FILED PURSUANT TO RULE 424(B)(3)
REG. NO. 333-33896-01
PROSPECTUS
NISOURCE INC.
13,600 Common Shares, $.01 Par Value
NISOURCE INC. NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
This Prospectus relates to common shares of NiSource Inc.
which may be offered and sold under the NiSource Inc. Nonemployee
Director Stock Incentive 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . 6
PROSPECTUS FOR THE NISOURCE INC. NONEMPLOYEE DIRECTOR STOCK
INCENTIVE PLAN . . . . . . . . . . . . . . . . . . . . . . . . 8
SUPPLEMENTAL INFORMATION TO THE NISOURCE INC. NONEMPLOYEE
DIRECTOR STOCK INCENTIVE PLAN . . . . . . . . . . . . . . . . 8
MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
GENERAL DESCRIPTION OF PLAN . . . . . . . . . . . . . . . . . 9
SHARES SUBJECT TO AWARDS UNDER THE PLAN . . . . . . . . . . . 9
RIGHTS UNSECURED . . . . . . . . . . . . . . . . . . . . . . . 9
FEDERAL INCOME TAX OBLIGATIONS . . . . . . . . . . . . . . . . 9
REPORTS TO GRANTEES . . . . . . . . . . . . . . . . . . . . . 10
NISOURCE INC. NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN . . . . . 12
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION . . . . . . . . . 12
1.1 Establishment of the Plan . . . . . . . . . . . . . 12
1.2 Purpose of the Plan . . . . . . . . . . . . . . . . 12
1.3 Duration of the Plan . . . . . . . . . . . . . . . . 12
ARTICLE 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 3. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 14
3.1 The Board of Directors . . . . . . . . . . . . . . . 14
3.2 Administration by the Board . . . . . . . . . . . . 15
3.3 Decisions Binding . . . . . . . . . . . . . . . . . 15
ARTICLE 4. SHARES SUBJECT TO THE PLAN . . . . . . . . . . . . . . 15
4.1 Number of Shares . . . . . . . . . . . . . . . . . . 15
4.2 Lapsed Awards . . . . . . . . . . . . . . . . . . . 15
4.3 Adjustments in Authorized Shares . . . . . . . . . . 15
ARTICLE 5. ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . 16
5.1 Eligibility . . . . . . . . . . . . . . . . . . . . 16
5.2 Actual Participation . . . . . . . . . . . . . . . . 16
ARTICLE 6. RESTRICTED STOCK . . . . . . . . . . . . . . . . . . . 16
6.1 Initial Grant of Restricted Stock . . . . . . . . . 16
6.2 Future Grants of Restricted Stock . . . . . . . . . 17
6.3 Restricted Stock Award Agreement . . . . . . . . . . 17
6.4 Transferability . . . . . . . . . . . . . . . . . . 17
6.5 Other Restrictions . . . . . . . . . . . . . . . . . 17
6.6 Certificate Legend . . . . . . . . . . . . . . . . . 17
6.7 Vesting . . . . . . . . . . . . . . . . . . . . . . 17
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6.8 Termination of Directorship . . . . . . . . . . . . 18
6.9 Voting Rights . . . . . . . . . . . . . . . . . . . 18
6.10 Dividends and Other Distributions . . . . . . . . . 18
ARTICLE 7. NONQUALIFIED STOCK OPTIONS . . . . . . . . . . . . . . 19
7.1 Potential Grants of Options . . . . . . . . . . . . 19
7.2 Option Award Agreement . . . . . . . . . . . . . . . 19
7.3 Option Price . . . . . . . . . . . . . . . . . . . . 19
7.4 Duration of Options . . . . . . . . . . . . . . . . 19
7.5 Vesting of Shares Subject to Option . . . . . . . . 19
7.6 Termination of Directorship . . . . . . . . . . . . 20
7.7 Payment . . . . . . . . . . . . . . . . . . . . . . 20
7.8 Restrictions on Share Transferability . . . . . . . 21
7.9 Nontransferability of Options . . . . . . . . . . . 21
ARTICLE 8. CHANGE IN CONTROL . . . . . . . . . . . . . . . . . . . 21
ARTICLE 9. AMENDMENT, MODIFICATION, AND TERMINATION . . . . . . . 21
9.1 Amendment, Modification, and Termination . . . . . . 21
9.2 Awards Previously Granted . . . . . . . . . . . . . 22
ARTICLE 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 22
10.1 Gender and Number . . . . . . . . . . . . . . . . . 22
10.2 Severability . . . . . . . . . . . . . . . . . . . . 22
10.3 Indemnification . . . . . . . . . . . . . . . . . . 22
10.4 Beneficiary Designation . . . . . . . . . . . . . . 23
10.5 No Right of Nomination . . . . . . . . . . . . . . . 23
10.6 Shares Available . . . . . . . . . . . . . . . . . . 23
10.7 Additional Compensation . . . . . . . . . . . . . . 23
10.8 Successors . . . . . . . . . . . . . . . . . . . . . 23
10.9 Requirements of Law . . . . . . . . . . . . . . . . 23
10.10 Governing Law . . . . . . . . . . . . . . . . . 24
LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . 27
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . 27
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . 27
DESCRIPTION OF COMMON SHARES . . . . . . . . . . . . . . . . . . . 27
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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
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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
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.
