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                                                                    EXHIBIT 10.2

                                  NISOURCE INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                            EFFECTIVE JANUARY 1, 2004

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                                TABLE OF CONTENTS

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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      Code..........................................................................................    2
         2.4      Committee.....................................................................................    2
         2.5      Company.......................................................................................    2
         2.6      Compensation..................................................................................    2
         2.7      Deferral Commitment...........................................................................    2
         2.8      Deferral Period...............................................................................    2
         2.9      Determination Date............................................................................    2
         2.10     Discretionary Contribution....................................................................    2
         2.11     Election Form.................................................................................    3
         2.12     Employer......................................................................................    3
         2.13     Participant...................................................................................    3
         2.14     Plan..........................................................................................    3
         2.15     Retirement Committee..........................................................................    3
         2.16     Severe Financial Hardship.....................................................................    3
         2.17     Gender and Number.............................................................................    3

ARTICLE III           MERGER OF NISOURCE PLAN AND OTHER PLANS...................................................    4

         3.1      Bay State Plan................................................................................    4
         3.2      Columbia Plan.................................................................................    4

ARTICLE IV            PARTICIPATION AND DEFERRAL COMMITMENTS....................................................    4

         4.1      Eligibility and Participation.................................................................    4
         4.2      Form and Amount of Deferral...................................................................    5
         4.3      Deferral Options..............................................................................    6
         4.4      Modification of Deferral Commitment...........................................................    6
         4.5      Change in Employment Status...................................................................    6

ARTICLE V             DEFERRED COMPENSATION ACCOUNT.............................................................    6

         5.1      Account.......................................................................................    6
         5.2      Timing of Credits; Withholding................................................................    6
         5.3      Discretionary Contributions...................................................................    7
         5.4      Determination of Account......................................................................    7
         5.5      Vesting of Account............................................................................    7
         5.6      Statement of Account..........................................................................    8

ARTICLE VI            INVESTMENTS...............................................................................    8

         6.1      Investment Options............................................................................    8
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                                TABLE OF CONTENTS

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         6.2      Special Investment Option for Former Participants in the Bay State Plan and
                  Participants in the Plan......................................................................    8
         6.3      Special Investment Option for Former Participants in the Columbia Plan........................    9

ARTICLE VII           PLAN BENEFITS.............................................................................   10

         7.1      Distributions Prior to Termination of Employment..............................................   10
         7.2      Distributions Following Termination of Employment.............................................   11
         7.3      Form of Benefit Payment.......................................................................   11
         7.4      Valuation and Settlement......................................................................   12
         7.5      Modification of Distribution..................................................................   13
         7.6      Distribution Provisions Applicable to a Transferred Bay State Account.........................   13
         7.7      Withholding for Taxes.........................................................................   14
         7.8      Payment to Guardian...........................................................................   14

ARTICLE VIII          BENEFICIARY DESIGNATION...................................................................   15

         8.1      Beneficiary Designation.......................................................................   15
         8.2      Changing Beneficiary..........................................................................   15
         8.3      Community Property............................................................................   15
         8.4      No Beneficiary Designation....................................................................   16

ARTICLE IX            ADMINISTRATION............................................................................   17

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

ARTICLE X             CLAIMS PROCEDURE..........................................................................   18

         10.1     Claim.........................................................................................   18
         10.2     Review of Claim...............................................................................   18
         10.3     Notice of Denial of Claim.....................................................................   18
         10.4     Reconsideration of Denied Claim...............................................................   19
         10.5     Employer to Supply Information................................................................   20

ARTICLE XI            AMENDMENT AND TERMINATION OF PLAN.........................................................   20

         11.1     Amendment.....................................................................................   20
         11.2     Employer's Right to Terminate.................................................................   21

ARTICLE XII           MISCELLANEOUS.............................................................................   22

         12.1     Unfunded Plan.................................................................................   22
         12.2     Company and Employer Obligations..............................................................   22
         12.3     Unsecured General Creditor....................................................................   22
         12.4     Trust Fund....................................................................................   22
         12.5     Nonassignability..............................................................................   23
         12.6     Not a Contract of Employment..................................................................   23
         12.7     Protective Provisions.........................................................................   24
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                                TABLE OF CONTENTS

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         12.8     Governing Law.................................................................................   24
         12.9     Validity......................................................................................   24
         12.10    Notice........................................................................................   24
         12.11    Successors....................................................................................   24
         12.12    Tax Savings Clause............................................................................   25

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                                  NISOURCE INC.

