<PAGE>
                                                                    Exhibit 10.2

                                  NISOURCE INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                           EFFECTIVE NOVEMBER 1, 2000
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                       PAGE
                                                                                                                       ----
<S>                                                                                                                    <C>
ARTICLE I
PURPOSE; EFFECTIVE DATE..........................................................................................       1
1.1      Purpose.................................................................................................       1
1.2      Effective Date..........................................................................................       1

ARTICLE II
DEFINITIONS......................................................................................................       1
2.1      Account.................................................................................................       1
2.2      Beneficiary.............................................................................................       2
2.3      Board...................................................................................................       2
2.4      Company.................................................................................................       2
2.5      Compensation............................................................................................       2
2.6      Deferral Commitment.....................................................................................       2
2.7      Deferral Period.........................................................................................       2
2.8      Determination Date......................................................................................       2
2.9      Discretionary Contribution..............................................................................       2
2.10     Employer................................................................................................       2
2.11     Participant.............................................................................................       2
2.12     Participation Agreement.................................................................................       3
2.13     Plan....................................................................................................       3
2.14     Retirement Committee....................................................................................       3
2.15     Severe Financial Hardship...............................................................................       3
2.16     Valuation Date..........................................................................................       3
2.17     Gender and Number.......................................................................................       3

ARTICLE III
MERGER OF NISOURCE PLAN AND BAY STATE PLAN.......................................................................       3

ARTICLE IV
PARTICIPATION AND DEFERRAL COMMITMENTS...........................................................................       4
4.1      Eligibility and Participation...........................................................................       4
4.2      Form of Deferral........................................................................................       5
4.3      Limitations on Deferral Commitments.....................................................................       5
4.4      Modification of Deferral Commitment.....................................................................       6
4.5      Change in Employment Status.............................................................................       6

ARTICLE V
DEFERRED COMPENSATION ACCOUNT....................................................................................       7
5.1      Account.................................................................................................       7
5.2      Timing of Credits; Withholding..........................................................................       7
5.3      Discretionary Contributions.............................................................................       7
5.4      Determination of Account................................................................................       7
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                    <C>
5.5      Vesting of Account......................................................................................       8
5.6      Statement of Account....................................................................................       8

ARTICLE VI
INVESTMENTS......................................................................................................       9
6.1      Investment Options......................................................................................       9
6.2      Special Investment Option for Former Participants in the Bay State Plan and Participants in the Plan....       9

ARTICLE VII
PLAN BENEFITS....................................................................................................      10
7.1      Distributions Prior to Termination of Employment........................................................      10
7.2      Distributions Following Termination of Employment.......................................................      10
7.3      Form of Benefit Payment Following Termination of Employment.............................................      11
7.4      Modification of Distribution............................................................................      11
7.5      Distribution Provisions Applicable to a Transferred Bay State Account...................................      12
7.6      Withholding for Taxes...................................................................................      13
7.7      Valuation and Settlement................................................................................      13
7.8      Payment to Guardian.....................................................................................      13

ARTICLE VIII
BENEFICIARY DESIGNATION..........................................................................................      14
8.1      Beneficiary Designation.................................................................................      14
8.2      Changing Beneficiary....................................................................................      14
8.3      Community Property......................................................................................      14
8.4      No Beneficiary Designation..............................................................................      15

ARTICLE IX
ADMINISTRATION...................................................................................................      16
9.1      Committee; Duties.......................................................................................      16
9.2      Agents..................................................................................................      16
9.3      Binding Effect of Decisions.............................................................................      16
9.4      Indemnity of Retirement Committee.......................................................................      17

ARTICLE X
CLAIMS PROCEDURE.................................................................................................      17
10.1     Claim...................................................................................................      17
10.2     Review of Claim.........................................................................................      17
10.3     Notice of Denial of Claim...............................................................................      17
10.4     Reconsideration of Denied Claim.........................................................................      18
10.5     Employer to Supply Information..........................................................................      19

ARTICLE XI
AMENDMENT AND TERMINATION OF PLAN................................................................................      19
11.1     Amendment...............................................................................................      19
11.2     Employer's Right to Terminate...........................................................................      20
</TABLE>
                                       ii
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                    <C>
ARTICLE XII
MISCELLANEOUS....................................................................................................      21
12.1     Unfunded Plan...........................................................................................      21
12.2     Company and Employer Obligations........................................................................      21
12.3     Unsecured General Creditor..............................................................................      21
12.4     Trust Fund..............................................................................................      21
12.5     Nonassignability........................................................................................      22
12.6     Not a Contract of Employment............................................................................      22
12.7     Protective Provisions...................................................................................      22
12.8     Governing Law...........................................................................................      22
12.9     Validity................................................................................................      23
12.10    Notice..................................................................................................      23
12.11    Successors..............................................................................................      23
12.12    Tax Savings Clause......................................................................................      23
</TABLE>

EXHIBIT A - Investment Options

                                       iii
<PAGE>

                                  NISOURCE INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN
                             PURPOSE; EFFECTIVE DATE

         1.1 PURPOSE. The purpose of this Executive Deferred Compensation Plan
is to provide current tax planning opportunities as well as supplemental funds
for retirement or death for selected employees of an Employer. It is intended
that the Plan will aid in attracting and retaining employees of exceptional
ability by providing them with these benefits. Effective November 1, 2000, the
Bay State Gas Company Key Employee Deferred Compensation Plan (the "Bay State
Plan") shall be merged into the NIPSCO Industries, Inc. Executive Deferred
Compensation Plan (the "NIPSCO Plan"), and renamed the NiSource Inc. Executive
Deferred Compensation Plan.

