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801 E. 86th Avenue • Merrillville, IN 46410 • (877) 647-5990 |
Gary W. Pottorff | |
Corporate Secretary |
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• | Telephoning the toll-free number listed on the proxy card; | |
• | Using the Internet site listed on the proxy card; or | |
• | Marking, dating, signing and returning the enclosed proxy card. |
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Name, Age and Principal Occupations | Has Been a | |||||
for Past Five Years and Present Directorships Held | Director Since | |||||
Nominees For Terms to Expire in 2008 | ||||||
Steven R. McCracken, 52 | ||||||
Chairman, President and Chief Executive Officer of Owens-Illinois, Inc., Toledo, Ohio, a manufacturer of glass containers and plastic packaging. Prior to joining Owens-Illinois in 2004, Mr. McCracken served as President of Invista, the global fibers and related intermediates business subsidiary of E. I. DuPont de Nemours and Company (“DuPont”) from 2003 to 2004, DuPont Group Vice President from 2001 to 2003 and Vice President and General Manager of DuPont Lycra® from 1997 to 2001. Mr. McCracken also is a director of Owens-Illinois, Inc. | — | |||||
Ian M. Rolland, 71 | ||||||
Prior to his retirement in 1998, Mr. Rolland served as Chairman and Chief Executive Officer of Lincoln National Corporation, Ft. Wayne, Indiana, a provider of financial products and services. Mr. Rolland also is a director of Bright Horizons Family Solutions and on the board of advisors of CID Partners | 1978 | |||||
Robert C. Skaggs, Jr., 50 | ||||||
President of the Company since October, 2004. Prior thereto Mr. Skaggs served as Executive Vice President, Regulated Revenue from October 2003, as President of Columbia Gas of Ohio, Inc. from February 1997 to October 2003; President of Columbia Gas of Kentucky, Inc. from January 1997 to October 2003; President of Bay State Gas Company and Northern Utilities from November 2000 to October 2003; and President of Columbia Gas of Virginia, Inc. Columbia Gas of Maryland, Inc. and Columbia Gas of Pennsylvania, Inc. from December 2001 to October 2003 | — | |||||
John W. Thompson, 55 | ||||||
Chairman and Chief Executive Officer of Symantec Corp., Cupertino, California, a provider of software and Internet security technology. Prior to joining Symantec in 1999, Mr. Thompson was General Manager of IBM Americas. Mr. Thompson also is a director of United Parcel Service, Inc. and Seagate Technology | 1993 |
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Name, Age and Principal Occupations | Has Been a | |||||
for Past Five Years and Present Directorships Held | Director Since | |||||
Directors Whose Terms Expire in 2007 | ||||||
Steven C. Beering, 72 | ||||||
President Emeritus of Purdue University, West Lafayette, Indiana. Dr. Beering was President of Purdue University from 1983 to 2000. Dr. Beering also is a director of American United Life Insurance Company and Eli Lilly and Company | 1986 | |||||
Dennis E. Foster, 64 | ||||||
Prior to his retirement in 2000, Mr. Foster was Vice Chairman of ALLTEL Corporation, Little Rock, Arkansas, a full service telecom and information service provider. Mr. Foster also is a director of ALLTEL Corporation and Yellow Corporation | 1999 | |||||
Richard L. Thompson, 66 | ||||||
Prior to his retirement in 2004, Mr. Thompson was Group President, Caterpillar Inc., Peoria, Illinois, a leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. Mr. Thompson also is a director of Gardner Denver, Inc. and Vice Chairman of the board of directors of Lennox International, Inc. | 2004 | |||||
Carolyn Y. Woo, 50 | ||||||
Martin J. Gillen Dean and Ray and Milann Siegfried Professor of Entrepreneurial Studies, Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana. Dr. Woo also is a director of AON Corporation and Circuit City, Inc. | 1998 | |||||
Directors Whose Terms Expire in 2006 | ||||||
Arthur J. Decio, 74 | ||||||
Chairman of the Board of Skyline Corporation, Elkhart, Indiana, a manufacturer of manufactured housing and recreational vehicles. Mr. Decio has notified the Company that he wishes to resign from the board of directors of the Company. His retirement will be effective at the Annual Meeting | 1991 | |||||
Gary L. Neale, 65 | ||||||
Chairman and Chief Executive Officer of the Company since 1993. Mr. Neale also served as President of the Company from 1993 to November 2004. Mr. Neale also is a director of Modine Manufacturing Company and Chicago Bridge and Iron Company | 1991 | |||||
Robert J. Welsh, 70 | ||||||