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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,
pipeline 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.
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 NiSource common
share issuable with respect to any award under the Plan has been
converted into one Common Share of the Company.
5
ALL REFERENCES IN THE PLAN AND THE PROSPECTUS TO NISOURCE ARE
NOW REFERENCES TO THE COMPANY, AND ALL REFERENCES IN THE PLAN AND THE
PROSPECTUS 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;
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;
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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 included or incorporated
by reference 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.
7
PROSPECTUS FOR THE NISOURCE INC. NONEMPLOYEE DIRECTOR
STOCK INCENTIVE PLAN
The prospectus includes (i) the Supplemental Information to the
NiSource Inc. Nonemployee Director Stock Incentive Plan, and (ii) the
NiSource Inc. Nonemployee Director Stock Incentive Plan document.
NOTE: REFERENCES IN THE PROSPECTUS TO NISOURCE AND NISOURCE
COMMON SHARES NOW REFER TO THE COMPANY AND THE COMPANY'S COMMON
SHARES.
NISOURCE INC. NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
SUPPLEMENTAL INFORMATION
The NiSource Inc. Nonemployee Director Stock Incentive Plan (the
"Plan"), attached hereto, and the Supplemental Information set forth
below constitute part of a Prospectus covering securities that have
been registered under the Securities Act of 1933.
MERGER
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. 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").
In the merger, each NiSource common share was converted into the
right to receive one Common Share of the Company. Accordingly, each
outstanding NiSource stock option has been converted into an option
to purchase a number of the Company's Common Shares equal to the number
of NiSource common shares that would have been obtained before the
merger upon the exercise of the option. The exercise price per share
of each Company option after the merger is equal to the exercise price
per share of each NiSource option before the merger. For example, if
following the merger a participant exercises an option granted under
the Plan prior to the merger for 100 NiSource common shares, then upon
payment of the exercise price, he will receive 100 Company Common
Shares. All of the other terms of the option, including the exercise
schedule, will continue to apply following the merger.
8
Each restricted share has been converted into a restricted share
of the Company as a result of the merger. All of the terms of the
restricted share continue to apply, including the applicable lapse of
restrictions schedule.
Except as described above, all of the terms of the Plan will
continue to apply.
GENERAL DESCRIPTION OF THE PLAN
-------------------------------
The Plan is a stock based plan providing for the grant of
nonqualified stock options ("Options") and restricted stock of the
Company ("Restricted Stock") to nonemployee directors of the Company
("Nonemployee Directors"). The purpose of the Plan is to promote the
achievement of the Company's long-term objectives by linking the
personal interests of the Nonemployee Directors to those of Company
shareholders, and to attract and retain Nonemployee Directors of
outstanding competence.
The Plan is not qualified under Section 401(a) of the Internal
Revenue Code and is not subject to the provisions of the Employee
Retirement Income Security Act of 1974.
Additional information about the Plan and its administrators is
available upon request from the Director, Compensation and Benefits,
NiSource Inc., 801 East 86th Avenue, Merrillville, Indiana 46410
(Telephone: (219) 853-5200).
SHARES SUBJECT TO AWARDS UNDER THE PLAN
---------------------------------------
The Company has registered 13,600 Common Shares for issuance
under the Plan after the merger date to Plan participants who cease
to be employees of NiSource Inc. and its subsidiaries on or prior to
November 1, 2000. Such shares may be either authorized but unissued
shares or treasury shares.
RIGHTS UNSECURED
----------------
No person or entity shall have any right to receive a benefit or
award under the Plan except in accordance with the Plan. The right
of a grantee or his or her beneficiary to receive a distribution under
the Plan is an unsecured claim against the general assets of the Company
and neither a grantee nor his or her beneficiary has any rights against
any specific assets of the Company.
FEDERAL INCOME TAX OBLIGATIONS
------------------------------
The following discussion of federal income tax obligations of
persons receiving awards under the Plan is based on the federal income
tax laws currently in effect.