         1.2 EFFECTIVE DATE. The Plan is effective as of November 1, 2000.

                                   ARTICLE II

                                   DEFINITIONS

         For the purposes of this Plan, the following terms shall have the
meanings indicated, unless the context clearly indicates otherwise:

         2.1 ACCOUNT. "Account" means the device used by an Employer to measure
and determine the amount to be paid to a Participant under the Plan. Each
account shall be divided into a NiSource Account containing contributions to the
Plan and, if applicable, a Transferred Bay State Account containing any amount
transferred from the Bay State Plan.
<PAGE>

         2.2 BENEFICIARY. "Beneficiary" means the person, persons or entity
entitled under Article VIII to receive any Plan benefits payable after a
Participant's death.

         2.3 BOARD. "Board" means the Board of Directors of the Company.

         2.4 COMPANY. "Company" means NiSource Inc., a Delaware corporation.

         2.5 COMPENSATION. "Compensation" means base salary and bonuses payable
to a Participant during the calendar year, before reduction for amounts deferred
under the Plan or any other salary reduction program. Compensation does not
include expense reimbursements, any form of noncash compensation, or benefits.

         2.6 DEFERRAL COMMITMENT. "Deferral Commitment" means a commitment made
by a Participant to defer Compensation pursuant to Article IV.

         2.7 DEFERRAL PERIOD. "Deferral Period" means each calendar year.

         2.8 DETERMINATION DATE. "Determination Date" means the last day of each
calendar month.

         2.9 DISCRETIONARY CONTRIBUTION. "Discretionary Contribution" means the
Employer contribution credited to a Participant's Account under Section 5.3.

         2.10 EMPLOYER. "Employer" means the Company and any subsidiary or
affiliate of the Company designated by the Board to participate in the Plan..

         2.11 PARTICIPANT. "Participant" means any eligible individual who has
elected to defer Compensation under the Plan.

                                       2
<PAGE>
         2.12 PARTICIPATION AGREEMENT. "Participation Agreement" means the
agreement submitted by a Participant to the Retirement Committee prior to the
beginning of a Deferral Period, with respect to a Deferral Commitment made for
such Deferral Period.

         2.13 PLAN. "Plan" means the NiSource Inc. Executive Deferred
Compensation Plan, as set forth herein and as amended from time to time.

         2.14 RETIREMENT COMMITTEE. "Retirement Committee" means a committee of
two (2) individuals appointed by the Nominating and Compensation Committee of
the Board.

         2.15 SEVERE FINANCIAL HARDSHIP. "Severe Financial Hardship" means a
financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent of the Participant, or
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant.

         2.16 VALUATION DATE. "Valuation Date" means each business day.

         2.17 GENDER AND NUMBER. Except when otherwise required by the context,
any masculine terminology in this document shall include the feminine, and any
singular terminology shall include the plural.

                                  ARTICLE III

                   MERGER OF NISOURCE PLAN AND BAY STATE PLAN

         As of the Effective Date, the Bay State Plan was merged into the
NiSource Plan. The balance of the account of each Bay State Plan participant,
determined as of the Effective Date, was transferred to the NiSource Plan and
became the initial balance in such Participant's

                                       3
<PAGE>
Transferred Bay State Account in the Plan. A Participant's Transferred Bay State
Account shall be held, administered, invested, and distributed pursuant to the
terms of the Plan.

                                   ARTICLE IV

                     PARTICIPATION AND DEFERRAL COMMITMENTS

         4.1 ELIGIBILITY AND PARTICIPATION.

                  (a) Eligibility. Any employee eligible to participate in the
         Bay State Plan or the NIPSCO Plan as of October 31, 2000 shall be
         eligible to participate in the Plan as of the Effective Date. From and
         after the Effective Date, eligibility to participate in the Plan for a
         Deferral Period shall be limited to (1) a key employee of an Employer
         whose annual rate of base salary on October 1 of the calendar year
         preceding the Deferral Period equals or exceeds $90,000 (as adjusted
         periodically as the Retirement Committee in its discretion deems
         appropriate), and (2) any other key employee of an Employer who is
         designated, from time to time by the Nominating and Compensation
         Committee of the Board.

