Document:

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                                                                    Exhibit 10.2

                                  NISOURCE INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                           EFFECTIVE NOVEMBER 1, 2000
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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      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
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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
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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
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EXHIBIT A - Investment Options

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                                  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.
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         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.

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         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

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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

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         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

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         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

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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:

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             (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.

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                                   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

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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

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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

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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

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         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

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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.

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             (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:

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             (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.)<PAGE>
                                                                    Exhibit 10.3

                              COLUMBIA ENERGY GROUP
                           DEFERRED COMPENSATION PLAN
                      (Amended and Effective July 1, 1998)
<PAGE>
                              COLUMBIA ENERGY GROUP
                           DEFERRED COMPENSATION PLAN

<TABLE>
<CAPTION>
<S>                                                                          <C>
 ARTICLE I INTRODUCTION ....................................................   1
      1.1. Name ............................................................   1
      1.2. Effective Date ..................................................   1
      1.3. Employers .......................................................   1
      1.4. Purpose .........................................................   1

ARTICLE II DEFINITIONS .....................................................   2
      2.1. "Administrator" .................................................   2
      2.2. "Beneficiary" ...................................................   2
      2.3. "Board" .........................................................   2
      2.4. "Committee" .....................................................   2
      2.5. "Compensation" ..................................................   2
      2.6. "Deferred Compensation" .........................................   2
      2.7. "Deferred Compensation Account" .................................   2
      2.8. "Deferred Compensation Election Form" ...........................   3
      2.9. "Eligible Employee" .............................................   3
     2.10. "Participant" ...................................................   3
     2.11. "Plan" ..........................................................   3
     2.12. "Plan Year" .....................................................   3

ARTICLE III PARTICIPATION BY ELIGIBLE EMPLOYEES ............................   4
      3.1. Participation ...................................................   4
      3.2. Failure to Designate ............................................   4
      3.3. Continuity of Participation .....................................   4
      3.4. Immediate Cash-Out of Ineligible Employee .......................   4
      3.5. Protection of Employees Thrift Plan Contributions ...............   5

ARTICLE IV INCENTIVE AWARD AND BASE SALARY DEFERRALS .......................   6
      4.1. Annual Incentive Award Deferral Election ........................   6
      4.2. Deferral of Base Salary .........................................   6
      4.3. Period for Which Deferral Election is Effective .................   7

 ARTICLE V DISTRIBUTIONS ...................................................   8
      5.1. Election of Distribution Date ...................................   8
      5.2. Method of Payment ...............................................   8
      5.3. Special Election for Early Distribution .........................   8
      5.4. Unforeseeable Emergency .........................................   9
      5.5. Distributions on Death ..........................................   9
</TABLE>

                                       (i)
<PAGE>
<TABLE>
<S>                                                                          <C>
        5.6. Valuation of distributions ...................................   10

ARTICLE VI ACCOUNTS .......................................................   11
        6.1. Deferred Compensation Account ................................   11
        6.2. Crediting of Interest and Statement of Account ...............   11
        6.3. Investment to Facilitate Payment of Benefits .................   11

ARTICLE VII FUNDING AND PARTICIPANT'S INTEREST ............................   12
        7.1. Deferred Compensation Plan Unfunded ..........................   12
        7.2. Participant's Interest in Plan ...............................   12

ARTICLE VIII ADMINISTRATION AND INTERPRETATION ............................   13
        8.1. Administration ...............................................   13
        8.2. Interpretation ...............................................   13
        8.3. Records and Reports ..........................................   14
        8.4. Payment of Expenses ..........................................   14
        8.5. Indemnification for Liability ................................   14
        8.6. Claims Procedure .............................................   15
        8.7. Review Procedure .............................................   15

ARTICLE IX AMENDMENT AND TERMINATION ......................................   16
        9.1. Amendment and Termination ....................................   16

ARTICLE X MISCELLANEOUS PROVISIONS ........................................   17
       10.1. Right of Employers to Take Employment Actions ................   17
       10.2. Alienation or Assignment of Benefits .........................   17
       10.3. Right to Withhold ............................................   17
       10.4. Construction .................................................   18
       10.5. Headings .....................................................   18
       10.6. Number and Gender ............................................   18
</TABLE>

                                      (ii)
<PAGE>
                              COLUMBIA ENERGY GROUP
                           DEFERRED COMPENSATION PLAN

                                    ARTICLE I
                                  INTRODUCTION

            1.1.  Name. The name of this Plan is the Columbia Energy Group
Deferred Compensation Plan ("Deferred Compensation Plan").

