FILED PURSUANT TO RULE NO. 424(B)(3)
REG. NO. 333-33896-01
PROSPECTUS
NISOURCE INC.
283,000 Common Shares, $.01 Par Value
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT TAX DEFERRED SAVINGS PLAN
This Prospectus relates to common shares of NiSource Inc.
which may be offered and sold under the Northern Indiana Public
Service Company Bargaining Unit Tax Deferred Savings Plan (the "Plan")
to Plan participants who ceased to be employees of NiSource Inc.
and its subsidiaries on or prior to November 1, 2000.
Our common shares are traded on the New York Stock Exchange under
the symbol "NI". On October 26, 2000, the closing sale price of the
common shares on the New York Stock Exchange was $24 per share.
The mailing address and telephone number of NiSource's
principal executive offices are: 801 East 86th Avenue, Merrillville,
Indiana 46410, telephone number (219) 853-5200.
This Prospectus should be retained for future reference.
__________________________________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
__________________________________________
The date of this Prospectus is November 2, 2000
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
You should rely only on the information provided or incorporated by
reference in this Prospectus. The information in this Prospectus is
accurate as of the date on these documents, and you should not assume
that it is accurate as of any other date.
TABLE OF CONTENTS
PAGE
----
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . 6
NORTHERN INDIANA PUBLIC SERVICE COMPANY BARGAINING UNIT TAX DEFERRED
SAVINGS PLAN PROSPECTUS. . . . . . . . . . . . . . . . . . . . . . 7
APPENDIX DATED OCTOBER, 2000 TO SUMMARY PLAN DESCRIPTION DATED
JANUARY, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
NORTHERN INDIANA PUBLIC SERVICE COMPANY BARGAINING UNIT TAX DEFERRED
SAVINGS PLAN SUMMARY PLAN DESCRIPTION DATED JANUARY, 2000 . . . . . 8
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PLAN AT A GLANCE . . . . . . . . . . . . . . . . . . . . . . . . . 11
ELIGIBLITY AND ENROLLMENT . . . . . . . . . . . . . . . . . . . . . 12
Who Is Eligible . . . . . . . . . . . . . . . . . . . . . . . 12
When Participation Begins . . . . . . . . . . . . . . . . . . 13
Breaks In Service and Transfers to Ineligible Status . . . . . 13
HOW YOUR 401(K) WORKS . . . . . . . . . . . . . . . . . . . . . . . 14
Before-Tax Contributions . . . . . . . . . . . . . . . . . . . 15
Matching Contributions . . . . . . . . . . . . . . . . . . . . 15
After-Tax Contributions . . . . . . . . . . . . . . . . . . . 16
Changing Your Contributions . . . . . . . . . . . . . . . . . 16
Naming a Beneficiary . . . . . . . . . . . . . . . . . . . . . 16
Change of Status . . . . . . . . . . . . . . . . . . . . . . . 17
Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Non-Assignment of Benefits . . . . . . . . . . . . . . . . . . 17
Limitations on Contributions . . . . . . . . . . . . . . . . . 17
Rollover Contributions . . . . . . . . . . . . . . . . . . . . 18
"Top-Heavy" Provisions . . . . . . . . . . . . . . . . . . . . 18
INVESTING YOUR 401(K) ACCOUNT . . . . . . . . . . . . . . . . . . . 19
Changing Your Investments . . . . . . . . . . . . . . . . . . 19
Statement of Account . . . . . . . . . . . . . . . . . . . . . 20
WITHDRAWALS AND LOANS WHILE YOU ARE EMPLOYED . . . . . . . . . . . 21
Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . 21
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
RECEIVING YOUR BENEFITS . . . . . . . . . . . . . . . . . . . . . . 24
TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 25
2
OTHER THINGS YOU SHOULD KNOW . . . . . . . . . . . . . . . . . . . 27
LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . 30
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . 30
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . 30
DESCRIPTION OF COMMON SHARES . . . . . . . . . . . . . . . . . . . 31
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3
THE COMPANY
On November 1, 2000, New NiSource Inc. (the "Company"), a new
company formed by NiSource Inc. ("NiSource"), completed the
acquisition by merger of Columbia Energy Group ("Columbia").
Effective November 1, 2000, the Company changed its name to "NiSource
Inc." Upon completion of the merger, Columbia became a wholly-owned
subsidiary of the Company, and the Company continues the businesses
conducted by NiSource and Columbia prior to the merger. The fiscal
year of the Company will end on December 31 of each year. The Company
is a Delaware corporation with its corporate headquarters in
Merrillville, Indiana.
The Company is a super-regional energy and utility-based holding
company that provides natural gas, electricity, water and energy
related services for residential, commercial and industrial uses
through a number of regulated and non-regulated subsidiaries. The
Company has over 3.6 million gas and electric customers located
primarily in nine states and is the leading gas competitor within the
key energy corridor between the Gulf Coast and the Northeast. The
Company is a registered holding company under the Public Utility
Holding Company Act of 1935. The Company's principal executive
offices are located at 801 East 86th Avenue, Merrillville, Indiana
46410, and its telephone number is (219) 853-5200.
NATURAL GAS. The Company's gas business is comprised of
regulated gas utilities and gas transmission companies that operate in
nine states. The Company is the largest gas company east of the
Rockies based on customers, and has the nation's second largest volume
of gas sales with 911 million cubic feet per day.
Through its wholly-owned subsidiary, Columbia Energy Group, the
Company owns five distribution subsidiaries that provide natural gas
services to nearly 2.1 million residential commercial and industrial
customers in Ohio, Pennsylvania, Virginia, Kentucky and Maryland. The
Company also distributes natural gas to approximately 751,000
customers in northern Indiana through three subsidiaries: Northern
Indiana Public Service Company, Kokomo Gas and Fuel Company and
Northern Indiana Fuel and Light Company, Inc. Additionally, the
Company's subsidiaries, Bay State Gas Company and Northern Utilities,
Inc. distribute natural gas to more than 320,000 customers in the
areas of Brockton, Lawrence and Springfield, Massachusetts, Lewiston
and Portland, Maine, and Portsmouth, New Hampshire.
The Company's subsidiaries Columbia Gas Transmission Corporation
and Columbia Gulf Transmission Company own and operate an interstate
pipeline network of approximately 16,250 miles extending from offshore
in the Gulf of Mexico to Lake Erie, New York and the eastern seaboard.