             (b) Participation. An eligible individual may elect to become a
         Participant in the Plan with respect to any Deferral Period by
         submitting a Participation Agreement to the Retirement Committee by the
         fifteenth (15th) day of the month immediately preceding the beginning
         of the Deferral Period.

             (c) Part-Year Participation. When an individual first becomes
         eligible to become a Participant during a Deferral Period, a
         Participation Agreement may be submitted to the Retirement Committee
         within thirty (30) days after the Retirement Committee notifies the
         individual of eligibility to participate. Such Participation


                                       4
<PAGE>

         Agreement will be effective only with regard to Compensation earned
         following submission of such Participation Agreement to the Retirement
         Committee.

         4.2 FORM OF DEFERRAL. A Participant may elect Deferral Commitments in
the Participation Agreement as follows:

             (a) Salary Deferral Commitment. A salary Deferral Commitment for a
         Deferral Period shall be related to the base salary payable by an
         Employer to a Participant during the Deferral Period. The amount to be
         deferred shall be stated either as a percentage of base salary or a
         dollar amount.

             (b) Bonus Deferral Commitment. A bonus Deferral Commitment for a
         Deferral Period shall be related to the bonus payable to the
         Participant in that Deferral Period. The amount to be deferred shall be
         stated either as a percentage of the bonus or a dollar amount.

         4.3 LIMITATIONS ON DEFERRAL COMMITMENTS. The following limitations
shall apply to Deferral Commitments:

             (a) Minimum. The minimum amount of a Deferral Commitment shall be
         two hundred dollars ($200.00) for each month in the Deferral Period,
         except there shall be no minimum amount on a bonus Deferral Commitment
         if the Participant has also made a salary Deferral Commitment for the
         same Deferral Period. The minimum amount of a Deferral Commitment for a
         Participant who enters participation after the beginning of a Deferral
         Period shall be based on the number of months remaining in the Deferral
         Period.

             (b) Maximum. The maximum amount of a Deferral Commitment shall be
         one hundred percent (100%) of base salary earned in a Deferral Period
         and one hundred


                                       5
<PAGE>
         percent (100%) of bonus earned in a Deferral Period, less any
         deductions for applicable taxes attributable to such deferrals.

             (c) Changes in Minimum or Maximum. The Retirement Committee may
         change the minimum or maximum amount of a Deferral Commitment from time
         to time by giving written notice to all Participants. No such change
         may affect a Deferral Commitment made prior to the Retirement
         Committee's action.

             (d) Deferral Options. A Participant shall make an election in his
         Participation Agreement as to the time and form of payment of the
         Deferral Commitment for each Deferral Period. A Participant shall not
         be required to designate the same time and form of payment for each
         Deferral Commitment or for each Deferral Period. However, payments
         pursuant to a Deferral Commitment shall not be made or begin later than
         the Participant's date of termination of employment with all Employers.

             (e) Termination of Employment. No Deferral Commitment shall be made
         subsequent to the date of a Participant's termination of employment
         with all Employers.

         4.4 MODIFICATION OF DEFERRAL COMMITMENT. Except as provided in Section
7.1(a) below, Deferral Commitments shall be irrevocable.

         4.5 CHANGE IN EMPLOYMENT STATUS. If the Nominating and Compensation
Committee of the Board determines that a Participant's performance is no longer
at a level that deserves reward through participation in the Plan, but does not
terminate the Participant's employment with an Employer, the Participant's
existing Deferral Commitment shall terminate at the end of the current Deferral
Period, and no new Deferral Commitment may be made by


                                       6
<PAGE>
such Participant for any Deferral Period beginning after notice of such
determination is given by the Nominating and Compensation Committee of the
Board.

                                   ARTICLE V

                         DEFERRED COMPENSATION ACCOUNT

         5.1 ACCOUNT. The Compensation deferred by a Participant under the Plan,
any Discretionary Contributions and earnings thereon shall be credited to the
Participant's Account. Separate subaccounts may be maintained to reflect
different forms of distribution, investment options, levels of vesting, and
forms of payment. The Account shall be a bookkeeping device utilized for the
sole purpose of determining the benefits payable under the Plan and shall not
constitute a separate fund of assets.

         5.2 TIMING OF CREDITS; WITHHOLDING. A Participant's deferred
Compensation shall be credited to the Participant's Account at the time it would
have been payable to the Participant. Any withholding of taxes or other amounts
with respect to deferred Compensation that is required by state, federal or
local law shall be withheld from the Participant's nondeferred Compensation to
the maximum extent possible and any remaining amount shall reduce the amount
credited to the Participant's Account.

         5.3 DISCRETIONARY CONTRIBUTIONS. An Employer may make Discretionary
Contributions to a Participant's Account. Discretionary Contributions shall be
credited at such times and in such amounts as the Board in its sole discretion
shall determine.

         5.4 DETERMINATION OF ACCOUNT. Each Participant's Account as of each
Determination Date shall consist of the balance of the Account as of the
immediately preceding Determination Date, adjusted as follows:

                                       7
<PAGE>

             (a) New Deferrals. The Account shall be increased by any deferred
         Compensation credited since such Determination Date.

