	 
	4.1 Supplemental Savings Account
	 	 	5	 
	4.2 Employer Credits
	 	 	5	 
	4.3 Special Employer Credits
	 	 	5	 
	4.4 Participant Credits
	 	 	6	 
	4.5 Interest Credits
	 	 	6	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE V IN-SERVICE WITHDRAWALS
	 	 	7	 
	 
	 	 	 	 
	5.1 Pre-2005 Benefit
	 	 	7	 
	5.2 Post-2004 Benefit
	 	 	7	 
	5.3 Limitations on In-Service Withdrawals
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VI TERMINATION OF PARTICIPATION AND PAYMENT OF BENEFITS
	 	 	8	 
	 
	 	 	 	 
	6.1 Termination of Participation
	 	 	8	 
	6.2 Benefits at Termination of Participation
	 	 	8	 
	6.3 Method and Time of Payment
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VII ADMINISTRATION OF PLAN
	 	 	11	 
	 
	 	 	 	 
	ARTICLE VIII COMPANY’S RIGHTS TO AMEND OR TERMINATE PLAN
	 	 	11	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS PROVISIONS
	 	 	11	 
	 
	 	 	 	 
	9.1 Definitions
	 	 	11	 
	9.2 Unsecured General Creditor
	 	 	11	 
	9.3 Income Tax Payout
	 	 	12	 
	9.4 General Conditions
	 	 	12	 
	9.5 No Guaranty of Benefits
	 	 	13	 
	9.6 No Enlargement of Employee Rights
	 	 	13	 
	9.7 Spendthrift Provision
	 	 	13	 
	9.8 Applicable Law
	 	 	13	 
	9.9 Incapacity of Recipient
	 	 	13	 
	9.10 Unclaimed Benefit
	 	 	13	 
	9.11 Limitations on Liability
	 	 	14	 
	9.12 Claims Procedure
	 	 	14	 

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SAVINGS RESTORATION PLAN

FOR NISOURCE INC. AND AFFILIATES

As Amended and Restated Effective January 1, 2008

ARTICLE I

PURPOSE

     Prior to January 1, 2004, Columbia Energy Group sponsored the Savings Restoration Plan for
Columbia Energy Group for eligible executives of Columbia Energy Group and certain affiliated
companies. Effective January 1, 2004, NiSource Inc., the parent company of Columbia Energy Group,
assumed sponsorship of the Savings Restoration Plan for Columbia Energy Group, renamed the Plan the
Savings Restoration Plan for NiSource Inc. and Affiliates, and broadened the Plan to include all
employees of NiSource Inc. and Affiliated Companies.

     The purpose of the Plan is to provide for the payment of savings restoration benefits to
employees of NiSource Inc. and Affiliated Companies, whose benefits under the Basic Plan are
subject to the Limits or affected by deferrals into the DCP, so that the total savings plan
benefits of such employees shall be determined on the same basis as is applicable to all other
employees of the Company. 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 Section 401(a)(17) and any other Code Sections, by restoring benefits to such Plan
Participants and Beneficiaries that are no longer available under the Basic Plan 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 Plan as a result of the Participant’s deferrals into the
DCP. The Plan was amended and restated effective January 1, 2004, and amended effective January 1,
2005. The Plan was then amended and restated again effective January 1, 2005, to comply with Code
Section 409A, and guidance and regulations thereunder, 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 provisions of the Plan as set forth herein apply only to Participants who actively
participate in the Plan on or after January 1, 2005. Any Participant who retired or otherwise
terminated employment with the Company and all Affiliated Companies prior to January 1, 2005 shall
have his or her rights determined under the provision of the Plan as it existed when his or her
employment relationship terminated. The Plan is now further amended and restated, effective
January 1, 2008, to provide for mandatory lump sum payments of small account balances in accordance
with Code Section 409A.

ARTICLE II

DEFINITIONS

 

 

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

     2.2 Annual Addition. “Annual Addition” for any Participant means the sum, in any Plan
Year, of:

	 	(a)	 	the Company’s, or any Affiliated Company’s, matching or profit sharing
contributions to the Basic Plan on behalf of the Participant; plus
	 
	 	(b)	 	all Participant deposits to the Basic Plan, including before-tax and after-tax
deposits.

     For purposes of the Plan, the determination of a Participant’s Annual Addition shall be made
without regard to the Limits.

     2.3 Basic Plan. “‘Basic Plan” means the NiSource Inc. Retirement Savings Plan, as
amended and restated effective January 1, 2002, and as further amended from time to time.

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

     2.5 Committee. “Committee” means the NiSource Inc. and Affiliates Retirement Plan
Administrative and Investment Committee.

     2.6 Company. “Company” means NiSource Inc.

     2.7 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.

     2.8 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.

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

     2.10 Employer. “Employer” means the Company or an Affiliated Company whose Employees
participate in the Plan.

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

2

 

     2.12 Interest. “Interest” means the average of the prime rates of interest charged as
of the last business day of a month, determined under procedures established by the Committee.

     2.13 Limits. “Limits” means the limits imposed on tax qualified retirement plans by
Code Sections 415 and 401(a)(17) and any other Code Sections.

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

     2.15 Plan. “Plan” means the Savings Restoration Plan for NiSource Inc. and Affiliates
(formerly known as the Savings Restoration Plan for the Columbia Energy Group, and before that as
the Thrift Restoration Plan for the Columbia Energy Group), as set forth herein.

     2.16 Plan Year. “Plan Year” means the 12-month period commencing each January 1 and
ending the following December 31.

     2.17 Post-2004 Benefit. “Post-2004 Benefit” means the portion of a Participant’s
Supplemental Savings Account equal to the excess of (1) the balance of the Participant’s
Supplemental Savings Account determined as of a Participant’s date of separation from service with
the Company and all Affiliated Companies after December 31, 2004 over (2) the Pre-2005 Benefit, to
which the Participant would be entitled under the Plan if he voluntarily separated from service
without cause as of such date and received a full payment of benefits from the Plan on the earliest
possible date allowed under the Plan following his separation from service.