Together, Columbia Gas Transmission and Columbia Gulf serve customers
in 15 northeastern, mid-Atlantic, midwestern, and southern states and
the District of Columbia. In addition, Columbia Gas Transmission
operates one of the nation's largest underground natural gas storage
4
systems. Columbia Gas Transmission is also participating in the
proposed 442-mile Millennium Pipeline Project that has been submitted
to the FERC for approval. As proposed, the project will transport
approximately 700,000 Mcf of natural gas per day from the Lake Erie
region to eastern markets.
The Company's wholly-owned subsidiary, Crossroads Pipeline
Company, owns and operates a 201-mile, 20 inch diameter interstate
pipeline extending from the northwestern corner of Indiana (near the
border with Chicago) eastward into Ohio. Another wholly-owned Company
subsidiary, Granite State Transmission, owns and operates a 105-mile,
6 to 12 inch diameter interstate pipeline that extends from Haverhill,
Massachusetts in a northeasterly direction to Maine. In addition to
the Crossroads and Granite State pipelines, the Company owns a 19%
share of Portland Natural Gas Transmission System, a 292-mile pipeline
built to bring Canadian gas from New Brunswick into Maine, New
Hampshire and Massachusetts in order to increase the gas supply to the
region.
ELECTRICITY. The Company generates and distributes electricity
to the public through its subsidiary Northern Indiana Public Service
Company. Northern Indiana provides electric service to approximately
426,000 customers in 30 counties in the northern part of Indiana, with
an area of approximately 12,000 square miles and a population of
approximately 2.2 million. In addition, the Company develops
unregulated power projects through its subsidiary, Primary Energy,
Inc. Primary Energy works with industrial customers in managing the
engineering, construction, operation and maintenance of "inside the
fence" cogeneration plants that provide cost-effective, long-term
sources of energy for energy-intensive facilities.
WATER. Through its wholly-owned subsidiary IWC Resources
Corporation and its subsidiaries, the Company supplies water to
residential, commercial and industrial customers and for fire
protection service in Indianapolis, Indiana and surrounding areas.
NON-REGULATED ENERGY SERVICES. The Company provides non-
regulated energy services through its wholly-owned subsidiary Energy
USA, Inc. Through its subsidiaries and investments, Energy USA
provides to customers in 22 states a variety of energy-related
services, including gas marketing and asset management services, pipline
construction and underground utility locating and marking services. The
Company expanded its gas marketing and trading operations with the April
1999 acquisition of TPC Corporation, now renamed Energy USA-TPC Corp., a
natural gas asset management company. Through Columbia, it also owns
Columbia Energy Resources, Inc., an exploration and production
subsidiary that explores for, develops, gathers and produces natural
gas and oil in Appalachia and Canada. In addition, the Company has
invested in a number of distributed generation technologies, including
fuel cells and microturbine ventures.
5
In the merger, NiSource shareholders received one common share of
the Company, par value $.01 per share, ("Common Share") for each of
their NiSource common shares. Accordingly, each of the NiSource
common shares held in the NiSource Common Stock Fund under the Plan
has been converted into one Common Share of the Company.
ALL REFERENCES IN THE PLAN AND THE SUMMARY PLAN DESCRIPTION TO
NISOURCE ARE NOW REFERENCES TO THE COMPANY, AND ALL REFERENCES IN THE
PLAN AND THE SUMMARY PLAN DESCRIPTION TO NISOURCE COMMON SHARES ARE
NOW REFERENCES TO COMPANY COMMON SHARES. EXCEPT AS DESCRIBED BELOW,
ALL OF THE TERMS OF THE PLAN WILL CONTINUE TO APPLY.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public at the SEC's
web site at HTTP://WWW.SEC.GOV.
The SEC allows us to "incorporate by reference" into this
prospectus the information we file with it, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to
be part of this prospectus, and later information that we file with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until our offering is completed:
1. The Annual Report on Form 10-K of NiSource for the fiscal year
ended December 31, 1999;
2. The Annual Report on Form 10-K and Form 10-K/A of Columbia for
the fiscal year ended December 31, 1999;
3. The Quarterly Reports on Form 10-Q of NiSource for the quarterly
periods ended March 31, 2000, June 30, 2000 and September 30, 2000;
4. The Quarterly Reports on Form 10-Q of Columbia for the quarterly
periods ended March 31, 2000, June 30, 2000 and September 30, 2000;
5. The Current Reports on Form 8-K of NiSource dated February 14,
2000, February 24, 2000, March 3, 2000, April 3, 2000, April 25,
2000, June 13, 2000, September 1, 2000 and September 13, 2000;
6. The Current Reports on Form 8-K of Columbia dated January 25,
2000, April 13, 2000, May 3, 2000, May 12, 2000, May 22, 2000,
June 2, 2000, June 15, 2000 and July 14, 2000;
6
7. The Current Reports on Form 8-K of the Company dated November 1,
2000 and November 3, 2000;
8. The description of our Common Shares contained in our Joint Proxy
Statement / Prospectus dated April 24, 2000;
9. The description of our Rights contained in our Joint Proxy
Statement / Prospectus dated April 24, 2000; and
10. The description of our SAILS contained in our Joint Proxy
Statement / Prospectus dated April 24, 2000.
You may request a copy of these filings at no cost, by writing to
or telephoning us at the following address:
NiSource Inc.
801 East 86th Avenue
Merrillville, Indiana 46410
(219) 853-5200
You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else to
provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You
should not assume that the information is this prospectus is accurate
as of any date other than the date on the front of the document.
NORTHERN INDIANA PUBLIC SERVICE COMPANY BARGAINING UNIT TAX DEFERRED
SAVINGS PLAN PROSPECTUS
The prospectus for the Plan includes (i) the Appendix dated
October, 2000 to the Summary Plan Description dated January, 2000,
and (ii) the Summary Plan Description dated January, 2000.
NOTE: REFERENCES IN THE APPENDIX DATED OCTOBER, 2000 AND IN THE
SUMMARY PLAN DESCRIPTION TO NISOURCE AND NISOURCE COMMON SHARES
NOW REFER TO THE COMPANY AND THE COMPANY'S COMMON SHARES.
7
APPENDIX
THIS DOCUMENT CONSTITUTES PART OF A SECTION 10(A) PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT TAX DEFERRED SAVINGS PLAN
Appendix dated October, 2000
to
Summary Plan Description dated
January, 2000
This Appendix provides certain current and updated information
regarding the Plan identified above, which is fully described in the
Prospectus and Summary Plan Description to which this Appendix
relates. Capitalized terms in this Appendix have the same meaning
assigned in the Prospectus and Summary Plan Description.