             (b) Discretionary Contributions. The Account shall be increased by
         any Discretionary Contributions credited since such Determination Date.

             (c) Distributions. The Account shall be reduced by any benefits
         distributed from the Account to the Participant since such
         Determination Date.

             (d) Valuation of Account. The Account shall be increased or
         decreased by the aggregate earnings, gains and losses on such Account
         since such Determination Date determined on a daily basis.

         5.5 VESTING OF ACCOUNT. Each Participant shall be vested in the amounts
credited to such Participant's Account and earnings thereon as follows:

             (a) Amounts Deferred. A Participant shall be one hundred percent
         (100%) vested at all times in the amount of Compensation elected to be
         deferred under this Plan, and earnings thereon.

             (b) Discretionary Contributions. A Participant's Discretionary
         Contributions, and earnings thereon, shall become vested as determined
         by the Nominating and Compensation Committee of the Board.

             (c) A Participant shall be one hundred percent (100%) vested at all
         times in the balance of his Transferred Bay State Account.

         5.6 STATEMENT OF ACCOUNT. The Retirement Committee shall give to each
Participant a statement showing the balance in the Participant's Account on a
quarterly basis and at such times as may be determined by the Retirement
Committee.

                                       8
<PAGE>

                                   ARTICLE VI

                                   INVESTMENTS

         6.1 INVESTMENT OPTIONS. Amounts credited hereunder to the Account of a
Participant shall be invested as such Participant elects among the investment
choices set forth on Exhibit A. No election of a Deferral Commitment by a
Participant shall be effective until such time as the Participant submits his
initial investment election to the Company. Such investment elections may,
thereafter, be changed on a daily basis.

         6.2 SPECIAL INVESTMENT OPTION FOR FORMER PARTICIPANTS IN THE BAY STATE
PLAN AND PARTICIPANTS IN THE PLAN. Former participants in the Bay State Plan who
become Participants in the Plan, or Participants in the Plan, on the Effective
Date, shall have an additional special investment option applicable solely to
their Transferred Bay State Account balances, or their Account balances in the
Plan, valued as of the Effective Date, and any subsequent amounts contributed to
such Participant's Account. Such Participants may invest their Transferred Bay
State Account balances, or their Account balances in the Plan as of the
Effective Date, and any subsequent amounts contributed to such Participant's
Account, in a subaccount which shall be credited with earnings equal to one (1)
percentage point higher than the effective annual yield of the average of the
Moody's Average Corporate Bond Yield Index for the previous calendar month as
published by Moody's Investor Services, Inc. (or any successor publisher
thereto), or, if such index is no longer published, a substantially similar
index selected by the Board. A Participant's Transferred Bay State Account
balance, or his Account


                                       9
<PAGE>
balance in the Plan on the Effective Date, shall be invested pursuant to this
special investment option from and after the Effective Date and until such time
as another investment choice is designated by him pursuant to Section 6.1 with
respect to all or a portion of his Transferred Bay State Account, or his Account
balance in the Plan on the Effective Date. Subsequent amounts contributed to any
such Participant's Account may be invested pursuant to this option as designated
by the Participant pursuant to Section 6.1. However, any portion of a
Transferred Bay State Account, or an Account balance in the Plan, subsequently
transferred from a Transferred Bay State Account, or an Account balance in the
Plan, to another investment option may not be reinvested under this Section 6.2.

                                  ARTICLE VII

                                  PLAN BENEFITS

         7.1 DISTRIBUTIONS PRIOR TO TERMINATION OF EMPLOYMENT. A Participant's
Account may be distributed to the Participant prior to termination of employment
as follows:

             (a) Hardship Withdrawals. Upon a finding that a Participant has
         suffered a Severe Financial Hardship, the Retirement Committee may, in
         its sole discretion, make distributions from the Participant's Account
         (including his Transferred Bay State Account) or allow a Participant to
         suspend entirely or reduce the amount of his Deferral Commitment. The
         amount of such a withdrawal or reduction shall be limited to the amount
         reasonably necessary to meet the Participant's needs resulting from the
         Severe Financial Hardship.

             (b) Form of Payment and Time. Any distribution pursuant to Section
         7.1(a) shall be payable in a lump sum. The distribution shall be paid
         within thirty (30) days after the determination of a Severe Financial
         Hardship.

         7.2 DISTRIBUTIONS FOLLOWING TERMINATION OF EMPLOYMENT. Upon a
Participant's termination of employment with an Employer for any reason, the
Employer shall pay the Participant, or in the case of death the Participant's
Beneficiary, an amount equal to the balance


                                       10
<PAGE>
in the Participant's Account. Plan benefits shall be payable in the manner
provided in Sections 7.3 and 7.5 and at the time provided in Section 7.7.

