Document:

<PAGE>   1
                                                                    EXHIBIT 4.62
================================================================================

                             JASPER COUNTY, INDIANA

                                       and

                     NORTHERN INDIANA PUBLIC SERVICE COMPANY

                  ---------------------------------------------

                     FIRST AMENDMENT TO FINANCING AGREEMENT

                  --------------------------------------------

                          Dated as of December 1, 2000

                     Supplementing and amending that certain
                               Financing Agreement
                           dated as of August 1, 1994

                                   $69,000,000
                             Jasper County, Indiana
                    Pollution Control Refunding Revenue Bonds
                (Northern Indiana Public Service Company Project)
                              Series 1994A, B and C

================================================================================

<PAGE>   2

                     FIRST AMENDMENT TO FINANCING AGREEMENT

                            ------------------------

                                TABLE OF CONTENTS

         (This Table of Contents is not a part of the First Amendment to
         Financing Agreement and is only for convenience of reference.)

<TABLE>
<CAPTION>
SECTION                                                HEADING                                                   PAGE

<S>                        <C>                                                                                   <C>
ARTICLE I                  DEFINITIONS; AMENDMENTS TO DEFINITIONS.................................................2

       Section 1.01.       Definitions of Terms; Amendments to Definitions........................................2

ARTICLE II                 AMENDMENTS TO ORIGINAL AGREEMENT.......................................................2

       Section 2.01.       Amendment to Section 3.2 of the Original Agreement.....................................2
       Section 2.02.       Amendment to Section 4.2 of the Original Agreement.....................................3
       Section 2.03.       Amendment to Sections 4.5(b) of the Original Agreement.................................3
       Section 2.04.       Amendment to Section 5,1 of the Original Agreement.....................................3
       Section 2.05.       Addition to Section 5.10 of the Original Agreement.....................................3
       Section 2.06.       Amendment to Sections 6.1(c), 6.5, 7.3(a), 8.2, 8.5 and 8.6 of the
                               Original Agreement.................................................................4
       Section 2.07.       Addition of Section 8.12 to the Original Agreement.....................................4

ARTICLE III                MISCELLANEOUS..........................................................................4

       Section 3.01.       Agreement Confirmed....................................................................4
       Section 3.02.       Notice to Rating Agencies..............................................................4
       Section 3.03.       Severability...........................................................................4
       Section 3.04.       Counterparts...........................................................................5
       Section 3.05.       Applicable Provisions of Law...........................................................5
       Section 3.06.       Effective Date.........................................................................5
</TABLE>

                                      -i-
<PAGE>   3

                     FIRST AMENDMENT TO FINANCING AGREEMENT

         THIS FIRST AMENDMENT TO FINANCING AGREEMENT (this "First Amendment") is
made and entered into as of December 1, 2000 between JASPER COUNTY, INDIANA, a
political subdivision of the State of Indiana (the "Issuer"), and NORTHERN
INDIANA PUBLIC SERVICE COMPANY (the "Company"):

                                   WITNESSETH:

         WHEREAS, on August 25, 1994 the Issuer issued its Pollution Control
Refunding Revenue Bonds (Northern Indiana Public Service Company Project) Series
1994A, B and C (collectively, the "Bonds") in the original aggregate principal
amount of $69,000,000 pursuant to an Indenture of Trust dated as of August 1,
1994 (the "Original Indenture") by and between the Issuer and Bank One Trust
Company, N.A., formerly Bank One, Indianapolis, NA (the "Trustee"); and

         WHEREAS, in connection with the issuance of the Bonds, the Issuer and
the Company executed and delivered the Financing Agreement dated as of August 1,
1994 by and between the Issuer and the Company (the "Original Agreement"); and

         WHEREAS, concurrently with the execution and delivery of this First
Amendment, the Original Indenture is being amended, supplemented and restated by
the Amended and Restated Indenture of Trust of even date herewith (the
"Indenture") in order to add provisions relating to a bond insurance policy for
each series of Bonds and an Auction Rate interest-setting mechanism; and

         WHEREAS, Section 1502 of the Original Indenture provides that the
Issuer and the Company may, with the consent of the owners of not less than 60%
in aggregate principal amount of each series of the Bonds now Outstanding, enter
into an agreement supplemental to the Original Agreement to make certain
changes, and Section 8.6 of the Original Agreement provides that such
supplemental agreement is subject to the written consent of the Trustee; and

         WHEREAS, the Issuer and the Company desire to enter into this First
Amendment, as permitted by Section 1502 of the Original Indenture and Section
8.6 of the Original Agreement, in order to amend the Original Agreement to make
certain changes relating to the amendments being made to the Indenture
concurrently herewith;

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein set forth, the parties hereto agree as follows:

<PAGE>   4

                                    ARTICLE I

                     DEFINITIONS; AMENDMENTS TO DEFINITIONS

        Section 1.01. Definitions of Terms; Amendments to Definitions. All words
and terms defined in Article I and elsewhere in the Original Agreement shall
have the same respective meanings in this First Amendment, except that the
following definitions are hereby amended to read as follows:

         "Indenture" means the Amended and Restated Indenture of Trust between
the Issuer and Bank One Trust Company, N.A., as trustee, dated as of November 1,
2000, including any indentures supplemental thereto or amendatory thereof.

