EXHIBIT 4.1
-----------
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT TAX DEFERRED SAVINGS PLAN
(AMENDED AND RESTATED AS OF JANUARY 1, 1994)
TABLE OF CONTENTS
ARTICLE PAGE
I GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . 1
II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 ACCOUNT OR ACCOUNT BALANCE . . . . . . . . . . . . . . 1
2.2 AFFILIATE . . . . . . . . . . . . . . . . . . . . . . 2
2.3 AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . 2
2.4 BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . 2
2.5 CODE . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 COMPENSATION . . . . . . . . . . . . . . . . . . . . . 2
2.8 COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 DISABILITY . . . . . . . . . . . . . . . . . . . . . . 3
2.10 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . 3
2.11 EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . 3
2.12 ENTRY DATE . . . . . . . . . . . . . . . . . . . . . . 4
2.13 HIGHLY COMPENSATED EMPLOYEE . . . . . . . . . . . . . . 4
2.14 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 5
2.15 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . 5
2.16 PARTICIPANT . . . . . . . . . . . . . . . . . . . . . . 5
2.17 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.18 PLAN QUARTER . . . . . . . . . . . . . . . . . . . . . 5
2.19 PLAN YEAR . . . . . . . . . . . . . . . . . . . . . . . 5
2.20 PRE-TAX CONTRIBUTION . . . . . . . . . . . . . . . . . 6
2.21 PRIOR PLAN . . . . . . . . . . . . . . . . . . . . . . 6
2.22 ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . 6
2.23 TRUST (OR TRUST FUND) . . . . . . . . . . . . . . . . . 6
2.24 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 6
2.25 VALUATION DATE . . . . . . . . . . . . . . . . . . . . 6
III PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 PARTICIPATION . . . . . . . . . . . . . . . . . . . . . 6
3.2 PARTICIPATION UPON REEMPLOYMENT . . . . . . . . . . . . 6
3.3 CHANGE IN JOB CLASSIFICATION . . . . . . . . . . . . . 7
3.4 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 7
3.5 LEAVE OF ABSENCE . . . . . . . . . . . . . . . . . . . 8
IV CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 PRE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . 8
4.2 SALARY REDUCTION AGREEMENT . . . . . . . . . . . . . . 8
4.3 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . 9
4.4 AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . 9
4.5 MAXIMUM CONTRIBUTIONS . . . . . . . . . . . . . . . . . 9
4.6 ROLLOVERS . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 INVESTMENT INSTRUCTIONS . . . . . . . . . . . . . . . . 10
V LIMITATIONS ON CONTRIBUTIONS AND BENEFITS . . . . . . . . . 10
5.1 MAXIMUM DOLLAR LIMITATION ON PRE-TAX CONTRIBUTIONS . . 10
5.2 LIMITATIONS UNDER CODE SECTION 415 . . . . . . . . . . 10
5.3 NONDISCRIMINATION REQUIREMENTS-DEFINITIONS . . . . . . 13
5.4 401(K) TESTS FOR PRE-TAX CONTRIBUTIONS . . . . . . . . 14
5.5 CORRECTION OF EXCESS CONTRIBUTIONS . . . . . . . . . . 14
5.6 401(M) TESTS FOR AFTER-TAX CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 15
5.7 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS . . . . . 16
5.8 MULTIPLE USE OF ALTERNATIVE LIMITATION . . . . . . . . 17
VI ALLOCATIONS AND INVESTMENTS . . . . . . . . . . . . . . . . 19
6.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE . . . . . . . . . . 19
6.2 ESTABLISHMENT OF SUBACCOUNTS . . . . . . . . . . . . . 19
6.3 ACCOUNT ADJUSTMENTS . . . . . . . . . . . . . . . . . . 19
6.4 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 20
6.5 INVESTMENT DIRECTED BY PARTICIPANTS . . . . . . . . . . 20
6.6 INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . 21
VII BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . 21
7.2 DISABILITY . . . . . . . . . . . . . . . . . . . . . . 21
7.3 DEATH . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.4 PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . 22
7.5 DESIGNATION OF BENEFICIARY . . . . . . . . . . . . . . 23
7.6 ROLLOVER DISTRIBUTIONS . . . . . . . . . . . . . . . . 24
7.7 MINIMUM DISTRIBUTION LIMITATIONS . . . . . . . . . . . 25
VIII WITHDRAWALS AND LOANS . . . . . . . . . . . . . . . . . . . 27
8.1 DISTRIBUTION AT AGE 59-1/2 . . . . . . . . . . . . . . 27
8.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 27
8.3 HARDSHIP WITHDRAWALS . . . . . . . . . . . . . . . . . 27
8.4 LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . 29
IX TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . 31
X ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . 32
10.1 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN
AND TRUST ADMINISTRATION . . . . . . . . . . . . . . . 32
10.2 APPOINTMENT OF COMMITTEE . . . . . . . . . . . . . . . 33
10.3 COMMITTEE POWERS AND DUTIES . . . . . . . . . . . . . . 33
10.4 RULES AND DECISIONS . . . . . . . . . . . . . . . . . . 33
10.5 COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . 34
10.6 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . 34
10.7 FACILITY OF PAYMENT . . . . . . . . . . . . . . . . . . 35
10.8 INDEMNIFICATION OF THE COMMITTEE . . . . . . . . . . . 35
XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 ACTION BY COMPANY . . . . . . . . . . . . . . . . . . . 35
11.2 NONGUARANTEE OF EMPLOYMENT . . . . . . . . . . . . . . 35
11.3 RIGHTS TO TRUST ASSETS . . . . . . . . . . . . . . . . 35
11.4 NONALIENATION OF BENEFITS . . . . . . . . . . . . . . . 35
11.5 NONFORFEITABILITY OF BENEFITS . . . . . . . . . . . . . 36
11.6 CONTROLLING LAW . . . . . . . . . . . . . . . . . . . . 36
XII AMENDMENTS AND TERMINATION . . . . . . . . . . . . . . . . . 36
12.1 AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . 36
12.2 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . 36
12.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS . . . . . . . 37
12.4 LIQUIDATION OF THE TRUST FUND . . . . . . . . . . . . . 37
12.5 MANNER OF DISTRIBUTION . . . . . . . . . . . . . . . . 37
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT TAX DEFERRED SAVINGS PLAN
ARTICLE I
GENERAL
1.1 PURPOSE Effective October 1, 1987, the Northern Indiana Public
Service Company (the "Company") established the Northern Indiana
Public Service Company Bargaining Unit Tax Deferred Savings Plan to
encourage savings and provide tax-effective compensation for
Participants (as defined herein). It was amended and restated
effective January 1, 1989 in order to meet the requirements of the Tax
Reform Act of 1986 ("Prior Plan"). It has been further amended and
restated effective January 1, 1994 in order to meet all additional
statutory and regulatory requirements applicable thereto. This
document sets forth the provisions of such Plan and is intended to
comply with Section 401(a) and 501(a) of the Internal Revenue Code of
1986, as amended, and regulations thereunder and all other currently
applicable statutory and regulatory requirements.
Except wherever otherwise provided herein, the provisions of this Plan
shall apply only to Participants who are actively employed on or after
January 1, 1994. Except where otherwise provided, the rights and
benefits, if any, of any Participant who terminated employment prior
to January 1, 1994, or who is or will be receiving benefits under the
Prior Plan shall be determined solely on the basis of the Prior Plan
provisions in effect on the date his employment terminated.
1.2 CONSTRUCTION The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender and the singular shall
be deemed to include the plural unless the context clearly indicates
to the contrary. The words "hereof," "herein," "hereunder," and other
similar compounds of the word "here" shall mean and refer to the
entire Plan and not to any particular provision or Article.
ARTICLE II
DEFINITIONS
Where the following words and phrases appear in this Plan, they shall
have the respective meanings set forth below, unless the context
clearly indicates to the contrary.
2.1 ACCOUNT OR ACCOUNT BALANCE The total assets of the combination
of each Participant's Pre-tax Contribution Account, After-tax
Contribution Account, Matching Contribution Account, and Rollover
Account held in accordance with Section 6.2 of the Plan.
-1-
2.2 AFFILIATE Any corporation that is a member of a controlled group
of corporations (as defined in Section 414(b) of the Code) that
includes the Company; any trade or business (whether or not
incorporated) that is under common control (as defined in Section
414(c) of the Code) with the Company; any organization (whether or not
incorporated) that is a member of an affiliated service group (as
defined in Section 414(m) of the Code) that includes the Company; any
leasing organization, to the extent that its employees are required to
be treated as if they were employed by the Company pursuant to Section
414(n) of the Code and the regulations thereunder; and any other
entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code. An entity shall be an
Affiliate only with respect to the existing period as described in the
preceding sentence.
2.3 AFTER-TAX CONTRIBUTIONS The contributions made to the Trust in
accordance with Section 4.4 of the Plan and allocated to an "After-tax
Contribution Account" pursuant to Section 6.2 of the Plan.
2.4 BENEFICIARY A person or persons designated by a Participant in
accordance with the provisions of Section 7.5 to receive any death
benefit which may be payable under this Plan.
2.5 CODE The Internal Revenue Code of 1986, as amended, and any
regulations thereunder.
2.6 COMMITTEE The persons appointed to assist in the administration
of the Plan in accordance with Section 10.2.
2.7 COMPENSATION The aggregate basic annual salary or wage, bonus,
overtime, sick pay and shift differential paid to a Participant by the
Company for personal services as defined under Code Section 415(c)(3),
including Pre-tax Contributions and Code Section 125 deferrals.
However, for purposes of applying the limitations under Code Section
415 as described in Section 5.2 of the Plan, Compensation shall not
include Pre-tax Contributions and Code Section 125 deferrals.
If during any Plan Year a Participant is employed by, and performs
personal services for, both the Company and United Steel Workers of
America, Local Union 12775 or 13796, as an elected or appointed
Official thereof, his Compensation for purposes of the Plan shall
include the aggregate basic annual salary or wage, bonus, overtime,
sick pay and shift differential paid to the Participant during such
Plan Year by the Company and the wages paid to such Participant during
such Plan Year by such Local Union in lieu of amounts that would
otherwise have been paid to him by the Company. For purposes of this
paragraph the term Official shall include the positions mutually
agreed to between the Company and the applicable Local Union. The
Company shall be entitled to conclusively rely upon only such
information that is timely received from either such Local Union
regarding Compensation received by a Participant from such Local
Union.
-2-
For purposes of Article V and purposes of determining who is a Highly
Compensated Employee, the Company shall have the right to use any
adjustments or alternative definitions of compensation as the Internal
Revenue Service may provide by regulation under Code Section 414(s).