MERGER
On November 1, 2000, NiSource Inc. ("NiSource") and Columbia
Energy Group ("Columbia") merged to form a new company, New NiSource
Inc. (the "Company"). Effective November 1, 2000, New NiSource
changed its name from New NiSource Inc. to NiSource Inc. Upon
completion of the merger, Columbia became a wholly-owned subsidiary of
the Company, and the Company continues the businesses conducted by
NiSource and Columbia prior to the merger. The fiscal year of the
Company will end on December 31 of each year. The Company is a
Delaware corporation with its corporate headquarters in Merrillville,
Indiana. All references in the Plan and the Summary Plan Description
to NiSource common shares are now references to common shares of the
Company, par value $.01 per share ("Common Shares"). Except as
described below, all of the terms of the Plan will continue to apply.
In the merger, each NiSource common share was converted into the right
to receive one Common Share of the Company. Accordingly, each
NiSource common share held in the NiSource Common Stock Fund under the
Plan has been converted into one Company Common Share.
FINANCIAL INFORMATION
Certain information regarding the performance of the Funds described
below has been extracted from materials provided to NiSource and the
Company by the Funds. Neither NiSource nor the Company has made any
independent review of the accuracy of this information and,
accordingly, makes no warranty or representation concerning this
information. Performance information related to an investment in the
Funds will be updated periodically and can be obtained from Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
8
FIDELITY RETIREMENT MONEY MARKET PORTFOLIO
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 5.43%, 5.36%, 5.04% and 4.06% for
1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and product description, copies of which can be obtained from Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
FIDELITY INTERMEDIATE BOND FUND
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 7.57%, 7.32%, 0.96% and 5.07% for
1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from Fidelity Group,
82 Devonshire Street, Boston, Massachusetts 02109; telephone (800)
835-5091.
FIDELITY GROWTH & INCOME PORTFOLIO
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 30.17%, 28.31%, 10.42% and 4.63% for
1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from the Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
FIDELITY MAGELLAN FUND
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 26.59%, 33.63%, 24.05% and 5.81% for
1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from the Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
FIDELITY OVERSEAS FUND
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 10.92%, 12.84%, 42.89% and -5.73%
for 1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from the Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
9
FIDELITY SMALL CAP SECTOR
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 27.25%, -7.39%, 14.10% and 12.93%
for 1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from the Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
FIDELITY PURITAN FUND
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 22.35%, 16.59%, 2.86% and 4.35% for
1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from the Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
SPARTAN U.S. EQUITY INDEX FUND
The Fund has experienced annual returns, after deduction for Fund
expenses and asset based fees, of 33.04%, 28.48%, 20.66% and 4.03% for
1997, 1998, 1999 and year to date through August 31, 2000;
respectively. Additional information is included in its annual report
and prospectus, copies of which can be obtained from the Fidelity
Group, 82 Devonshire Street, Boston, Massachusetts 02109; telephone
(800) 835-5091.
NISOURCE COMMON STOCK FUND
The Fund, based on NiSource Common Shares, has experienced annual
returns, after deduction for Fund expenses and asset based fees and
inclusion of dividends, of 16.1%, 16.1%, 12.8% for 1997, 1998 and
1999; respectively. Effective as of November 1, 2000, the Fund
performance will be based on the Company Common Shares.
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission
covering up to 283,000 Common Shares to be offered and sold under
the Plan to Plan participants who ceased to be employees of
NiSource and its subsidiaries on or prior to November 1, 2000.
The Company will provide, without charge, to each person eligible to
participate in the Plan, upon written or oral request, (i) a copy of
any of the documents which are incorporated by reference in the
Registration Statement, other than the exhibits to such documents
(unless such exhibits are specifically incorporated by reference into
10
the information that the Registration Statement incorporates) and (ii)
a copy of its Annual Report to Shareholders for its most recent fiscal
year. The documents incorporated by reference in the Registration
Statement are hereby specifically incorporated by reference in this
Prospectus. Requests for copies of such documents should be directed
to the Director, Compensation and Benefits, at NiSource Inc., 801
East 86th Avenue, Merrillville, Indiana 46410, telephone number (219)
853-5200.
NOTE: References in this document to NiSource and NiSource common shares
now refer to the Company and the Company's Common Shares.
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT
TAX DEFERRED SAVINGS PLAN
SUMMARY PLAN DESCRIPTION
------------------------
Dated January, 2000
INTRODUCTION
YOUR NIPSCO BARGAINING UNIT TAX-DEFERRED SAVINGS PLAN (401(K)) IS
DESIGNED TO WORK WITH YOUR PENSION PLAN TO PROVIDE YOU WITH RETIREMENT
INCOME. THE 401(K) PLAN IS A TAX-DEFERRED SAVINGS PLAN. THAT MEANS
THAT YOU PAY NO INCOME TAXES ON THE AMOUNT YOU CONTRIBUTE TO THE PLAN
UNTIL YOU MAKE A WITHDRAWAL FROM THE PLAN. SO YOUR 401(K) PLAN IS A
TAX-DEFERRED WAY TO INVEST MONEY TODAY TO SHAPE YOUR FINANCIAL WELL-BE
INGFOR TOMORROW.
The 401(k) Plan gives you the chance to make regular contributions
directly from your paycheck before taxes are applied to your pay. The
money you contribute to the 401(k) Plan goes into an account that is
managed on your behalf by Fidelity Investments, a firm that
specializes in investment fund management. Your contributions will be
distributed among nine different investment funds, according to the
information you provide.
Among the investment choices you have is the NiSource Inc. Stock Fund.
If you choose to invest your contributions in NiSource Inc. Common
Stock, the Company will match your contribution. This means the
Company contributes $.10 for every $.90 of your before-tax
contribution that you invest in the Common Stock Fund. This feature
gives you more investment power for your dollar.
In addition to before-tax contributions, you may contribute a certain
amount of your after-tax pay to a separate 401(k) account. And you
can roll over funds from any other eligible tax-qualified retirement
account into a 401(k) rollover account.
This section provides a detailed description of the terms and
conditions of the 401(k) plan effective as of January 1, 2000.
PLAN AT A GLANCE
THIS SECTION GIVES YOU A BRIEF DESCRIPTION OF THE 401(K) PLAN. BE
SURE TO READ THE MORE DETAILED SECTIONS THAT FOLLOW TO BE CERTAIN THAT
YOU UNDERSTAND HOW THE PLAN WORKS. THE OFFICIAL NAME OF THE PLAN IS
THE NORTHERN INDIANA PUBLIC SERVICE COMPANY BARGAINING UNIT TAX
DEFERRED SAVINGS PLAN. IN THIS SUMMARY, THE NORTHERN INDIANA PUBLIC
SERVICE COMPANY BARGAINING UNIT TAX DEFERRED SAVINGS PLAN IS OFTEN
REFERRED TO AS "NIPSCO BARGAINING UNIT TAX-DEFERRED SAVINGS PLAN
11
401(K), THE "401(K) PLAN" OR THE "PLAN". THE PLAN IS CLASSIFIED AS A
DEFINED CONTRIBUTION PLAN.