Chairman of the Board and Chief Executive Officer of Welsh Holdings, LLC, Merrillville, Indiana, a real estate holding company. Prior to its sale in 2001, Mr. Welsh was Chairman and Chief Executive Officer of Welsh, Inc., Merrillville, Indiana, a marketer of petroleum products through convenience stores and travel centers | 1988 |
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• | Communications to the board of directors may be made to the board of directors generally, any director individually, the non-management directors as a group or the lead director of the non-management group by writing to the following address: |
NiSource Inc. | |
Attention: [Board of Directors]/[Board | |
Member]/[Non-management Directors]/[Lead Director] | |
c/o Gary W. Pottorff, Corporate Secretary | |
801 East 86th Avenue | |
Merrillville, Indiana 46410 |
• | The Audit Committee has approved procedures with respect to the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or audit matters. Communications regarding such matters may be made by contacting the Company’s Ethics Officer atethics@nisource.com, calling the business ethics program hotline at 1-800-457-2814, or writing to: |
NiSource Inc. | |
Attention: Gary W. Pottorff, Ethics Officer | |
801 East 86th Avenue | |
Merrillville, Indiana 46410 |
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• | Executive, | |
• | Audit, | |
• | Corporate Governance, | |
• | Environmental, Health and Safety, | |
• | Officer Nomination and Compensation, and | |
• | Public Affairs and Career Development. |
Executive Committee |
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Audit Committee |
• | the integrity of the Company’s financial statements, | |
• | the independent auditors’ qualifications and independence, | |
• | the performance of the Company’s internal audit function and the independent auditors, and | |
• | the compliance by the Company with legal and regulatory requirements. |
Corporate Governance Committee |
• | identifying individuals qualified to become board members, consistent with criteria approved by the board, | |
• | recommending to the board director nominees for the next annual meeting of the stockholders, | |
• | developing and recommending to the board a set of corporate governance principles applicable to the Company, and | |
• | overseeing the evaluation of the board. |
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Environmental, Health and Safety Committee |
Officer Nomination and Compensation Committee |
• | approves the CEO’s compensation level based on the Corporate Governance Committee’s report on its evaluation of the CEO’s performance; | |
• | considers (1) the Company’s performance and relative stockholder return, (2) the value of similar incentive awards to CEOs at comparable companies, and (3) the awards given to the Company’s CEO in past years when determining the long-term component of the CEO’s compensation; | |
• | makes recommendations to the Board with respect to (1) compensation of executive officers of the Company and (2) incentive-compensation plans and equity-based plans; | |
• | reviews and approves periodically a general compensation policy for other officers of the Company and officers of its principal subsidiaries; | |
• | recommends Company officer candidates for election by the Board; | |
• | oversees the evaluation of management; and | |
• | produces the Officer Nomination and Compensation Committee Report on Executive Compensation included in this proxy statement. |
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Public Affairs and Career Development Committee |
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Amount and Nature of | Percent of Class | |||||||
Name and Address of Beneficial Owner | Beneficial Ownership | Outstanding | ||||||
T. Rowe Price Associates, Inc. | 21,759,987 | 8.2 | (1) | |||||
100 East Pratt Street Baltimore, Maryland 21202 | ||||||||
Barclays Global Investors, NA | 15,127,758 | 5.74 | (2) | |||||
45 Fremont Street San Francisco, California 94105 | ||||||||
Capital Research & Management Company | 15,089,310 | 5.7 | (3) | |||||
333 South Hope Street, 55th Floor Los Angeles, California 90071 |
(1) | As reported on statements made on Schedule 13G filed with the Securities and Exchange Commission on behalf of T. Rowe Price Associates, Inc. on February 14, 2005. These securities are owned by various individual investors which T. Rowe Price Associates, Inc. serves as investment advisor with power to direct investment and/or sole power to vote securities. T. Rowe Price Associates, Inc. expressly disclaims that it is, in fact, the beneficial owner of these securities. |
(2) | As reported on statements made on Schedule 13G filed with the Securities and Exchange Commission on behalf of Barclays Global Investors, NA, Barclays Global Fund Advisors, Barclays Global Investors, LTD, Barclays Capital Securities Limited, Palomino Limited, and other affiliated entities on February 14, 2005. |