In no event shall the Compensation of a Participant taken into account
under the Plan for any Plan Year commencing after December 31, 1988
and prior to January 1, 1994, exceed $200,000 (or such greater amount
provided pursuant to Section 401(a)(17) of the Code). In addition to
other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account under the Plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
of Internal Revenue for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment
in effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual compensation limit will
be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is
12. For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth
in this paragraph. If Compensation for any prior determination period
is taken into account in determining a Participant's benefits accruing
in the current Plan Year, the Compensation for that prior
determination period is subject to the OBRA '93 annual compensation
limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of
the Plan Year beginning on January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2.8 COMPANY The Northern Indiana Public Service Company, a
corporation organized and existing under the laws of the State of
Indiana, or its successor or successors. The term "Company" shall
also include NIPSCO Industries, Inc. and such Affiliates that adopt
the Plan.
2.9 DISABILITY Any Participant who receives long-term disability
benefits from the Company or who receives Social Security disability
payments is presumptively disabled for purposes of this Plan.
2.10 EFFECTIVE DATE The date the amended and restated Plan became
effective which is January 1, 1994.
2.11 EMPLOYEE Any person who is employed by the Company on a full-
time basis (40 or more hours per week on a regular basis), and on
whose behalf contributions are being made by the Company under the
Federal Insurance Contribution Act and whose terms and conditions of
employment are governed by a collective bargaining agreement between
-3-
the Company and a duly recognized bargaining representative; provided
that such collective bargaining agreement provides for coverage under
the Plan.
Notwithstanding the provisions of this Section 2.11, a person who is
not employed by the Company, but who performs services for the Company
pursuant to an agreement between the Company and a leasing
organization, shall be considered a "leased employee" after such
person performs such services for a twelve-month period and the
services are of a type historically performed by Employees. A person
who is considered a leased employee of the Company shall not be
considered an Employee for purposes of the Plan. If a leased employee
subsequently became an Employee and thereafter participates in the
Plan, he shall receive credit for participation under Article III, for
his period of employment as a leased employee, except to the extent
that Section 414(n)(5) of the Code was satisfied with respect to such
Employee while he was a leased employee.
2.12 ENTRY DATE The first day of each Plan Quarter.
2.13 HIGHLY COMPENSATED EMPLOYEE Any present or former Employee who,
during the current or immediately preceding year:
(a) was a 5 percent owner of the Company;
(b) received annual Compensation from the Company of more than
$75,000 (as adjusted under Code Section 414(q));
(c) received annual Compensation from the Company of more than
$50,000 (as adjusted under Code Section 414(q)) and was in the
top-paid 20% of the Employees; or
(d) was an officer of the Company receiving annual Compensation
greater than 50% of the limitation then in effect under Code
Section 415(b)(1)(A); provided that for purposes of this
subparagraph (d), no more than 50 Employees of the Company (or if
lesser, the greater of 3 Employees or 10 percent of the
Employees) shall be treated as officers.
If an Employee described in subparagraph (b), (c) or (d) during the
current Plan Year was not described in subparagraph (b), (c) or (d)
during the preceding Plan Year, such individual shall not be a Highly
Compensated Employee unless the Employee is one of the highest paid
100 Highly Compensated Employees in the current Plan Year.
If an Employee is, during a determination year or immediately
preceding year, a family member of either a 5 percent owner who is an
active or former Employee or a Highly Compensated Employee who is one
of the 10 most Highly Compensated Employees ranked on the basis of
Compensation paid by the Company during such year, then the family
member and the 5 percent owner or top-ten Highly Compensated Employee
shall be aggregated. In such case, the family member and the 5 percent
-4-
owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and Plan contributions or
benefits equal to the sum of such Compensation and contributions or
benefits of the family member and 5 percent owner or top-ten Highly
Compensated Employee. For purposes of this Section, family member
includes the spouse, lineal ascendants or descendants of the Employee
or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-
paid group, the top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, will be made in
accordance with section 414(q) of the Code and the regulations
thereunder.
The Company for any Plan Year may elect to identify Highly Compensated
Employees based upon only the current Plan Year to the extent
permitted by Section 414(q) of the Code and regulations issued
thereunder.
2.14 INVESTMENT FUNDS The funds in which a Participant may direct the
Trustee to invest the assets of his Account, as described in Section
6.4 of the Plan.
2.15 MATCHING CONTRIBUTIONS Contributions made to the Trust by the
Company on behalf of eligible Participants, as described under Section
4.3 and allocated to a Participant's "Matching Contributions Account"
in accordance with Section 6.2.
2.16 PARTICIPANT An Employee participating in the Plan in accordance
with Section 3.1, and any former Employee who has an Account Balance
under the Plan which has not been paid in full. Notwithstanding the
preceding sentence, only actively employed Participants, other than
anyone on an unpaid leave of absence, may contribute Pre-tax or After-
tax Contributions pursuant to Article IV.
In any event, an Employee who has deposited a Rollover Contribution
pursuant to Section 4.6 of the Plan shall be deemed a Participant to
the extent that the provisions of the Plan apply to the Rollover
Account of such Employee.
2.17 PLAN The Northern Indiana Public Service Company Bargaining Unit
Tax Deferred Savings Plan as of the Effective Date, and as may
hereafter be further amended.
2.18 PLAN QUARTER The three month calendar period beginning on
January 1, April 1, July 1, or October 1 of each Plan Year.
2.19 PLAN YEAR The twelve month period commencing on January 1 and
ending on December 31.
-5-
2.20 PRE-TAX CONTRIBUTION A contribution made to the Trust in
accordance with Section 4.1 of the Plan and allocated to a "Pre-tax
Contribution Account" in accordance with Section 6.2 of the Plan.
2.21 PRIOR PLAN The Northern Indiana Public Service Company
Bargaining Unit Tax Deferred Savings Plan, as in effect prior to
January 1, 1989.
2.22 ROLLOVER CONTRIBUTIONS The contributions made to the Trust under
Section 4.6, and allocated to a "Rollover Account" as described in
Section 6.2 of the Plan, including a 1989 rollover contribution from
the Northern Indiana Public Service Company Employee Stock Ownership
Plan.
2.23 TRUST (OR TRUST FUND) Any and all assets held under the Plan
by the Trustee maintained in accordance with the terms of the trust
agreement, as from time to time amended, that constitutes a part of
this Plan.
2.24 TRUSTEE The corporation, person or persons, bank or trust
company, authorized by the Company to perform custodial and investment
functions with respect to the Trust.
2.25 VALUATION DATE The close of each business day.
ARTICLE III
PARTICIPATION
3.1 PARTICIPATION An Employee who was eligible to participate in the
Prior Plan will continue to be eligible to participate in this Plan.
Each other Employee will become eligible to participate in this Plan
on the date he completes six months of continuous employment with the
Company, beginning on his Employment Commencement Date subject to the
provisions of Section 3.4. Once an Employee becomes eligible to
participate, be will remain eligible as long as he remains an
Employee, subject to the provisions of Section 3.3, and he may become
a Participant as of the first Entry Date following the date he first
becomes eligible or any Entry Date thereafter by completing the form
set forth in Section 4.2 or Section 4.4. An Employee who became a
Participant shall remain a Participant until he or his Beneficiary is
paid his entire Account Balance following his Severance Date, except
that any Participant who is on an unpaid leave of absence shall not be
able to make Pre-tax Contributions or After-tax Contributions to the
Plan during his unpaid leave of absence.
3.2 PARTICIPATION UPON REEMPLOYMENT A Participant who incurs a Break
in Service shall be eligible to participate on his Reemployment
Commencement Date and may become a Participant on the first Entry Date
following his Reemployment Commencement Date. Any other Employee must
meet the eligibility requirements of Section 3.1.
-6-
3.3 CHANGE IN JOB CLASSIFICATION In the event that a Participant
becomes ineligible to participate in this Plan because his job
classification is one that makes him ineligible under Section 2.11, he
shall continue to have all rights of participation in the Plan as to
his Account Balance, except that he shall not be eligible to make Pre-
tax Contributions or After-tax Contributions to the Plan.
If an Employee's job classification changes such that he meets the
definition of Employee under Section 2.11, he shall become eligible to
participate in the Plan on the date his change in status becomes
effective, and may become a Participant on the first Entry Date
following his change in status or any Entry Date thereafter pursuant
to the procedures of the Plan.
3.4 DEFINITIONS Where the following words or phrases appear in this
Article III, they shall have the meanings set forth below:
a. BREAK IN SERVICE A 12 consecutive month period commencing on
an individual's Severance Date and ending on his Reemployment
Commencement Date.
b. EMPLOYMENT COMMENCEMENT DATE The first day on which an
individual first performs an Hour of Service for the Company.
c. HOUR OF SERVICE Each hour for which an individual is paid or
entitled to payment from the Company for the performance of
duties and for reasons other than for the performance of duties,
including each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by
the Company, determined and credited in accordance with the
Department of Labor Regulation Section 2530.200b-2.
d. REEMPLOYMENT COMMENCEMENT DATE The first day following an
Employee's Severance Date in which he first performs an Hour of
Service for the Company.
e. SEVERANCE DATE The earlier of:
(1) the date on which an Employee quits, retires, is
discharged or dies or;
(2) the first anniversary of the first day of the period in
which an Employee remains absent from service (with or
without pay) for any reason other than quitting, retirement,
discharge or death. Notwithstanding the prior sentence, the
Severance Date of an individual who is absent from service
beyond the first anniversary of the first day of absence by
reason of a maternity or paternity absence as described in
Code Section 410(a)(5)(E)(i) is the second anniversary of
the first day of such absence. The period between the first
and second anniversaries of the first date of absence is
neither a period of service nor a Break in Service.
-7-
3.5 LEAVE OF ABSENCE Employment for purposes of this Article III
shall include a leave of absence of an Employee on and after August 5,
1993 pursuant to the Family and Medical Leave Act if the Employee
returns to work for the Company at the end of such leave of absence.
ARTICLE IV
CONTRIBUTIONS
4.1 PRE-TAX CONTRIBUTIONS A Participant may elect to have the
Company make Pre-tax Contributions to the Trust on his behalf by
executing a salary reduction agreement as described in Section 4.2.