                      EXECUTIVE DEFERRED COMPENSATION PLAN

                                    ARTICLE I

                             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") was merged into the NIPSCO Industries, Inc. Executive Deferred
Compensation Plan (the "NIPSCO Plan"), and the NIPSCO Plan was renamed the
NiSource Inc. Executive Deferred Compensation Plan (the "Plan"). Effective
January 1, 2004, the Columbia Energy Group Deferred Compensation Plan (the
"Columbia Plan") shall be merged into the Plan.

         1.2      EFFECTIVE DATE. The Plan is effective as of January 1, 2004.

                                   ARTICLE II

                                   DEFINITIONS

         For the purposes of the 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

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Bay State Account containing any amount transferred from the Bay State Plan or a
Transferred Columbia Account containing any amount transferred from the Columbia
Plan.

         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      CODE. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.

         2.4      COMMITTEE. "Committee" means the Nominating and Compensation
Committee of the Board of Directors of the Company.

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

         2.6      COMPENSATION. "Compensation" means base salary and incentive
awards paid 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. Compensation does not include lump severance payments
or lump sum vacation payout.

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

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

         2.9      DETERMINATION DATE. "Determination Date" means each business
day.

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

                                        2
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         2.11     ELECTION FORM. "Election Form" 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.

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

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

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

         2.15     RETIREMENT COMMITTEE. "Retirement Committee" means a committee
consisting of the Executive Vice President, Human Resources and Communications
and the Vice President, Total Rewards of the Company.

         2.16     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.

         2.17     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.

                                        3
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                                   ARTICLE III

                     MERGER OF NISOURCE PLAN AND OTHER PLANS

         3.1      BAY STATE PLAN. As of November 1, 2000, the Bay State Plan was
merged into the Plan. The balance of the account of each Bay State Plan
participant, determined as of November 1, 2000, was transferred to the Plan and
became the initial balance in such Participant's 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.

         3.2      COLUMBIA PLAN. As of January 1, 2004, the Columbia Plan was
merged into the Plan. The balance of the account of each Columbia Plan
participant, determined as of December 31, 2003, was transferred to the Plan and
became the initial balance in such Participant's Transferred Columbia Account in
the Plan. A Participant's Transferred Columbia 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 who was eligible to participate in
     the Bay State Plan or the NIPSCO Plan as of October 31, 2000 remained
     eligible to participate in the Plan as of November 1, 2000. Any employee
     eligible to participate in the Columbia Plan or the Plan as of December 31,
     2003 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) an employee in job scope
     level D2 or above, and (2) any other key employee of an Employer who is
     designated from time to time by the Committee.

                                        4
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         (b)      Participation. An eligible individual may elect to become a
     Participant in the Plan with respect to any Deferral Period by submitting
     an Election Form to the Retirement Committee during the annual enrollment
     period, established by the Retirement Committee, last 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, an Election Form
     may be submitted to the Retirement Committee within thirty (30) days after
     the Retirement Committee notifies the individual of eligibility to
     participate. Such Election Form shall be effective beginning with regard to
     Compensation payable in the next payroll period or as soon as practicable
     following submission of such Election Form to the Retirement Committee.

         4.2      FORM AND AMOUNT OF DEFERRAL. A Participant may elect Deferral
Commitments in the Election Form 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 that Deferral Period. The amount to be deferred
     shall be stated as a whole percentage of base salary from 5% to 80%.

         (b)      Incentive Award Deferral Commitment. An incentive award
     Deferral Commitment for a Deferral Period shall be related to the incentive
     award payable to the Participant in that Deferral Period. The amount to be
     deferred shall be stated as a whole percentage of the incentive award from
     5% to 100%.

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

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         4.3      DEFERRAL OPTIONS. A Participant shall make an election in his
Election Form 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 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.

         4.4      MODIFICATION OF DEFERRAL COMMITMENT. Except as provided in
Sections 7.1(a) and 7.5 below, Deferral Commitments shall be irrevocable.

         4.5      CHANGE IN EMPLOYMENT STATUS. If the Committee 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 such Participant for any Deferral Period beginning after notice of such
determination is given by the Committee.

                                    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.

                                        6
<PAGE>

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
Committee 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:

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

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

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

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

                                        7
<PAGE>

                  (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 the Plan, and earnings thereon.

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

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

         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 other times as may be determined by the Retirement
Committee.

                                   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 or available pursuant to Sections 6.2
and 6.3. 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 election shall continue to apply to
subsequent Deferral Commitments made by the Participant until changed by the
Participant.