            1.2.  Effective Date. This Plan was established effective March 1,
1997. The Plan was amended and restated effective July 1, 1998.

            1.3.  Employers. Columbia Energy Group ("Columbia") and each
subsidiary or affiliate of Columbia that employs one or more Eligible Employees
who have become Participants in accordance with Article III, shall each be an
"Employer" under this Deferred Compensation Plan.

            1.4.  Purpose. This Deferred Compensation Plan was established,
effective March 1, 1997, by Columbia for the purposes of providing deferred
compensation benefits for a select group of management and/or highly compensated
employees of the Employer.

            This Deferred Compensation Plan provides a means whereby Eligible
Employees may defer all or a portion of their incentive awards they otherwise
would receive under the Columbia Energy Group Annual Incentive Compensation Plan
6r the Columbia Energy Group Value Sharing Rights Plan for services performed
for the Employer. It will also be the means whereby Eligible Employees may defer
a portion of their annual base salary, whether or not they defer all or a
portion of their incentive award.

            All deferrals under this Plan shall be in the form of unfunded
recordkeeping entries which shall be increased by the rate of interest specified
in the Plan.

                                        1
<PAGE>
                                   ARTICLE II
                                   DEFINITIONS

             Whenever the following initially capitalized words and phrases are
used in this Deferred Compensation Plan, they shall have the meanings specified
below unless the context clearly indicates to the contrary:

            2.1.  "Administrator" shall mean the senior Human Resources officer
of Columbia, or his delegate.

            2.2.  "Beneficiary" shall mean such person or legal entity as may be
designated by a Participant under Section 5.5 to receive benefits hereunder
after such Participant's death.

            2.3.  "Board" shall mean the Board of Directors of Columbia, as
constituted from time to time.

            2.4.  "Committee" shall mean the Compensation Committee of the
Board.

            2.5.  "Compensation" shall mean the base salary plus the incentive
award payable to a Participant for a Plan Year under Columbia's Annual Incentive
Compensation Plan or the Columbia Value Sharing Rights Plan before any reduction
to such base salary or incentive award is effected in accordance with the
Deferred Compensation Election Form.

            2.6.  "Deferred Compensation" shall mean that portion of the
Participant's Compensation which the Participant elects to defer pursuant to
Sections 4.1 or 4.2 of this Deferred Compensation Plan in accordance with a
Deferred Compensation Election Form.

            2.7.  "Deferred Compensation Account" shall mean the record keeping
account established by the Administrator for each Participant to which the
portion of a Participant's annual incentive award and/or base salary that is
voluntarily deferred pursuant to Sections 4.1 or 4.2 is credited, as well as
interest pursuant to Section 6.2, and from which distributions to the
Participant or to his Beneficiary are debited. A Participant shall at all times
be fully vested in the balance of his Deferred Compensation Account.

                                        2
<PAGE>
            2.8.  "Deferred Compensation Election Form" shall mean a document or
form (or documents or forms) as made available from time to time by the
Administrator, whereby an Eligible Employee enrolls as a Participant and elects
to defer Compensation pursuant to Article IV of this Deferred Compensation Plan.

            2.9.  "Eligible Employee" shall mean an individual employed by the
Employer who is a member of a select group of management and/or highly
compensated employees participating in Columbia's Annual Incentive Compensation
Plan and/or the Columbia Value Sharing Rights Plan as designated by the
Committee in its sole discretion to be eligible to participate hereunder.

            2.10. "Participant" shall mean an individual who has amounts
standing to his credit under this Deferred Compensation Plan, regardless of
whether the individual is actively employed by Columbia or currently deferring
into this Plan.

            2.11. "Plan" shall mean the Columbia Energy Group Deferred
Compensation Plan.

            2.12. "Plan Year" shall mean Columbia's fiscal reporting year.

                                        3
<PAGE>
                                   ARTICLE III
                       PARTICIPATION BY ELIGIBLE EMPLOYEES

            3.1.  Participation. Participation in this Plan is limited to
Eligible Employees.

            3.2.  Failure to Designate. In the event that the Committee fails to
designate the group of Eligible Employees who shall be eligible to participate
for any year, each Eligible Employee who was designated in the prior year shall
be deemed to have been designated for the next succeeding Plan Year, provided
that any such employee shall participate for purposes of the next succeeding
Plan Year only if he or she is actively employed by an Employer on the first day
of such succeeding Plan Year and provided he or she is an Eligible Employee for
such year.