Prior to January 1, 1995, the amount of Pre-tax Contributions that may
be made on behalf of a Participant for any designated period shall be
deducted from his Compensation and shall equal such whole dollar
amount, not less than $10.00 per pay period as is designated by the
Participant in the salary reduction agreement. On and after January
1, 1995 the amount of Pre-Tax Contributions that may be made on behalf
of a Participant for any designated period shall be deducted from his
Compensation and shall equal either (1) such whole percentage of his
Compensation, or (2) such whole dollar amount not less than $10.00 per
pay period, as is designated by the Participant in the salary
reduction agreement. The Participant may also elect in a separate
writing to have the Company contribute on his behalf, as a Pre-tax
Contribution to the Trust, (a) any lump sum bonus amount otherwise
payable, (b) any lump sum amount payable to the Participant in lieu of
vacation days in accordance with the vacation policy of the Company,
or (c) any amount resulting from unused credits from a plan
established by the Company under Code Section 125. All Pre-tax
Contributions made pursuant to the first two sentences of this Section
shall be transmitted to the Trust within 30 days after the date on
which such Pre-tax Contributions were deducted from the Participant's
Compensation and all Pre-tax Contributions made pursuant to the third
sentence of this Section shall be transmitted to the Trust within 30
days after the date on which such Pre-tax Contributions become
available for transmission. All Pre-tax Contributions will be 100%
vested and nonforfeitable at all times.
4.2 SALARY REDUCTION AGREEMENT The salary reduction agreement
represents a legally binding agreement by a Participant with the
Company to accept a reduction in Compensation in consideration of a
contribution to the Trust by the Company on the Participant's behalf
in the same amount. For each Plan Year a Participant may enter into
such an agreement with the Company by indicating his election
according to the provisions of Section 4.1 on a form provided by the
Company. Subject to the provisions of Article V, such election shall
remain in force until changed in writing by the Participant. A
Participant may elect to (i) commence, (ii) resume, (iii) change or
(iv) eliminate the amount of future Pre-tax Contributions made on his
behalf effective as of each Entry Date by filing a written change in
election with the Company at least 15 days prior to the applicable
-8-
Entry Date. Any election made pursuant to this paragraph shall apply
to any regular payroll check dated on or after the Entry Date in which
the election becomes effective. A Participant may not change his
election with respect to Pre-tax Contributions already made by payroll
deduction.
4.3 MATCHING CONTRIBUTIONS Beginning January 1, 1991, the Company
shall make a Matching Contribution to the Trust on behalf of each
Participant who elected to make Pre-tax Contributions pursuant to
Section 4.1, and who elected to invest such Pre-tax Contributions in
the NIPSCO Industries, Inc. Common Stock Fund according to the
provisions of Section 6.5. The amount of the Matching Contribution
shall equal 1/9th of the amount of Pre-tax Contributions contributed
to the NIPSCO Industries, Inc. Common Stock Fund. All Matching
Contributions shall be transmitted to the Trust within 30 days after
the date on which the contributions were made. All Matching
Contributions will be 100% vested and nonforfeitable at all times.
4.4 AFTER-TAX CONTRIBUTIONS A Participant may elect to have the
Company make After-tax Contributions to the Trust on his behalf by
executing a written election for each Plan Year on a form furnished by
the Company. Prior to January 1, 1995, such After-tax Contributions
shall be in such whole dollar amounts, not less than $10.00 per pay
period as designated by the Participant, but not to exceed 10% of his
Compensation for any pay period. On and after January 1, 1995 such
After-tax Contributions shall be either (1) in such whole percentages
of Compensation, or (2) in such whole dollar amounts not less than
$10.00 per pay period, as designated by the Participant, but not to
exceed 10% of his Compensation for any pay period. All After-tax
Contributions shall be transmitted to the Trust within 30 days after
the date on which the After-tax Contributions were deducted from the
Participant's Compensation, and no later than 30 days following the
end of the Plan Year in which such Contributions were made. All
After-tax Contributions will be 100% vested and nonforfeitable at all
times.
4.5 MAXIMUM CONTRIBUTIONS Notwithstanding anything in the Plan to
the contrary, the sum of a Participant's Pre-tax Contributions made
pursuant to Section 4.1 plus the Participant's After-tax Contributions
made pursuant to Section 4.4 shall not exceed twenty percent (20%) of
such Participant's Compensation.
4.6 ROLLOVERS Effective February 1, 1991, a Participant who has
participated in any other qualified plan described in Section 401(a)
of the Code shall be permitted, in accordance with such rules as
established by the Committee, to make a Rollover Contribution to the
Trust of an amount received by the Participant that is attributable to
participation in such plan. A Rollover Contribution may be made only
within 60 days following the date the Employee receives the
distribution from such other plan (or within such additional period as
may be provided under Section 408 of the Code if the Participant shall
have made a timely deposit of the distribution in an individual
-9-
retirement account). The Trustee may also receive directly from the
trustee under such other plan all or any portion (as designated by
such Employee in writing to the Committee) of the amount that would
otherwise be distributable to the Participant by reason of his
termination of participation in such other plan. Such Rollover
Contribution shall be allocated to his Rollover Account, which may
include a 1989 Rollover Contribution from the Northern Indiana Public
Service Company Employee Stock Ownership Plan. A Rollover
Contribution may not be made to the Trust by a former Employee.
4.7 INVESTMENT INSTRUCTIONS Notwithstanding the preceding provisions
of this Article, in no event may any contribution be made or
authorized by a Participant unless such Participant has delivered
investment instructions with respect to such contributions pursuant to
the provisions of Section 6.5 on or prior to the date such
contributions are authorized or delivered by the Participant.
ARTICLE V
LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
5.1 MAXIMUM DOLLAR LIMITATION ON PRE-TAX CONTRIBUTIONS
(a) In no event shall the sum of: (i) a Participant's Pre-tax
Contributions for any calendar year and (ii) any other "elective
deferrals" as defined in Code Section 402(g)(3), exceed $9,240
for 1994, or adjusted amounts (as indexed under Code Section
402(g)).
(b) In the event that the aggregate amount of Pre-tax
Contributions by a Participant exceeds the maximum dollar
limitation as determined under (a) above, the amount of such
excess Pre-tax Contributions, increased by any income and
decreased by any losses attributable thereto, shall be returned
to the Participant no later than April 15th of the calendar year
following the calendar year for which the Pre-tax Contributions
were made.
(c) Excess Pre-tax Contributions shall be adjusted for any
income, gain or loss pursuant to Section 402(g) of the Code for
the calendar year in which such Contributions occurred.
5.2 LIMITATIONS UNDER CODE SECTION 415
(a) Notwithstanding anything contained in this Plan to the
contrary, the provisions of this Plan shall at all times comply
with the limitations, adjustments and other requirements
prescribed in Code Section 415 and the regulations thereunder,
the terms of which are specifically incorporated herein by
reference. In the case of a Participant covered by this Plan and
a defined benefit plan sponsored by an Employer, the benefits
-10-
provided by the defined benefit plan shall be reduced first in
order to comply with Code Section 415 and the regulations
thereunder.
(b) ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS The amount of
Annual Additions that may be credited to a Participant's Account
under this Plan, or that may be credited to such Participant
under any other qualified plan, welfare benefit fund, (as defined
in Code Section 419(e)), or an individual medical account, (as
defined in Code Section 415 (1)(2)), maintained by an Employer,
for any Limitation Year will not exceed the lesser of $30,000 (as
increased by the Commissioner of Internal Revenue under Code
Section 415(d)), or 25 percent of a Participant's Compensation
(the "Maximum Permissible Amount"). If the foregoing limitation
on allocations would be exceeded in any Limitation Year for any
Participant as a result of (i) reasonable error in estimating
such Participant's Compensation, (ii) reasonable error in
determining the amount of elective deferrals within the meaning
of Section 402(g)(3) of the Code (that may be made with respect
to such Participant), or (iii) under such other limited facts and
circumstances that the Commissioner of Internal Revenue (pursuant
to Code Regulations Section 415-6(b)(6)) finds justify the
availability of this paragraph (b), the After-tax Contributions
and Pre-tax Contributions made by or with respect to such
Participant shall be distributed to him, to the extent that any
such distribution would reduce the amount in excess of the limits
of this Section 5.2, and any amount in excess of the limits of
this Section 5.2, remaining after such distribution shall be
placed, unallocated to any Participant, in a Suspense Account.
If a Suspense Account is in existence at any time during a
particular Limitation Year, other than the Limitation Year
described in the preceding sentence, all amounts in the Suspense
Account must be allocated to the Participants' Accounts (subject
to the limits of this Section 5.2) before any contributions which
would constitute Annual Additions may be made to the Plan for
that Limitation Year. The excess amount allocated pursuant to
this Section 5.2(b) shall be used to reduce Matching
Contributions for the next Limitation Year (and succeeding
Limitation Years), as necessary, for that Participant. However,
if that Participant is not covered by the Plan as of the end of
the applicable Limitation Year, then the excess amounts must be
held unallocated in the Suspense Account for the Limitation Year
and allocated and reallocated in the next limitation year to all
of the remaining Participants in the Plan. The Suspense Account
will not share in the valuation of Participant's Accounts, and
the allocation of earnings set forth in Section 6.3 of the Plan,
and the change in fair market value and allocation of earnings
attributable to the Suspense Account shall be allocated to the
remaining Accounts hereunder as set forth in Section 6.3.
(c) Prior to determining a Participant's actual Compensation for
the Limitation Year, the Company may determine the Maximum
-11-
Permissible Amount for a Participant on the basis of a reasonable
estimate of the Participant's Compensation for the Limitation
Year uniformly determined for all Participants similarly
situated.
(d) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(e) If pursuant to Sections 5.2(b) and (d) there is an Excess
Amount, the excess will be disposed of by the Committee as
follows:
(i) If the Participant is covered by the Plan at the end of
the Limitation Year, After-tax Contributions, adjusted for
earnings, gains and losses allocable thereto, will be
returned to the Participant, to the extent they would reduce
the Excess Amount.
(ii) If, after the application of Section 5.2(e)(i), an
Excess Amount still exists and the Participant is covered by
the Plan at the end of the Limitation Year, Pre-tax
Contributions, adjusted for earnings, gains and losses
allocable thereto, will be returned to the Participant, to
the extent they would reduce the Excess Amount.
(iii) If, after the application of Sections 5.2(e)(i) and
(ii), an Excess Amount still exists, and the Participant is
covered by the Plan at the end of the Limitation Year, the
Excess Amount in the Suspense Account will be used to reduce
Matching Contributions for such Participant in the next
Limitation Year, and each succeeding Limitation Year, if
necessary.
(f) For purposes of this Section 5.2:
(i) "Excess Amount" means for a Participant for each
"Limitation Year" the excess, if any, of (1) the Annual
Additions which would be credited to his Account under the
terms of the Plan without regard to Code Section 415 over
(2) the maximum Annual Additions allowed under Code Section
415(c)(1)(A).