You can contribute money to the 401(k) Plan in a variety of ways. You
can make contributions directly from your paycheck or you can also
roll over any money you have invested in another eligible retirement
plan.
401(K) ACCOUNTS
The main advantage of the 401(k) Plan is that you can make
contributions on a before-tax basis. This means you can have money
deducted from your pay before taxes are applied, reducing your taxable
income. You do not have to pay taxes on your contribution amount
until you make a withdrawal from the 401(k) Plan.
If you invest your before-tax contributions in the NiSource Inc.
Common Stock Fund, you will have a matching contribution account into
which the Company will deposit its matching contributions. The
Company matching contribution is $.10 for every $.90 of before-tax
contributions you invest in the NiSource Inc. Common Stock Fund. The
matching contribution is also invested in the Common Stock Fund.
Separate accounts are maintained for any after-tax or rollover
contributions you may have.
401(K) INVESTMENT OPTIONS
Under the 401(k) Plan, you have nine investment fund choices. You
must specify the funds in which you wish to invest your contributions.
You cannot make any contributions to the Plan until you specify your
investment choices. Your investment choices are:
* Magellan Fund (a stock fund) * Overseas Fund
* Growth and Income Portfolio * Fidelity Small Cap Sector
* Intermediate Bond Fund * Fidelity Puritan Fund
* NiSource Inc. Stock Fund * Spartan US Equity Index Fund
* Retirement Money Market Portfolio
ELIGIBLITY AND ENROLLMENT
ONCE ENROLLED, YOU CAN RECEIVE BENEFITS UNDER THIS PLAN I/YOU ARE AN
ACTIVE BARGAINING UNIT EMPLOYEE.
WHO IS ELIGIBLE
The provisions of this plan apply to you only if you are an active
part-time or full-time bargaining unit employee on or after January 1,
2000. You become eligible on the first day of the calendar quarter
following date of hire.
12
WHEN PARTICIPATION BEGINS
Once eligible, you can enroll in the 401(k) Plan at any time by
submitting a completed enrollment form to H. R. Support Services.
Your participation will begin on the first day of the calendar quarter
(January 1, April 1, July 1 or October 1) following the date H. R.
Support Services processes your form.
To ensure that your participation begins on the first day of the
calendar quarter, your enrollment form must he received by the H. R.
Support Services Department by the 15th day of the month immediately
before the calendar quarter you wish to begin participation. Please
note: if the 15th falls on a weekend then the form must be received
by the Friday before the 15th.
BREAKS IN SERVICE AND TRANSFERS TO INELIGIBLE STATUS
If you end employment after completing the eligibility requirements
and are later rehired, you are eligible to participant on the first
day of any calendar quarter following reemployment.
If you become ineligible because of a transfer out of a bargaining
unit, your participation in the 401(k) Plan ends automatically. You
maintain rights to your account balance, but you may not make any
contributions to your account. You can rejoin the plan if you return
to a part-time or full-time bargaining unit position.
If you are rehired to a part-time ore full-time bargaining unit
position, you can complete a new form and return it to H. R. Support
Services. Though you may rejoin the 401(k) Plan at any time, your
contributions will not resume until the calendar quarter immediately
following the date your form is processed.
13
HOW YOUR 401(K) WORKS
YOUR 401(K) PLAN GIVES YOU AN OPPORTUNITY TO INVEST MONEY NOW TO
ENSURE SOME LEVEL OFFINANCIAL INCOME FOR YOUR RETIREMENT. YOU CAN
CONTRIBUTE TO ANY OF NINE INVESTMENT FUNDS WHICH MAY GROW THROUGHOUT
YOUR EMPLOYMENT.
The following five-step look at the 401(k) Plan illustrates what you
need to consider in order to get the most out of the plan and how the
plan works for you.
1. You must determine how much you wish to contribute each pay
period. There is a minimum and a maximum amount you can
contribute on a before-tax or after-tax basis. These limits are
described in detail under the sections "Before-Tax Contributions"
and "After-Tax Contributions".
2. You must determine how much money to have deducted from your
paycheck before taxes are applied. This is the amount that will
be deposited in your 401(k) before-tax contribution account.
3. Your taxable pay is reduced by the amount of your before-tax
contributions, which means you pay less in taxes.
4. You must examine the nine investment choices and decide where to
invest your money. If you opt to invest in NiSource Inc. Common
Stock, the Company will match your BEFORE-TAX CONTRIBUTIONS by
depositing $.10 for every $.90 of before-tax contributions you
invest in the Common Stock Fund. The Company matching
contribution is also invested in NiSource Inc. Common Stock Fund.
5. Your savings and earnings continue to be tax deferred until you
withdraw funds from your accounts. The earliest age at which you
can make withdrawals without incurring any penalties is 59 1/2,
although applicable income taxes will be payable. You can access
the money in your account before age 59 1/2 if you leave the
Company or have an eligible hardship as described in detail on
page F.11. However, you will have to pay any applicable taxes
and penalties under these circumstances. You can access your
after-tax and rollover contributions at any time as described on
page 11. You may also borrow against your account as described
in detail on page F.12.
6. If, during any year you are employed by, and perform personal
services for, both the Company and United Steel Workers of
America Local Union 12775 or 13796, as an elected or appointed
official thereof, your pay for purposes of the Plan will include
the aggregate pay you receive from the Company, and wages paid to
you during the year by the local union in lieu of amounts that
would otherwise have been paid to you by the Company. The term
official includes positions with a local union mutually agreed to
between the Company and the applicable local union. The Company
14
is entitled to rely upon information that it receives from either
local union regarding the wages you receive from the local union.
BEFORE-TAX CONTRIBUTIONS
You may elect to have money deducted from each paycheck before taxes
are applied to your pay. The chief advantages of before-tax
contributions are that your taxable income is reduced and your
contributions earn and grow tax-free until you take withdrawals. The
following example shows the advantages of before-tax contributions.