         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 became Participants in the Plan, or Participants in the Plan, on
November 1, 2000, shall have an additional special

                                        8
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investment option applicable solely to their Transferred Bay State Account
balances, or their Account balances in the Plan, valued as of November 1, 2000,
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 November 1, 2000, 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 Committee. A
Participant's Transferred Bay State Account balance, or his Account balance in
the Plan on November 1, 2000, shall be invested pursuant to this special
investment option from and after November 1, 2000 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 November 1, 2000. 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 the investment option described in this Section 6.2 to another investment
option may not be reinvested under this Section 6.2.

         6.3      SPECIAL INVESTMENT OPTION FOR FORMER PARTICIPANTS IN THE
COLUMBIA PLAN. Former participants in the Columbia Plan who become Participants
in the Plan on January 1, 2004 shall have an additional special investment
option applicable solely to their Transferred Columbia Account balances, valued
as of January 1, 2004. Such Participants may invest all or any portion of their
Transferred Columbia Account balances in a subaccount which shall be

                                        9
<PAGE>

credited each day with earnings equal to the prime rate of interest in effect as
of such business day, as listed in The Wall Street Journal. All or the
designated portion of a Participant's Transferred Columbia Account balance shall
be invested pursuant to this special investment option from and after January 1,
2004 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
Columbia Account. Any portion of a Transferred Columbia Account subsequently
transferred from the investment option described in this Section 6.3 to another
investment option may not be reinvested under the investment option described in
this Section 6.3. Amounts contributed to any such Participant's Account on or
after January 1, 2004 shall not be eligible for the investment option described
in this Section 6.3.

                                   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 Distributions. 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
         Transferred Columbia Account, if applicable) or allow a Participant to
         suspend entirely his Deferral Commitment. The amount of such a
         distribution shall be limited to the amount reasonably necessary to
         meet the Participant's needs resulting from the Severe Financial
         Hardship. Any distribution pursuant to this 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.

                                       10
<PAGE>

                  (b)      Deferral to Designated Year. The Employer shall pay
         the Participant an amount of a Deferral Commitment and earnings thereon
         not paid pursuant to Section 7.1(a) in the year designated by the
         Participant in such Deferral Commitment. Such amount shall be payable
         in the manner provided in Sections 7.3 and 7.6 and at the time provided
         in Section 7.4.

         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 in the Participant's Account. Such
amount shall be payable in the manner provided in Sections 7.3 and 7.6 and at
the time provided in Section 7.4.

         7.3      FORM OF BENEFIT PAYMENT.

                  (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 (1) in the year designated by the Participant in such
         Deferral Commitment, or (2) following termination of employment, as
         applicable, to the Participant (or to his Beneficiary in the case of
         his death) in the form selected by the Participant in his Election Form
         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 at the
         time distribution begins, or following a distribution pursuant to
         subsection (a)(ii) above, is fifteen thousand

                                       11
<PAGE>

         dollars ($15,000) or less, that balance shall be paid to the
         Participant or his Beneficiary in a lump sum on the next annual
         installment distribution date notwithstanding any form of benefit
         payment elected by the Participant.

         7.4      VALUATION AND SETTLEMENT.

                  (a)      Lump Sum in Designated Year. The amount of a lump sum
         payment in a designated year pursuant to Section 7.1(b) shall be based
         on the value of the Participant's Account, or a Deferral Commitment and
         earnings thereon, as of the March 15th of such designated year. The
         distribution date shall be March 31st of such year or as soon as
         practicable thereafter.

                  (b)      Lump Sum Following Termination. The amount of a lump
         sum payment following termination of employment pursuant to Section 7.2
         shall be based on the value of the Participant's Account, or a Deferral
         Commitment and earnings thereon, on the date of termination. The
         distribution date shall be as soon as practicable after the
         Participant's date of termination of employment.

                  (c)      Installments. The amount of an installment payment,
         pursuant to Section 7.1(b) or 7.2, shall be based on the value of the
         Participant's Account, or a Deferral Commitment and earnings thereon,
         as of the March 15th preceding distribution of each such installment.
         The distribution date shall be each subsequent March 31st or as soon as
         practicable thereafter.

         7.5      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

                                       12
<PAGE>

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 shall be ineffective, unless (1) the
modification election is filed with the Retirement Committee more than twelve
(12) months prior to the time of commencement of payment, or (2) a Participant
elects by written instrument delivered to the Company prior to the time of
commencement of payment to have his Account or the applicable Deferral
Commitment reduced by 10%. This reduction shall 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 period set forth in clause (1) above and
prevent him from being deemed in constructive receipt of his Account prior to
its actual payment to him.