(3) | As reported on statements made on Schedule 13G filed with the Securities and Exchange Commission on behalf of Capital Research & Management Company on February 14, 2005. |
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Amount and Nature of | ||||
Name of Beneficial Owner | Beneficial Ownership(1)(2) | |||
Stephen P. Adik | 595,944 | |||
Steven C. Beering | 11,691 | |||
Arthur J. Decio | 13,100 | |||
Dennis E. Foster | 13,017 | |||
Steven R. McCracken | 0 | |||
Samuel W. Miller, Jr. | 132,197 | |||
Gary L. Neale | 2,256,129 | |||
Michael W. O’Donnell | 261,416 | |||
Ian M. Rolland(3) | 26,777 | |||
Robert C. Skaggs, Jr. | 161,069 | |||
John W. Thompson | 16,156 | |||
Richard L. Thompson | 0 | |||
Robert J. Welsh | 16,600 | |||
Carolyn Y. Woo | 4,000 | |||
Roger A. Young | 34,831 | |||
S. LaNette Zimmerman | 185,024 | |||
All directors and executive officers as a group | 4,221,244 |
(1) | The number of shares owned includes shares held in the Company’s Automatic Dividend Reinvestment and Share Purchase Plan, shares held in the Company’s Retirement Savings Plan (the “401(k)”), Employee Stock Purchase Plan and restricted shares awarded under the Company’s 1994 Long-Term Incentive Plan (the “Incentive Plan”) and Nonemployee Director Stock Incentive Plan, where applicable. The percentage of common stock owned by all directors and executive officers as a group is approximately 1.5 percent of the common stock outstanding as of March 1, 2005. |
(2) | The totals include shares for which the following individuals have a right to acquire beneficial ownership, within 60 days after March 1, 2005, by exercising stock options granted under the Incentive Plan: Gary L. Neale — 1,570,950 shares; Stephen P. Adik — 420,643 shares; Samuel W. Miller, Jr. 48,883 shares; Michael W. O’Donnell — 198,438 shares; Robert C. Skaggs, Jr. — 110,050; S. LaNette Zimmerman — 133,811 shares; and all executive officers as a group — 2,786,122 shares. |
(3) | The number of shares owned by Mr. Rolland includes 9,277 shares owned by the Ian and Miriam Rolland Foundation over which Mr. Rolland maintains investment control, but for which Mr. Rolland disclaims beneficial ownership. |
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Incentive at | Incentive at | |||||||
Trigger | Maximum | |||||||
Chief Executive Officer | 40.0% | 120.0% | ||||||
President and Executive Vice President, Chief Operating Officer | 35.0% | 105.0% | ||||||
Other Executive Vice Presidents and Senior Vice Presidents | 32.5% | 97.5% | ||||||
Other Vice Presidents | 20.0% to 25.0% | 60.0% to 75.0% |
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Officer Nomination and Compensation Committee | |
Steven C. Beering, Chairman | |
Arthur J. Decio | |
John W. Thompson | |
Robert J. Welsh |
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1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
NiSource | 100.00 | 181.50 | 142.17 | 130.78 | 151.94 | 164.84 | ||||||||||||||||||
S & P 500 | 100.00 | 90.91 | 80.11 | 62.41 | 80.31 | 89.05 | ||||||||||||||||||
DJ Utilities | 100.00 | 150.46 | 111.20 | 85.54 | 110.57 | 143.87 |
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Annual Compensation(1) | Long-Term Compensation | ||||||||||||||||||||||||||||||||
Awards | Payouts | ||||||||||||||||||||||||||||||||
Securities | Long-Term | ||||||||||||||||||||||||||||||||
Restricted | Underlying | Incentive | |||||||||||||||||||||||||||||||
Other Annual | Stock | Options/ | Plan | All Other | |||||||||||||||||||||||||||||
Salary | Bonus | Compensation | Award(s) | SARS | Payouts | Compensation | |||||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(2) | ($)(3) | ($)(4) | (#) | ($)(5) | ($)(6) | |||||||||||||||||||||||||
Gary L. Neale, | 2004 | 950,000 | 380,000 | 6,156 | 5,207,849 | 353,352 | 2,084,462 | 8,628 | |||||||||||||||||||||||||
Chairman and Chief | 2003 | 950,000 | 436,050 | 62,620 | 4,586,120 | 373,157 | 0 | 9,950 | |||||||||||||||||||||||||
Executive Officer | 2002 | 950,000 | 361,000 | 105,943 | — | 194,064 | 0 | 18,827 | |||||||||||||||||||||||||
Robert C. Skaggs, Jr.(7) | 2004 | 425,000 | 148,750 | 385 | 720,463 | 48,883 | 201,152 | 28,890 | |||||||||||||||||||||||||
President | 2003 | 325,000 | 111,800 | 0 | 335,360 | 27,287 | 0 | 18,000 | |||||||||||||||||||||||||
2002 | 310,000 | 105,000 | 0 | 0 | 18,550 | 0 | 16,525 | ||||||||||||||||||||||||||
Samuel W. Miller, Jr. | 2004 | 500,000 | 175,000 | 0 | 720,463 | 48,883 | 0 | 12,350 | |||||||||||||||||||||||||
Executive Vice President and | 2003 | 500,000 | 200,500 | 29 | 815,720 | 66,372 | 0 | 2,600 | |||||||||||||||||||||||||