(ii) "Annual Additions" means the sum of the following
amounts credited to a Participant's Account for the
Limitation Year:
(1) Employer contributions,
(2) Employee contributions,
(3) Forfeitures, and
-12-
(4) Amounts described in Section 415(1)(2) and
419(A)(d)(2) of the Code.
(iii) "Limitation Year" means the Plan Year.
5.3 NONDISCRIMINATION REQUIREMENTS-DEFINITIONS
For purposes of the remainder of this Article:
(a) The "Actual Deferral Percentage" means the average of the
actual deferral ratios, (calculated separately for each Eligible
Employee) of the amount of Pre-tax Contributions actually made by
the Eligible Employee for such Plan Year to the Eligible
Employee's Compensation for the period of time during such Plan
Year that he participated in the Plan, rounded to the nearest
one-hundredth of one percent.
(b) The "Actual Contribution Percentage" means the average of
the actual contribution ratios, (calculated separately for each
Eligible Employee) of the amount of Matching Contributions
actually made by the Company for the Eligible Employee for such
Plan Year plus the amount of After-tax Contributions made by the
Eligible Employee during such Plan Year to such Employee's
Compensation for the period of time during such Plan Year in
which he participated in the Plan, rounded to the nearest one-
hundredth of one percent.
(c) "Eligible Employee" means any Participant in the Plan, and
any Employee who would be eligible to make Pre-tax Contributions
or After-tax Contributions to the Plan for a Plan Year, but for a
suspension due to a distribution or a failure to elect to
participate in the Plan.
(d) "Excess Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of the Pre-tax Contributions
actually made on behalf of Highly Compensated Eligible Employees
for such Plan Year, over the maximum amount of such contributions
permitted under the limitations of Code Section 401(k)(3)(A)(ii).
(e) "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the After-tax
Contributions and Matching Contributions actually made on behalf
of Highly Compensated Eligible Employees for such Plan Year, over
the maximum amount of such contributions permitted under the
limitations of Code Section 401(m)(2)(A).
(f) "Highly Compensated Eligible Employee" means an Eligible
Employee who is a Highly Compensated Employee.
-13-
5.4 401(K) TESTS FOR PRE-TAX CONTRIBUTIONS
(a) GENERAL REQUIREMENTS The total amount of Pre-tax
Contributions shall comply with either (1) or (2) below for each
Plan Year:
(1) The Actual Deferral Percentage for the Highly
Compensated Eligible Employees shall not exceed the Actual
Deferral Percentage for all other eligible Employees
multiplied by 1.25; or
(2) The Actual Deferral Percentage for Highly Compensated
Eligible Employees shall not exceed the Actual Deferral
Percentage of all other eligible Employees multiplied by
2.0, provided that the Actual Deferral Percentage for the
Highly Compensated Eligible Employees does not exceed that
of all other eligible Employees by more than two percentage
points.
(b) The Actual Deferral Percentage for the Plan Year for any
Highly Compensated Eligible Employee who is eligible to make Pre-
tax Contributions under two or more plans that are qualified
under Section 401(a) or 401(k) of the Code and that are
maintained by the Company, must be determined as if all such
deferrals were made under a single plan; except that for Plan
Years beginning after December 31, 1989, plans may be aggregated
only if they have the same Plan Year.
(c) The Actual Deferral Percentage of any Highly Compensated
Eligible Employee (within the meaning of Section 414(q)(6)(B) of
the Code), as determined in accordance with the preceding
sentence, shall include the contributions of the family members
of such Highly Compensated Eligible Employee.
(d) In determining whether the requirements Section 5.4(a) of
the Plan are met, the Committee may aggregate plans on any basis
as permitted under Code Section 401(a)(4) and regulations
thereunder.
5.5 CORRECTION OF EXCESS CONTRIBUTIONS
(a) If the amount of Pre-tax Contributions made for Highly
Compensated Eligible Employees in a Plan Year would not comply
with either (1) or (2) in 5.4(a) above, then the Committee in its
discretion may choose either (1), (2) or (3) below, or any
combination, in order to comply with such test:
(1) In determining the Actual Deferral Percentage of
Eligible Employees, the Committee may treat Matching
Contributions, other than Matching Contributions used to
meet the test in Section 5.6(a), as Pre-tax Contributions,
-14-
(2) The Excess Contributions can, with the consent of the
applicable Highly Compensated Eligible Employees, be
recharacterized as After-tax Contributions solely for the
purposes of Sections 5.4 and 5.6 of the Plan, within 2-1/2
months after the related Plan Year, but only to the extent
that it will not cause the limitations in Section 5.6(a) to
be exceeded, or
(3) The Excess Contributions for such Plan Year (including
the income, gains and losses attributable to such
Contributions as provided in (b) below) shall be distributed
by the last day of the following twelve month period to
Highly Compensated Eligible Employees on the basis of the
respective portions of such Excess Contributions
attributable to each Highly Compensated Eligible Employee,
determined according to the following leveling method.
Beginning with the class of Highly Compensated Eligible
Employees that have the highest Actual Deferral Percentage,
reduce the Actual Deferral Percentage of such Highly
Compensated Eligible Employees to the extent required to
cause such Actual Deferral Percentage to equal the Actual
Deferral Percentage of the class of Highly Compensated
Eligible Employees with the next highest Actual Deferral
Percentage. This process is repeated until the Plan
satisfies either of the tests in 5.4(a).
In the event of the complete termination of the Plan during the
Plan Year in which Excess Contributions arose, such distributions
are to be made after termination of the Plan and before the close
of the twelve month period that immediately follows such
termination. Any distribution of Excess Contributions may be
made without regard to any notice or consent requirements of the
Plan.
(b) The income, gains and losses allocable to Excess
Contributions shall be the income, gains and losses attributable
to such Excess Contributions for the Plan Year in which they
occurred, determined pursuant to Section 401(k)(8) of the Code.
(c) For purposes of this Section 5.5, a distribution occurring
on or before the fifteenth day of the month will be treated as
having been made as of the last day of the preceding month and a
distribution occurring after such fifteenth day will be treated
as having been made on the first day of the following month.
5.6 401(M) TESTS FOR AFTER-TAX CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
(a) GENERAL REQUIREMENTS The total amount of Matching
Contributions as described in Section 4.3, except for any
Matching Contributions used to satisfy the test in Section
5.4(a), plus the total amount of After-tax Contributions as
-15-
described under Section 4.4, including any amount recharacterized
as After-tax Contributions under Section 5.5(a)(2) above, shall
comply with either (1) or (2) below for each Plan Year:
(1) The Actual Contribution Percentage for the Highly
Compensated Eligible Employees shall not exceed the Actual
Contribution Percentage for all other Eligible Employees
multiplied by 1.25; or
(2) The Actual Contribution Percentage for Highly
Compensated Eligible Employees shall not exceed (i) the
Actual Contribution Percentage of all other Eligible
Employees multiplied by 2.0, provided that the Actual
Contribution Percentage for the Highly Compensated Eligible
Employees does not exceed that of all other Eligible
Employees by more than two percentage points.
(b) The Actual Contribution Percentage for the Plan Year for any
Highly Compensated Eligible Employee who is eligible to receive
Matching Contributions or to make After-tax Contributions under
two or more plans that are qualified under Section 401(a) or
401(k) of the Code and that are maintained by the Company, must
be determined as if all such Contributions were made under a
single plan; except that for Plan Years beginning after December
31, 1989, plans may be aggregated only if they have the same Plan
Year.
(c) The Actual Contribution Percentage of any Highly Compensated
Eligible Employee (within the meaning of Section 414(q)(6)(B) of
the Code), as determined in accordance with the preceding
sentence, shall include the contributions of the family members
of such Highly Compensated Eligible Employee.
(d) In determining whether the requirements in Section 5.6(a)
are met, the Committee may aggregate plans as permitted under
Code Section 401(a)(4) and regulations thereunder.
5.7 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) If the amount of Matching Contributions plus After-tax
Contributions made for Highly Compensated Eligible Employees in a
Plan Year would not comply with either clause (1) or (2) in
Section 5.6(a) above, then the Committee in its discretion will
choose either (1) or (2) below in order to comply with such
tests:
(1) The Pre-tax Contributions of nonhighly compensated
Eligible Employees will be recharacterized as Matching
Contributions to the extent necessary to comply with either
clause (1) or (2) in Section 5.6(a), provided that the
Section 401(k) test for Pre-tax Contributions (as described
in Section 5.4(a)(1) or (2)) and the alternative limitation
-16-
set forth in Section 5.8 will still be met both before and
after such recharacterization; or
(2) The Excess Aggregate Contributions for such Plan Year
(including any income, gains or losses attributable to such
Contributions as provided in (b) below) shall be distributed
by the last day of the following twelve month period to
Highly Compensated Eligible Employees on the basis of the
respective portions of such Excess Aggregate Contributions
attributable to each Highly Compensated Eligible Employees,
determined according to the following leveling method.
Beginning with the class of Highly Compensated Eligible
Employees that have the highest Actual Contribution
Percentage, reduce the Actual Contribution Percentage of
such Highly Compensated Eligible Employees to the extent
required to cause their Actual Contribution Percentage to
equal the Actual Contribution Percentage of the class of
Highly Compensated Eligible Employees with the next highest
Actual Contribution Percentage. This process is repeated
until the Plan satisfies either of the tests in Section
5.6(a).
In the event of the complete termination of the Plan during
the Plan Year in which an Excess Aggregate Contribution
arose, such distributions are to be made after termination
of the Plan and before the close of the twelve month period
that immediately follows such termination. Any distribution
of Excess Aggregate Contributions may be made without regard
to any notice or consent requirements of the Plan.
(b) The income, gains and losses allocable to Excess Aggregate
Contributions shall be such income, gains and losses attributable
to such Excess Aggregate Contributions for the Plan Year in which
they occurred, determined pursuant to Section 401(k)(8) of the
Code.
(c) For purposes of this Section 5.7, a distribution occurring
on or before the fifteenth day of the month will be treated as
having been made as of the last day of the preceding month and a
distribution occurring after such fifteenth day will be treated
as having been made on the first day of the following month.
5.8 MULTIPLE USE OF ALTERNATIVE LIMITATION
(a) If the sum of:
(1) the Actual Deferral Percentage of the entire group of
Highly Compensated Eligible Employees,
plus
-17-
(2) the Actual Contribution Percentage of Highly
Compensated Eligible Employees
exceeds the limitation set forth in (b) below (the "Aggregate
Limitation"), it shall be corrected as provided in (c) below.
The determination of the Actual Deferral Percentage for Highly
Compensated Eligible Employees and the Actual Contribution
Percentage for Highly Compensated Eligible Employees shall be
made after the determinations and corrections in Section 5.3
through 5.7 have been made. If plans have been aggregated as
permitted under Sections 5.4(d) and 5.6(d), such plans may also
be aggregated for purposes of this Section 5.8.