            3.3.  Continuity of Participation. A Participant who separates from
service with all of the Employers will cease active participation hereunder.
However, the separation from service of an Eligible Employee with one Employer
will not interrupt the continuity of his or her active participation if,
concurrently with or immediately after such separation, he or she is employed by
one or more of the other Employers.

            3.4.  Immediate Cash-Out of Ineligible Employee. This Deferred
Compensation Plan is intended to be an unfunded "top-hat" plan, maintained
primarily for the purposes of providing deferred compensation for a select group
of management or highly compensated employees. Accordingly, if the Committee
determines that any Participant does not qualify as a member of the select
group, one hundred percent (100%) of such Participant's Deferred Compensation
Account shall be payable to the Participant immediately, subject to amounts
withheld or deducted pursuant to Section 10.3. Notwithstanding the preceding
sentence, if a Participant was an Eligible Employee, but ceases to be an
Eligible Employee, the Participant's account balance shall continue to be
deferred until the date specified in the applicable Deferred Compensation
Election Form unless continued deferral jeopardizes the "top-hat" status of the
Plan in the Committee's sole discretion. In such event, one hundred percent
(100%) of such Participant's Deferred Compensation Account shall be paid to the
participant immediately, subject to amounts withheld or deducted pursuant to
Section 10.3.

                                        4
<PAGE>
            3.5.  Protection of Employees' Thrift Plan Contributions. In the
event the Administrator determines that the amount of base salary deferrals
under this Deferred Compensation Plan adversely impacts nondiscrimination
testing results under the Employees' Thrift Plan of Columbia Energy Group, the
Administrator may suspend, revoke or return any base salary deferrals for a
calendar year made by Eligible Employees in order to reduce or eliminate such
adverse impact in accordance with guidelines established by the Committee.

                                        5
<PAGE>
                                   ARTICLE IV
                    INCENTIVE AWARD AND BASE SALARY DEFERRALS

            4.1.  Incentive Award Deferral Election. Each Eligible Employee may
irrevocably elect no later than the first day of October in the calendar year
preceding the year in which an award under the Columbia Annual Incentive
Compensation Plan or Value Sharing Rights Plan is paid or granted to defer
receipt of any portion of his or her award for that Plan Year, in accordance
with guidelines established by the Administrator, by completing and executing a
Deferred Compensation Election Form and filing it with the Administrator. In the
event the award is measured on a period other than the calendar year, an
irrevocable election to defer a portion of the Eligible Employee's award will be
required to be made no later than ninety (90) days prior to the end of the
performance measurement period in which the award is earned or payable. For
incentive awards which are measured on a basis other than a period of time, each
Eligible Employee may irrevocably elect to defer any portion of such award by
completing and executing a Deferred Compensation Election Form and filing it
with the Administrator no later than the first day of October in the year prior
to the calendar year in which such bonus is earned. In the event that a change
is made during a Plan Year in the timing or performance measurement period of an
award for that Plan Year, then each Eligible Employee eligible to earn such an
award a may elect to make or change a deferral election applicable to the change
within sixty (60) days of the change, provided that such election shall be made
at least thirty (30) days before the event or date giving rise to the award.

            4.2.  Deferral of Base Salary. An Eligible Employee may elect to
defer up to twenty-five percent (25%) of his or her future base salary, in
accordance with guidelines established by the Administrator, by completing and
executing a Deferred Compensation Election Form which specifies the amount of
base salary to be deferred and filing it with the Administrator. No more than
two elections (including modifications and revocations) may be made in any
calendar year. Any election, modification or revocation shall be effective only
for base salary payable at least 30 days after the Deferred Compensation
Election Form is received by the Administrator. No election, modification or
revocation is permissible with respect to base salary paid prior to the
execution of a Deferred Compensation Election Form.

                                        6
<PAGE>
            4.3.  Period for Which Deferral Election is Effective. A
Participant's deferral election under Section 4.1 with respect to incentive
awards payable from the Columbia Annual Incentive Compensation Plan or the
Columbia Value Sharing Rights Plan shall be effective only for the Plan Year
specified in the Deferred Compensation Election Form. A Participant must file a
separate Deferred Compensation Election Form by the date specified in Section
4.1 in order to make award deferrals for that Plan Year. A Participant's
election to defer base salary shall remain in effect until modified or revoked
as provided in Section 4.2.