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OPTIONS
-------
Under federal income tax law as currently in effect, nonqualified
stock options without an ascertainable fair market value do not
require a grantee to recognize income at the time of grant. However,
upon the exercise of a nonqualified stock option, the grantee will
recognize ordinary income in an amount equal to the excess of the fair
market value of the Common Shares (i.e., the closing price of the
Common Shares on the New York Stock Exchange on the trading day
immediately preceding the exercise date) over the aggregate exercise
price. For this purpose, the date as of which income is recognized is
the date of exercise. The Company will be entitled to a deduction in
connection with the grantee's exercise of a nonqualified stock option
in an amount equal to the income recognized by the grantee, provided
that the Company complies with applicable withholding requirements.
The conversion of a NiSource option to a Company option as a
result of the merger does not result in a taxable event to the
grantee, or change the status of the option as a nonqualified stock
option.
RESTRICTED SHARES
-----------------
At the date of a grant of restricted shares, the grantee will not
recognize income, and the Company will not be entitled to a deduction.
The grantee will realize ordinary income equal to the fair market
value of the Common Shares received when the restrictions on the
Common Shares lapse and the grantee's interest in the Common Shares is
no longer subject to a substantial risk of forfeiture. The Company
may be entitled to a deduction with respect to the ordinary income
realized by the grantee, subject to the limitations of Section 162(m)
of the Internal Revenue Code.
THE FOREGOING IS INCLUDED ONLY AS A SUMMARY OF POSSIBLE FEDERAL
INCOME TAX CONSEQUENCES. A PERSON SHOULD CONSULT HIS OR HER TAX
ADVISOR CONCERNING MATTERS COVERED BY THIS DISCUSSION AND THE POSSIBLE
APPLICATION OF FOREIGN, STATE AND LOCAL TAX LAWS.
REPORTS TO GRANTEES
-------------------
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission
covering up to 13,600 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.
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NOTE: REFERENCES IN THE PLAN TO NISOURCE AND NISOURCE COMMON SHARES
NOW REFER TO THE COMPANY AND THE COMPANY'S COMMON SHARES.
NONEMPLOYEE DIRECTOR
STOCK INCENTIVE PLAN
NIPSCO Industries, Inc.
(AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 1998)
WHEREAS, NIPSCO Industries, Inc. (the "Company") adopted the
NIPSCO Industries, Inc. Nonemployee Director Stock Incentive Plan,
effective February 1, 1992, as last amended effective December 16,
1997; and
WHEREAS, pursuant to Section 9.1 of the Plan, the Company wishes
to amend the Plan in certain respects and restate it in a single
document;
NOW THEREFORE, the Plan is hereby amended and restated, effective
February 1, 1998, as follows:
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. NIPSCO Industries, Inc. hereby
establishes an incentive compensation plan to be known as the "NIPSCO
Industries, Inc. Nonemployee Director Stock Incentive Plan" (the
"Plan"), as set forth in this document. The Plan permits the grant of
Restricted Stock and Nonqualified Stock Options to Nonemployee
Directors, subject to the terms and provisions set forth herein.
Upon approval by the Board of Directors of the Company, subject
to ratification within twelve (12) months by an affirmative vote of a
majority of Shares present and entitled to vote at the April 8, 1992
annual shareholders meeting at which a quorum was present, the Plan
became effective as of February 1, 1992 (the "Effective Date"), and
shall remain in effect as provided in Section 1.3 herein.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote
the achievement of long-term objectives of the Company by linking the
personal interests of Nonemployee Directors to those of Company
shareholders, and to attract and retain Nonemployee Directors of
outstanding competence.
1.3 DURATION OF THE PLAN. The Plan commenced on February 1,
1992 and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Article 9
herein, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions. However, in no event may
an Award be granted under the Plan on or after April 30, 2002.
-12-
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the
meanings set forth below and, when the meaning is intended, the
initial letter of the word is capitalized:
(a) "Award" means, individually or collectively, a grant of
Restricted Stock or Nonqualified Stock Options under the
Plan.
(b) "Award Agreement" means an agreement entered into by and
between the Company and a Nonemployee Director, setting
forth the terms and provisions applicable to an Award
granted under the Plan.
(c) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.
(d) "Board" or "Board of Directors" means the Board of Directors
of the Company, and includes any committee of the Board of
Directors designated by the Board to administer part or all
of the Plan.
(e) "Change in Control" of the Company shall be deemed to have
occurred if any one of the occurrences of "Change in
Control" set forth in the Change in Control and Termination
Agreements between the Company and certain executive
officers thereof shall have been satisfied.