     2.18 Pre-2005 Benefit. “Pre-2005 Benefit” means the portion of a Participant’s
Savings Account determined as of December 31, 2004, adjusted to reflect Interest credited to such
balance from and after such date.

     2.19 Supplemental Savings Account. “Supplemental Savings Account” means the sum of
credits accrued under Article IV on behalf of a Participant, adjusted to reflect Interest credited
to the Account, and reduced by any withdrawals under Article V.

     2.20 Unforeseeable Emergency. “Unforeseeable Emergency” means a severe financial
hardship to a Participant resulting from an illness or accident of the Participant, the
Participant’s spouse or a dependent (as defined in Code Section 152(a)), of the Participant, loss
of the Participant’s property due to casualty or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant. The amount
distributed with respect to an Unforeseeable Emergency shall not exceed the amount necessary to
satisfy the Emergency, plus amounts necessary to pay taxes reasonably anticipated as a result
of the distribution, after taking into account the extent to which such hardship is or may be
relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not itself cause severe
financial hardship).

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ARTICLE III

ELIGIBILITY

     3.1 Eligibility. Any Employee who is not a Participant in the Plan on December 31,
2004, who is participating in the Basic Plan and (i) whose Compensation in a Plan Year will exceed
the Limits, or (ii) who has deferrals in the DCP excluded for purposes of benefit allocations in
the Basic Plan, shall be eligible to become a Participant in the Plan as of January 1 of such Plan
Year. Any Participant in the Plan on December 31, 2004 shall continue as a Participant after that
date. If an Employee who was not expected to be eligible to become a Participant in a given Plan
Year subsequently qualifies because his or her Compensation exceeds the Limits for that Plan Year,
or because he or she becomes eligible for, or begins to participate in, the DCP, such Employee
shall be eligible to participate in the Plan as soon as practicable after this determination has
been made or deferrals begin.

     3.2 Notice of Eligibility to Participants. The Committee shall inform each Employee
of his or her eligibility to participate in the Plan as soon as practicable but before the earliest
date such Employee’s participation could become effective.

     3.3 Method of Becoming a Participant. In order to become a Participant, each eligible
Employee must sign a written agreement with his or her Employer providing for a reduction of his or
her Compensation and a corresponding direction of Employer contributions or Participant Pre-tax
Contributions that would normally be made to the Basic Plan, except for the Limits or deferrals
into the DCP, to be credited to his or her Supplemental Savings Account under the Plan, to the
extent necessary to satisfy the Limits with respect to the Basic Plan or deferrals into the DCP.

     A Participant in the Plan as of December 31, 2004 who remains a Participant in the Plan as of
January 1, 2005 shall deliver to the Committee the written agreement referenced in the preceding
paragraph with respect to his or her Compensation earned from and after January 1, 2006 no later
than December 31, 2005. An Employee who becomes a Participant on or after January 1, 2005 shall
deliver the aforementioned written agreement to the Committee within 30 days after the date the
Participant first becomes eligible to participate, and such agreement shall be effective with
respect to Compensation related to services to be performed subsequent to the election; provided
that such 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 account balance plan that is subject
to Code Section 409A, maintained by the Company or an Affiliated Company. If an Employee referred
to in the preceding sentence does not deliver the
aforementioned written agreement to the Committee within such 30-day period, he or she shall
be entitled to deliver to the Committee a written agreement of the type referenced in the preceding
paragraph with respect to his or her Compensation earned from and after the first day of the Plan
Year next following the Plan Year in which the written agreement is delivered. Any election made
pursuant to a written agreement, delivered pursuant to the preceding sentences of this paragraph,
shall continue in effect until revoked by a Participant by notice delivered to the

4

 

Committee no later than the last day of the Plan Year immediately preceding the first day of the Plan Year in
which such election is to become effective.

        3.4 Continuation of Participation. A Participant shall remain a Participant so long
as his or her Supplemental Savings Account has not been fully distributed to him or her.

ARTICLE IV

SUPPLEMENTAL SAVINGS ACCOUNT

        4.1 Supplemental Savings Account. A Supplemental Savings Account shall be established
for each Participant. The amounts to be credited to a Participant’s Supplemental Savings Account
shall be determined under procedures established by the Committee and shall consist of:

	 	(a)	 	Employer credits, as described in Sections 4.2 and 4.3; plus
	 
	 	(b)	 	Participant credits, as described in Section 4.4; plus
	 
	 	(c)	 	Interest credits under Section 4.5.

        A Participant’s Supplemental Savings Account shall be reduced by any withdrawals made under
Article V.

        4.2 Employer Credits. The amount of Employer credits for a Participant shall equal
(a) minus (b) below:

	 	(a)	 	The total amount of Matching Contributions that would otherwise have been
contributed to the Basic Plan for the Participant without regard to the Limits or
deferrals into the DCP;
	 
	 	(b)	 	The actual amount of Matching Contributions contributed to the Basic Plan for
the Participant.