         7.6      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 November 1, 2000. If no form is selected by the
         Participant, payment shall be made in a lump sum. The provisions of
         Sections 7.3 and 7.5 shall apply with respect to the election of the
         form of payment of a Transferred Bay State Account and the modification
         of such election.

                                       13
<PAGE>

                  (b)      Any former employee of Bay State Gas Company who (1)
         was a participant in the Bay State Plan immediately prior to November
         1, 2000, (2) terminated employment with Bay State Gas Company prior to
         November 1, 2000 for any reason other than Retirement, death or
         Disability (as such terms were defined in the Bay State Plan
         immediately prior to November 1, 2000), and (3) as of November 1, 2000
         had not commenced payment of his Account, shall not commence payment of
         his Transferred Bay 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.

         7.7      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 Code Section 3405(a)(2).

         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 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

                                       14
<PAGE>

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.

                                       15
<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, unless the designation is
         reaffirmed when the Participant is unmarried.

                                    (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:

                                       16
<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 the
Retirement Committee. 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.
Members of the Retirement Committee may be Participants under the Plan.

         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.

         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

                                       17
<PAGE>

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 filing claims for
benefits, and for furnishing and verifying proof 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 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

                                       18
<PAGE>

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 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

                                       19
<PAGE>

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

                                       20
<PAGE>

         11.2     EMPLOYER'S RIGHT TO TERMINATE. The Committee 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 Committee 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 Committee 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 $100,000               3 Years
More than $100,000                           5 Years
</TABLE>

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

                                       21
<PAGE>

                                   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 the
Plan. Any life insurance policies, annuity contracts or other property purchased
by the Employer in connection with the 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 may establish
separate subtrusts for deferrals by employees of each Employer, pursuant to a
trust agreement entered into with such trustees as the Committee 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 the Plan for its
employees to the subtrust established with respect to such Employer under such
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,

                                       22
<PAGE>

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.

         Notwithstanding the preceding paragraph, the Account of any Participant
shall be subject to and payable in the amount determined in accordance with any
qualified domestic relations order, as that term is defined in Section 206(d)(3)
of the Employee Retirement Income Security Act of 1974, as amended. The
Retirement Committee shall provide for payment in a lump sum from a
Participant's Account to an alternate payee (as defined in Code Section
414(p)(8)) as soon as administratively practicable following receipt of such
order. Any federal, state or local income tax associated with such payment shall
be the responsibility of the alternate payee. The balance of an Account that is
subject to any qualified domestic relations order shall be reduced by the amount
of any payment made pursuant to such order.

         12.6     NOT A CONTRACT OF EMPLOYMENT. The Plan shall not constitute a
contract of employment between an Employer and the Participant. Nothing in the
Plan shall give a

                                       23
<PAGE>

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 shall 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.

         12.9     VALIDITY. In case any provision of the 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,

                                       24
<PAGE>

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, (1) 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 (2) 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 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 23rd day of January, 2003,
effective as of the 1st day of January, 2004.

                                                     NISOURCE INC.

                                                     By: /s/ Gary L. Neale

                                       25
<PAGE>

                                    EXHIBIT A

                               INVESTMENT OPTIONS

<TABLE>
<CAPTION>
                                     FIDELITY BASED FUNDS
                                     --------------------
<S>                                  <C>                                        <C>
Contra Fund                          Equity Income Fund                         Growth & Income Fund
Growth Company Fund                  Magellan Fund                              Small Cap Independence Fund
Europe Fund                          Overseas Fund                              Pacific Basin Fund
Freedom 2010 Fund                    Freedom 2020 Fund                          Freedom 2030 Fund
Freedom 2040 Fund                    Freedom Income Fund                        Balanced Fund
Puritan Fund                         Intermediate Bond Fund                     Spartan U.S. Equity Index Fund
</TABLE>

                                     NON FIDELITY FUNDS
                                     ------------------
                               American Funds EuroPacific Growth Fund
                               Dreyfus Emerging Leaders Fund
                               Janus Small Cap Value Inst. Fund
                               Morgan Stanley IFT U.S. Small Cap Core Fund
                               PIMCO Long Term Gov't Fund
                               PIMCO Low Duration Fund
                               PIMCO Total Return Fund Inst.
                               PIMCO StocksPLUS Fund Inst.
                               Vanguard U.S. Growth Fund
                               Money Market Fund

                                       A-1