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Company" means NIPSCO Industries, Inc., an Indiana
corporation, or any successor thereto as provided in Section
10.8 herein.
(h) "Director" means any individual who is a member of the Board
of Directors of the Company.
(i) "Disability" means a permanent and total disability, within
the meaning of Code Section 22(e)(3), as determined by the
Board in good faith, upon receipt of sufficient competent
medical advice from one or more individuals, selected by the
Board, who are qualified to give professional medical
advice.
(j) "Employee" means any full-time, nonunion, salaried employee
of the Company. For purposes of the Plan, an individual
whose only employment relationship with the Company is as a
Director, shall not be deemed to be an Employee.
-13-
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
(1) "Fair Market Value" means the average of the highest and
lowest quoted selling prices for Shares on the relevant
date, or (if there were no sales on such date) the weighted
average of the mean between the highest and lowest quoted
selling prices on the nearest day before the nearest day
after the relevant date, as reported in THE WALL STREET
JOURNAL or a similar publication selected by the Board.
(m) "Nonemployee Director" means any individual who is a member
of the Board of Directors of the Company, but who is not
otherwise an Employee of the Company.
(n) "Nonqualified Stock Option" or "NQSO" means an option to
purchase Shares, granted under Article 7 herein.
(o) "Option" means a Nonqualified Stock Option granted under the
Plan.
(p) "Parent" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
(q) "Participant" means a Nonemployee Director of the Company
who has outstanding a viable Award granted under the Plan.
(r) "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is limited in some
way, and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 6 herein.
(s) "Person" shall have the meaning ascribed to such term in
Section 3(a) (9) of the Exchange Act and used in Sections
13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d).
(t) "Restricted Stock" means an Award granted to a Nonemployee
Director pursuant to Article 6 herein.
(u) "Shares" means the common shares of NIPSCO Industries, Inc.,
without par value.
ARTICLE 3. ADMINISTRATION
3.1 THE BOARD OF DIRECTORS. The Plan shall be administered by
the Board of Directors of the Company, subject to the restrictions set
forth in the Plan.
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3.2 ADMINISTRATION BY THE BOARD. The Board shall have the full
power, discretion, and authority to interpret and administer the Plan
in a manner which is consistent with the Plan's provisions. However,
in no event shall the Board have the power to determine Plan
eligibility, or to determine the number, the value, the vesting
period, or the timing, of Awards to be made under the Plan (all such
determinations are automatic pursuant to the provisions of the Plan).
Notwithstanding the preceding sentence, the Board shall have the
authority to designate whether an upcoming grant of Awards shall
consist of Restricted Stock or Nonqualified Stock Options.
3.3 DECISIONS BINDING. All determinations and decisions made by
the Board pursuant to the provisions of the Plan, and all related
orders or resolutions of the Board, shall be final, conclusive, and
binding on all persons, including the Company, its stockholders,
employees, Participants, and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in
Section 4.3 herein, the total number of Shares available for grant
under the Plan may not exceed one hundred thousand (100,000) (two
hundred thousand (200,000) after January 30, 1998).
4.2 LAPSED AWARDS. If any Share of Restricted Stock or Share
under an Option granted under the Plan terminates, expires, or lapses
for any reason, any such Shares of Restricted Stock and any Shares
subject to purchase pursuant to such Option, again shall be available
for grant under the Plan. However, in the event that prior to the
Award's termination, expiration, or lapse, the holder of the Award at
any time received one or more "benefits of ownership" pursuant to such
Award (as defined by the Securities and Exchange Commission, pursuant
to any rule or interpretation promulgated under Section 16 of the
Exchange Act), the Share subject to such Award shall not be made
available for regrant under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. (i) Appropriate
adjustments in the aggregate number of Shares issuable pursuant to the
Plan, the number of Shares subject to each outstanding Award granted
under the Plan and the option price with respect to Options, shall be
made to give effect to any increase or decrease in the number of
issued Shares resulting from a subdivision or consolidation of shares,
whether through recapitalization, stock split, reverse stock split,
spin-off, spin-out or other distribution of assets to stockholders,
stock distributions or combinations of shares, payment of stock
dividends, other increase or decrease in the number of such Shares
outstanding effected without receipt of consideration by the Company,
or any other occurrence for which the Board determines an adjustment
is appropriate.
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(ii) In the event of any merger, consolidation or reorganization
of the Company with any other corporation or corporations, or an
acquisition by the Company of the stock or assets of any other
corporation or corporations, there shall be substituted on an
equitable basis, as determined by the Board in its sole discretion,
for each Share then subject to the Plan, and for each Share then
subject to an Award granted under the Plan, the number and kind of
shares of stock, other securities, cash or other property to which the
holders of Shares of the Company are entitled pursuant to such
transaction.