Chief Operating Officer | 2002 | 166,666 | 166,550 | 466 | 204,387 | (8) | 0 | 0 | 0 | ||||||||||||||||||||||||
Michael W. O’Donnell | 2004 | 400,000 | 130,000 | 593 | 1,018,926 | 69,135 | 638,867 | 27,805 | |||||||||||||||||||||||||
Executive Vice President and | 2003 | 400,000 | 149,200 | 0 | 897,300 | 73,009 | 384,694 | 26,080 | |||||||||||||||||||||||||
Chief Financial Officer | 2002 | 400,000 | 123,500 | 12,183 | — | 25,472 | 492,339 | 24,000 | |||||||||||||||||||||||||
S. LaNette Zimmerman | 2004 | 325,000 | 105,624 | 0 | 641,211 | 43,506 | 775,168 | 16,315 | |||||||||||||||||||||||||
Executive Vice President, | 2003 | 325,000 | 121,225 | 0 | 565,340 | 46,000 | 465,475 | 16,315 | |||||||||||||||||||||||||
Human Resources and | 2002 | 304,166 | 98,000 | 2,583 | — | 20,047 | 582,776 | 1,221 | |||||||||||||||||||||||||
Communications |
(1) | Compensation deferred at the election of the Named Officer is reported in the category and year in which such compensation was earned. |
(2) | All bonuses are paid pursuant to the NiSource Corporate Incentive Plan. For further discussion of the bonuses paid for 2004 please refer to the Officer Nomination and Compensation Committee Report on Executive Compensation. |
(3) | The 2003 amount for Mr. Neale includes $10,462 for financial advisory services, $14,159 for fair market value gain resulting from the purchase of a company vehicle and $9,479 for taxes paid by the Company as a result of such gain. The 2002 amount shown for Mr. Neale includes $73,076 paid to Mr. Neale to buy back unused vacation days. |
(4) | Represents restricted and contingent stock awarded under the Company’s Time Accelerated Restricted Stock Award Program (“TARSAP”). The amounts shown for 2003 and 2004 are based on the closing sale price of the Company’s common stock on December 31, 2003 and December 31, 2004, respectively, as reported on the New York Stock Exchange Composite Transactions Tape. Vesting of restricted stock under the Long Term Incentive Plan in prior years were performance based and are shown under the Long-Term Incentive Plan Payouts column. See Note 5 below. As of December 31, 2004, the total shares outstanding under the TARSAP (including those shares held by the Named Officers) was 1,251,844 with an aggregate value of $28,517,006, based on the Company’s closing market price on such date ($22.78). For more information regarding the restricted and contingent stock awards under the TARSAP please see the Long-Term Incentive Plan Table and its accompanying footnotes on page 19. |
(5) | The payouts shown are based on the value, at date of vesting, of restricted stock awarded under the Long-Term Incentive Plan which vested during the years shown. Total shares of restricted stock and contingent stock held (assuming 100% vesting) and aggregate market value at December 31, 2004 (based on the |
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closing sale price of the common stock on that date as reported on the New York Stock Exchange Composite Transactions Tape) for the Named Officers were as follows: Mr. Neale, 1,016,671 shares valued at $23,159,765; Mr. Miller, 82,669 shares valued at $1,883,200; Mr. Skaggs, 59,596 shares valued at $1,357,597; Mr. O’Donnell, 108,206 shares valued at $2,464,933; and Ms. Zimmerman, 71,063 shares valued at $1,618,815. Dividends on the restricted and contingent stock are paid in cash to the Named Officers. | |
(6) | “All Other Compensation” represents Company contributions to the 401(k) Plan of $6,094 for Mr. Neale, $15,690 for Mr. Skaggs, $12,350 for Mr. Miller, $16,080 for Mr. O’Donnell, and $16,315 for Ms. Zimmerman. The amount shown for Mr. Neale also includes $2,534 term insurance costs for 2004. The amount shown for 2004 for Messrs. Skaggs and O’Donnell also includes $13,200 and $11,725, respectively, paid to the Savings Restoration Plan for NiSource Inc. and Affiliates. |
(7) | Mr. Skaggs became President of the Company on October 26, 2004. The amounts shown include compensation received by Mr. Skaggs as the Company’s Executive Vice President, Regulated Revenue. |
(8) | The amount shown represents a grant of restricted stock made to Mr. Miller in connection with the commencement of his employment with the Company. The amount shown is based on the closing sale price of the Company’s common stock on September 1, 2002, as reported on the New York Stock Exchange Composite Transactions Tape. |
Number of | Percent of Total | |||||||||||||||||||
Securities | Options/SARS | Exercise | ||||||||||||||||||
Underlying | Granted to | or Base | Grant Date | |||||||||||||||||
Options/SARS | Employees in | Price | Expiration | Present | ||||||||||||||||
Name | Granted (#)(1) | Fiscal Year (2) | ($/sh)(3) | Date | Value ($)(4) | |||||||||||||||