                                        7
<PAGE>
                                    ARTICLE V

                                  DISTRIBUTIONS

      5.1.  Election of Distribution Date. At the time a Participant makes an
election to defer Compensation under Article IV, such Participant shall also
apply to the Administrator in writing on the Deferred Compensation Election
Form, as applicable, as to the form of payment as well as the date or event on
which the cash payment of the Participant's Deferred Compensation Account is to
be made. Such date may be any of the following:

            (a)   with respect to deferred portions of the incentive awards,
within ten (10) business days after the fourth January 1st immediately following
the date on which the incentive award would have been payable but for the
election to defer under this Plan (notwithstanding the foregoing, if earlier,
upon termination of employment for any reason, payment of such Participant's
deferred incentive award shall commence within fifteen (15) days after the end
of the month in which the event occurs, subject to amounts withheld or deducted
pursuant to Section 10.3); or

            (b)   with respect to the deferred portion of base salary or the
incentive award, upon termination of employment for any reason, and payment
shall be in the form of a lump sum to be payable within fifteen (15) days after
the end of the month in which the event occurs, or annual installment r
payments, commencing within ten (10) days after the first January 1st
immediately following the event of termination.

      5.2.  Method of Payment. All distributions under this Plan may be paid in
cash in the form of a lump sum or, as applicable pursuant to Section 5.1, annual
installment payments for a period of five years, but in any event the Method of
Payment is at the sole discretion of the Administrator at the time an election
is made, and notwithstanding that a Participant may apply for a particular
method of payment, such application must be accepted and approved by the
Administrator to be effective.

      5.3.  Special Election for Early Distribution. A Participant may apply to
the Administrator for early distribution of all or any part of his or her
Deferred Compensation Account, excluding any amounts attributable to deferrals
that have not been credited to the account for the minimum period of deferral.
Such early distribution shall be made in a single

                                        8
<PAGE>
lump sum and in cash, provided that ten percent (10%) of the amount withdrawn in
such early distribution shall be forfeited prior to payment of the remainder to
the Participant and subject to further withholdings or deductions pursuant to
Section 10.3.

      5.4.  Unforeseeable Emergency. The Committee shall have the authority to
determine, in its sole discretion, that payments should be made in any manner
the Committee deems appropriate, in whole or in part, on any other date or dates
in order to alleviate a financial hardship of a Participant. "Financial
hardship" shall mean a severe financial hardship resulting from a sudden and
unexpected illness or accident of the Participant, or of a dependent (as defined
in Section 152(a) of the Code) of the Participant, 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. The circumstances that will constitute an unforeseeable emergency
will depend on the facts of each case, but, in any case, payment may not be made
to the extent that such hardship is or may be relieved (i) through reimbursement
or compensation by insurance or otherwise, (ii) by liquidation of the
Participant's assets, to the extent such liquidation would not itself cause
severe financial hardship, and (iii) by cessation of deferrals under this Plan.
Any financial hardship distribution approved by the Committee shall be limited
to the amount necessary to meet the emergency and shall be made solely from the
Participant's Deferred Compensation Account.

      5.5.  Distributions on Death. A Participant may from time to time change a
designated Beneficiary without the consent of such Beneficiary, if consent is
not required by applicable state law or the Administrator, by filing a new
Beneficiary election form with the Administrator. If no Beneficiary designation
is in effect at the time of the Participant's death, or if the designated
Beneficiary is missing or has predeceased the Participant, distribution shall be
made to the Participant's surviving spouse, or if none, to his or her surviving
children per stirpes, and if none, to his or her estate. In the event of a
Participant's death before his or her Deferred Compensation Account has been
distributed, distribution(s) to be paid in annual installments shall be made to
the Beneficiary selected by the Participant, in a single lump sum cash payment
within forty-five (45) days after the date of death or up to one year later at
the discretion of the Administrator (or, if later, after the proper Beneficiary
has been identified).

                                        9
<PAGE>
      5.6.  Valuation of Distributions. All distributions under this Plan shall
be based upon the amount credited to a Participant's Deferred Compensation
Account as of the last business day of the month immediately preceding the date
of the distribution. The amount of installments payable to a Participant
electing such method of payment shall be determined by dividing the amount
credited to the Participant's Deferred Compensation Account by the remaining
number of installments, including the current installment, to be paid. It is
understood that administrative requirements may lead to a delay between such
valuation date and the date of distribution, not to exceed fifteen (15) days.