(iii) Without limiting the generality of the foregoing
provisions of this paragraph, any such adjustment shall be deemed to
have prevented any dilution or enlargement of a Participant's rights,
if such Participant receives in any such adjustment, rights that are
substantially similar (after taking into account the fact that the
Participant has not paid the applicable option price) to the rights
the Participant would have received had he exercised his outstanding
Award and become a shareholder of the Company immediately prior to the
event giving rise to such adjustment. Adjustments under this
paragraph shall be made by the Board, whose decision as to the amount
and timing of any such adjustment shall be conclusive and binding on
all persons.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in the Plan
are limited to Nonemployee Directors who are serving on the Board on
the date of each scheduled grant under the Plan.
5.2 ACTUAL PARTICIPATION. All eligible Nonemployee Directors
shall receive grants of Restricted Stock and Options pursuant to the
terms and provisions set forth in Articles 6 and 7 herein.
ARTICLE 6. RESTRICTED STOCK
6.1 INITIAL GRANT OF RESTRICTED STOCK. Each person who was a
Nonemployee Director on the Effective Date was granted two hundred
fifty (250) Shares of Restricted Stock for each year of service as a
Nonemployee Director of the Company or its predecessor (The number of
years of service was determined as of the date of the first annual
meeting of shareholders of the Company following the Effective Date).
6.2 FUTURE GRANTS OF RESTRICTED STOCK. Upon each election (or
reelection, as applicable) of a Nonemployee Director to serve on the
Board, such Nonemployee Director shall be granted one thousand (1,000)
(two thousand (2000) after January 30, 1998) Shares of Restricted
Stock, subject to the terms of the Plan. Each such grant shall be
made as of the first day of the Board term of the newly-elected (or
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reelected, as applicable) Nonemployee Director, which begins
immediately following such election (or reelection, as applicable).
In the event that the Board properly designates (pursuant to
Section 3.2 herein) that a scheduled Award grant will consist of
Options rather than Restricted Stock, then such grant shall be
governed by the terms and provisions of Article 7 herein, which shall
in such event completely supersede and replace the terms and
provisions of this Section 6.2.
6.3 RESTRICTED STOCK AWARD AGREEMENT. Each Restricted Stock
grant under the Plan shall be evidenced by a Restricted Stock Award
Agreement that shall specify the Period(s) of Restriction, the number
of Restricted Stock Shares granted, and such other provisions as the
Board shall determine consistent with the Plan.
6.4 TRANSFERABILITY. Except as provided in this Section 6.4,
the Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction specified in the
Restricted Stock Award Agreement. However, in no event may any Shares
of Restricted Stock granted under the Plan become vested in a
Participant prior to six (6) months following the date of its grant.
Prior to vesting, all rights with respect to Shares of Restricted
Stock granted to a Nonemployee Director under the Plan shall be
available during his or her lifetime only to such Director.
6.5 OTHER RESTRICTIONS. The Board shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable, including restrictions imposed under
Section 7.8 hereof. Any restriction imposed on Shares of Restricted
Stock shall be included in a legend appearing on the certificates
representing Shares of Restricted Stock.
6.6 CERTIFICATE LEGEND. In addition to any legends placed on
certificates pursuant to Section 6.5 herein, each certificate
representing Shares of Restricted Stock granted pursuant to the Plan
shall bear the following legend:
"The sale or other transfer of the Shares of stock represented by
this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer
as set forth in the NIPSCO Industries, Inc. Nonemployee Director
Stock Incentive Plan, and in a Restricted Stock Award Agreement.
A copy of the Plan and such Restricted Stock Award Agreement may
be obtained from the Secretary of NIPSCO Industries, Inc."
6.7 VESTING. Except as otherwise provided in the Plan, all
Shares of Restricted Stock granted under the Plan shall vest and
become freely transferable by the Director according to the following
schedule:
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Annual Cumulative
Anniversary Percentage of Percentage of
of Grant Date Shares Which Vest Shares Which are Vested
------------- ----------------- -----------------------
1 20% 20%
2 20% 40%
3 20% 60%
4 20% 80%
5 20% 100%
Regardless of the vesting schedule set forth above, all Shares of
Restricted Stock held by a Participant shall immediately become one
hundred percent (100%) vested upon the first to occur of the
following:
(a) The completion of the vesting schedule set forth above; or
(b) The death of the Participant; or
(c) The Disability of the Participant; or
(d) The effective date of a Change in Control of the Company.
Following vesting, each Director shall be entitled to have the
legend required by Section 6.5 and/or Section 6.6 removed from his or
her Share certificate.