(b) The Aggregate Limitation shall be the greater of (1) or (2)
below
(1) the sum of:
(i) 1.25 multiplied by the lesser of:
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees
Plus
(ii) 2 points plus the greater of:
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees,
but not exceeding 200% of the greater of (A) or (B).
(2) the sum of:
(i) 1.25 multiplied by the greater of:
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees
Plus
(ii) 2 points plus the lesser of:
-18-
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees,
but not exceeding 200% of the lesser of (A) or (B).
(c) In accordance with Treasury Regulation Section 1.401(m)-2, as
revised by IRS Revenue Procedure 89-65, the Committee may reduce
the Actual Deferral Percentage of Highly Compensated Eligible
Employees by the leveling method described in Section 5.5(a)(3),
or reduce the Actual Contribution Percentage of Highly
Compensated Eligible Employees by the leveling method described
in Section 5.7(a)(2), or by any other method allowed by the
Internal Revenue Service in subsequent guidance.
ARTICLE VI
ALLOCATIONS AND INVESTMENTS
6.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE All contributions to the
Trust that are received by the Trustee, together with any earnings
thereon, shall be held, managed and administered by the Trustee in
accordance with the terms and conditions of this Plan and the Trust
agreement.
6.2 ESTABLISHMENT OF SUBACCOUNTS
(a) With respect to each Participant, the Committee shall
maintain: (1) a Pre-tax Contribution Account to record any
contributions made on behalf of a Participant as of the end of a
Plan Year, (2) an After-tax Contribution Account to record any
After-tax Contributions made on behalf of a Participant as of the
end of a Plan Year, (3) a Matching Contribution Account to record
Matching Contributions described under Section 4.3 made on behalf
of a Participant as of the end of a Plan Year, and (4) a Rollover
Account to record any Rollover Contributions made by a
Participant pursuant to Section 4.6 of the Plan.
(b) The maintenance of subaccounts under this Section 6.2 is for
accounting purposes only. Any distribution to a Participant, or
his Beneficiary under Section 7.4 shall be charged to the
appropriate subaccounts of the Participant as of the date of the
distribution.
6.3 ACCOUNT ADJUSTMENTS As of each Valuation Date the value of each
Account shall be adjusted on the basis of their then fair market value
in accordance with the following rules:
-19-
(a) CONTRIBUTIONS All contributions made during each pay
period (pursuant to Sections 4.1,4.3,4.4 or 4.6) shall be
added to the proper Account of each Participant as of the
Valuation Date received by the Trustee.
(b) WITHDRAWALS Any withdrawal made pursuant to Section
8.3 may be made from any Investment Fund, based on the value
as of Valuation Date on which the withdrawal is made, after
adding the contributions in (a) above.
(c) EARNINGS, LOSSES AND LOAN REPAYMENTS As of each
Valuation Date, the net earnings or losses shall be
determined for each of the Investment Funds described in
Section 6.4, adjusted for any costs or expenses payable from
the Trust. The amount of such determination shall be
allocated as of each Valuation Date to the subaccounts of
Participants invested in the respective Investment Funds who
had unpaid balances in their subaccounts on such date, but
after first adding any loan repayments, any contributions as
described in (a) above, and after reducing each such
beginning balance by any loans, and any withdrawals as
specified in (b) above.
(d) DISTRIBUTIONS Subject to Section 6.5, as of each
Valuation Date, after (a), (b) and (c) above, any
distributions that may be made from any Investment Fund
shall be deducted from the proper subaccount of the
Participant.
6.4 INVESTMENT FUNDS Contributions made under this Plan shall be
deposited in the Trust for purposes of investment. The Trust may
consist of four or more separate Investment Funds reflecting various
types of investments that the Committee may from time to time
designate, such as an Equity Fund, a Fixed Income Fund, a Money Market
Fund, a NIPSCO Industries, Inc. Common Stock Fund and a Growth and
Income Fund.
Notwithstanding any other provisions of the Plan, assets of the Trust
may be invested in any collective investment fund or funds, including
common and group trust funds presently in existence or hereafter
established. The assets so invested shall be subject to all the
provisions of the instruments establishing such funds as they may be
amended from time to time, and which are hereby incorporated by
reference.
6.5 INVESTMENT DIRECTED BY PARTICIPANTS The Trustee shall invest and
reinvest the subaccounts (other than his Matching Contribution
subaccount) as the Participant shall instruct the Committee, and
according to the provisions of Section 6.6, by such means of
instructions provided by the Committee. The instructions of a
Participant shall remain in force until altered by him. As set forth
in Section 4.7, no contributions may be authorized by or made for a
-20-
Participant unless an investment instruction with respect to such
contributions is provided by him prior to the date such contributions
are authorized or delivered. A Participant shall not be allowed to
withdraw all prior investment instructions unless simultaneous
therewith he delivers new investment instructions. All amounts in all
Matching Contribution subaccounts shall be invested in the NIPSCO
Industries, Inc. Common Stock Fund.
6.6 INVESTMENT OF CONTRIBUTIONS
(a) Except as provided in subparagraph (c) below, a Participant
may change his investment designation for new contributions
(other than Matching Contributions) as follows:
(i) changes made during the first 15 days of any
calendar month shall be effective on the valid trading date
occurring on or next following the 27th day of that calendar
month; and
(ii) changes made on or after the 16th day of any
calendar month shall be effective on the valid trading date
occurring on or next following the 6th day of the next
following calendar month.
(b) A Participant may transfer portions of his existing
subaccounts (other than his Matching Contributions Subaccount)
among the permitted funds in any amount that equals or exceeds
the lesser of (1) $250, and (2) the balance of the applicable
existing subaccount from which the transfer is made. Any such
transfer shall be effective as of the next following Valuation
Date except as provided in subparagraph (c) below.
(c) Changes in investment designation in the NIPSCO Industries,
Inc. Common Stock Fund may only be made effective as of the first
business day of each Plan Quarter, except that any amounts
attributable to Matching Contributions, including any earnings
thereon, can never be transferred.
ARTICLE VII
BENEFITS
7.1 TERMINATION OF EMPLOYMENT If a Participant's employment with the
Company is terminated for any reason other than death or Disability,
he shall be entitled to receive his entire Account Balance (reduced by
any amount attributable to an outstanding loan made by the Participant
pursuant to Section 8.4), subject to the provisions of Section 7.4.
7.2 DISABILITY Upon incurring a Disability, a Participant shall be
entitled to receive his entire Account Balance (reduced by any amount
-21-
attributable to an outstanding loan made by the Participant pursuant
to Section 8.4), subject to the provisions of Section 7.4.
7.3 DEATH In the event a Participant's employment with the Company
is terminated because of death, the Participant's Beneficiary shall be
entitled to his entire Account Balance (reduced by any amount
attributable to an outstanding loan made by the Participant pursuant
to Section 8.4), subject to the provisions of Section 7.4.
7.4 PAYMENT OF BENEFITS
(a) FORM All amounts distributed from a Participant's Account
following termination of employment shall be distributed in one
lump sum amount, in cash, or, if elected by the Participant or
Beneficiary, in shares of NIPSCO Industries, Inc. Common Stock
based on the numbers of whole shares allocated to the NIPSCO
Industries, Inc. Common Stock Fund for the Participant. The
Committee shall provide each recipient receiving such payment a
notice which specifies certain information regarding the federal
income tax treatment of Plan benefits.
(b) COMMENCEMENT OF DISTRIBUTIONS Distributions to a
Participant entitled to payments under the Plan shall commence as
soon as practicable or within four (4) months following the later
of the date on which the elections specified in paragraph (a)
above and (c) below occur, or the date of termination of
employment, retirement, death, or upon incurring a Disability.
Notwithstanding the foregoing, distributions shall commence no
later than 90 days after the later of the Participant's 65th
birthday ("Normal Retirement Age") or termination of employment,
subject to the following rules:
(1) Payments due under the Plan shall not be made later
than April 1 of the calendar year following the year in
which the Participant attains age 70-1/2.
(2) If the amount payable under the Plan to any Participant
or Beneficiary is less than or equal to $3,500, the
Committee will direct that such amount be paid in a lump
sum, in full satisfaction and release of all further rights
of the Participant or Beneficiary to receive any benefits
under the Plan.
(c) Notwithstanding the preceding provisions of this Section, if
a Participant's Account Balance at the time for distribution
exceeds $3,500, then neither such distribution nor any subsequent
distribution shall be made to the Participant at any time prior
to the first to occur of his 65th birthday and the date of his
death without his written consent. The preceding sentence shall
not apply with respect to the distribution of the Account Balance
of a deceased Participant. A Participant who does not consent to
a distribution shall be entitled to request a distribution of all
-22-
of his Account Balance, at any time prior to the first to occur
of his 65th birthday and the date of his death by written
instrument delivered to the Committee at least 90 days prior to
the Valuation Date as to which such requested distribution is to
be determined.
(d) If a distribution is one to which Sections 401(a)(11) and
417 of the Code do not apply, distribution of the Participant's
Account may, pursuant to the preceding clauses of this paragraph,
commence less than thirty (30) days after the notice required
under Section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
(1) the Committee clearly informs the Participant
that the Participant has a right to a period of at least
thirty (30) days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option); and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
7.5 DESIGNATION OF BENEFICIARY
(a) PROCEDURE Subject to the provisions of paragraph (b), each
Participant may designate any person or persons (who may be
designated primarily, contingently or successively and who may be
an entity other than a natural person) as his Beneficiary to whom
his Plan benefits are paid if he dies before receipt of such
benefits. Each designation shall be in a form prescribed by the
Committee, and will be effective only when filed with the
Committee during the Participant's lifetime.
Each Beneficiary designation filed with the Committee will cancel
all Beneficiary designations previously filed with the Committee.
The revocation of a Beneficiary designation shall not require the
consent of any designated Beneficiary except as provided in (b)
below.
(b) SPOUSAL CONSENT No Beneficiary designation shall be
effective under the Plan unless the Participant's spouse consents
in writing to such designation, and the spouse's signature is
witnessed by a Plan representative or a notary public.
Consequently, any Beneficiary designation previously made by a
Participant shall be automatically revoked upon the marriage or
remarriage of a Participant.
A spouse's consent shall be valid under this Plan only with
respect to the specified Beneficiary designated. If the
Beneficiary is subsequently changed, a new consent by the spouse
will be required.