                                       10
<PAGE>
                                   ARTICLE VI

                                    ACCOUNTS

            6.1.  Deferred Compensation Account. The Administrator shall
establish and maintain, or cause to be established and maintained, a separate
Deferred Compensation Account for each Participant hereunder who executes an
election pursuant to Section 4.1 or Section 4.2. Deferred amounts will be
credited to a Deferred Compensation Account as of the date they would have been
paid but for the deferral. Each such Participant's Compensation deferred
pursuant to a Deferred Compensation Election Form under Section 4.1 or Section
4.2 shall be separately accounted for and credited with interest, for
recordkeeping purposes only, to his Deferred Compensation Account. A
Participant's Deferred Compensation Account shall be solely for the purposes of
measuring the amounts to be paid under the Deferred Compensation Plan. Columbia
shall not be required to fund or secure the Account in any way, Columbia's
obligation to Participants hereunder being purely contractual.

            6.2.  Crediting of Interest and Statement of Account. The
Participant's Deferred Compensation Account shall be credited with interest
monthly. The amount of interest to be credited each month shall be equal to the
prime rate of interest in effect as of the last business day of the preceding
month as listed in The Wall Street Journal. Interest will be credited on a
Deferred Compensation Account on the last day of the month on the balance at the
beginning of the month, less withdrawals made in that month. As soon as
practicable after the end of each Plan Year (and at such additional times as the
Administrator may determine), the Administrator shall furnish each Participant
with a statement of the balance credited to the Participant's Deferred
Compensation Account.

            6.3.  Investment to Facilitate Payment of Benefits. Although neither
the Employers nor Columbia are obligated to invest in any specific asset or fund
or purchase any insurance contract in order to provide the means for the payment
of any liabilities under this Deferred Compensation Plan, the Committee may
elect to do so.

                                       11
<PAGE>
                                   ARTICLE VII

                       FUNDING AND PARTICIPANT'S INTEREST

            7.1.  Deferred Compensation Plan Unfunded. This Deferred
Compensation Plan shall be unfunded and no trust shall be created by the
Deferred Compensation Plan. The crediting to each Participant's Deferred
Compensation Account, as the case may be, shall be made through recordkeeping
entries. No actual funds shall be set aside; provided, however, that nothing
herein shall prevent Columbia or the Employers from establishing one or more
grantor trusts from which benefits due under this Deferred Compensation Plan may
be paid in certain instances. All distributions shall be paid by the Employer
from its general assets and a Participant (or his or her Beneficiary) shall have
the rights of a general, unsecured creditor against the Employer for any
distributions due hereunder. The Deferred Compensation Plan constitutes a mere
promise by the Employer to make payments in the future with respect to amounts
which the Participant deferred while an employee of that Employer.

            7.2.  Participant's Interest in Plan. A Participant has an interest
only in the cash value of the amount credited to his or her account. A
Participant has no rights or interests in any specific funds, stock or
securities.

                                       12
<PAGE>
                                  ARTICLE VIII

                        ADMINISTRATION AND INTERPRETATION

            8.1.  Administration. Except where certain duties are delegated to
the Administrator, the Committee shall be in charge of the overall operation and
administration of this Deferred Compensation Plan. The Committee has, to the
extent appropriate and in addition to the powers described elsewhere in this
Plan, full discretionary authority to construe and interpret the terms and
provisions of the Plan; to adopt, alter and repeal administrative rules,
guidelines and practices governing the Plan; to perform all acts, including the
delegation of its administrative responsibilities to advisors or other persons
who may or may not be employees of the Employers; and to rely upon the
information or opinions of legal counsel or experts selected to render advice
with respect to the Plan, as it shall deem advisable, with respect to the
administration of the Plan.

            8.2.  Interpretation. The Committee may take any action, correct any
defect, supply any omission or reconcile any inconsistency in the Deferred
Compensation Plan, or in any election hereunder, in the manner and to the extent
it shall deem necessary to carry the Deferred Compensation Plan into effect or
to carry out the Board's purposes in adopting the Plan. Any decision,
interpretation or other action made or taken in good faith by or at the
direction of the Employers, the Board, the board of directors of any Employer,
the Committee, or the Administrator arising out of or in connection with the
Deferred Compensation Plan, shall be within the absolute discretion of all and
each of them, as the case may be, and shall be final, binding and conclusive on
the Employers, and all Participants and Beneficiaries and their respective
heirs, executors, administrators, successors and assigns. The Committee's
determinations hereunder need not be uniform, and may be made selectively among
Eligible Employees, whether or not they are similarly situated. Any actions to
be taken by the Committee will require the consent of a majority of the
Committee members present at a meeting at which a quorum is constituted or by
unanimous written consent. If a member of the Committee is a Participant in this
Deferred Compensation Plan, such member may not decide or determine any matter
or question concerning his benefits under this Deferred Compensation Plan that
such member would not have the right to decide or determine if he were not a
member.