AN EXAMPLE
<TABLE>
<CAPTION>
Savings for Savings for
Retirement Retirement
With the Without
401(k) Plan 401(k) Plan
----------- -------------
<S> <C> <C>
Your Pay $30,000 $30,000
401(k) Plan Before-Tax Contribution -2,000 - 0
TAXABLE PAY $28,000 $30,000
FICA Tax -2,295 -2,295
Federal Income Tax -3,240 -3,540
Retirement Savings Deposit - 0 -2,000
TAKE-HOME PAY $22,465 $22,165
</TABLE>
THIS EXAMPLE USES 2000 FEDERAL INCOME TAX RATES AND ASSUMES THAT YOU
ARE SINGLE, WITH NO DEPENDENTS. IT CONSIDERS ONLY FEDERAL INCOME
TAXES AND FICA TAXES; YOU MAY SAVE EVEN MORE IN STATE AND LOCAL TAXES.
The maximum amount you can contribute is 20% of your compensation up
to $170,000. If compensation (which amount is adjusted periodically).
You can also elect to make before-tax contributions from (1) lump sum
bonus amounts, (2) lump sum amounts payable instead of vacation days
in accordance with the Company's vacation policy, and (3) unusual
credits under the Company's cafeteria plan. Your maximum contribution
is subject to annual limits imposed by the federal government. For
2000, the annual limit is $10,500. This amount is adjusted each year.
Your before-tax contributions must be at least $10 per pay period.
MATCHING CONTRIBUTIONS
A special feature of your 401(k) Plan is the matching contribution
account. When you choose to invest your before-tax contributions in
15
the NiSource Inc. Stock Fund, the Company matches a portion of your
before-tax contributions.
The matching contribution is intended to encourage you to save
aggressively for your retirement. For every $.90 of your before-tax
contributions you invest in the NiSource Inc. Common Stock Fund, the
Company contributes $.10. This means you can purchase $1.00 worth of
NiSource Inc. Common Stock through the Plan for every $.90 of your
before-tax contributions to the Plan.
The matching amount is invested in the Common Stock Fund and must
remain in that Fund. Only new before-tax contributions invested in the
Common Stock Fund receive matching Company contributions. Transfers
from other investment funds to the Common Stock Fund and after-tax and
rollover contributions do not receive any Company matching
contributions.
AFTER-TAX CONTRIBUTIONS
You also can make after-tax contributions of up to 10% of your
compensation. Your after-tax contributions must be at least $10 per
pay period. Your after-tax contributions do not receive matching
Company contributions. One advantage of after-tax contributions is
that you may make withdrawals from this account without satisfying
hardship requirements.
The sum of your before-tax contributions and after-tax contributions
may not exceed 20% of your pay for each pay period.
CHANGING YOUR CONTRIBUTIONS
You may increase or decrease the amount of your before-tax and after-
tax contributions as of the first day of any calendar quarter as long
as you submit written notice to the H. R. Support Services Department
at least 15 days before the start of that calendar quarter. You may
stop your contributions as soon as practicable after you notify the H.
R. Support Services Department in writing.
NAMING A BENEFICIARY
You may wish to select a person or people to receive your plan benefit
if you die before receiving any distribution. To do so, you must
complete and submit a beneficiary form to H. R. Support Services. Any
subsequent beneficiary designation will nullify a previous
designation. However, if you are married, you cannot name someone
other than your spouse as a beneficiary without the written consent of
your spouse. Such written consent must be witnessed by a notary
public.
Spousal consent is not necessary if you name your spouse as the
primary beneficiary, or if you have no spouse or are abandoned by your
spouse.
16
If you have no beneficiary, outlive all beneficiaries or have an
illegal or ineffective beneficiary designation, your benefit will be
paid to the following:
* your surviving spouse, or if none
* your descendants, per stirpes[*], or if none
* your father and mother, in equal parts, or if none
* your brothers and sisters, in equal parts, or if none
* your estate
The Committee will have the final word on determining the identity of
any or your beneficiaries. Any payment made to your beneficiaries
releases the Committee and the Company from all obligations under this
plan.
CHANGE OF STATUS
If you transfer to a non-bargaining unit position, your account
balance will be transferred to the salaried tax-deferred savings plan.
VESTING
You are always 100% vested in the balance of your 401(k) Plan
accounts. That means you are entitled to receive your total account
balances after leaving the Company. You can withdraw your before-tax
contributions after age 59 1/2 or in the case of a hardship and you
can withdraw your after-tax and rollover contributions as indicated on
page 11.
NON-ASSIGNMENT OF BENEFITS
In general, your plan benefit cannot be transferred or assigned to any
other person. However, under a qualified domestic relations order,
your benefits can be assigned to an alternate payee such as a spouse,
child or other dependent for child support, alimony payments or
marital property rights. The amount assigned to the alternate payee
is determined or approved by the court and notification is given to
you and the plan.
LIMITATIONS ON CONTRIBUTIONS
All amounts contributed to your 401(k) accounts (your before-tax
contributions, your after-tax contributions and Company matching
contributions) are limited to 25% of your gross compensation or
$30,000, whichever is less. Any reduction in your contributions
required by this limit will be taken first from your after-tax
contributions, next your before-tax contributions with any matching
contributions attributed to your contributions being refunded, being
forfeited, and if necessary, any Company matching contributions.
[*]CHILDREN OF THE DECEASED DESCENDANT
17
The IRS also sets limits on the amount of before and after tax
contributions made by highly-compensated employees, based on the
amount of before-tax and after-tax contributions made by non-highly
compensated employees. There are similar limits on Company matching
contributions. If these limits are not met, excess contributions and
any interest earned on them will be returned to highly-compensated
employees. You will be notified if you are affected by these limits.
ROLLOVER CONTRIBUTIONS
If you receive a distribution from any other qualified retirement
plan, you can contribute any portion of this distribution to a 401(k)
Plan account within 60 days after you receive the distribution.
Rollover contributions do not receive matching Company contributions.
In order to make rollover contributions, you must complete and submit
a rollover contribution form available at H. R. Support Services.
"TOP-HEAVY" PROVISIONS
If the current value of the accrued benefits of certain Company owners
and executives exceeds 60 percent of the total benefits provided by
the plan in any plan year, the plan is considered "top-heavy" While
the plan is not currently top-heavy and is not expected to become top-
heavy, certain special rules will apply if it ever becomes top-heavy.
18
INVESTING YOUR 401(K) ACCOUNT
Separate accounts are maintained for your before-tax, after-tax and
company match contributions, as well as for any rollover contributions
you have. You can invest your contributions in one or more of the
following funds:
* Magellan Fund (a stock fund)
* Intermediate Bond Fund
* Retirement Money Market Portfolio
* Growth and Income Portfolio
* NiSource Inc. Common Stock Fund
* Overseas Fund
* Fidelity Small Cap Selector
* Fidelity Puritan Fund
* Spartan US Equity Index Fund
You can deposit all of your contributions into one fund or distribute
them, in 1% increments, among any combination of the nine investment
funds. For example, you can put 100% of your before-tax contributions
in the Magellan Fund; 50% in the Intermediate Bond Fund and 50% in the
Magellan Fund; 20% in each of five funds, or any other combination
involving 1% increments.