Gary L. Neale | 353,352 | 16.3 | 21.86 | 12/31/13 | 1,667,821 | |||||||||||||||
Robert C. Skaggs, Jr. | 48,883 | 2.25 | 21.86 | 12/31/13 | 230,727 | |||||||||||||||
Samuel W. Miller, Jr. | 48,883 | 2.25 | 21.86 | 12/31/13 | 230,727 | |||||||||||||||
Michael W. O’Donnell | 69,135 | 3.19 | 21.86 | 12/31/13 | 326,317 | |||||||||||||||
S. LaNette Zimmerman | 43,506 | 2.01 | 21.86 | 12/31/13 | 205,348 |
(1) | All options granted in 2004 are fully exercisable commencing one year from the date of grant. Vesting may be accelerated as a result of certain events relating to a change in control of the Company. The exercise price may be paid by delivery of already owned shares of common stock and any tax withholding obligations related to exercise may be paid by delivery of already owned shares of common stock or by reducing the number of shares of common stock received on exercise, subject to certain conditions. |
(2) | Based on an aggregate of 2,168,200 options granted to all employees in 2004. |
(3) | The options were granted on January 1, 2004 at the average of high and low sale prices of the common stock on December 31, 2004 as reported on the New York Stock Exchange Composite Transactions Tape. |
(4) | Grant date present value is determined using the Black-Scholes option pricing model. The assumptions used in the Black-Scholes option pricing model for the January 1, 2004 grants (expiring December 31, 2013) were as follows: expected volatility — (30%) (estimated stock price volatility for the term of the grant); risk-free rate of return — (4.15%) (the rate for a ten-year U.S. treasury); discount for risk of forfeiture — (10%;) estimated annual dividend — ($0.92;) expected option term — ten years; and vesting — 100% one year after date of grant. No assumption was made relating to non-transferability. Actual gains, if any, on option exercises and common shares are dependent on the future performance of the common stock and overall market condition. The amounts reflected in this table may not be achieved. |
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Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-The-Money | |||||||||||||||||||||||
Shares | Options/SARS at | Options/SARS at Fiscal | ||||||||||||||||||||||
Acquired on | Value | Fiscal Year-End (#) | Year-End ($)(1) | |||||||||||||||||||||
Exercise | Realized | |||||||||||||||||||||||
Name | (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Gary L. Neale | 50,000 | 321,245 | 1,217,598 | 353,352 | 2,516,947 | 287,982 | ||||||||||||||||||
Robert C. Skaggs, Jr. | 0 | 0 | 61,167 | 48,883 | 108,337 | 39,840 | ||||||||||||||||||
Samuel W. Miller, Jr. | 66,372 | 130,753 | 0 | 48,883 | 0 | 39,840 | ||||||||||||||||||
Michael W. O’Donnell | 0 | 0 | 129,303 | 69,135 | 258,453 | 56,345 | ||||||||||||||||||
S. LaNette Zimmerman | 0 | 0 | 90,305 | 43,506 | 170,921 | 35,458 |
(1) | Represents the difference between the option exercise price and $22.675, the average of high and low sale prices of the common shares on December 31, 2004, as reported on the New York Stock Exchange Composite Transactions Tape. |
Number of | Performance | |||||||||||||||||||
Shares, | or Other | Estimated Future Payouts Under | ||||||||||||||||||
Units or | Period Until | Non-Stock Price-Based Plans(3) | ||||||||||||||||||
Other | Maturation | |||||||||||||||||||
Name | Rights (#) | or Payout | Threshold (#) | Target (#) | Maximum(#) | |||||||||||||||
Gary L. Neale(1) | 228,615 | 3/6 years | 228,615 | 228,615 | 228,615 | |||||||||||||||
Robert C. Skaggs, Jr.(1) | 31,627 | 3/6 years | 31,627 | 31,627 | 31,627 | |||||||||||||||
Samuel W. Miller, Jr.(2) | 31,627 | 3/6 years | 31,627 | 31,627 | 31,627 | |||||||||||||||
Michael W. O’Donnell(1) | 44,729 | 3/6 years | 44,729 | 44,729 | 44,729 | |||||||||||||||
S. LaNette Zimmerman(1) | 28,148 | 3/6 years | 28,148 | 28,148 | 28,148 |
(1) | The awards for Messrs. Neale, Skaggs and O’Donnell and Ms. Zimmerman reflected above consist of grants of contingent stock under the Long Term Incentive Plan which were made on January 1, 2004, pursuant to the Company’s Time Accelerated Restricted Stock Award Program (“TARSAP”). Restrictions with respect to the TARSAP awards lapse six years from the date of the grant: however, if at the end of a three year performance cycle the Company meets both a peer group target (a 60% percentile for relative total stockholder return ranking) and an absolute target (a 12% annualized compound total stockholder return), the restrictions with respect to the awards will lapse on the third anniversary of the grants. The six-year lapse period is reduced on a pro rata basis for an executive if he or she terminates employment, without cause, on or after attaining age 55 with ten years of service or if he or she dies or becomes disabled to the extent that the end of the six-year period would extend beyond age 62, to a minimum of three years. Due to the age-related restrictions within the TARSAP, the 2004 awards for Messrs. Neale and O’Donnell and Ms. Zimmerman will lapse over a period of three years in the event of retirement, disability or death. In the event of a change in control, all restrictions on the awards immediately lapse five business days after the event. |