6.8 TERMINATION OF DIRECTORSHIP. In the event a Participant
ceases to be a Director for any reason other than death or Disability,
all Shares of Restricted Stock not vested as of the effective date of
termination shall be forfeited and shall revert back to the Company
(with no further vesting to occur). In the event a Participant ceases
to be a Director by reason of death or Disability, all Shares of
Restricted Stock granted under the Plan shall immediately vest one
hundred percent (100%).
6.9 VOTING RIGHTS. During the Period of Restriction, Directors
holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to such Shares.
6.10 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Directors holding Shares of Restricted Stock granted
hereunder shall be entitled to receive all dividends and other
distributions paid with respect to such Shares while they are so held.
If any such dividends or distributions are paid in Shares, the Shares
shall be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which
they were paid.
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ARTICLE 7. NONQUALIFIED STOCK OPTIONS
7.1 POTENTIAL GRANTS OF OPTIONS. In the event that the Board
properly designates (pursuant to Section 3.2 herein) that a scheduled
Award will consist of Options rather than Restricted Stock, then each
eligible Nonemployee Director shall be granted an Option to purchase
three thousand (3,000) (six thousand (6000) after January 30, 1998)
Shares, subject to the terms and provisions of the Plan. A
Nonemployee Director shall be deemed to be eligible for such an Option
grant if the Director is elected (or reelected, as applicable) to
serve on the Board pursuant to the shareholder vote for which such
Award grant is applicable. Each such grant shall be made as of the
first day of the Board term of the newly-elected (or reelected, as
applicable) Nonemployee Director, which begins immediately following
such election (or reelection, as applicable).
7.2 OPTION AWARD AGREEMENT. Each Option grant shall be
evidenced by an Option Award Agreement that shall specify the Option
Price, the duration of the Option, the number of Shares available for
purchase under the Option, and such other provisions as the Board
shall determine.
7.3 OPTION PRICE. The purchase price per Share available for
purchase under an Option shall equal the Fair Market Value of a Share
on the date the Option is granted.
7.4 DURATION OF OPTIONS. Each Option shall expire on the tenth
(10th) anniversary date of its grant.
7.5 VESTING OF SHARES SUBJECT TO OPTION. Participants shall be
entitled to exercise Options at any time and from time to time, but no
sooner than the time period beginning six (6) months after the grant
of the Option, and ending ten (10) years after grant of the Option,
and according to the following vesting schedule:
Annual Cumulative
Anniversary Percentage of Percentage of
of Grant Date Options Which Vest Options Which are Vested
------------- ------------------ ------------------------
1 20% 20%
2 20% 40%
3 20% 60%
4 20% 80%
5 20% 100%
Regardless of the vesting schedule set forth in this Section 7.5, all
Options held by a Participant shall immediately become one hundred
percent (100%) vested upon the first to occur of the following:
(a) The completion of the vesting schedule set forth above; or
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(b) The death of the Participant; or
(c) The Disability of the Participant; or
(d) The effective date of a Change in Control of the Company.
7.6 TERMINATION OF DIRECTORSHIP. In the event a Participant
ceases to be a Director for any reason other than death or Disability,
all Options not vested as of the effective date of termination shall
be forfeited and shall revert back to the Company (with no further
vesting to occur). All Options which are vested as of such date shall
remain exercisable for six (6) months following the date the
Director's service on the Board terminates, or until their expiration
date, whichever period is shorter.
To the extent an Option is exercisable immediately following the
date of death (or immediately following the date that the Board
determines that the definition of Disability is satisfied, as
applicable), it shall remain exercisable at any time prior to its
expiration date, or for one (1) year after the date of death (or after
the date that the Board determines that the definition of Disability
is satisfied, as applicable), whichever period is shorter, by the
Participant or such person or persons as shall have been named as the
Participant's legal representative or beneficiary, or by such persons
that have acquired the Participant's rights under the Option by will
or by the laws of descent and distribution. Options which vest
pursuant to a Change in Control shall remain exercisable throughout
their entire term.
7.7 PAYMENT. Options shall be exercised by the delivery of a
written notice of exercise to the Secretary of the Company, setting
forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to
the Company in full either: (a) in cash or its equivalent, or (b) by
tendering previously acquired Shares having a Fair Market Value at the
time of exercise equal to the total Option Price of the Shares for
which the Option is being exercised (provided that the Shares tendered
upon Option exercise have been held by the Participant for at least
six (6) months prior to their tender to satisfy the Option Price), or
(c) by a combination of (a) and (b). The proceeds from such a payment
shall be added to the general funds of the Company and shall be used
for general corporate purposes.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the
Participant, in the Participant's name, Share certificates in an
appropriate amount based upon the number of Shares purchased pursuant
to the exercise of the Option.