        4.3 Special Employer Credits. Any Participant who (1) during the 2003 and/or 2004
Plan Years had a Matching Contribution allocated to his Matching Contribution Account under the
Basic Plan that was less than the maximum Matching Contribution available under the Basic Plan,
(2) authorized After-tax Contributions and/or Pre-tax Contributions under the Basic Plan
equal to at least 6% of his Compensation for such Plan Year(s), (3) commenced employment with
an Employer prior to January 1, 2002 and was still employed by an Employer on January 1, 2005 and
(4) participated in the Account Balance Option of the NiSource Inc. and Northern Indiana Public
Service Company Pension Plan Provisions Pertaining to Salaried and Non-Exempt Employees, the
NiSource Subsidiary Pension Plan or the Bay State Gas Company Pension Plan, as applicable, shall be
eligible for an additional Employer credit hereunder. The additional Employer credit shall be
calculated as the difference between (i) the Matching

5

 

Contributions that would have been allocated
to the Participant’s Matching Contribution Account under the Basic Plan during the 2003 and/or 2004
Plan Year(s) if his or her total After-tax Contributions, if any, and Pre-tax Contributions under
the Basic Plan for such Plan Year(s) had been contributed evenly over each pay period throughout
the Plan Year(s) and (ii) the Matching Contribution actually allocated to the Participant’s
Matching Contribution Account under the Basic Plan for such Plan Year(s).

     The additional Employer credit, plus interest (calculated using a rate equal to 4.5% from
January 1, 2005 to the date the additional Employer credit is credited to his or her Supplemental
Savings Account as provided herein) shall be credited to the Participant’s Supplemental Savings
Account in accordance with Section 4.1. The additional Employer credit shall be credited to his or
her Supplemental Savings Account as soon as administratively practicable after September 1, 2005,
but in any event no later than December 31, 2005.

     Except where inconsistent with this Section 4.3, the additional Employer credit shall be
subject to all provisions of the Plan applicable to Employer credits.

        4.4 Participant Credits. The amount of Participant credits for a Participant shall
equal (a) minus (b) below:

	 	(a)	 	The total amount of Pre-tax Contributions that would otherwise have been
contributed to the Basic Plan for the Participant without regard to the Limits or
deferrals into the DCP;
	 
	 	(b)	 	The actual amount of Pre-tax Contributions contributed to the Basic Plan for
the Participant.

        4.5 Interest Credits.

	 	(a)	 	Interest credits to a Participant’s Supplemental Savings Account, if
applicable, shall be considered made on a monthly basis.
	 
	 	(b)	 	All credits shall accrue Interest starting with the first full calendar month
in which they are deemed to be a part of the applicable Supplemental Savings Account
and ending with the last full calendar month in which credits are still deemed to be
part of the Supplemental Savings Account.
	 
	 	(c)	 	Interest shall be based on the balance of the value of the Participant’s
Supplemental Savings Account as of the first working day of the calendar month and
credited as of the last working day of the calendar month.
	 
	 	(d)	 	In the event there is a withdrawal by a Participant from his or her
Supplemental Savings Account, the value of such Supplemental Savings Account, prior to
the withdrawal, shall be credited with Interest to the end of the
calendar month in 

6

 

	 	 	 	which the withdrawal is actually made. The amount of the withdrawal shall then be
subtracted from the balance so determined.
	 
	 	(e)	 	Interest shall be earned only on monies held under reserve by an Employer. If
the Committee has invested any portion of a Participant’s Supplemental Savings Account,
Interest shall not be earned on such portion, but such Account shall be adjusted for
actual earnings, gains, and losses on such investment.

ARTICLE V

IN-SERVICE WITHDRAWALS

        5.1 Pre-2005 Benefit. This section applies only to a Pre-2005 Benefit.

	 	(a)	 	In-Service Withdrawals. Subject to the limitations of Section 5.3, a
Participant, by filing a written request with the Committee, may, while employed by an
Employer or an Affiliated Company, elect to withdraw 33%, 67% or 100% of his or her
Pre-2005 Benefit.
	 
	 	(b)	 	Limitation on In-Service Withdrawals. Any In-Service withdrawal under
paragraph (a) of this Section 5.1 shall be subject to a 10% early distribution penalty.
	 
	 	(c)	 	Unforeseeable Emergency. At the written request of a Participant, and
in the written discretion of the Committee, up to 100% of the balance of a
Participant’s Pre-2005 Benefit, determined as of the last day of the calendar month
prior to the date of distribution may be distributed to a Participant in a lump sum in
the case of an Unforeseeable Emergency.

        5.2 Post-2004 Benefit. A Participant shall be entitled to withdraw all or any portion
of his or her Post-2004 Benefit, as he or she may request in a direction delivered to the
Committee, in the case of an Unforeseeable Emergency.

        5.3 Limitations on In-Service Withdrawals. Any In-Service Withdrawal under this
Article V shall be subject to the following provisions:

	 	(a)	 	Only one In-Service Withdrawal shall be permitted in any 12-month period.
	 
	 	(b)	 	In-Service Withdrawals under this Article V shall require suspension of
Employer credits and Participant credits (but not Interest credits) under the Plan for
a period of time varying with the percentage of the value of the Participant’s
Supplemental Savings Account which is withdrawn, according to the following schedule:

	 	 	 
	Percentage	 	Suspension
	Up to 33%
	 	2 months
	34 - 67%
	 	4 months

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	Percentage	 	Suspension
	68 - 100%
	 	6 months

     This suspension shall not affect a Participant’s participation in the Basic Plan nor the basis
for determining the Employer contributions or Participant Pre-tax Contributions under the Basic
Plan.

ARTICLE VI

TERMINATION OF PARTICIPATION

AND PAYMENT OF BENEFITS

        6.1 Termination of Participation. A Participant’s participation in the Plan shall
terminate at separation from service with the Company and all Affiliated Companies for any reason,
including Disability or death.

        6.2 Benefits at Termination of Participation. Upon his or her separation from
service, a Participant, his or her spouse, or his or her Beneficiary or legal representative shall
be entitled to 100% of the Participant’s Supplemental Savings Account credited with Interest, if
applicable, through the calendar month preceding the date payment is made to the Participant (or to
his or her spouse, legal representative or Beneficiary in the case of his or her incapacity or
death).

        6.3 Method and Time of Payment.

	 	(a)	 	Pre-2005 Benefit.