         7.3 FORM OF BENEFIT PAYMENT FOLLOWING TERMINATION OF EMPLOYMENT.

             (a) Subject to Section 8.3(c), the amount of a Deferral Commitment
         and earnings thereon not paid pursuant to Section 7.1(a) shall be paid
         following termination of employment, to the Participant (or to his
         Beneficiary in the case of his death) in the form selected by the
         Participant in his Participation Agreement at the time of the Deferral
         Commitment. Options include:

                  (i)      A lump sum payment.

                  (ii)     Equal annual installments over a period of not more
                           than fifteen (15) years.

             (b) In the event a Participant's Account balance on the date of
         termination of employment or at any time thereafter is five thousand
         dollars ($5,000) or less, that balance will be paid out in a lump sum
         notwithstanding any form of benefit payment elected by the Participant.

         7.4 MODIFICATION OF DISTRIBUTION. Notwithstanding any other provision
of the Plan, a Participant may modify his election as to the form or time of
commencement of payment of his entire Account, or of any Deferral Commitment
under the Plan and earnings thereon, by a writing filed with the Retirement
Committee at any time prior to the commencement of payment. A Participant's
modification of his election as to the form or time of commencement of payment
will be ineffective, unless (a) the modification is made more than twelve (12)
months prior to the time of commencement of payment, or (b) a Participant elects
by written instrument delivered to


                                       11
<PAGE>
the Company prior to the time of commencement of payment to have his Account or
the applicable Deferral Commitment reduced by 10%. This reduction will be
forfeited and used by the Plan to reduce expenses of administration. This
reduction is intended to discourage a Participant from modifying his election as
to the form or time of commencement of payment within the periods set forth in
clause (a) above and prevent him from being deemed in constructive receipt of
his Account prior to its actual payment to him.

         7.5 DISTRIBUTION PROVISIONS APPLICABLE TO A TRANSFERRED BAY STATE
ACCOUNT. Notwithstanding any other provision in the Plan, the following
provisions shall apply to the form and time of payment of the balance of a
Transferred Bay State Account:

             (a) The portion of a Transferred Bay State Account not paid
         pursuant to paragraph (a) of Section 7.1, shall be paid to a
         Participant following his termination of employment, or to his
         Beneficiary in the case of death, in the form selected by the
         Participant, by written instrument delivered to the Retirement
         Committee before the Effective Date. If no form is selected by the
         Participant, payment shall be made in a lump sum. The provisions of
         Sections 7.3 and 7.4 shall apply with respect to the election of the
         form of payment of a Transferred Bay State Account and the modification
         of such election.

             (b) Any former employee of Bay State Gas Company who (i) was a
         participant in the Bay State Plan immediately prior to the Effective
         Date, (ii) terminated employment with Bay State Gas Company prior to
         the Effective Date for any reason other than Retirement, death or
         Disability (as such terms were defined in the Bay State Plan
         immediately prior to the Effective Date), and (iii) as of the Effective
         Date, had not commenced payment of his Account shall not commence
         payment of his Transferred Bay


                                       12
<PAGE>
         State Account until the earlier of the Participant's attainment of age
         65, Disability or death. Notwithstanding the preceding sentence, the
         Retirement Committee may, in its sole discretion, vary the manner and
         time of making the payment of a Participant's Transferred Bay State
         Account to such former Bay State employee, and may make such
         distributions over a longer or shorter period of time or in a lump sum.

         7.6 WITHHOLDING FOR TAXES. To the extent required by the law in effect
at the time payments are made, an Employer shall withhold from the payments made
hereunder any taxes required to be withheld by the federal or any state or local
government, including any amounts which the Employer determines is reasonably
necessary to pay any generation-skipping transfer tax which is or may become
due. A Beneficiary, however, may elect not to have withholding of federal income
tax pursuant to Section 3405(a)(2) of the Internal Revenue Code, or any
successor provision thereto.

         7.7 VALUATION AND SETTLEMENT. The amount of a lump sum payment and the
initial amount of installments shall be based on the value of the Participant's
Account, or a Deferred Commitment and earnings thereon, on the Determination
Date coincident with or next preceding the date such payment is made or
commences. The date on which a lump sum is paid or the date on which
installments commence shall be the Settlement Date. The Settlement Date shall be
no more than sixty-five (65) days after the applicable Determination Date. All
payments shall be made as of the first day of the month.

         7.8 PAYMENT TO GUARDIAN. The Retirement Committee may direct payment to
the duly appointed guardian, conservator or other similar legal representative
of a Participant or Beneficiary to whom payment is due. In the absence of such a
legal representative, the Retirement Committee may, in its sole and absolute
discretion, make payment to a person having


                                       13
<PAGE>
the care and custody of a minor, incompetent or person incapable of handling the
disposition of property upon proof satisfactory to the Retirement Committee of
incompetency, minority or incapacity. Such distribution shall completely
discharge the Company from all liability with respect to such benefit.