                                       13
<PAGE>
            8.3.  Records and Reports. The Administrator shall maintain or cause
to be maintained all such books of account, records, and other data as shall be
necessary for the proper administration of the Plan. Such records shall contain
all relevant data pertaining to individual Participants and their rights under
this Plan. The Administrator shall have the duty to carry into effect all rights
or benefits provided hereunder to the extent assets of the Employers are
properly available.

            8.4.  Payment of Expenses. The Employers, in such proportions as the
Administrator determines, shall bear all expenses incurred by them and by the
Administrator in administering this Plan. If a claim or dispute arises
concerning the rights of a Participant or Beneficiary to amounts deferred under
this Plan, regardless of the party by whom such claim or dispute is initiated,
the Employers shall (in such proportions as between the Employers as the
Administrator determines), and upon presentation of appropriate vouchers, pay or
reimburse all legal expenses, including reasonable attorneys' fees, court costs,
and ordinary and necessary out-of-pocket costs of attorneys, billed to and
payable by the Participant or by anyone claiming under or through the
Participant (such person being hereinafter referred to as the "Participant's
Claimant"), in connection with the bringing, prosecuting, defending, litigating,
negotiating, or settling of such claim or dispute following a judgment in
Participant's favor from a court of competent jurisdiction from which no appeal
may be taken, whether because the time to do so has expired or otherwise;
provided that it is not determined by the court that such expenses were not
incurred by the Participant or the Participant's Claimant while acting in good
faith and further provided that in the case of any claim or dispute initiated by
a Participant or the Participant's Claimant, such claim shall be made, or notice
of such dispute given, with specific reference to the provisions of this Plan,
to the Administrator within one year after the occurrence of the event giving
rise to such claim or dispute.

            8.5.  Indemnification for Liability. The Employers shall indemnify
the Administrator, the members of the Committee, and the employees of any
Employer to whom the Administrator delegates duties under this Plan, against any
and all claims, losses, damages, expenses and liabilities arising from their
responsibilities in connection with this Plan, unless the same is determined to
be due to gross negligence or willful misconduct.

                                       14
<PAGE>
            8.6.  Claims Procedure. If a claim for benefits or for participation
under this Plan is denied in whole or in part, a Participant will receive
written notification. The notification will include specific reasons for the
denial, specific reference to pertinent provisions of this Plan, a description
of any additional material or information necessary to process the claim and why
such material or information is necessary, and an explanation of the claims
review procedure. If the Committee, or the Administrator on its behalf, fails to
respond within 90 days, the claim is treated as denied.

            8.7.  Review Procedure. Within 60 days after the claim is denied or,
if the claim is deemed denied, within 150 days after the claim is filed, a
Participant (or his duly authorized representative) may file a written request
with the Committee for a review of his denied claim. The Participant may review
pertinent documents that were used in processing his claim, submit pertinent
documents, and address issues and comments in writing to the Committee. A
decision on review will be made on the date of the next meeting if the request
is filed more than 30 days prior to the meeting. The Committee will notify the
Participant of its final decision in writing. In its response, the Committee
will explain the reason for the decision, with specific references to pertinent
Deferred Compensation Plan provisions on which the decision was based. If the
Committee fails to respond to the request for review within 60 days, the review
is treated as denied.

                                       15
<PAGE>
                                   ARTICLE IX

                            AMENDMENT AND TERMINATION

            9.1.  Amendment and Termination. Columbia, through action by its
Board, shall have the right, at any time, to amend or terminate this Deferred
Compensation Plan in whole or in part provided that such amendment or
termination shall not adversely affect the right of any Participant or
Beneficiary to a payment under the Deferred Compensation Plan on the basis of
Compensation allocated to the Participant's Deferred Compensation Account.
Columbia reserves the right, in its sole discretion, to discontinue deferrals
under, or completely terminate, the Deferred Compensation Plan at any time. If
the Deferred Compensation Plan is discontinued with respect to future deferrals,
Participants' Deferred Compensation Accounts shall be distributed on the
distribution dates elected in accordance with Section 5.1, unless the Committee
designates that distributions shall be made on an earlier date. If the Committee
designates such earlier date, each Participant shall receive distribution of his
entire Deferred Compensation Account, as specified by the Committee. If the
Deferred Compensation Plan is completely terminated, each Participant shall
receive distribution of his entire Deferred Compensation Account in one lump sum
cash payment as of the date of the Deferred Compensation Plan termination
designated by the Board.