(2) | The award for Mr. Miller reflected above consists of a grant of restricted stock under the TARSAP. Restrictions with respect to the award will lapse on December 31, 2009; however, if at the end of the three year performance cycle (that began on January 1, 2004 and will end on December 31, 2006) the Company meets both a peer group target (a 60% percentile for relative total stockholder return ranking) and an absolute target (a 12% annualized compound total stockholder return), the restrictions with |
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respect to the award will lapse on December 31, 2006. Upon the death or disability of the grantee, the grantee will receive a distribution of the restricted stock awarded on a pro rata basis based on a quarterly distribution schedule contained in the restricted stock agreement between the Company and each grantee with respect to each grant. | |
(3) | In the case of each of the other Named Officers, the restrictions with respect to both the restricted stock awards and the contingent stock awards will lapse and the Named Officer will be entitled to the underlying stock only to the extent that the value of shares for which the restrictions lapse in any calendar year, when added to other non-performance based compensation for that year, does not exceed $999,999. |
Years of Service | ||||||||||||||||||||
Remuneration | 15 | 20 | 25 | 30 | 35 | |||||||||||||||
$ 300,000 | $ | 118,944 | $ | 158,592 | $ | 166,092 | $ | 173,592 | $ | 173,592 | ||||||||||
400,000 | 163,944 | 218,592 | 228,592 | 238,592 | 238,592 | |||||||||||||||
500,000 | 209,944 | 278,592 | 291,092 | 303,592 | 303,592 | |||||||||||||||
600,000 | 253,944 | 338,592 | 353,592 | 368,592 | 368,592 | |||||||||||||||
700,000 | 298,944 | 398,592 | 416,092 | 433,592 | 433,592 | |||||||||||||||
800,000 | 343,944 | 458,592 | 478,592 | 498,592 | 498,592 | |||||||||||||||
900,000 | 388,944 | 518,592 | 541,092 | 563,592 | 563,592 | |||||||||||||||
1,000,000 | 433,944 | 578,592 | 603,592 | 628,592 | 628,592 | |||||||||||||||
1,100,000 | 478,944 | 638,592 | 666,092 | 693,592 | 693,592 | |||||||||||||||
1,200,000 | 523,944 | 698,592 | 728.592 | 758,592 | 758,592 | |||||||||||||||
1,300,000 | 568,944 | 758,592 | 791,092 | 823,592 | 823,592 | |||||||||||||||
1,400,000 | 613,944 | 818,592 | 855,592 | 888,592 | 888,592 | |||||||||||||||
1,500,000 | 658,944 | 878,592 | 916,092 | 953,592 | 953,592 | |||||||||||||||
1,600,000 | 703,944 | 938,592 | 978,592 | 1,018,592 | 1,018,592 | |||||||||||||||
1,700,000 | 748,944 | 998,592 | 1,041,092 | 1,083,592 | 1,083,592 | |||||||||||||||
1,800,000 | 793,944 | 1,058,592 | 1,103,592 | 1,148,592 | 1,148,592 | |||||||||||||||
1,900,000 | 838,944 | 1,118,592 | 1,166,092 | 1,213,592 | 1,213,592 | |||||||||||||||
2,000,000 | 883,944 | 1,178,592 | 1,228,592 | 1,278,592 | 1,278,592 |
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• | Incentive stock options within the meaning of section 422 of the Internal Revenue Code, | |
• | Options not intended to be incentive stock options (nonqualified stock options), | |
• | Stock appreciation rights | |
• | Restricted and contingent stock | |
• | Performance units and | |
• | Dividend equivalents payable on grants of contingent stock |
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• | Growth in gross revenue; | |
• | Earnings per share; | |
• | Ratios of earnings relative to stockholder’s equity or to total assets; | |
• | Dividend payments; | |
• | Total stockholder return. |
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• | Richard Thompson, a new director in 2004, was designated a “problem director” by The Corporate Library (TCL), an independent investment research firm in Portland, Maine. Reason: Mr. Thompson chaired the committee that sets executive compensation at Lennox International, which received a CEO Compensation grade of “F” by TCL. | |
• | Hopefully Mr. Richard Thompson will not have future service on any of our key board committees. | |
• | An awesome 80% shareholder vote was required to make certain key governance changes — entrenchment concern. | |
• | Our directors were protected by a poison pill. |
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• | Our Lead Director had 26-years tenure — independence concern. | |