	 	(i)	 	The Pre-2005 Benefit payable under the Plan to a Participant or
his or her spouse, Beneficiary, or legal representative shall be paid in the
same form under which the Basic Plan benefit is payable to the Participant or
his or her spouse, Beneficiary, or legal representative. The Participant’s
election under the Basic Plan of any optional form of payment of his or her
Basic Plan benefit (with the valid consent of his or her surviving spouse where
required under the Basic Plan) shall also be applicable to the payment of his
or her Pre-2005 Benefit under the Plan.
	 
	 	(ii)	 	Payment of the Pre-2005 Benefit under the Plan to a Participant
or his or her spouse, Beneficiary, or legal representative under the Plan shall
commence on the same date as payment of the benefit to the Participant or his
or her spouse, Beneficiary, or legal representative under the Basic Plan
commences. Any election under the Basic Plan made by the Participant with
respect to the commencement of payment of his or her benefit under the Basic
Plan shall also be applicable with respect to the commencement of payment of
his or her Pre-2005 Benefit under the Plan.

8

 

	 	(iii)	 	Notwithstanding the provisions of paragraphs (i) and (ii)
above, an election made by the Participant under the Basic Plan with respect to
the form of payment of his or her Pre-2005 Benefit thereunder (with the valid
consent of his or her surviving spouse where required under the Basic Plan), or
the date for commencement of payment thereof, shall not be effective with
respect to the form of payment or date for commencement of payment of his or
her Pre-2005 Benefit under the Plan unless such election is expressly approved
in writing by the Committee. If the Committee shall not approve such election
in writing, then the form of payment or date for commencement of payment of the
Participant’s Pre-2005 Benefit under the Plan shall be selected by the
Committee at its sole discretion.

	 	(b)	 	Post-2004 Benefit.

	 	(i)	 	Payment of a Post-2004 Benefit in accordance with this
Section 6.3 shall commence within 45 days after the Participant’s date of
separation from service with the Company and all Affiliated Companies, or, if
later, within such timeframe permitted under Code Section 409A, and guidance
and regulations thereunder.
	 
	 	(ii)	 	The Post-2004 Benefit shall be payable in a form elected by a
Participant no later than 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 the form of
payment of a Post-2004 Benefit shall be made within 30 days after the date the
Participant first becomes eligible to participate, and such election shall be
effective with respect to Compensation related to services to be performed
subsequent to the election; provided that such a Participant shall not be
considered first eligible if on the date he becomes a Participant he
participates in any other nonqualified account balance plan that is subject to
Code Section 409A, maintained by the Company or an Affiliated Company. The
form of payment shall be elected by the Participant at the time he makes the
election described in the first or second sentence of this paragraph (iii) from
among those forms of
payment available at that time under the Basic Plan. If a timely payment
election is not made by a Participant, payment shall be made in a lump sum.
	 
	 	(iii)	 	A Participant cannot change the time or form of payment of a
Post-2004 Benefit under this Section 6.3(b) unless (A) such election does not
take effect until at least 12 months after the date the election is made,
(B) in the case of an election related to a payment not related 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

9

 

	 	 	 	the date such payment would otherwise have been made, and (C) 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.
	 
	 	(iv)	 	Notwithstanding any preceding provision of this Section 6.3(b),
a Participant may change an election with respect to the time and form of
payment of a Post-2004 Benefit, without regard to the restrictions imposed
under paragraph (iii) next above, on or before December 31, 2006; provided that
such election (A) applies only to amounts that would not otherwise be payable
in calendar year 2006, and (B) shall not cause an amount to be paid in calendar
year 2006 that would not otherwise be payable in such year.
	 
	 	(v)	 	Notwithstanding any other provision of the Plan, in no event
can a payment of a Post-2004 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 death or Disability.
	 
	 	 	 	     A Participant shall be deemed to be a Specified Employee for purposes
of this subparagraph (iv) if he or she is in job category C2 or above with
respect to the Company or the Affiliated Company 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 a 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 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.
	 
	 	(c)	 	Mandatory Lump Sum Payments.

10

 

	 	 	 	Notwithstanding any other provision in this Section 6.3, if (1) the sum of the
Participant’s Pre-2005 Benefit and Post-2004 Benefit does not exceed the applicable
dollar limit under code Section 402(g)(1)(B) and (2) this sum is the entirety of the
Participant’s interest in the Plan and all other arrangements with respect to which
deferrals of compensation are treated as having been deferred under a single
nonqualified deferred compensation plan under Code Section 409A and applicable
guidance thereunder, then the form of payment of both the Pre-2005 Benefit and
Post-2004 Benefit shall be a single lump sum.

ARTICLE VII

ADMINISTRATION OF PLAN

     The Plan shall be administered by the Committee.

ARTICLE VIII

COMPANY’S RIGHTS TO AMEND OR TERMINATE PLAN

     While the Company intends to maintain the Plan in conjunction with the Basic Plan, 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, surviving spouses and beneficiaries in the manner and at the time described
in Article VI of the Plan. No additional benefits shall be earned after termination of the Plan
other than the crediting of Interest until the date of distribution of a Participant’s Supplemental
Savings Account.

ARTICLE IX

MISCELLANEOUS PROVISIONS

     9.1 Definitions. The terms used in the Plan that are defined in the Basic Plan shall
have the meanings assigned to them in the Basic Plan unless otherwise defined in the Plan.

     9.2 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.

11

 

        9.3 Income Tax Payout.

	 	(a)	 	Notwithstanding anything to the contrary contained herein, (1) in the event
that the Internal Revenue Service prevails in its claim that any amount of a Pre-2005
Benefit, payable pursuant to the Plan and held in the general assets of the Company or
any other Employer, constitutes taxable income to a Participant or his or her
Beneficiary for a taxable year prior to the taxable year in which such amount is
distributed to him or her, or (2) 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 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.
	 