         "Insurance Policy" means collectively, the financial guaranty insurance
policies issued by the Insurer insuring the payment when due of the principal of
and interest on the Bonds as provided therein.

         "Insurer" means MBIA Insurance Corporation and its successors and
assigns.

         "Issuer" means Jasper County, Indiana and any successor body to the
duties or functions of the Issuer and for purposes of any exculpatory and
indemnity provisions of this Agreement and the Indenture, the "Issuer" also
includes the Jasper County Economic Development Commission.

         "Reimbursement Agreement" means the Reimbursement and Indemnity
Agreement dated as of October 1, 2000, by and between the Company and the
Insurer, and any and all modifications, alterations, amendments and supplements
thereto.

         "Trustee" means Bank One Trust Company, N.A., and any successor Trustee
pursuant to Section 1106 or 1109 of the Indenture at the time serving as
successor Trustee thereunder.

                                   ARTICLE II

                        AMENDMENTS TO ORIGINAL AGREEMENT

         Section 2.01. Amendment to Section 3.2 of the Original Agreement. The
first paragraph of Section 3.2 of the Original Agreement is hereby amended to
read as follows:

                  "Any moneys held as a part of the Bond Fund shall be invested
                  or reinvested by the Trustee at the written direction of an
                  Authorized Company Representative as to specific investments,
                  to the extent permitted by law and in particular by the Act,
                  and consented to in writing by the Insurer. In the absence of
                  specific instructions, the Trustee shall invest such moneys in
                  the One Group U.S. Treasury

                                      -2-
<PAGE>   5

                  Securities Money Market Fund (so long as such fund is rated
                  AAAm-G, AAAm or AAm by S&P) or other money market fund (so
                  long as such fund is rated AAAm-G, AAAm or AAm by S&P) that
                  invests exclusively in short-term U.S. Treasury obligations
                  including repurchase agreements collateralized by such
                  treasury obligations and when-issued securities, U. S.
                  Treasury bills, notes and other securities issued or backed by
                  the U. S. Government."

         Section 2.02. Amendment to Section 4.2 of the Original Agreement. The
first paragraph of Section 4.2(a) of the Original Agreement is hereby amended to
read as follows:

                           "(a) On the Business Day prior to each date provided
                  in or pursuant to the Indenture for the payment of principal
                  (whether at maturity or upon redemption or acceleration) of,
                  premium, if any, and/or interest on the Bonds, until the
                  principal of, premium, if any, and interest on the Bonds shall
                  have been fully paid or provision for the payment thereof
                  shall have been made in accordance with the Indenture, the
                  Company shall pay to the Trustee in immediately available
                  funds, for deposit in the Bond Fund, as a repayment
                  installment of the loan of the proceeds of the Bonds pursuant
                  to Section 4.1 hereof, sums equal to the amounts payable on
                  such interest payment or redemption or acceleration or
                  maturity dates as principal (whether at maturity or upon
                  redemption or acceleration), premium, if any, and interest
                  upon the Bonds as provided in the Indenture; provided,
                  however, that the obligation of the Company to make any such
                  payments shall be deemed to be satisfied and discharged to the
                  extent of the corresponding payments made to the Trustee under
                  a Letter of Credit or from amounts realized by the Trustee
                  under any Alternate Credit Facility."

         Section 2.03. Amendment to Section 4.5(b) of the Original Agreement.
The reference to "Section 304 of the Indenture" in Section 4.5(b) of the
Original Agreement is hereby amended to "Section 305 of the Indenture."

         Section 2.04. Amendment to Section 5,1 of the Original Agreement. The
phrase, "shall be a public utility" is hereby deleted from Section 5.1 of the
Original Agreement.

         Section 2.05. Addition to Section 5.10 of the Original Agreement. The
first paragraph of Section 5.10 of the Original Agreement is hereby amended to
read as follows:

                  "The Company hereby covenants for the benefit of the Owners of
                  the Bonds and the Issuer that it (a) has not taken, and will
                  not take or permit to be taken on its behalf, any action which
                  would adversely affect the exclusion of interest on the Bonds
                  from gross income of the recipients thereof for federal income
                  tax purposes

                                      -3-
<PAGE>   6

                  and (b) will take, or require to be taken, such actions as
                  may, from time to time, be required under applicable law or
                  regulation to continue to cause the interest on the Bonds to
                  be so excluded. The Company hereby acknowledges that in the
                  event of an examination by the Internal Revenue Service of the
                  exclusion of interest on the Bonds from the gross income of
                  the Owners thereof for federal income tax purposes under
                  current regulations, the Internal Revenue Service will treat
                  the Issuer as the "taxpayer" in such examination. The Company
                  and the Issuer each agree that it will respond in a
                  commercially reasonable manner to any inquiries from the
                  Internal Revenue Service in connection with such an
                  examination. The Issuer hereby covenants that it will
                  cooperate with the Company, at the Company's expense and at
                  its direction, in connection with such examination."