                                  ARTICLE VIII

                             BENEFICIARY DESIGNATION

         8.1 BENEFICIARY DESIGNATION. Subject to Section 8.3, each Participant
shall have the right, at any time, to designate one (1) or more persons or an
entity as Beneficiary (both primary as well as secondary) to whom benefits under
the Plan shall be paid in the event of the Participant's death prior to complete
distribution of the Participant's Account. Each Beneficiary designation shall be
in a written form prescribed by the Retirement Committee and shall be effective
only when filed with the Retirement Committee during the Participant's lifetime.

         8.2 CHANGING BENEFICIARY. Subject to Section 8.3, any Beneficiary
designation may be changed by a Participant without the consent of the
previously named Beneficiary by the filing of a new designation with the
Retirement Committee. The filing of a new designation shall cancel all
designations previously filed.

         8.3 COMMUNITY PROPERTY. If the Participant resides in a community
property state, the following rules shall apply:

             (a) Designation by a married Participant of a Beneficiary other
         than the Participant's spouse shall not be effective unless the spouse
         executes a written consent that acknowledges the effect of the
         designation, or it is established the consent cannot be obtained
         because the spouse cannot be located.

                                       14
<PAGE>

             (b) A married Participant's Beneficiary designation may be changed
         by a Participant with the consent of the Participant's spouse as
         provided for in Section 8.3(a) by the filing of a new designation with
         the Retirement Committee.

             (c) If the Participant's marital status changes after the
         Participant has designated a Beneficiary, the following shall apply:

                 (i) If the Participant is married at the time of death but was
         unmarried when the designation was made, the designation shall be void
         unless the spouse has consented to it in the manner prescribed in
         Section 8.3(a).

                 (ii) If the Participant is unmarried at the time of death but
         was married when the designation was made:

                     (A) The designation shall be void if the spouse was named
         as Beneficiary.

                     (B) The designation shall remain valid if a nonspouse
         Beneficiary was named.

                 (iii) If the Participant was married when the designation was
         made and is married to a different spouse at death, the designation
         shall be void unless the new spouse has consented to it in the manner
         prescribed above.

         8.4 NO BENEFICIARY DESIGNATION. If any Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void or if the
Beneficiary designated by a deceased Participant dies before the Participant or
before complete distribution of the Participant's benefits, the Participant's
Beneficiary shall be the person in the first of the following classes in which
there is a survivor:

                                       15
<PAGE>

             (a) The Participant's spouse;

             (b) The Participant's children in equal shares, except that if any
         of the children predeceases the Participant but leaves issue surviving,
         then such issue shall take by right of representation the share the
         parent would have taken if living;

             (c) The Participant's estate.

                                   ARTICLE IX

                                 ADMINISTRATION

         9.1 COMMITTEE; DUTIES. The Plan shall be administered by a Retirement
Committee appointed by the Nominating and Compensation Committee of the Board.
The Retirement Committee shall have the authority to make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of the Plan
and decide or resolve any and all questions, including interpretations of the
Plan, as may arise in such administration. A majority vote of the Retirement
Committee members shall control any decision. Members of the Retirement
Committee may be Participants under this Plan. In no event shall a Retirement
Committee member make a deciding vote on his own benefit.

         9.2 AGENTS. The Retirement Committee may, from time to time, employ
agents and delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the Company.

         9.3 BINDING EFFECT OF DECISIONS. The decision or action of the
Retirement Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final, conclusive
and binding upon all persons having any interest in the Plan.

                                       16
<PAGE>

         9.4 INDEMNITY OF RETIREMENT COMMITTEE. The Company shall indemnify and
hold harmless the members of the Retirement Committee against any and all
claims, loss, damage, expense, or liability arising from any action or failure
to act with respect to the Plan on account of such person's service on the
Retirement Committee, except in the case of gross negligence or willful
misconduct.

                                   ARTICLE X

                                CLAIMS PROCEDURE

         10.1 CLAIM. The Retirement Committee shall establish rules and
procedures to be followed by Participants and Beneficiaries in (a) filing claims
for benefits, and (b) for furnishing and verifying proofs necessary to establish
the right to benefits in accordance with the Plan, consistent with the remainder
of this Article. Such rules and procedures shall require that claims and proofs
be made in writing and directed to the Retirement Committee.

         10.2 REVIEW OF CLAIM. The Retirement Committee shall review all claims
for benefits. Upon receipt by the Retirement Committee of such a claim, it shall
determine all facts which are necessary to establish the right of the claimant
to benefits under the provisions of the Plan and the amount thereof as herein
provided within ninety (90) days of receipt of such claim. If prior to the
expiration of the initial ninety (90) day period, the Retirement Committee
determines additional time is needed to come to a determination on the claim,
the Retirement Committee shall provide written notice to the Participant,
Beneficiary or other claimant of the need for the extension, not to exceed a
total of one hundred eighty (180) days from the date the application was
received.