	 	(b)	 	Notwithstanding anything to the contrary contained herein, (1) in the event
that the Internal Revenue Service prevails in its claim that any amount of a Post-2004
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 a taxable
year prior to the taxable year in which such amount is distributed to him or her, or
(2) 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.

        9.4 General Conditions. Except as otherwise expressly provided herein, all terms and
conditions of the 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

12

 

terms and conditions of the 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.

     9.5 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 shall be sufficient to pay any benefit hereunder.

     9.6 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 other Employer.

     9.7 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 sentence, the Supplemental Savings Account 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 Section 206(d)(3) of ERISA. The Committee shall
provide for payment of such portion of a Supplemental Savings Account to an alternate payee (as
defined in Section 206(d)(3) of ERISA) 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 balance of any Supplemental Savings Account that is
subject to any qualified domestic relations order shall be reduced by the amount of any payment
made pursuant to such order.

     9.8 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.

     9.9 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 therefor 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 therefor.

     9.10 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

13

 

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.

     9.11 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.

     9.12 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 (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.

14

 

     IN WITNESS WHEREOF, NiSource Inc. has caused this amended and restated Plan to be executed in
its name, by its duly authorized officer, on this 28 day of October, 2008, effective as of
January 1, 2008.

	 	 	 	 	 
	 	NISOURCE INC.

 	 
	 	By:  	/s/ Robert Campbell
 	 
	 	 	 	 
	 	 	 	 
	 

15exv10w7

Exhibit 10.7

NISOURCE INC.

FORM OF

CHANGE IN CONTROL AND TERMINATION AGREEMENT

     NiSource Inc., a Delaware corporation (“Employer”), which as used herein shall mean NiSource
Inc. and all of its Affiliates, and
                                         (“Executive”) hereby enter into a Change in
Control and Termination Agreement as of                                         , (the “Effective Date”), which
Agreement is hereinafter set forth (“Agreement”).

WITNESSETH

     WHEREAS, Employer considers the ability to attract and retain talented management to be part
of its corporate strategy and necessary in protecting and enhancing the interests of the Employer
and its shareholders. As part of this strategy, Employer desires to retain Executive in its
employment notwithstanding any actual or threatened Change in Control; and

     WHEREAS, Executive and Employer desire to enter into this Agreement pertaining to the terms of
Executive’s employment in the event of any actual or threatened Change in Control;

     NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and
other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:

     1. Term. This Agreement shall begin on the Effective Date and shall continue in
effect until the date which is 24 months after the date on which either Employer or Executive has
given written notice to the other party of its or his election to have this Agreement terminate
(“Term”).

     2. Definitions. For purposes of this Agreement:

          (a) “Affiliate” or “Associate” shall have the meaning set forth in Rule 12b-2 under the
Securities Exchange Act of 1934.

          (b) “Base Salary” shall mean Executive’s monthly base salary at the rate in effect on the date
of a reduction for purposes of paragraph (g) of this Section, or on the date of a termination of
employment under circumstances described in subsections 3(a) or (b) below, whichever is higher;
provided, however, that such rate shall in no event be less than the highest rate in effect for
Executive at any time during the Term.

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          (c) “Beneficiary” shall mean the person or entity designated by Executive, by written
instrument delivered to Employer, to receive the benefits payable under this Agreement in the event
of his death. If Executive fails to designate a Beneficiary, or if no Beneficiary survives
Executive, such death benefits shall be paid:

               (i) to his surviving spouse; or

               (ii) if there is no surviving spouse, to his living descendants per stirpes; or

               (iii) if there is neither a surviving spouse nor descendants, to his duly appointed and
qualified executor or personal representative.

          (d) “Bonus” shall mean Executive’s target annual incentive bonus compensation for the calendar
year in which the date of a termination of employment under circumstances described in subsection
3(a) below occurs, under the NiSource Inc. Corporate Incentive Plan or such other incentive bonus
compensation plan then maintained by Employer (“Annual Incentive Plan”); provided, however, that
such target annual incentive bonus compensation shall in no event be less than the highest target
annual incentive bonus compensation of Executive under any such Annual Incentive Plan for any
calendar year commencing during the Term.

          (e) A “Change in Control” shall be deemed to take place on the occurrence of any of the
following events:

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

     (2) The effective time of (i) a merger or consolidation of NiSource Inc. with one
or more other corporations unless the holders of the outstanding Voting Power of
NiSource Inc. immediately prior to such merger or consolidation (other than the
surviving or resulting corporation or any Affiliate or Associate thereof) hold at least
50% of the Voting Power of the surviving or resulting corporation (in substantially the
same proportion as the Voting Power of NiSource Inc. immediately prior to such merger or
consolidation), or (ii) a transfer of a

-2-

 

Substantial Portion of the Property, of NiSource Inc. other than to an entity of which
NiSource Inc. owns at least 50% of the Voting Power; or

     (3) The election to the Board of Directors of NiSource Inc. (the “Board”) of
candidates who were not recommended for election by the Board, if such candidates
constitute a majority of those elected in that particular election (for this purpose,
recommended directors will not include any candidate who becomes a member of the Board
as a result of an actual or threatened election contest or proxy or consent solicitation
on behalf of anyone other than the Board or as a result of any appointment, nomination,
or other agreement intended to avoid or settle a contest or solicitation).
Notwithstanding the foregoing, a Change in Control shall not be deemed to take place by
virtue of any transaction in which Executive is a participant in a group effecting an
acquisition of NiSource Inc. and, after such acquisition, Executive holds an equity
interest in the entity that has acquired NiSource Inc.