If you invest in the NiSource Inc. Stock Fund, and contribute on a
before-tax basis, the Company will contribute $.10 for every $.90 you
invest in the stock fund.
Contributions to the NiSource Inc. Stock Fund will be used to purchase
stock on the open market. Contributions to the other funds will be
invested for you in mutual funds managed by Fidelity Investments.
The plan's Tax-Deferred Savings Plan Committee reserves the right to
change at any time the investment funds available under the 401(k)
Plan.
CHANGING YOUR INVESTMENTS
Allowing you to change your investments gives you the flexibility to
adjust your investment strategy to match changes in your circumstances
or your long-term financial outlook. At any time, you can reallocate
your existing investment fund balances in an amount that is at least
$250, or the balance of your account from which the transfer is made,
whichever is less, by calling Fidelity at l-800-835-5091. Most
changes will be made on the next business day. However, transfers
into or out of the NiSource Inc. Common Stock Fund are effective on
the first business day of the next calendar quarter, provided Fidelity
is notified on any business day between the 16th and the last day of
the month preceding the start of a quarter. Fidelity will stop taking
calls at 4:00 p.m. eastern time on the last business day in this
period.
19
Changes in the investment of new contributions are made by notifying
Fidelity as follows:
1. Changes made during the first 15 days of any calendar month are
effective on the trading date occurring on or next following the
27th day of that month; and
2. Changes made on or after the 16th day of any calendar month are
effective on the trading date occurring on or next following the
6th day of the next month.
You cannot transfer any Company matching contributions to another
fund. Matching contributions must remain invested in the NiSource
Inc. Stock Fund.
STATEMENT OF ACCOUNT
Your accounts will be adjusted automatically on a daily basis. You
will receive a quarterly summary of your account so you can keep track
of your investment funds. The summary provides a complete report of
your 401(k) account including:
* sources and amounts of account deposits
* amounts of account withdrawals and loans
* earnings and fluctuation in market values on all accounts
* final balance of all accounts as of the end of the calendar
quarter (March 31, June 30, September 30, December 31)
20
WITHDRAWALS AND LOANS WHILE YOU ARE EMPLOYED
WITHDRAWALS
AFTER-TAX ACCOUNT
The minimum withdrawal from your after-tax contribution account is the
lesser of $1,000 or your entire after-tax contribution account
balance. You can make a request to withdraw money from your after-tax
account at any time, provided you give written notice before the first
of the month you wish to make the withdrawal. The money will be
withdrawn from your account at the end of the calendar quarter in
which you make your request. You may make only one withdrawal in any
12-month period. Please not the tax considerations of page F.15.
ROLLOVER ACCOUNT
The minimum withdrawal from your rollover account is the lesser of
$1,000 or your entire rollover account balance. You may make a
request to withdraw money from your rollover account at any time,
provided you give written notice at least 15 days before you wish to
make the withdrawal. The money will be withdrawn from your account at
the end of the calendar quarter in which you make your request. You
may make only one withdrawal in any 12 month period. Your rollover
withdrawal may be subject to applicable taxes and penalties.
BEFORE-TAX ACCOUNT
Because your before-tax contribution account is intended as a means
for you to save for retirement, and you receive a tax break for
contributing to the account, there are many more restrictions on
making a withdrawal. You can withdraw money from your before-tax
contributions any time after you reach age 59 1/2. Distributions must
be made before April 1 of the year following the year you reach age 70
1/2. However, if you leave the Company, you can access the money in
your account, subject to any applicable taxes and penalties. Also,
the government allows withdrawals from before-tax contributions before
age 59 1/2 in the event of a financial hardship. You may withdraw
only enough money to cover the expense of your financial hardship,
plus any applicable taxes.
Financial hardship is defined by the government as an immediate and
substantial financial need that cannot be met by other reasonably
available resources. The following situations qualify as legitimate
needs:
* medical expenses for you, your spouse or your dependents
* purchase of your principal residence (but not regular
mortgage payments or home improvements)
* tuition for the next semester or quarter of post-secondary
education for you, your spouse or your dependents
21
* preventing foreclosure on or eviction from your principal
residence
A distribution that is not for one of the specified reasons set forth
in the preceding paragraph will be deemed due to a financial hardship
if the Committee reasonably determines, based on written
representations and evidence received from you, that the distribution
is for a financial hardship, that the hardship cannot be met from
other available resources of you, your spouse or children, and that
the amount requested does not exceed the amount needed to meet the
financial hardship.
You must withdraw your entire after-tax contribution account before
you can make a withdrawal from your before-tax contribution account.
You must also borrow the full amount available to you as a loan,
providing such loan does not create an additional hardship, before
making any hardship withdrawal. You cannot withdraw any earnings on
your before-tax contributions, any employer matching contributions or
earnings on those contributions.
Hardship withdrawals may not be made more frequently than once a
years, except for tuition payments.
Any hardship withdrawals you make will be treated as a taxable
distribution. You must also pay a 10% excise tax for early withdrawal
if you are under 59 1/2 and the distribution is not for medical
reasons.
IMPORTANT NOTE: You cannot make any contributions to this or any
other employer plan, excluding health and welfare plans, during the
12-month period beginning after the date you receive your hardship
distribution.
LOANS
The plan also permits you to borrow against the value of your before-
tax contribution and rollover contribution accounts. While taking a
loan can meet important short-term needs, the biggest advantage of
this feature is that you actually repay the loan and all interest to
yourself while you replenish your retirement savings.
You can apply for a loan by filing a written application form with the
Committee. You must be in the plan at least one year to qualify for a
loan. The loan application must be submitted by the first day of the
month in order for the loan to become effective the first day of the
following month.
The maximum amount you can borrow is the smaller of 50% of your
account balance, (other than your after-tax contribution account), or
$50,000 reduced by the excess of(a) the highest outstanding balance
during the one-year period ending immediately preceding the date of
the loan, over (b) the outstanding balance on the date of the loan.
22
The minimum loan amount is $1,000. Loans can be granted only once
during any 12-month period, and you can have only one loan outstanding
at any time.
The Tax-Deferred Savings Plan Committee will establish the interest
rate for all loans. This interest rate will be consistent with rates
charged by lending institutions for loans made under similar
situations and will apply for the entire term of the loan.