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7.8 RESTRICTIONS ON SHARE TRANSFERABILITY. The Board shall
impose such restrictions on any Shares acquired pursuant to the
exercise of an Option under the Plan, as it may deem advisable,
including, without limitation, restrictions under applicable Federal
securities laws, under the requirements of any stock exchange or
market upon which such Shares are then listed and/or traded, and under
any blue sky or state securities laws applicable to such Shares.
7.9 NONTRANSFERABILITY OF OPTIONS. No Option granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, all Options granted to a
Participant under the Plan shall be exercisable, during his lifetime,
only by such Participant. Notwithstanding the preceding provisions of
this Section, a Participant, at any time prior to his death, may
assign all or any portion of an Option granted to him under the Plan
to (i) his spouse or lineal descendant, (ii) the trustee of a trust
for the primary benefit of his spouse or lineal descendant, or (iii) a
tax-exempt organization as described in Section 501(c)(3) of the Code.
In such event the spouse, lineal descendant, trustee or tax-exempt
organization will be entitled to all of the rights of the Participant
with respect to the assigned portion of such Option, and such portion
of the Option will continue to be subject to all of the terms,
conditions and restrictions applicable to the Option as set forth
herein, and in the related Option Award Agreement, immediately prior
to the effective date of the assignment. Any such assignment will be
permitted only if (i) the Participant does not receive any
consideration therefor, and (ii) the assignment is expressly approved
by the Board or its delegate. Any such assignment shall be evidenced
by an appropriate written document executed by the Participant, and a
copy thereof shall be delivered to the Board or its delegate on or
prior to the effective date of the assignment.
ARTICLE 8. CHANGE IN CONTROL
In the event of a Change in Control of the Company, all Awards
granted under the Plan that are still outstanding and not yet vested,
shall become immediately one hundred percent (100%) vested in each
Participant, as of the effective date of the Change in Control, and
shall remain as such for the remaining life of the Award, as such life
is provided herein, and within the provisions of the related Award
Agreements. All Options that are outstanding as of the effective date
of the Change in Control shall remain exercisable for the remaining
lives of the Options.
ARTICLE 9. AMENDMENT, MODIFICATION, AND TERMINATION
9.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the
terms set forth in this Section 9.1, the Board may terminate, amend,
or modify the Plan at any time and from time to time; provided,
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however, that the provisions set forth in the Plan regarding the
amount of securities to be awarded to Directors, the price of
securities to be awarded to Directors, and the timing of awards to
Directors, may not be amended more than once within any six (6) month
period.
Without the approval of the shareholders of the Company (as may
be required by the Code, by the insider trading rules of Section 16 of
the Exchange Act, by any national securities exchange or system on
which the Shares are then listed or reported, or by a regulatory body
having jurisdiction with respect hereto) no such termination,
amendment, or modification may:
(a) Increase the total number or value of Shares which may be
available for grants of Awards under the Plan, except as
provided in Section 4.3 herein; or
(b) Change the class of Participants eligible to participate in
the Plan; or
(c) Materially increase the cost of the Plan, or materially
increase the benefits to Participants; or
(d) Extend the maximum period after the date of grant during
which Options may be exercised; or
(e) Change the provisions of the Plan regarding Option Price.
9.2 AWARDS PREVIOUSLY GRANTED. Unless required by law, no
termination, amendment, or modification of the Plan shall in any
manner adversely affect any Award previously granted under the Plan,
without the written consent of the Participant holding the Award.
ARTICLE 10. MISCELLANEOUS
10.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall
include the plural.
10.2 SEVERABILITY. In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.
10.3 INDEMNIFICATION. Each individual who is or shall have been
a member of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection
with or resulting from any claim, action, suit, or proceeding to which
-22-
he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such individuals may be
entitled under the Company's Articles of Incorporation or By-laws, as
a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.
10.4 BENEFICIARY DESIGNATION. Each Participant under the Plan
may, from time to time, name any beneficiary or beneficiaries (who may
be named contingently or successively) to whom any benefit under the
Plan is to be paid in the event of his or her death (and/or who may
exercise the Participant's vested Options following his or her death).
Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Board, and will be
effective only when filed by the Participant in writing with the Board
during his or her lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to
the Participant's estate (and, subject to the terms and provisions of
the Plan, any unexercised vested Options may be exercised by the
administrator or executor of the Participant's estate).
10.5 NO RIGHT OF NOMINATION. Nothing in the Plan shall be deemed
to create any obligation on the part of the Board to nominate any
Director for reelection by the Company's shareholders.