• | Both our Audit Committee and Compensation Committee allowed a director with 26-years director tenure to serve as Chairman — independence concern. | |
• | Our key Compensation Committee allowed a director with 18-years director tenure to serve as Chairman — independence concern. | |
• | Our directors had special protection from a requirement of our overwhelming 80%-vote to oust any director for good cause. | |
• | Our Directors still had a $250,000 Charitable Award program — independence concern. |
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Audit Committee | |
Ian M. Rolland, Chairman | |
Dennis E. Foster | |
Richard L. Thompson | |
Carolyn Y. Woo |
2003 | 2004 | |||||||
Deloitte & Touche LLP | Deloitte & Touche LLP | |||||||
Audit Fees(1) | $ | 3,385,080 | $ | 4,431,638 | ||||
Audit-Related Fees(2) | 991,652 | 407,480 | ||||||
Tax Fees(3) | 110,704 | 121,332 | ||||||
All Other Fees(4) | 23,508 | 0 |
(1) | Audit Fees — These are fees for professional services performed by Deloitte & Touche LLP for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s 10-Q filings, and services that are normally provided in connection with statutory and regulatory filings or engagements. |
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(2) | Audit-Related Fees — These are fees for the assurance and related services performed by Deloitte & Touche LLP that are reasonably related to the performance of the audit or review of the Company’s financial statements. |
(3) | Tax Fees — These are fees for professional services performed by Deloitte & Touche LLP with respect to tax compliance, tax advice and tax planning. |
(4) | All Other Fees — These are fees for permissible work performed by Deloitte that does not meet the above categories. |
Number of Securities | ||||||||||||
Remaining Available for | ||||||||||||
Future Issuance Under | ||||||||||||
Number of Securities to | Weighted-Average | Equity Compensation | ||||||||||
be Issued Upon Exercise | Exercise Price of | Plans (Excluding | ||||||||||
of Outstanding Options, | Outstanding Options, | Securities Reflected in | ||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | Column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders(1) | 10,125,766 | 22.1799 | 6,312,734 | |||||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 | |||||||||
Total | 10,125,766 | 22.1799 | 6,312,734 |
(1) | Stockholder Approved Plans. This Plan category includes the following plans: The 1988 Long Term Incentive Plan, as amended and restated effective as of April 14, 1999 (No shares remain available for issuance under the plan), The 1994 Long Term Incentive Plan, as amended and restated effective as of January 1, 2004 (5,896,485 shares remain available for issuance under the plan), The Nonemployee Director Stock Incentive Plan, amended and restated effective as of January 1, 2004 (338,957 shares remain available for issuance under the plan), and the NiSource Inc. Employee Stock Purchase Plan, last amended on December 1, 2003 (77,292 shares remain available for purchase under the plan). |
(2) | In calculating the weighted-average exercise price of outstanding options, warrants and rights shown in column (b), stock units and contingent stock which can convert into shares of common stock upon maturity have been excluded. Stock units and contingent stock are payable at no cost to the grantee on a one-for-one basis. |
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By Order of the Board of Directors | |
Gary W. Pottorff | |
Corporate Secretary |
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801 E. 86th Avenue | |
Merrillville, Indiana 46410 |
Officers | |
Gary L. Neale | |
Chairman and Chief Executive Officer | |
Robert C. Skaggs, Jr. | |
President | |
Samuel W. Miller, Jr. | |
Executive Vice President Chief Operating Officer | |
Michael W. O’Donnell | |
Executive Vice President and Chief Financial Officer | |
S. LaNette Zimmerman | |
Executive Vice President, Human Resources and Communications | |
Peter V. Fazio, Jr. | |
Executive Vice President and General Counsel | |
Arthur E. Smith, Jr. | |
Senior Vice President and Environmental Counsel | |
Mark D. Wyckoff | |
Senior Vice President | |
Jeffrey W. Grossman | |
Vice President and Controller | |
Barbara S. McKay | |
Vice President, Communications | |
Larry J. Francisco | |
Vice President, Audit | |
Dennis E. Senchak | |
Vice President, Investor Relations, Assistant Treasurer & Assistant Secretary | |
David J. Vajda | |
Vice President and Treasurer | |
Gary W. Pottorff | |
Corporate Secretary |
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PROXY | PROXY |
This Proxy is Solicited on Behalf of the Board of Directors of NiSource Inc.