         10.3 NOTICE OF DENIAL OF CLAIM. In the event that any Participant,
Beneficiary or other claimant claims to be entitled to a benefit under the Plan,
and the Retirement Committee

                                       17
<PAGE>
determines that such claim should be denied in whole or in part, the Retirement
Committee shall, in writing, notify such claimant that the claim has been
denied, in whole or in part, setting forth the specific reasons for such denial.
Such notification shall be written in a manner reasonably expected to be
understood by such claimant and shall refer to the specific sections of the Plan
relied on, shall describe 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 where appropriate, shall include an explanation of
how the claimant can obtain reconsideration of such denial.

         10.4 RECONSIDERATION OF DENIED CLAIM.

             (a) Within sixty (60) days after receipt of the notice of the
         denial of a claim, such claimant or duly authorized representative may
         request, by mailing or delivery of such written notice to the
         Retirement Committee, a reconsideration by the Retirement Committee of
         the decision denying the claim. If the claimant or duly authorized
         representative fails to request such a reconsideration within such
         sixty (60) day period, it shall be conclusively determined for all
         purposes of the Plan that the denial of such claim by the Retirement
         Committee is correct. If such claimant or duly authorized
         representative requests a reconsideration within such sixty (60) day
         period, the claimant or duly authorized representative shall have
         thirty (30) days after filing a request for reconsideration to submit
         additional written material in support of the claim, review pertinent
         documents and submit issues and comments in writing.

             (b) After such reconsideration request, the Retirement Committee
         shall determine within sixty (60) days of receipt of the claimant's
         request for reconsideration whether such denial of the claim was
         correct and shall notify such claimant in writing of


                                       18
<PAGE>
         its determination. The written notice of decision shall be in writing
         and shall include specific reasons for the decision, written in a
         manner calculated to be understood by the claimant, as well as specific
         references to the pertinent Plan provisions on which the decision is
         based. In the event of special circumstances determined by the
         Retirement Committee, the time for the Retirement Committee to make a
         decision may be extended by an additional sixty (60) days upon written
         notice to the claimant prior to the commencement of the extension. If
         such determination is favorable to the claimant, it shall be binding
         and conclusive. If such determination is adverse to such claimant, it
         shall be binding and conclusive unless the claimant or his duly
         authorized representative notifies the Retirement Committee within
         ninety (90) days after the mailing or delivery to the claimant by the
         Retirement Committee of its determination that claimant intends to
         institute legal proceedings challenging the determination of the
         Retirement Committee and actually institutes such legal proceedings
         within one hundred eighty (180) days after such mailing or delivery.

         10.5 EMPLOYER TO SUPPLY INFORMATION. To enable the Retirement Committee
to perform its functions, each Employer shall supply full and timely information
to the Retirement Committee of all matters relating to the retirement, death or
other cause for termination of employment of all Participants, and such other
pertinent facts as the Retirement Committee may require.

                                   ARTICLE XI

                        AMENDMENT AND TERMINATION OF PLAN

         11.1 AMENDMENT. The Board may at any time amend the Plan by written
instrument, notice of which is given to all Participants and to Beneficiaries
receiving installment payments.


                                       19
<PAGE>

Notwithstanding the preceding sentence, no amendment shall reduce the amount
accrued in any Account prior to the date such notice of the amendment is given.

         11.2 EMPLOYER'S RIGHT TO TERMINATE. The Board may at any time partially
or completely terminate the Plan if, in its judgment, the tax, accounting or
other effects of the continuance of the Plan, or potential payments thereunder,
would not be in the best interests of the Employers.

             (a) Partial Termination. The Board may partially terminate the Plan
         by instructing the Retirement Committee not to accept any additional
         Deferral Commitments. If such a partial termination occurs, the Plan
         shall continue to operate and be effective with regard to Deferral
         Commitments entered into prior to the effective date of such partial
         termination.

             (b) Complete Termination. The Board may completely terminate the
         Plan by instructing the Retirement Committee not to accept any
         additional Deferral Commitments, and by terminating all ongoing
         Deferral Commitments. If such a complete termination occurs, the Plan
         shall cease to operate and the Employers shall pay out each Account.
         Payment shall be made in equal monthly installments over the following
         period, based on the Account balance:
<TABLE>
<CAPTION>
ACCOUNT BALANCE                         PAYOUT PERIOD
---------------                         -------------
<S>                                     <C>
Less than $50,000                       Lump Sum
$50,000 but less than                   3 Years
$100,000                                5 Years
More than $100,000
</TABLE>

                                       20
<PAGE>

Payments shall commence within sixty-five (65) days after the Board terminates
the Plan and earnings shall continue to be credited on the unpaid Account
balance.

                                  ARTICLE XII

                                  MISCELLANEOUS

         12.1 UNFUNDED PLAN. This Plan is an unfunded plan maintained primarily
to provide deferred Compensation benefits for a select group of "management or
highly-compensated employees" within the meaning of Sections 201, 301 and 401 of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

         12.2 COMPANY AND EMPLOYER OBLIGATIONS. The obligation to make benefit
payments to any Participant under the Plan shall be a joint and several
liability of the Company and the Employer that employed the Participant.