10.6 SHARES AVAILABLE. The Shares made available pursuant to
Awards under the Plan may be either authorized but unissued Shares, or
Shares which have been or may be reacquired by the Company, as
determined from time to time by the Board.
10.7 ADDITIONAL COMPENSATION. Shares granted under the Plan
shall be in addition to any annual retainer, attendance fees, or other
compensation payable to each Participant as a result of his or her
service on the Board.
10.8 SUCCESSORS. All obligations of the Company under the Plan,
with respect to Awards granted hereunder, shall be binding on any
successor to the Company, whether the existence of such successor is
the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets
of the Company.
10.9 REQUIREMENTS OF LAW. The granting of Awards under the Plan
shall be subject to all applicable laws, rules, and regulations, and
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to such approvals by any governmental agencies or national securities
exchanges as may be required.
10.10 GOVERNING LAW. To the extent not preempted by Federal
law, the Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Indiana.
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FIRST AMENDMENT TO NISOURCE INC.
--------------------------------
NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
-----------------------------------------
WHEREAS, NiSource Inc. (formerly NIPSCO Industries, Inc.)
("Company") adopted the NIPSCO Industries, Inc. Nonemployee Director
Stock Incentive Plan, effective February 1, 1992, as last amended and
restated effective February 1, 1998 ("Plan"); and
WHEREAS, pursuant to Section 9.1 of the Plan, the Company deems
it to be in its best interest to amend the Plan as described below;
NOW, THEREFORE, the Plan is hereby amended, effective April 1,
1999, as follows:
1. The Plan is renamed the NiSource Inc. Nonemployee Director
Stock Incentive Plan;
2. The second sentence of Section 6.7 is amended to read as
follows:
Regardless of the vesting schedule set forth above, all
Shares of Restricted Stock held by a Participant shall
immediately become one hundred percent (100%) vested upon
the first to occur of the following:
(a) The completion of the vesting schedule set forth
above;
(b) The death of the Participant;
(c) The Disability of the Participant;
(d) The retirement of the Participant from service on
the Board prior to death or Disability and after
attaining the age of seventy (70) years; or
(e) The effective date of a Change in Control of the
Company.
3. Section 6.8 is amended to read as follows:
6.8 TERMINATION OF DIRECTORSHIP. In the event a
Participant ceases to be a Director for any reason other
than death, Disability or retirement (as defined in Section
6.7(d)), all Shares of Restricted Stock not vested as of the
effective date of termination shall be forfeited and shall
revert back to the Company (with no further vesting to
occur). In the event a Participant ceases to be a Director
by reason of death, Disability or retirement, all Shares of
Restricted Stock granted under the Plan shall immediately
vest one hundred percent (100%).
4. The second sentence of Section 7.5 is amended to read as
follows:
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Regardless of the vesting schedule set forth above, all
Options held by a Participant shall immediately become one
hundred percent (100%) vested upon the first to occur of the
following:
(a) The completion of the vesting schedule set forth
above;
(b) The death of the Participant;
(c) The Disability of the Participant;
(d) The retirement of the Participant from service on
the Board prior to death or Disability and after
attaining the age of seventy (70) years; or
(e) The effective date of a Change in Control of the
Company.
5. Section 7.6 of the Plan is amended to read as follows:
7.6 TERMINATION OF DIRECTORSHIP. In the event a
Participant ceases to be a Director for any reason other
than death, Disability or retirement (as defined in Section
7.5(d)), all Options not vested as of the effective date of
termination shall be forfeited and shall revert back to the
Company (with no further vesting to occur). All Options
which are vested as of such date shall remain exercisable
for six (6) months following the date the Director's service
on the Board terminates, or until their expiration date,
whichever period is shorter.
In the event a Participant dies, incurs a Disability or
ceases service on the Board due to retirement, prior to
termination of any of his Options without having fully
exercised such Option, the Participant, or his legal
representative, beneficiary, heir or legatee, shall have the
right to exercise such unexercised Option during its term
within a period of one year after the date of such
termination due to death, Disability or retirement, or
during such other period and subject to such terms as may be
determined by the Board. Options which vest pursuant to a
Change in Control shall remain exercisable throughout their
entire term.
NISOURCE INC.
By: /s/Mark D. Wyckoff
-------------------------------
Mark D. Wyckoff
Vice President, Human Resources
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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
Any net proceeds that the Company realizes from the issuance of its
Common Shares in connection with awards under the Plan will be used
for general corporate purposes.
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
following satisfaction of the applicable vesting, exercise and/or lapse
of restrictions schedules applicable to stock options and restricted
stock awards granted under the Plan.
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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