          (f) “Good Cause” shall be deemed to exist if, and only if Employer notifies Executive, in
writing, within 60 days of its knowledge that one of the following events occurred:

     (1) Executive 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 Employer; or

     (2) Executive is convicted of a criminal violation involving fraud or dishonesty.

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

     (1) there is a significant diminution in the nature or the scope of Executive’s
authorities or duties;

     (2) there is a significant reduction in Executive’s monthly rate of Base Salary and
his opportunity to earn a bonus under an incentive bonus compensation plan maintained by
Employer or his benefits; or

     (3) Employer changes by 50 miles or more the principal location at which Executive
is required to perform services as of the date of a Change in Control.

          (h) “Pension Plan” shall mean any Retirement Plan that is a defined benefit plan as defined in
Section 3(35) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

-3-

 

          (i) “Retirement Plan” shall mean any qualified or nonqualified supplemental employee pension
benefit plan, as defined in Section 3(2) of ERISA, currently or hereinafter made available by
Employer in which Executive is eligible to participate.

          (j) “Severance Period” shall mean the period beginning on the date Executive’s employment with
Employer terminates under circumstances described in subsection 3(a) and ending on the date
241 months thereafter.

          (k) “Substantial Portion of the Property of NiSource Inc.” shall mean 50% of the aggregate
book value of the assets of NiSource Inc. and its Affiliates and Associates as set forth on the
most recent balance sheet of NiSource Inc., prepared on a consolidated basis, by its regularly
employed, independent, certified public accountants.

          (l) “Welfare Plan” shall mean any health and dental plan, disability plan, survivor income
plan or life insurance plan, as defined in Section 3(1) of ERISA, currently or hereafter made
available by Employer in which Executive is eligible to participate.

     3. Benefits Upon Termination of Employment.

          (a) The following provisions will apply if a Change in Control occurs during the Term, and at
any time during the 24 months after the Change in Control occurs (whether during or after the
expiration of the Term), the employment of Executive with Employer is terminated by Employer for
any reason other than Good Cause, or Executive terminates his employment with Employer for Good
Reason. In addition, the following provisions also will apply if (i) a Change in Control occurs
during the Term, (ii) Employer has terminated Executive’s employment other than for Good Cause
during the year prior to the Change in Control but after a third party and/or Employer had taken
steps reasonably calculated to effect a Change in Control and (iii) it is reasonably demonstrated
by Executive that such termination of employment was in connection with or in anticipation of a
Change in Control.

     (1) Employer shall pay Executive an amount equal to 242 times the sum of
(a) Executive’s Base Salary plus (b) one-twelfth of his Bonus. Such amount shall be
paid to Executive in a lump sum within 60 days following Executive’s

 

			
	1	 	With respect to the agreement with Mr. Skaggs, the
Severance Period will end 36 months following termination.
	 
	2	 	With respect to the agreement with Mr. Skaggs, the
agreement provides that Mr. Skaggs would receive a payment equal to 36 times
his times the sum of (a) his Base Salary plus (b) one-twelfth of his Bonus.

-4-

 

termination of employment.

     (2) Employer shall pay Executive an amount equal to the pro rata portion of
Executive’s target annual incentive bonus compensation for the calendar year under the
Annual Incentive Plan then maintained by Employer, that is applicable to the period
commencing on the first day of such calendar year and ending on the date of termination.
Such bonus amount shall be paid to Executive in a lump sum within 30 days after his
date of termination of employment.

     (3) Executive shall receive any and all benefits accrued through the date of
termination of employment under any Retirement Plan, Welfare Plan or other plan or
program in which he participates at the date of termination of employment. The amount,
form and time of payment of such benefits will be determined by the terms of such
Retirement Plan, Welfare Plan and other plan or program. Further, Executive’s
employment shall be deemed to have terminated by reason of retirement without regard to
vesting limitations in all such plans and other plans or programs not subject to the
qualification requirements of Section 401(a) of the Internal Revenue Code of 1986 as
amended (“Code”), under circumstances that have the most favorable result for Executive
thereunder for all purposes of such Plans and other plans or programs. Payment shall be
made at the earliest date permitted under any such Plan or other plan or program that is
not funded with a trust agreement.

     (4) If upon the date of termination of Executive’s employment Executive holds any
options with respect to stock of Employer, all such options will immediately become
exercisable upon such date and will be exercisable for 200 days thereafter (but not
longer than the regularly scheduled term of such options). Any restrictions on stock of
Employer owned by Executive on the date of termination of his employment will lapse on
such date.

     (5) In lieu of a contribution by Employer to, or a reimbursement to Executive for,
any coverage premiums and any other expenses payable by Executive during the Severance
Period under all Welfare Plans maintained by Employer in which he and his spouse and
other dependents were participating immediately prior to the date of his termination,
Employer will pay to

-5-

 

Executive an amount equal to 130% of such coverage premiums and expenses otherwise
payable during the Severance Period. Such amount shall be paid to Executive in a lump
sum within 60 days following Executive’s termination of employment.

     (6) Executive shall receive outplacement services for a period commencing on the
date of termination of employment and continuing until the earlier to occur of the
Executive accepting other employment or 12 months after the date of termination, in an
amount not to exceed $25,000.

     (7) During the Severance Period, Executive shall not be entitled to reimbursement
for fringe benefits, including without limitation, dues and expenses related to club
memberships, automobile expenses, expenses for professional services and other similar
perquisites.

          (b) If the employment of Executive with Employer is terminated by Employer or Executive other
than under circumstances set forth in subsection 3(a), Executive’s Base Salary shall be paid
through the date of his termination, and Employer shall have no further obligation to Executive or
any other person under this Agreement. Such termination shall have no effect upon Executive’s
other rights, including but not limited to, rights under the Retirement Plans and the Welfare
Plans.