         12.3 UNSECURED GENERAL CREDITOR. Participants and Beneficiaries shall
be unsecured general creditors, with no secured or preferential right to any
assets of the Employer or any other party for payment of benefits under this
Plan. Any life insurance policies, annuity contracts or other property purchased
by the Employer in connection with this Plan shall remain its general, unpledged
and unrestricted assets. The Employer's obligation under the Plan shall be an
unfunded and unsecured promise to pay money in the future.

         12.4 TRUST FUND. Subject to Section 12.3, the Company shall establish
separate subtrusts for deferrals by employees of each Employer, pursuant to a
trust agreement entered into with such trustees as the Board may approve, for
the purpose of providing for the payment of benefits owed under the Plan. At its
discretion, each Employer may contribute deferrals under this Plan for its
employees to the subtrust established with respect to such Employer under such


                                       21
<PAGE>
trust agreement. To the extent any benefits provided under the Plan are paid
from any such subtrust, the Employer shall have no further obligation to pay
them. If not paid from a subtrust, such benefits shall remain the obligation of
the Employer. Although such subtrusts may be irrevocable, their assets shall be
held for payment of all the Company's general creditors in the event of
insolvency or bankruptcy.

         12.5 NONASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage,
or otherwise encumber, transfer, hypothecate, or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof or rights
to, which are expressly declared to be unassignable and nontransferable. No part
of the amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony, or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency.

         12.6 NOT A CONTRACT OF EMPLOYMENT. This Plan shall not constitute a
contract of employment between an Employer and the Participant. Nothing in this
Plan shall give a Participant the right to be retained in the service of an
Employer or to interfere with the right of an Employer to discipline or
discharge a Participant at any time.

         12.7 PROTECTIVE PROVISIONS. A Participant will cooperate with his
Employer by furnishing any and all information requested by the Employer in
order to facilitate the payment of benefits hereunder, and by taking such
physical examinations as the Employer may deem necessary and taking such other
action as may be requested by the Employer.

         12.8 GOVERNING LAW. The provisions of the Plan shall be construed and
interpreted according to the laws of the State of Indiana, except as preempted
by federal law.

                                       22
<PAGE>

         12.9 VALIDITY. In case any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but the Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.

         12.10 NOTICE. Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or certified
mail. Such notice shall be deemed as given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Mailed notice to the Retirement Committee
shall be directed to the Company's address. Mailed notice to a Participant or
Beneficiary shall be directed to the individual's last known address in the
applicable Employer's records.

         12.11 SUCCESSORS. The provisions of the Plan shall bind and inure to
the benefit of the Employers and their successors and assigns. The term
successors as used herein shall include any corporate or other business entity
which shall, whether by merger, consolidation, purchase, or otherwise, acquire
all or substantially all of the business and assets of an Employer, and
successors of any such corporation or other business entity.

         12.12 TAX SAVINGS CLAUSE. Notwithstanding anything to the contrary
contained in the Plan, (a) in the event that the Internal Revenue Service
prevails in its claim that amounts contributed to the Plan for the benefit of a
Participant, and/or earnings thereon, constitute taxable income to the
Participant or his Beneficiary for any taxable year, prior to the taxable year
in which such contributions and/or earnings are distributed to him, or (b) in
the event that legal counsel satisfactory to the Company and the applicable
Participant or his Beneficiary renders an opinion that the Internal Revenue
Service would likely prevail in such a claim, the assets in the Plan, to the
extent constituting taxable income, shall be immediately distributed to the
Participant or his Beneficiary. For purposes of this Section, the Internal
Revenue Service shall be deemed to have prevailed in a claim if such claim is
upheld by a court of final jurisdiction, or, if based upon an opinion of legal
counsel satisfactory to the Company and the Participant


                                       23
<PAGE>
or his Beneficiary, the Plan fails to appeal a decision of the Internal Revenue
Service, or a court of applicable jurisdiction, with respect to such claim to an
appropriate Internal Revenue Service appeals authority or to a court of higher
jurisdiction within the appropriate time period.

         IN WITNESS WHEREOF, the Company has caused the Plan to be executed in
its name by its duly authorized officer this 26th day of January, 2001,
effective as of the 26th day of January, 2001.



                                              NISOURCE INC.



                                              By: /s/ Gary L. Neale
                                                 -------------------------------


                                       24
<PAGE>
                                    EXHIBIT A

                               INVESTMENT OPTIONS

Oppenheimer Money Fund
MML Managed Bond Fund
MML Equity Index Fund
Oppenheimer Capital Appreciation / VA
Oppenheimer Main Street Growth & Income Fund / VA
Goldman Sachs VIT Capital Growth Fund
Oppenheimer Small Cap Growth Fund / VA
Goldman Sachs VIT International Equity Fund

Special Investment Option: Moody's Corporate Bond Average + 1% (available only
for current balances and new deferrals of those individuals who were
participants in the Bay State Plan or the NiSouce Plan on October 31, 2000, and
who became Participants in this Plan on November 1, 2000.)