for its Annual Meeting of Stockholders, May 10, 2005
The undersigned hereby appoints Gary L. Neale and Michael W. O’Donnell, or either of them, the attorneys and proxies of the undersigned, with full power of substitution, for and in the name of the undersigned to represent and vote the shares of common stock of the undersigned at the Annual Meeting of Stockholders of the Company, to be held at The Westin Convention Center Pittsburgh, 1000 Penn Avenue, Pittsburgh, Pennsylvania on Tuesday, May 10, 2005, at 10:00 a.m., local time, and at any adjournment or adjournments thereof.
Unless otherwise marked, this proxy will be voted: “FOR” the nominees listed in Proposal 1, “FOR” Ratification of the Independent Public Accountants in Proposal 2, “FOR” approval of the amendment to the Company’s Long-Term Incentive Plan in Proposal 3, “FOR” approval of the amendment to the Company’s Employee Stock Purchase Plan in Proposal 4, “AGAINST” the stockholder proposal to elect directors annually in Proposal 5, and “AGAINST” the stockholder proposal to elect directors by majority vote in Proposal 6.
The undersigned stockholder hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement relating to the Annual Meeting and hereby revokes any proxy or proxies previously given. The undersigned stockholder may revoke this proxy at any time before it is voted by filing with the Corporate Secretary of the Company a written notice of revocation or a duly executed proxy bearing a later date, by voting by telephone or through the Internet, or by attending the Annual Meeting and voting in person.
PLEASE VOTE YOUR SHARES BY TELEPHONE, THROUGH THE INTERNET, OR BY MARKING, SIGNING, DATING AND MAILING THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(IMPORTANT — Continued and to be signed on reverse side.)
/\FOLD AND DETACH HERE/\
ChooseMLinksmfor fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect® at www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment.
You can now access your NiSource Inc. account online.
Access your NiSource Inc. stockholder account online via Investor ServiceDirect® (ISD).
Mellon Investor Services LLC, Transfer Agent for NiSource Inc., now makes it easy and convenient to get current information on your shareholder account.
• View account status | • View payment history for dividends | |
• View certificate history | • Make address changes | |
• View book-entry information | • Obtain a duplicate 1099 tax form • Establish/change your PIN |
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For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
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Please o Mark Here for Address Change or Comments SEE REVERSE SIDE |
The Board of Directors recommends a vote “FOR” Proposals 1, 2, 3 and 4:
The Board of Directors recommends a vote “AGAINST” Proposals 5 and 6:
Proposal 1. | To elect four directors to serve on the Board of Directors, each for a three-year term and until their respective successors are elected and qualified. |
FOR all | ||||
FOR | WITHHELD | except* | ||
o | o | o |
Nominees:
02 Ian M. Rolland
03 Robert C. Skaggs, Jr.
04 John W. Thompson
* | Instruction: To withhold authority to vote for any nominee, write that nominee’s name on the line below. |
Proposal 2. | Ratification of Independent Public Accountants. | FOR o | AGAINST o | ABSTAIN o | ||||
FOR | AGAINST | ABSTAIN | ||||||
Proposal 3. | Approval of the Amendments to the Company’s Long-Term Incentive Plan | o | o | o | ||||
Proposal 4. | Approval of the Amendments to the Company’s Employee Stock Purchase Plan | FOR o | AGAINST o | ABSTAIN o |
Proposal 5. | Stockholder Proposal to Elect Directors Annually | FOR o | AGAINST o | ABSTAIN o | ||||
Proposal 6. | Stockholder Proposal to Elect Directors by Majority Vote | FOR o | AGAINST o | ABSTAIN o |
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING | o |
PLEASE RETURN THIS PROXY CARD PROMPTLY.
Signature Signature Date
(Please sign this proxy as your name appears on the Company’s corporate records. Joint owners should each sign personally. Trustees and others signing in a representative capacity should indicate the capacity in which they sign.)
/\FOLD AND DETACH HERE/\
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.proxyvoting.com/ni Use the internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement
on the internet at www.nisource.com