          (c) Notwithstanding anything herein to the contrary, (1) in the event Employer shall terminate
the employment of Executive for Good Cause hereunder, Employer shall give Executive at least thirty
(30) days prior written notice specifying in detail the reason or reasons for Executive’s
termination, and (2) in the event Executive terminates his employment for Good Reason hereunder,
Executive shall give Employer at least 30 days prior written notice specifying in detail the Good
Reason conditions. If Employer cures such conditions, any subsequent termination of employment by
Executive will not be considered to be made for Good Reason.

          (d) This Agreement shall have no effect, and Employer shall have no obligations hereunder, if
Executive’s employment terminates for any reason at any time other than during the 24 months
following a Change in Control.

     4. Excise Tax.

          (a) In the event that a Change in Control shall occur, and a final
 

-6-

 

determination is made by legislation, regulation, ruling directed to Executive or Employer, by
court decision, or by independent tax counsel described in subsection (b) next below, that the
aggregate amount of any payment made to Executive (1) hereunder, and (2) pursuant to any plan,
program or policy of Employer in connection with, on account of, or as a result of, such Change in
Control (“Total Payments”) will be subject to the excise tax provisions of Section 4999 of the Code
(“Excise Tax”), or any successor section thereof, Executive shall be entitled to receive from
Employer, in addition to any other amounts payable hereunder, a lump sum payment (the “Gross-Up
Payment”), sufficient to cover the full cost of such excise taxes and Executive’s federal, state
and local income and employment taxes on this additional payment so that the net amount retained by
Executive, after the payment of all such excise taxes on the Total Payments, and all federal, state
and local income and employment taxes and excise taxes on the Gross-Up Payment, shall be equal to
the Total Payments. The Total Payments, however, shall be subject to any federal, state and local
income and employment taxes thereon. For this purpose, Executive shall be deemed to be in the
highest marginal rate of federal, state and local taxes. The Gross-Up Payment shall be made at the
same time as the payments described in subsections 3(a)(1) above. Notwithstanding the foregoing
provisions of this Section 4(a), if it shall be determined that Executive is entitled to the
Gross-Up Payment, but that the Total Payments do not exceed 110% of the greatest amount that could
be paid to Executive such that the receipt of the Total Payments will not give rise to any Excise
Tax (the “Reduced Amount”), then no Gross-Up Payment shall be made to Executive and the Total
Payments shall be reduced to the Reduced Amount. In the event that the Total Payments would be
reduced as provided in the previous sentence, then such reduction shall be determined in a manner
which has the least economic cost to Executive and, to the extent the economic cost is equivalent,
the Total Payments will be reduced in the inverse order of when the Total Payments would have been
made to Executive until the reduction specified is achieved.

          (b) Employer and Executive shall mutually and reasonably determine the amount of the Gross-Up
Payment to be made to Executive pursuant to the preceding subsection. Prior to the making of any
such Gross-Up Payment, either party may request a determination as to the amount of such Gross-Up
Payment. If such a determination is requested, it shall be made promptly, at Employer’s expense,
by independent tax

-7-

 

counsel selected by Executive and approved by Employer (which approval shall not unreasonably be
withheld), and such determination shall be conclusive and binding on the parties. Employer shall
provide such information as such counsel may reasonably request, and such counsel may engage
accountants or other experts at Employer’s expense to the extent that they deem necessary or
advisable to enable them to reach a determination. The term “independent tax counsel,” as used
herein, shall mean a law firm of recognized expertise in federal income tax matters that has not
previously advised or represented either party.

          (c) In the event the Internal Revenue Service subsequently adjusts the excise tax computation
made pursuant to subsections 4(a) and (b) above, Employer shall pay to Executive, or Executive
shall pay to Employer, as the case may be, the full amount necessary to make either Executive or
Employer whole had the excise tax initially been computed as subsequently adjusted, including the
amount of any underpaid or overpaid excise tax, and any related interest and/or penalties due to
the Internal Revenue Service. Any payment by Employer or reimbursement made by Executive pursuant
to this Section 4(c) shall be paid or reimbursed by the end of the taxable year next following the
taxable year in which the payment or reimbursement of taxes is made or received, as the case may
be.

     5. Setoff. No payments or benefits payable to or with respect to Executive pursuant
to this Agreement shall be reduced by any amount Executive or his spouse or Beneficiary, or any
other beneficiary under the Pension Plans, may earn or receive from employment with another
employer or from any other source, except as expressly provided in subsection 3(a)(6).

     6. Death. If Executive’s employment with Employer terminates under circumstances
described in subsections 3(a) or (b), then upon Executive’s subsequent death, all unpaid amounts
payable to Executive under subsections 3(a)(1), (2) or (3) or 3(b), or Section 4, if any, shall be
paid to his Beneficiary.

     7. No Solicitation of Representatives and Employees. Executive agrees that he shall
not, during the Term or the Severance Period, directly or indirectly, in his individual capacity or
otherwise, induce, cause, persuade, or attempt to do any of the foregoing in order to cause, any
representative, agent or employee of Employer to terminate such person’s employment relationship
with Employer, or to violate the terms of any agreement between said representative, agent or
employee and Employer.

     8. Confidentiality.
Executive acknowledges that preservation of a continuing
business

-8-

 

 

relationship between Employer and their respective customers, representatives, and employees is of
critical importance to the continued business success of Employer and that it is the active policy
of Employer to guard as confidential certain information not available to the public and relating
to the business affairs of Employer. In view of the foregoing, Executive agrees that he shall not
during the Term and at any time thereafter, without the prior written consent of Employer, disclose
to any person or entity any such confidential information that was obtained by Executive in the
course of his employment by Employer. This section shall not be applicable if and to the extent
Executive is required to testify in a legislative, judicial or regulatory proceeding pursuant to an
order of Congress, any state or local legislature, a judge, or an administrative law judge or is
otherwise required by law to disclose such information.