-23-
Notwithstanding the above, spousal consent shall not be required
if:
(1) the spouse is designated as the sole primary
Beneficiary by the Participant, or
(2) it is established to the satisfaction of the Committee
that spousal consent cannot be obtained because there is no
spouse or because the spouse cannot be located. If the
spouse is legally incompetent to give consent, the spouse's
legal guardian, even if the guardian is the Participant, may
give consent. Also, if the Participant is legally separated
or the Participant has been abandoned (within the meaning of
local law) and the Participant has a court order to such
effect, spousal consent is not required unless a Qualified
Domestic Relations Order provides otherwise.
(c) If a Participant fails to designate a Beneficiary, if such
designation is for any reason illegal or ineffective, or if no
Beneficiary survives the Participant, his benefits otherwise
payable pursuant to this Section shall be paid:
(1) to his surviving spouse; or if none,
(2) to his descendants, PER STIRPES; in equal parts; or if
none,
(3) to his father and mother, in equal parts; or if none,
(4) to his brothers and sisters, in equal parts, or if
none,
(5) to his estate.
(d) The Committee may determine the identity of the distributees
of any benefit payable under the Plan and in so doing may act and
rely upon any information it may deem reliable upon reasonable
inquiry, and upon any affidavit, certificate, or other paper
believed by it to be genuine, and upon any evidence believed by
it sufficient. Any payment made in accordance with this Section
7.5 shall be a complete discharge of obligations of the Committee
and the Company to the extent of such payment without regard to
the application of any payment so made.
7.6 ROLLOVER DISTRIBUTIONS
(a) This Section 7.6 applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee's election
under this section, a Distributee may elect, at the time and in
the manner prescribed by the Committee, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible
-24-
Retirement Plan specified by the Distributee in a Direct
Rollover.
(b) Definitions.
(i) "Eligible Rollover Distribution" is any distribution of
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: any distribution that is one of a series
of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(ii) "Eligible Retirement Plan" is an individual retirement
account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to a surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual
retirement annuity.
(iii) "Distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(iv) "Direct Rollover" is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
7.7 MINIMUM DISTRIBUTION LIMITATIONS. Notwithstanding anything to
the contrary contained elsewhere in the Plan:
(i) The payment of benefits under the Plan to any Participant
will:
(A) be distributed to him not later than the Required
Distribution Date (as defined in paragraph (iii)), or
-25-
(B) be distributed to him commencing not later than the
Required Distribution Date in accordance with regulations
prescribed by the Secretary of the Treasury over a period
not extending beyond the life expectancy of the Participant
or the joint life expectancy of the Participant and his
Beneficiary.
(ii) (A) If the Participant dies after distribution to him has
commenced pursuant to subparagraph (i)(B) but before his entire
interest in the Plan has been distributed to him, the remaining
portion of that interest will be distributed at least as rapidly
as under the method of distribution being used under subparagraph
(i)(B) at the date of his death.
(B) If the Participant dies before distribution to him has
commenced pursuant to subparagraph (i)(B), then, except as
provided in paragraphs (ii)(C) and (ii)(D), his entire interest
in the Plan will be distributed within five years after his
death.
(C) Notwithstanding the provisions of subparagraph (ii)(B),
if the Participant dies before distribution to him has commenced
pursuant to subparagraph (i)(B), and if any portion of his
interest in the Plan is payable (I) to or for the benefit of a
Beneficiary, (II) in accordance with regulations prescribed by
the Secretary of the Treasury over a period not extending beyond
the life expectancy of the Beneficiary, and (III) beginning not
later than one year after the date of the Participant's death or
such later date as the Secretary of the Treasury may prescribe by
regulations, then the portion of his interest referred to in this
subparagraph (ii)(C) shall be treated as distributed on the date
on which such distributions begin.
(D) Notwithstanding the provisions of subparagraphs (ii)(B)
and (ii)(C), if the Beneficiary referred to in subparagraph
(ii)(C) is the spouse of the Participant, then:
(I) the date on which the distributions are required
to begin under subparagraph (ii)(C)(III) shall not be
earlier than the date on which the Participant would have
attained age 70-1/2, and
(II) if the spouse dies before the distributions to
that spouse begin, then this subparagraph (ii)(D) shall be
applied as if the spouse were the Participant.
(iii) For purposes of this Section, the Required Distribution
Date means April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2 provided, however, if the
Participant attained age 70-1/2 in calendar year 1988, the Required
Distribution Date means April 1, 1990, and further provided if the
Participant attained age 70-1/2 prior to January 1, 1988, the Required
-26-
Distribution Date means the April 1 following the later of the
calendar year in which the Participant: (A) attains age 70-1/2, or (B)
terminates service with all Employers and Affiliates, unless he is a
5% owner (as defined in Section 416 of the Code) of an Employer with
respect to the Plan Year ending in the calendar year in which he
attains age 70-1/2, in which case clause (B) shall not apply.
(iv) For purposes of this Section, the life expectancy of a
Participant and his spouse may be redetermined, but not more
frequently than annually. This paragraph (iv) shall not apply in the
case of a single life annuity.
ARTICLE VIII
WITHDRAWALS AND LOANS
8.1 DISTRIBUTION AT AGE 59-1/2 A Participant may elect an in-service
distribution of any amount up to his entire Account Balance on or
after he has attained age 59-1/2, subject to the provisions of Section
7.4.
8.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS
A Participant may, upon written request to the Committee, make
withdrawals in cash from his After-tax Contribution Account or his
Rollover Contribution Account as of the end of any calendar month, but
only once in any twelve-month period. No such withdrawal shall be less
than $1,000 in amount unless it is for the entire balance
withdrawable.
8.3 HARDSHIP WITHDRAWALS
(a) A Participant may withdraw all or any part of the amount
credited to his Pre-tax Contribution Account (excluding on and
after January 1, 1989, any earnings credited to his Pre-tax
Contributions) to meet a financial hardship as described in this
Section. Such withdrawals may not be made more frequently than
once a year, except withdrawals for tuition payments may be made
as indicated in clause (b)3. The Participant's request for a
withdrawal shall be in writing on a form prescribed by the
Committee. All rules governing withdrawal privileges shall be
administered by the Committee in a uniform manner, and are
subject to the claims procedure described in Section 10.6.
(b) Financial hardship shall be determined in accordance with
rules established by the Committee, and shall include the
following list of events or circumstances:
(1) The purchase (excluding mortgage payments) of a
principal residence;
-27-
(2) Medical expenses (described in Code Section 213(d))
previously incurred by the Participant, the Participant's
spouse or any dependents of the Participant (as defined in
Code Section 152) or necessary for any of those persons to
obtain medical care described in Code Section 213(d);
(3) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, his spouse, his children or dependents;
(4) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage
of the Participant's principal residence;
(5) Any other need as the Committee determines to be a
hardship expressly specified in rules announced by the
Commissioner of Internal Revenue issued under Section 401(k)
of the Code; and
(6) Amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result
from the distribution.
(c) A distribution that is not for one of the specified reasons
set forth in the preceding paragraph (b) will be deemed due to a
financial hardship if the Committee reasonably determines, based
on written representations and evidence received from the
Participant, that the distribution is for a financial hardship
and that the amount requested does not exceed the amount needed
to meet the financial hardship. In making such determination,
the Committee shall rely upon the Participant's written
representation that the need cannot reasonably be relieved:
(1) through reimbursement or compensation by insurance or
otherwise;
(2) by liquidation of the Participant's assets, including
assets of his spouse or children to the extent available to
him, to the extent liquidation of such assets will not
itself create a financial need;
(3) from amounts available from the Participant's After-tax
Contribution Account; and
(4) by other distributions or non-taxable loans from plans
maintained by the Company and its Affiliates, or by any
other employer, or by borrowing from commercial sources on
reasonable commercial terms in an amount sufficient to
satisfy the need.
A need cannot reasonably be relieved by any action described
in clauses (1) through (4) if the effect of such action would be
to increase the amount of the need.
-28-
(d) In no event may any distribution be made for a financial
hardship pursuant to this Section unless the following conditions
have been satisfied:
(1) The Participant has first obtained all distributions,
other than hardship distributions, and all non-taxable loans
currently available under the Plan and all other plans
maintained by the Company and its Affiliates;
(2) The Participant is prohibited from making any Pre-tax
Contributions or After-tax Contributions to this Plan, or
contributions to any other plan of the Company or its
Affiliates (excluding health and welfare plans) during the
12 month period beginning with the date of receipt of a
hardship distribution under this Section; and
(3) The Participant is prohibited from making Pre-tax
Contributions for his taxable year immediately following the
taxable year of the hardship distribution in excess of the
limit described in Section 5.1, reduced by the amount of the
Participant's Pre-tax Contributions for the taxable year of
the hardship distribution.
8.4 LOANS TO PARTICIPANTS
(a) The Trustee may loan any Participant who has participated in
the Plan for at least twelve months (and who is a Party-in-
Interest as defined in Section 3.1(14) of ERISA whose Account
Balance has not been distributed), up to the amount described in
paragraph (b) below, upon written application according to such
rules as the Committee may from time to time establish which are
hereby incorporated and made a part of this Plan, and subject to
paragraphs (c) through (f) below.
(b) The maximum amount of the loan, when added to the
outstanding balance of all other loans made to the Participant
from all qualified Plans maintained by the Company, shall not
exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of:
(A) the highest outstanding balance during the one-
year period ending immediately preceding the date of
the loan, over
(B) the outstanding balance on the date of the loan,
of all such loans from all such plans;
(2) 50% of the amount to which the Participant would be
entitled under such Participant's Pre-tax Contribution
Account, Matching Contribution Account and Rollover Account
maintained on behalf of the Participant under the Plan if he
were to terminate his employment with the Company on the
date of the loan.
-29-
(c) The minimum amount of the loan is at least $1,000.
(d) Loans may not be made from any amount held in the
Participant's Matching Contribution Account or his After-tax
Contribution Account.
(e) Each loan must be evidenced by a written note in a form
approved by the Committee, shall bear interest at a reasonable
rate commensurate with the interest rates charged by persons in
the business of lending money for loans that would be made under
similar circumstances, and shall require substantially level
amortization (with payments at least quarterly) over the term of
the loan. The note shall be evidence of the Participant's
indebtedness, which indebtedness shall be secured by such
Participant's Account under the Plan in an amount not to exceed
50% of the present value of the Participant's Pre-tax
Contribution Account, Matching Contribution Account and Rollover
Account Balance as determined immediately after the origination
of the loan to the Participant.
(f) Each loan shall specify a repayment period that shall not
extend beyond five years. However, a repayment period of up to 30
years may be established for a loan used to acquire any dwelling
unit that within a reasonable amount of time is to be used
(determined at the time the loan is made) as the principal
residence of the Participant.
(g) Each Participant shall agree to make loan repayments through
automatic salary deductions throughout the repayment period.