ACCOUNT BALANCE MAXIMUM AMOUNT OF LOAN
--------------- ----------------------
Under $2,000 Loan not available
$2,000 - $100,000 50% of your account balance
Over $100,000 $50,000 (subject to above limitations)
The term of the loan depends upon its purpose. If your loan is toward
the purchase of your principal residence, you may establish a period
of up to 30 years. For all other loans, the repayment period is
limited to a maximum of five years.
You repay all loans in equal installments through automatic after-tax
payroll deductions. However, you can repay the loan in full at any
time. Also, if your account becomes payable because of your
retirement, disability, death or termination of employment, your loan
becomes due and payable in full.
Your loan will be considered in default if you make no payments for
three consecutive months. If you do not repay the loan, the unpaid
balance is treated as a taxable distribution.
As you repay the loan, the interest and principal are transferred from
your loan account to your plan account and reinvested according to
your current investment choices and fund contribution proportions.
You may continue to make contributions to your account while your loan
is outstanding.
If you leave Company employment, any unpaid loan balance is considered
a taxable distribution, unless paid in full.
23
RECEIVING YOUR BENEFITS
Active participation in your 401(k) Plan accounts ends immediately
under any of the following circumstances:
* you retire
* you end Company employment
* you die
* you become disabled
BENEFIT DISTRIBUTION
In the event you should terminate employment, retire, or become
disabled, you can receive your account balance or defer distribution
to a later date. In the event of your death, your beneficiary will
receive a lump sum distribution.
Benefits will be paid as soon as practicable following the later of
the date your application for benefits is submitted to the Company or
the date of termination, retirement, or disability. However, you must
receive distribution of your benefits within 120 days after you reach
age 65 or terminate employment, whichever is later. If you are still
actively employed at age 70 1/2, benefits will be paid by April 1
following the calendar year in which you reach age 70 1/2 provided
that starting in 1997 you will not be required to receive a
distribution until you cease active employment when you are a 5% owner
of the Company or an affiliate. You should be aware of several tax
considerations that may affect your benefit distribution. These tax
considerations are described on page F.15.
If your account balance is less than $5,000, a distribution will be
made in one lump sum to you or your beneficiary. At that point, you
will no longer be a participant in the plan. [f your account balance
is greater than $5,000 you can elect a lump sum payment or defer
receiving your distribution until a later date.
All distributions are paid to you or your beneficiary in cash, unless
you elect to receive shares of NiSource Inc. Common Stock based on the
whole numbers of shares allocated to the NiSource Inc. Stock Fund for
you. You will be sent a notice explaining the federal tax treatment
of plan benefits you receive.
24
TAX CONSIDERATIONS
Generally, any distribution from the plan will be taxed in the year
you receive it. In addition, distributions before age 59 1/2 are also
subject to a 10% excise tax, except for certain situations such as
retirement after age 55, disability or death.
You may avoid current taxation on a distribution by rolling the
distribution over into an IRA. You can choose a DIRECT rollover of
all or any portion of your payment that is an "eligible rollover
distribution". In a direct rollover, the eligible rollover
distribution is paid directly from the Plan to an IRA or another
employer plan that accepts rollovers. If you choose a direct
rollover, you are not taxed on a payment until you later take it out
of the IRA or the employer plan.
If you are employed by a new employer that has a plan, and you want a
DIRECT rollover to that plan, ask the administrator of that plan
whether it will accept your rollover. An employer plan is not legally
required to accept a rollover.
If any portion of the payment to you is an eligible rollover
distribution, the Plan is required by law to withhold 20% of that
amount. This amount is sent to the IRS as income tax withholding.
For example, if your eligible rollover distribution is $10,000, only
$8,000 will be paid to you because the Plan must withhold $2,000 as
income tax. However, when you prepare your income tax return for the
year, you will report the full $10,000 as a payment for the Plan. You
will report the $2,000 as tax withheld, and it will be credited
against any income tax you owe for the year.
If you have an eligible rollover distribution paid to you, you can
still decide to roll over all or part of it to an IRA or another
employer plan that accepts rollovers. If you decide to roll over, YOU
MUST MAKE THE ROLLOVER WITHIN 60 DAYS AFTER YOUR RECEIVE THE PAYMENT.
The portion of your payment that is rolled over will not be taxed
until you take it out of the IRA of the employer plan.
You can roll over up to 100% of the eligible rollover distribution,
including an amount equal to the 20% that was withheld. If you choose
to roll over 100%, you must find other money within 60 days to
contribute to an IRA or another employer plan to replace the 20% that
was withheld for taxes. If you roll over only the 80% that you
received, you will be taxed on the 20% that was withheld.
Under certain conditions, more favorable tax treatments that usually
result in rates lower than those for ordinary income might be
applicable to a lump-sum distribution. Special 5-Year Averaging, for
example, is available for certain lump-sum distributions after age 59
1/2. In addition, if you were born before 1936, you may take
advantage of Special 10-Year Averaging tax rules.
25
Distributions from your after-tax account will be part principal
your contributions and part investment return. The investment
return portion is subject to taxes, including the 10% excise tax
described above, if applicable.
Please see your tax advisor before electing a distribution to make
sure of the tax consequences.
26
OTHER THINGS YOU SHOULD KNOW
PLAN SPONSOR
The Plan sponsor is:
Northern Indiana Public Service Company
5265 Hohman Avenue
Hammond, Indiana 46320
(219) 853-5200
PLAN ADMINISTRATION
The Plan is administered by a Committee appointed by the Board of
Directors. This Committee interprets the plan, selects investment
advisors, authorizes benefit payments, considers any appeals, resolves
questions, and makes rules to assure the plan is fair to all.
The Committee serves as a Plan Administrator under the Employee
Retirement Income Security Act (ERISA) and is responsible for
maintaining records, filing reports, and distributing information to
plan participants and beneficiaries.
Communications to the Committee should be addressed to: NIPSCO
Bargaining Unit Tax Deferred Savings Plan, 5265 Hohman Avenue,
Hammond, Indiana 46320 (Tel: 219-853-5200). The plan and its records
are kept on a calendar year basis. The agent for service of legal
process is the Committee.
PLAN NUMBER
The Plan number is 003.
The employer identification number of the Company is 35-0552990.
MAXIMUM CONTRIBUTIONS
By federal law, certain annual limits apply to employee contributions
under the plan along, and under the plan together with any other tax-
qualified retirement plans supported by NIPSCO. These maximums will
be explained by the Committee to any affected employee.
EFFECT ON OTHER BENEFITS
Pension benefits are not affected by your participation in the plan.