                                       16
<PAGE>
                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

            10.1. Right of Employers to Take Employment Actions. The adoption
and maintenance of this Deferred Compensation Plan shall not be deemed to
constitute an employment contract between an Employer and any Eligible Employee,
nor to be a consideration for, nor an inducement or condition of, the employment
of any person. Nothing herein contained, or any action taken hereunder, shall be
deemed to give any Eligible Employee the right to be retained in the employ of
an Employer or to interfere with the right of an Employer to discharge any
Eligible Employees at any time, nor shall it be deemed to give to an Employer
the right to require the Eligible Employee to remain in its employ, nor shall it
interfere with the Eligible Employee's right to terminate his or her employment
at any time. Nothing in this Plan shall prevent Columbia from amending,
modifying, or terminating any other benefit plan or compensation arrangement.

            10.2. Alienation or Assignment of Benefits. A Participant's rights
and interest under the Deferred Compensation Plan shall not be assigned or
transferred except as otherwise provided herein, and the Participant's rights to
benefit payments under the Deferred Compensation Plan shall not be subject to
alienation, pledge or garnishment by or on behalf of creditors (including heirs,
beneficiaries, or dependents) of the Participant or of a Beneficiary.
Notwithstanding the preceding, the Administrator may direct distributions to an
alternate payee pursuant to a Qualified Domestic Relations Order (QDRO), as
defined in Section 414(p) of the Internal Revenue Code of 1986, as amended,
prior to any distribution date described in Article V.

            10.3. Right to Withhold. To the extent the Employer or its agent is
of the opinion that it is required by law in effect at the time a distribution
is made from the Deferred Compensation Plan, the Employer or its agents shall
have the right to withhold or deduct from any distributions or payments any
taxes required to be withheld by federal, state or local governments.

                                       17
<PAGE>
            10.4. Construction. All legal questions pertaining to the Deferred
Compensation Plan shall be determined in accordance with the laws of the State
of Delaware, to the extent such laws are not superseded by the Employee
Retirement Income Security Act of 1974, as amended, or any other federal law.

            10.5. Headings. The headings of the Articles and Sections of this
Deferred Compensation Plan are for reference only. In the event of a conflict
between a heading and the contents of an Article or Section, the contents of the
Article or Section shall control.

            10.6. Number and Gender. Whenever any words used herein are in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply, and references to the male
gender shall be construed as applicable to the female gender where applicable,
and vice versa.

                   Adopted by the Board of Directors of Columbia Energy Group
                   on February 19, 1997; amended and restated on August 19, 1998

                   /s/ Carolyn McKinney Afshar
                   --------------------------------------------------
                   Corporate Secretary

                                       18
<PAGE>
                                                                  Exhibit 10.3-A

                                  FIRST AMENDMENT TO THE
                                  COLUMBIA ENERGY GROUP
                                DEFERRED COMPENSATION PLAN
                     (AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1998)

      WHEREAS, Columbia Energy Group ("Columbia") maintains the Columbia Energy
Group Deferred Compensation Plan, as amended and restated effective July 1, 1998
(the "Plan");

      WHEREAS, pursuant to Section 9.1 of the Plan, Columbia has reserved the
right to amend the Plan, and now, through action by its Board of Directors,
deems it appropriate to do so;

      NOW, THEREFORE, the Plan is hereby amended, effective October 1, 2001, as
follows:

1.    Section 2.9 is amended to read as follows:

            "2.9. "Eligible Employee" shall mean an individual employed by the
      Employer who is a member of a select group of management and/or highly
      compensated employees and (a) whose annual incentive target under the
      Columbia Annual Incentive Compensation Plan and/or the Columbia Value
      Sharing Rights Plan for the calendar year preceding the calendar year in
      which an award under such Plan would be paid or granted is equal to or
      greater than 15% of base salary for the preceding calendar year, or (b)
      who is designated by the Committee in its sole discretion to be eligible
      to participate hereunder."

2.    The first sentence of Section 4.1 is amended to read as follows:

            "Each Eligible Employee for a calendar year may irrevocably elect,
      no later than the fifteenth day of December in the calendar year preceding
      the calendar year in which an award under the Columbia Annual Incentive
      Compensation Plan or Value Sharing Rights Plan is paid or granted, to
      defer receipt of any portion of his or her award for that Plan Year in
      accordance with guidelines established by the Administrator, by completing
      and executing a Deferred Compensation Election Form and filing it with the
      Administrator."