(h) A Participant may have only one outstanding loan at any
given time and only one loan may be granted to a Participant in
any twelve month period. An outstanding loan shall be considered
in default if, at the end of three consecutive months, no loan
payment has been made, except for any Participant on an unpaid
leave of absence. A loan default of a Participant on an unpaid
leave of absence shall not occur until 1 year following the date
of the first delinquent payment.
(i) The provisions of this Section 8.4 shall apply to former
Participants who are Parties In Interest (as defined in Section 3(14)
of ERISA) and who retain Account Balances in the Plan following
termination of employment. Payments of principal and interest on
a loan to such former Participant shall be made by cash or
personal check in equal quarterly (or more frequent)
installments. A loan to a former Participant shall become
payable in full on the date such Participant receives a final
distribution of his Account Balance.
(j) Each such loan shall be a first lien against the Account of
the borrowing Participant. If (i) any portion of the loan is
outstanding and (ii) an event occurs pursuant to which the
-30-
Participant, his estate, or his Beneficiaries will receive a
distribution from the Participant's Account under the provisions
of the Plan, then the Participant, if living, shall pay to the
Trustee an amount equal to the portion of the loan then
outstanding, including all accrued interest thereon, and the
Participant shall then receive the full amount of the
distribution under the provisions of the Plan to which he is
otherwise entitled. If the Participant is not then living, or if
the Participant does not make full payment of the portion of the
loan then outstanding within 90 days after the date of the event
pursuant to which the distribution is to be made, then such
distribution, to the extent necessary to liquidate the unpaid
portion of the loan, shall be made to the Trustee as payment on
the loan. No distribution shall be made to a Participant, his
estate, or his Beneficiaries in an amount greater than the excess
of the portion of his Account otherwise distributable over the
aggregate of the amounts owing with respect to such loan plus
interest, if any, thereon, taking into consideration any portion
of the loan paid by the Participant pursuant to the provisions of
this paragraph.
ARTICLE IX
TRUST FUND
All contributions made by the Company under this Plan shall be paid to
the Trustee and deposited in the Trust Fund. However, contributions
made by the Company are expressly conditioned upon the initial
qualification of the Plan under the Code, and are expressly
conditioned upon the deductibility under Section 404 of the Code.
All assets of the Trust Fund, including investment income, shall be
retained for the exclusive benefit of Participants and Beneficiaries
and shall be used to pay benefits to such persons or to pay
administrative expenses of the Plan and Trust Fund to the extent not
paid by the Company.
The Company shall not have any right, title, or interest in or to
the contributions made to the Trustee, and no assets of the Trust Fund
including investment income shall ever revert or be repaid to the
Company, either directly or indirectly, except as provided in Section
12.4. However, without regard to the foregoing provisions of this
section:
(a) If a contribution under the Plan is conditioned on initial
qualification of the Plan under Section 401(a) of the Code, and
the Plan receives an adverse determination with respect to its
initial qualification, the Trustee shall, upon written request of
the Company, return to the Company the amount of such
contribution (increased by earnings attributable thereto and
reduced by losses attributable thereto) within one calendar year
-31-
after the date that qualification of the Plan is denied, provided
that the application for the determination is made by the time
prescribed by law for filing the Company's return for the taxable
year in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe;
(b) If a contribution is conditioned upon the deductibility of
the contribution under Section 404 of the Code, then, to the
extent the deduction is disallowed, the Trustee shall, upon
written request of the Company, return the contribution (to the
extent disallowed) to the Company within one year after the date
the deduction is disallowed;
(c) If a contribution or any portion thereof is made by the
Company by a mistake of fact, the Trustee shall, upon written
request of the Company, return the contribution or such portion
to the Company within one year after the date of payment to the
Trustee; and
(d) Earnings attributable to amounts to be returned to the
Company pursuant to subsection (b) or (c) above shall not be
returned, and losses attributable to amounts to be returned
pursuant to subsection (b) or (c) shall reduce the amount to be
so returned.
ARTICLE X
ADMINISTRATION
10.1 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST
ADMINISTRATION The fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given
them under this Plan or the Trust. The Company shall have the sole
responsibility for making the Matching Contributions provided for
under Section 4.3. The Company shall have the sole authority to
appoint and remove the Trustee, and members of the Committee and to
amend or terminate, in whole or in part, the Plan or the Trust. The
Company shall have the responsibility for the administration of this
Plan, with the assistance of the Committee, which responsibility is
specifically described in the Plan and the Trust. The Trustee shall
have the sole responsibility to perform custodial responsibilities
with respect to the Trust and shall have the sole responsibility for
the management of the assets held under the Trust, all as specifically
provided in the Trust.
Each fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the
provisions of the Plan or the Trust, as the case may be, authorizing
or providing for such direction, information, or action. Furthermore,
each fiduciary may rely upon any such direction, information, or
action of another fiduciary as being proper under the Plan or the
-32-
Trust, and is not required under the Plan or the Trust to inquire into
the propriety of any such direction, information, or action. It is
intended under the Plan and the Trust that each fiduciary shall be
responsible for the proper exercise of its own powers, duties,
responsibilities, and obligations under the Plan and the Trust and
shall not be responsible for any act or failure to act of another
fiduciary. No fiduciary guarantees the Trust Fund in any manner
against investment loss or depreciation in asset value.
10.2 APPOINTMENT OF COMMITTEE A Committee consisting of from one to
seven persons shall be appointed by and serve at the pleasure of the
Board of Directors of the Company to assist in the administration of
the Plan. All usual and reasonable expenses of the Committee may be
paid in whole or in part by the Company, and any expenses not paid by
the Company shall be paid by the Trustee out of the principal or
income of the Trust Fund. Any members of the Committee who are
Employees shall not receive compensation with respect to their
services for the Committee.
10.3 COMMITTEE POWERS AND DUTIES The Committee shall have such duties
and powers as may be necessary to discharge its duties hereunder,
including, but not by way of limitation, the following:
(a) to construe and interpret the Plan in their complete
discretion in a nondiscriminatory manner, decide all questions of
eligibility and determine the amount, manner and time of payment
of any benefits hereunder;
(b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;
(c) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) to receive from the Company and from Participants such
information as shall be necessary for the proper administration
of the Plan;
(e) to furnish the Participants, upon request, such annual
reports with respect to the administration of the Plan as are
reasonable and appropriate;
(f) to receive, review and keep on file (as it deems convenient
or proper) reports of benefit payments by the Trustee and reports
of disbursements for expenses directed by the Committee;
(g) to appoint or employ individuals to assist in the
administration of the Plan and any other agents it deems
advisable, including legal and actuarial counsel.
10.4 RULES AND DECISIONS The Committee may adopt such rules as it
deems necessary, desirable or appropriate. All rules and decisions of
-33-
the Committee shall be uniformly and consistently applied to all
Participants in similar circumstances. When making a determination or
calculation, the Committee shall be entitled to rely upon information
furnished by a Participant or Beneficiary, the Company, the legal
counsel of the Company or the Trustee.
10.5 COMMITTEE ACTION The Committee may act at a meeting or in
writing without a meeting. The Committee may adopt such bylaws and
regulations as it deems desirable for the conduct of its affairs. All
decisions of the Committee shall be made by the vote of the majority,
including actions in writing taken without a meeting. By appropriate
action the Committee may authorize one or more of its members to
execute documents on its behalf, and the Trustees, upon written
notification of such authorization, shall accept and rely upon such
documents until notified in writing that such authorization has been
revoked by the Committee.
10.6 CLAIMS PROCEDURE Any Participant or Beneficiary who is entitled
to a payment of a benefit for which provision is made in this Plan
shall file a written claim with the Committee and shall furnish such
evidence of entitlement to benefits as the Committee may reasonably
require. The Committee shall notify the Participant or Beneficiary in
writing as to the amount of benefit to which he is entitled, the
duration of such benefit, the time the benefit is to commence and
other pertinent information concerning his benefit.
If a claim for a benefit is denied by the Committee, in whole or in
part, the Committee shall provide adequate notice, in writing to the
Participant or Beneficiary whose claim for a benefit has been denied,
within ninety (90) days after receipt of the claim, unless special
circumstances require an extension of time for processing the claim.
If such an extension of time for processing is required, written
notice indicating the special circumstances and the date by which a
final decision is expected to be rendered shall be furnished to the
Participant or Beneficiary. In no event shall the period of extension
exceed one hundred eighty (180) days after receipt of the claim.
The notice of denial of the claim shall set forth: (a) the specific
reason or reasons for the denial; (b) specific reference to pertinent
Plan provisions on which the denial is based; (c) a description of any
additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or
information is necessary; and (d) a statement that any appeal of the
denial must be made by giving to the Committee, within sixty (60) days
after receipt of the notice of the denial, written notice of such
appeal, such notice to include a full description of the pertinent
issues and basis of the claim.
The Participant or Beneficiary (or his duly authorized representative)
may review pertinent documents and submit issues and comments in
writing to the Committee. If the Participant or Beneficiary fails to
appeal such action to the Committee in writing within the prescribed
-34-
period of time, the Committee's adverse determination shall be final,
binding and conclusive.
10.7 FACILITY OF PAYMENT Whenever, in the Committee's opinion a
person entitled to receive any payment of a benefit or installment
thereof hereunder is under a legal disability or is incapacitated in
any way so as to be unable to manage his financial affairs, the
Committee may direct the Trustee to make payments to such person or to
his legal representative or to a relative or friend of such person for
his benefit, or the Committee may direct the Trustee to apply the
payment for the benefit of such person in such manner as the Committee
considers advisable. Any payment of a benefit or installment thereof
in accordance with the provisions of this Section shall be a complete
discharge of any liability for the making of such payment under the
provisions of the Plan.
10.8 INDEMNIFICATION OF THE COMMITTEE The Committee and its
individual members shall be indemnified by the Company and not from
the Trust Fund against any and all liabilities arising by reason of
any act or failure to act made in good faith pursuant to the
provisions of the Plan, including expenses reasonably incurred in the
defense of any claim.
ARTICLE XI
MISCELLANEOUS
11.1 ACTION BY COMPANY Any action required or permitted to be taken
by the Company under this Plan shall be by resolution of its Board of
Directors, or by any person or persons duly authorized by resolution
of said Board to take such action.
11.2 NONGUARANTEE OF EMPLOYMENT Nothing contained in this Plan shall
be construed as a contract of employment between the Company and any
Employee, or as a right of any Employee to be continued in the
employment of the Company, or as a limitation of the right of the
Company to discharge any of its Employees, with or without cause.