They will be based on the amount of your pay before any conversion of
salary for a tax-deferred contribution. Regular Social Security
taxes, and wage credits for Social Security benefit purposes, apply to
your tax-deferred and to your after-tax contributions.
27
RIGHT TO EMPLOYMENT NOT IMPLIED
Participation in the plan does not create a right to be retained in
the employ of the company or interfere with the right of the company
to discharge a participant. It does not give the company the right to
require any participant to remain in its employ; nor does it interfere
with a participant's right to terminate employment at any time.
REEMPLOYMENT
If you terminate employment after becoming eligible to participate and
are later re-employed, you are eligible to join the plan on the first
day of any quarter.
APPLYING FOR BENEFITS
To receive your benefits, you must apply in writing on forms provided
for that purpose. It is the responsibility of the person eligible for
benefits to furnish the Committee with any information needed,
including a current mailing address for benefit payments or
correspondence.
QUALIFIED DOMESTIC RELATIONS ORDER
If a Qualified Domestic Relations Order is entered against you, the
Plan's trust fund may be required to pay all or part of your benefit
to someone else.
A Qualified Domestic Relations Order is a court order, judgment, or
decree under state law that requires payment of child support, alimony
or marital property rights to a spouse, former spouse, child or other
dependent.
You will be notified if such an order is received against you.
OFFICIAL PLAN DOCUMENTS
This section contains the highlights of the NIPSCO Bargaining Unit Tax
Deferred Savings Plan. All of your rights and benefits are described
in the official plan and trust documents, which are controlling. The
plan identification number for governmental filings is EIN35-0552990
PN 003.
The plan is intended to be permanent, but NIPSCO reserves the right to
amend or terminate the plan. If the plan is ever discontinued, the
full value of accounts is payable to participants.
The plan is classified as a defined contribution plan. Therefore, it
is not insured by the Pension Benefit Guaranty Corporation which only
applies to pension plans classified as defined benefit plan under the
Employee Retirement Income Security Act of 1974 (ERISA). The plan is
audited each year by an independent accounting firm.
28
TRUSTEE
The trustee of the plan is the Fidelity Management Trust Company, 82
Devonshire Street, Boston, Massachusetts 020109 (Tel: 1-617-570-7000).
CLAIMS PROCEDURE
If a claim for benefits by you or your beneficiary under the Plan is
denied, either in whole or in part, the Committee will let the
claimant know in writing within 90 days unless special circumstances
require an extension of up to an additional 90 days. A notice of a
denial of a claim will refer to a specific reason or reasons for the
denial; will have specific references to the Plan provisions upon
which the denial is based; will describe any additional material or
information necessary for the claimant to perfect the claim and will
explain why such material or information is necessary; and will have
an explanation of the Plan's review procedure.
The claimant will have 60 days after the receipt of the notice of
denial to ask for a review. The claimant must file a written request
with the Committee for a review. During this time the claimant or his
authorized representative may review pertinent documents and may
submit issues and comments in writing. The Committee will have
another 60 days in which to consider the claimant's request for
review. If special circumstances require an extension of time for
processing, the Committee will have an additional 60 days to answer
the claimant. The claimant will receive a written notice if the extra
days are needed. The claimant or his authorized representative may
submit in writing any document, issues and comments he may wish. The
decision of the Committee will tell the claimant the specific reasons
for its actions, and refer the claimant to the specific Plan
provisions upon which its decision is based.
YOUR RIGHTS UNDER ERISA
As a participant in the plan, you are entitled to the following rights
and protections under ERISA.
You may read all plan documents, including the official plan, the
trust agreement, the plan description and annual financial reports
that are filed with the U. S. Department of Labor.
You may automatically receive a summary of the plan's annual financial
report at no cost. You may examine the complete report of any of the
other documents referred to above without charge. If you would like a
copy of any of them for yourself, you may obtain one at a reasonable
cost by writing the Committee.
If your claim for a plan benefit is denied in whole or in part, you
have the right of a written explanation, and upon request, a review
and reconsideration of the claim denial.
29
The people who operate the plan are called FIDUCIARIES. They must act
prudently, and in the interests of you and other plan participants and
beneficiaries.
Under ERISA, you can take action to enforce your rights. Furthermore,
you cannot be fired, nor can your employer or any other person
discriminate against you in any way to prevent you from obtaining a
plan benefit or exercising your rights under ERISA.
If you request documents you are entitled to receive, and the
Committee does not comply within 30 days, you may' file suit in
federal court. The court may require the Committee to provide the
requested material and pay you up to $100 for each day's delay, unless
the delay was beyond the Committee's control.
If you file claim for benefits and it is denied in whole or in part,
or ignored, you may file suite in a state or federal court. If you
believe A plan fiduciary has misused the plan's money, or if you are
discriminated against for asserting your ERISA rights, you may file
suit in a federal court or seek help from the U. S. Department of
Labor. In the event you have sued and won, the court may order the
person you have sued to pay court costs and fees. On the other hand,
if you lose, you may have to pay court costs and fees yourself, if,
for example, the court decides your claim is frivolous.
If you have any questions about the plan, write directly to the
Committee. If you have questions about this statement of rights under
ERISA, contact the nearest Are Office of the U. S. Department of
Labor- Management Service Administration, Department of Labor.
LIMITATION OF LIABILITY
Neither the Company, nor any of its agents (including the Company if
it is acting as such) in administering the Plan shall be liable for
any act done in good faith or for the good faith omission to act in
connection with the Plan. However, nothing contained herein shall
affect a Participant's right to bring a cause of action based on
alleged violations of federal securities laws.
USE OF PROCEEDS
The Company does not anticipate that it will realize any net proceeds
from the issuance of its Common Shares under the Plan.
PLAN OF DISTRIBUTION
The Common Shares being offered hereby are offered pursuant to the
Plan, the terms of which provide for the issuance of Common Shares in
connection with investment of participant and employer contributions
to the Plan.
30
DESCRIPTION OF COMMON SHARES
The Company's certificate of incorporation authorizes the issuance of
400,000,000 Common Shares. The description of the Common Shares is
incorporated by reference into this Prospectus. See "Where You Can
Find More Information" for information on how to obtain a copy of this
description.
EXPERTS
The consolidated financial statements and schedules of NiSource
incorporated by reference herein have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports
with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said
reports.
The consolidated financial statements of Columbia incorporated in this
document by reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance
upon the authority of said firm as experts in giving said report.
LEGAL MATTERS
Certain legal matters in connection with the Company's Common Shares
offered hereby have been passed upon for the Company by Schiff Hardin
& Waite, Chicago, Illinois.
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