3.    Section 4.2 is amended to read as follows:

            "4.2  Deferral of Base Salary Each Eligible Employee may irrevocably
      elect, no later than the fifteenth day of December in the calendar year
      preceding the calendar year in which base salary is paid, to defer up to
      twenty-five (25%) of his or her future base salary for that calendar year,
      in accordance with guidelines established by the Administrator, by
      completing and executing a Deferred Compensation Election Form which
      specifies the amount of base salary to be deferred
<PAGE>
      and filing it with the Administrator. No election, modification or
      revocation is permissible with respect to base salary paid prior to the
      execution of a Deferred Compensation Election Form."

4.    Section 4.3 is amended to read as follows:

            "4.3 Period for Which Deferral Election is Effective A Participant's
      deferral elections under Section 4.1 with respect to incentive awards
      payable from the Columbia Annual Incentive Compensation Plan or the
      Columbia Value Sharing Rights Plan, and under Section 4.2 with respect to
      base salary, shall be effective only for the Plan Year specified in the
      Deferred Compensation Election Form. A Participant must file a separate
      Deferred Compensation Election form by the date specified in Sections 4.1
      and 4.2 in order to make award and base salary deferrals for the specified
      Plan Year."

      IN WITNESS WHEREOF, Columbia has caused this First Amendment to be
executed on its behalf, by its duly authorized officer, on this 23rd day of
October, 2001.

                                 COLUMBIA ENERGY GROUP

                                 BY:   /S/ MICHAEL W. O'DONNELL
                                     -------------------------------------------
                                         ITS:        PRESIDENT
                                              ----------------------------------
<PAGE>
                                                                  EXHIBIT 10.3-B

                             SECOND AMENDMENT TO THE
                              COLUMBIA ENERGY GROUP
                           DEFERRED COMPENSATION PLAN

                (AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1998)

      WHEREAS, Columbia Energy Group ("Columbia") maintains the Columbia Energy
Group Deferred Compensation Plan, as Amended and Restated Effective July 1, 1998
and as subsequently amended effective October 1, 2001 (the "Plan"); and

      WHEREAS, pursuant to Section 9.1 of the Plan, Columbia has reserved the
right to amend the Plan and the Nominating and Compensation Committee of the
Board of Directors of NiSource Inc., parent of Columbia, has adopted an
amendment to the Plan as set forth below;

      NOW THEREFORE, Sections 8.1 and 9.1 of the Plan are hereby amended to read
as follows:

      8.1   Administration. Effective November 1, 2002, the Nominating and
Compensation Committee of the Board of Directors of NiSource Inc. shall appoint
the Executive Vice President, Human Resources and Communications of NiSource
Inc. ("Executive Vice President") to administer the Plan. The Executive Vice
President shall have the authority to make, amend, interpret and enforce all
appropriate rules and regulations for the administration of the Plan, and to
decide or resolve any and all questions, including the interpretation of the
Plan, as may arise in such administration. The Executive Vice President shall
have the authority to rely upon the information or opinions of legal counsel or
experts selected to render advice with respect to the Plan as he or she shall
deem advisable, with respect to the administration of the Plan.

      9.1   Amendment and Termination. Effective October 31, 2002, Columbia
through action by its Board, or the Nominating and Compensation Committee of the
Board of Directors of NiSource Inc., parent of Columbia, shall have the right at
any time to amend or terminate the Plan in whole or in part, provided that such
amendment or termination shall not adversely affect the right of any Participant
or Beneficiary to a payment under the Plan on the basis of Compensation
allocated to the Participant's Deferred Compensation Account. Columbia, or the
Nominating and Compensation Committee, reserves the right, in its discretion, to
discontinue deferrals under or completely terminate the Plan at any time. If the
Plan is discontinued with respect to future deferrals, Participants' Deferred
Compensation Accounts shall be distributed on the dates elected in accordance
with Section 5.1, unless the Executive Vice President appointed to administer
the Plan pursuant to Section 8.1 designates that distributions shall be made on
an earlier date. If the Executive Vice President designates such earlier date,
each Participant shall receive distribution of his entire Deferred Compensation
Account as specified by the Executive Vice President. If the Plan is completely
terminated, each Participant shall receive distribution of his entire Deferred
Compensation Account in one lump sum cash payment as of the date of the Plan
termination designated by Columbia or the Nominating and Compensation Committee.
<PAGE>
      IN WITNESS WHEREOF, the Company has caused this Second Amendment to be
executed on behalf of Columbia, by its duly authorized member, on this 3rd day
of December, 2002.

                                      Columbia Energy Group

                                      By:   /s/ Michael W. O'Donnell
                                           -------------------------------------

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