11.3 RIGHTS TO TRUST ASSETS No Employee or Beneficiary shall have the
right to, or interest in, any assets of the Trust Fund upon
termination of his employment or otherwise, except as provided from
time to time under this Plan, and then only to the extent of the
benefits payable under the Plan to such Employee or Beneficiary out of
the assets of the Trust Fund. All payments of benefits as provided for
in this Plan shall be made solely out of the assets of the Trust Fund
and none of the fiduciaries shall be liable therefor in any manner.
11.4 NONALIENATION OF BENEFITS Benefits payable under this Plan shall
not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary,
-35-
including any such liability which is for alimony or other payments
for the support of a spouse or former spouse, or for any other
relative of the Employee, prior to actually being received by the
person entitled to the benefit under the terms of the Plan; and any
attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits payable
hereunder, shall be void. The Trust Fund shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to benefits hereunder.
The account of any Participant shall, however, be subject to and
payable in accordance with the provisions of Section 206(d)(3) of the
Employee Retirement Income Security Act of 1974 and regulations issued
thereunder pertaining to qualified domestic relations orders.
Notwithstanding any other provision to the contrary, in the event that
a qualified domestic relations order requires immediate distribution
in a single sum cash payment from a Participant's Account to an
alternate payee, then such payment shall be made notwithstanding the
fact that it is being made prior to the time that such Participant is
entitled to payment under the rules of the Plan.
11.5 NONFORFEITABILITY OF BENEFITS Subject only to the specific
provisions of this Plan, nothing shall be deemed to divest a
Participant during his lifetime of his right to the nonforfeitable
benefit to which he becomes entitled in accordance with the provisions
of this Plan.
11.6 CONTROLLING LAW Except to the extent superseded by the laws of
the United States, the laws of the State of Indiana will be
controlling in all matters relating to this Plan.
ARTICLE XII
AMENDMENTS AND TERMINATION
12.1 AMENDMENT OR TERMINATION The Company reserves the right to
alter, amend, modify or revoke or terminate this Plan and any Trust
that may be established by it which do not cause any part of the Trust
Fund to be used for, or diverted to, any purpose other than for the
exclusive benefit of Participants or their Beneficiaries; provided,
however, that the Company may make any amendment it determines
necessary or desirable, with or without retroactive effect, to comply
with applicable law.
12.2 MERGER OR CONSOLIDATION In the case of any merger or
consolidation with, or transfer of assets or liabilities to, any other
plan, each Participant or Beneficiary shall receive a benefit
immediately after the merger, consolidation or transfer that is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan
had then terminated).
-36-
12.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS In the event of a
permanent discontinuance of contributions to the Plan by the Company,
the Accounts of all Participants employed by the Company shall, as of
the date of such discontinuance, become 100% vested and
nonforfeitable.
12.4 LIQUIDATION OF THE TRUST FUND Upon termination of the Plan, the
Accounts of all Participants affected thereby shall become fully
vested, and the Committee may direct the Trustee: (a) to continue to
administer the Trust Fund and pay Account Balances in accordance with
Section 7.4 to Participants affected by the termination upon their
termination of employment or to their Beneficiaries upon such a
Participant's death, until the Trust Fund has been liquidated, or (b)
to distribute the assets remaining in the Trust Fund, after payment of
any expenses properly chargeable thereto, to Participants and
Beneficiaries in proportion to their respective Account Balances.
12.5 MANNER OF DISTRIBUTION Upon termination of the Plan,
distribution shall be made in cash or NIPSCO Industries, Inc. Common
Stock, as elected by the Participant or Beneficiary, in a manner
consistent with the requirements of Section 7.4.
IN WITNESS WHEREOF, this Plan is hereby executed on this ________
day of December, 1994, by the duly authorized officer of the Company,
to be effective as of January 1, 1994.
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By:
Its
-37-
FIRST AMENDMENT
TO
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT TAX DEFERRED SAVINGS PLAN
WHEREAS, Northern Indiana Public Service Company (the "Company")
established the Northern Indiana Public Service Company Bargaining
Unit Tax Deferred Savings Plan, effective October 1, 1987 ("Plan"),
amended and restated the Plan effective January 1, 1989, and further
amended and restated the Plan effective January 1, 1994; and
WHEREAS, the Company has reserved the right to amend the Plan;
and
WHEREAS, it is desirable to amend the Plan in certain respects;
NOW THEREFORE, the Plan is hereby amended, effective January 1,
1994 (except where otherwise indicated), as follows:
1. The following sentences are added at the end of Section 2.7:
In determining the Compensation of a Participant for
purposes of the foregoing limitations set forth in Section
401(a)(17) of the Code, the rules of Section 414(q)(6) of
the Code shall apply with respect to family members of the
Participant, except that in applying such rules, the term
"family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not
attained age 19 before the close of the applicable Plan
Year. If as a result of the application of such rules, the
adjusted limitation set forth in Section 401(a)(17) of the
Code is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such
individual's Compensation as determined under this section
prior to the application of such limitation.
2. The first paragraph of Section 2.11 is amended, effective
October 1, 1996, to read as follows:
2.11 EMPLOYEE. Any person who is employed by the Company
and on whose behalf contributions are being made by the
Company under the Federal Insurance Contribution Act
and whose terms and conditions of employment are
governed by a collective bargaining agreement between
the Company and a duly recognized bargaining
1
representative; provided that such collective
bargaining agreement provides for coverage under the
Plan.
3. The following paragraphs are added at the end of Section
5.5:
(d) The amount of Excess Contributions to be distributed to, or
recharacterized with respect to, a Highly Compensated
Eligible Employee for a Plan Year, shall be reduced by any
Excess Contributions previously distributed to the Highly
Compensated Eligible Employee for the taxable year of the
Highly Compensated Eligible Employee ending with or within
the same Plan Year, and Excess Contributions to be
distributed to a Highly Compensated Eligible Employee for a
taxable year of the Highly Compensated Eligible Employee
shall be reduced by Excess Contributions previously
distributed to, or recharacterized with respect to, such
Highly Compensated Eligible Employee for the Plan Year
beginning in such taxable year.
(e) For purposes of determining the amount of Excess
Contributions to be distributed to a Highly Compensated
Eligible Employee, if the Highly Compensated Eligible
Employee is subject to the family aggregation rules of
Section 414(q)(6) of the Code because the Highly Compensated
Eligible Employee is either a 5% owner of the Company or any
Affliate, or is one of the 10 most highly compensated
employees of the Company or any Affiliate, the combined
Actual Deferral Percentage for the Highly Compensated
Eligible Employee and the members of his family group (who
are treated as one Highly Compensated Eligible Employee)
must be determined by combining the Pre-tax Contributions,
Compensation and amounts treated as Pre-tax Contributions of
all members of the family group of the Highly Compensated
Eligible Employee. For purposes of this paragraph, the
family group of a Highly Compensated Eligible Employee
includes such Highly Compensated Eligible Employee, his
spouse, his lineal ascendants or descendants, and the
spouses of his lineal ascendants or descendants.
(f) An amount of Matching Contributions attributable to the Pre-
tax Contributions distributed to a Highly Compensated
Eligible Employee as an Excess Contribution pursuant to
clause (3) of paragraph (a) of this Section 5.5 shall also
be distributed to the applicable Highly Compensated Eligible
Employee by the last day of the twelve month period
following the end of the Plan Year in which such Excess
Contributions occurred.
2
4. Clause (1) of paragraph (a) of Section 5.7 and all
references thereto are deleted and clause (2) of paragraph (a) of
Section 5.7 is redesignated as clause (1).
5. The following sentences are added at the end of redesignated
clause (1) of paragraph (a) of Section 5.7:
The amount of Excess Aggregate Contributions for a Plan Year
shall be determined only after first determining the Excess
Contributions that are recharacterized as After-tax
Contributions pursuant to clause (2) of paragraph (a) of
Section 5.5 or pursuant to any other retirement plan of the
Company or an Affiliate. The amount of Excess Aggregate
Contributions to be distributed to each Highly Compensated
Eligible Employee pursuant to this clause (1) for a Plan
Year shall be distributed on a pro-rata basis from the
After-tax Contributions made by such Highly Compensated
Eligible Employee for such Plan Year and the Matching
Contributions allocable to the Matching Contribution Account
of the Highly Compensated Eligible Employee for such Plan
Year.
6. The reference in the second sentence of paragraph (b) of
Section 7.4 to 90 days shall be amended to be 60 days.
IN WITNESS WHEREOF, this First Amendment to the Plan has been
adopted on this day of
, 1997.
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By:
Its:
3
SECOND AMENDMENT
TO
NORTHERN INDIANA PUBLIC SERVICE COMPANY
BARGAINING UNIT TAX DEFERRED SAVINGS PLAN
WHEREAS, Northern Indiana Public Service Company (the "Company")
established the Northern Indiana Public Service Company Bargaining
Unit Tax Deferred Savings Plan effective October 1, 1987 ("Plan"),
amended and restated the Plan effective January 1, 1989, further
amended and restated the Plan effective January 1, 1994, and further
amended the Plan effective January 1, 1994; and
WHEREAS, the Company has reserved the right to amend the Plan;
and
WHEREAS, it is desirable to further amend the Plan in certain
respects.
NOW THEREFORE, the Plan is hereby amended, effective January 1,
1998, as follows:
1. The second and third sentences of Section 3.1 are
amended to read as follows:
Each other Employee will become eligible to participate in
this Plan on his Employment Commencement Date subject to the
provisions of Sections 3.2 and 3.3. Once an Employee becomes
eligible to participate, he will remain eligible as long as he
remains an Employee, subject to the provisions of Sections 3.2
and 3.3, and he may become a Participant as of the first Entry
Date following the date at least 15 days after he completes and
files the applicable form set forth in Section 4.2 or Section
4.4.
1
2. Section 3.2 is amended to read as follows:
3.2 PARTICIPATION UPON REEMPLOYMENT. An Employee who
incurs a Break in Service shall be eligible to participate in
this Plan on his Reemployment Commencement Date and may
thereafter become a Participant as of the first Entry Date
following the date at least 15 days after he completes and files
the applicable form set forth in Section 4.2 or Section 4.4.
3. The second paragraph of Section 3.3 is amended to read
as follows:
If an Employee's job classification changes such that he
meets the definition of Employee under Section 2.11, he shall
become eligible to participate in the Plan on the date his change
in status becomes effective, and he may thereafter become a
Participant as of the first Entry Date following the date at
least 15 days after he completes and files the applicable form
set forth in Section 4.2 or Section 4.4.
IN WITNESS WHEREOF, this Second Amendment to the Plan has been
adopted on this day of , 1999.
NORTHERN INDIANA PUBLIC
SERVICE COMPANY
By:
Its:
2