     9. Forfeiture. If Executive shall at any time violate any obligation of his under
Sections 7 or 8 in a manner that results in significant damage to the Employer or its business, he
shall immediately forfeit his right to any benefits under this Agreement, and Employer shall
thereafter have no further obligation hereunder to Executive or his spouse, Beneficiary or any
other person.

     10. Executive Assignment. No interest of Executive, his spouse or any Beneficiary, or
any other beneficiary under the Pension Plans, under this Agreement, or any right to receive any
payment or distribution hereunder, 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 payment or distribution be taken, voluntarily or involuntarily, for
the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse,
Beneficiary or other beneficiary, including claims for alimony, support, separate maintenance, and
claims in bankruptcy proceedings.

     11. Benefits Unfunded. All rights under this Agreement of Executive and his spouse,
Beneficiary or other beneficiary under the Pension Plans, shall at all times be entirely unfunded,
and no provision shall at any time be made with respect to segregating any assets of Employer for
payment of any amounts due hereunder. None of Executive, his spouse, Beneficiary or any other
beneficiary under the Pension Plans shall have any interest in or rights against any specific
assets of Employer, and Executive and his spouse, Beneficiary or other beneficiary shall have only
the rights of a general unsecured

-9-

 

creditor of Employer.

     12. Waiver. No waiver by any party at any time of any breach by the other party of,
or compliance with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of any other provisions or conditions at the same time or at any
prior or subsequent time.

     13. Litigation Expenses. Following the occurrence of Change in Control, Employer
shall pay Executive’s reasonable attorneys’ fees and legal expenses in connection with any judicial
proceeding to enforce this Agreement, or to construe or determine the validity of this Agreement or
otherwise in the event Executive is successful in one material claim in such litigation. Such
reimbursement shall occur by March 15 of the calendar year after the calendar year in which such
reimbursement obligation was finally determined.

     14. Continuing Indemnification and Advancement of Expenses. Following the occurrence
of a Change in Control, to the full extent permitted by law, Employer shall indemnify Executive
against any actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative, arising by reason of Executive’s status as a director, officer,
employee and/or agent of Employer. In addition, to the extent permitted by law, Employer shall
advance or reimburse any expenses, including reasonable attorney’s fees, Executive incurs in
investigating and defending any actual or threatened action, suit or proceeding for which Executive
may be entitled to indemnification under this Section 14. Executive agrees to repay any expenses
paid or reimbursed by Employer if it is ultimately determined that Executive is not legally
entitled to be indemnified by Employer.

     15. Applicable Law. This Agreement shall be construed and interpreted pursuant to the
laws of Indiana.

     16. Entire Agreement. This Agreement contains the entire Agreement between the
Employer and Executive and supersedes any and all previous agreements; written or oral; between the
parties relating to the subject matter hereof. For the avoidance of doubt, if Executive becomes
entitled to the benefits under this Agreement, Executive shall not be eligible for any duplicative
benefits under any other agreement, offer letter, plan, program or policy. No amendment or
modification of the terms of this Agreement shall be binding upon the parties hereto unless reduced
to writing and signed by Employer and Executive.

     17. No
Employment Contract. Nothing contained in this Agreement shall be
construed to

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be an employment contract between Executive and Employer or provide Executive with the right to
continued Employment with Employer.

     18. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original.

     19. Severability. In the event any provision of this Agreement is held illegal or
invalid, the remaining provisions of this Agreement shall not be affected thereby.

     20. Successors. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, representatives and successors.

     21. Employment with an Affiliate. For purposes of this Agreement, (A) employment or
termination of employment of Executive shall mean employment or termination of employment with
Employer and all Affiliates, (B) Base Salary and Bonus shall include remuneration received by
Executive from Employer and all Affiliates, and (C) the terms Pension Plan, Retirement Plan and
Welfare Plan maintained or made available by Employer shall include any such plans of any Affiliate
of Employer.

     22. Notice. Notices required under this Agreement shall be in writing and sent by
registered mail, return receipt requested, to the following addresses or to such other address as
the party being notified may have previously furnished to the other party by written notice:

	 	 	 	 	 	 	 
	 

	 	If to Employer:
	 	NiSource Inc.
	 	 
	 
	 

	 	 	 	801 E. 86th Avenue	 	 
	 

	 	 	 	Merrillville, Indiana 46410	 	 
	 

	 	 	 	Attention: Robert D. Campbell	 	 
	 
	 	 	 	 	 	 
	 

	 	If to Executive:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

     23. 409A Savings Clause. Employer and Executive intend that this Agreement be
interpreted in a manner that is compliant with Code Section 409A so that Executive does not incur
additional taxes or penalties under Code Section 409A. If and to the extent that any payment or
benefit under this Agreement is determined by Employer to constitute “non-qualified deferred
compensation” subject to Code Section 409A and is payable to Executive by reason of Executive’s
termination of employment, then (a) such payment or benefit shall be made or provided to Executive
only upon a “separation from service” as defined for purposes of Code Section 409A under applicable
regulations and (b) if Executive is a “specified employee” (within

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the meaning of Code Section 409A and as determined by Employer), such payment or benefit shall not
be made or provided before the date that is six months after the date of Executive’s separation
from service (or Executive’s earlier death). Any amount not paid in respect of the six month
period specified in the preceding sentence will be paid to Executive in a lump sum after the
expiration of such six month period. Any such payment or benefit shall be treated as a separate
payment for purposes of Section Code 409A to the extent Code Section 409A applies to such payments.

     IN WITNESS WHEREOF, Executive has hereunto set his hand, and Employer has caused these
presents to be executed in its name on its behalf, all on the
___ day of ____, 20___.

	 	 	 	 	 	 	 
	 	 	 	NISOURCE INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Title:
	 	
 

 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 

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