        Section 2.06. Amendment to Sections 6.1(c), 6.5, 7.3(a), 8.2, 8.5 and
8.6 of the Original Agreement. All references to the "Bank" shall be deemed to
refer, mutatis mutandis, to the "Insurer" in the following Sections of the
Original Agreement: Sections 6.1(c), 6.5, 7.3(a), 8.2, 8.5 and 8.6.

         Section 2.07. Addition of Section 8.12 to the Original Agreement. An
additional Section is hereby added to the end of Article VIII of the Original
Agreement as follows:

                  "Section 8.12. Insurer as Third Party Beneficiary. The Insurer
                  is a third-party beneficiary to this Agreement."

                                   ARTICLE III

                                  MISCELLANEOUS

         Section 3.01. Agreement Confirmed. Except as amended by this First
Amendment, all of the provisions of the Original Agreement shall remain in full
force and effect, and from and after the effective date of this First Amendment
shall be deemed to have been amended as herein set forth.

         Section 3.02. Notice to Rating Agencies. In accordance with Section
1611 of the Original Indenture, the Trustee agrees to give notice of this First
Amendment to each Rating Agency currently rating the Bonds.

         Section 3.03. Severability. If any provision of this First Amendment
shall be held or deemed to be or shall, in fact, be inoperative or unenforceable
as applied in any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any other provision or
provisions hereof or any constitution or statute or rule of public policy, or
for any other reason, such circumstances shall not have the effect of rendering
the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any

                                      -4-
<PAGE>   7

other provision or provisions herein contained invalid, inoperative, or
unenforceable to any extent whatever.

         Section 3.04. Counterparts. This First Amendment may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

         Section 3.05. Applicable Provisions of Law. This First Amendment shall
be governed by and construed in accordance with the laws of the State of
Indiana.

         Section 3.06. Effective Date. This First Amendment shall become
effective on the date the Trustee has received the Consents of the Trustee and
the owners of 60% in aggregate principal amount of the Bonds now Outstanding to
the execution hereof.

                                      -5-
<PAGE>   8

         IN WITNESS WHEREOF, the Issuer and the Trustee have caused this First
Amendment to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.

                                       BOARD OF COMMISSIONERS OF JASPER
                                            COUNTY, INDIANA

                                       By  /S/ RICHARD E. MAXWELL
                                           ------------------------------
                                       By  /S/ GARY G. GREEN
                                           ------------------------------
                                       By  /S/ WALTER R. PETTERSON
                                           ------------------------------

[SEAL]

ATTEST:

By /S/ Rita J. Steele
   ----------------------------
      County Auditor
                                       NORTHERN INDIANA PUBLIC SERVICE COMPANY

                                       By  /S/ FRANCIS P. GIROT
                                           ------------------------------
                                       Title  Treasurer
                                              ---------------------------
                                       [SEAL]

ATTEST:

By /S/ Gary W. Pottorff
   ---------------------------
Title  Secretary
       -----------------------

                                      -6-

<PAGE>   9

                             CONSENT OF THE TRUSTEE

         Pursuant to Section 8.6 of the Financing Agreement between Jasper
County, Indiana (the "Issuer") and Northern Indiana Public Service Company (the
"Company"), dated as of August 1, 1994, Bank One Trust Company, N.A., formerly
Bank One, Indianapolis, NA, as Trustee, hereby consents to the execution and
delivery of the First Amendment to Financing Agreement dated as of December 1,
2000 between the Issuer and the Company.

                                       BANK ONE TRUST COMPANY, N.A., formerly
                                          Bank One, Indianapolis, NA, as Trustee

                                       By   John K. Pearce
                                            -------------------------
                                           Its  Authorized Officer
                                                ---------------------
Date:  ___________, 2000

<PAGE>   10

                              CONSENT OF BONDHOLDER

         The undersigned (the "Bondholder"), the owner as of December 1, 2000 of
Jasper County, Indiana Pollution Control Refunding Revenue Bonds (Northern
Indiana Public Service Company Project) Series 1994A, B and C in the aggregate
principal amount stated below, hereby consents to the execution and delivery of
the First Amendment to Financing Agreement dated as of December 1, 2000 between
Jasper County, Indiana and Northern Indiana Public Service Company attached
hereto. The Bondholder agrees that this Consent shall be irrevocable.

                                   Name of Owner:  Morgan Stanley & Co.
                                                       Incorporated

                                   Aggregate Principal Amount of Bonds Owned:
                                   $69,000,000
                                   CUSIP No. ______________

                                   By:  /s/ P. J. Sweeney
                                        ---------------------------
                                   Title: Managing Director
                                          -------------------------
                                   Date:  December 1, 2000<PAGE>   1

                                                                    Exhibit 10.3

                   CHANGE IN CONTROL AND TERMINATION AGREEMENT

        NiSource Inc., a Delaware corporation ("Employer") and _________
("Executive") entered into a Change in Control and Termination Agreement as of
____________________ ("Agreement"), and Employer and Executive hereby enter into
an amendment and restatement of the Agreement, effective _______ __, 200_, which
amended and restated Agreement is hereinafter set forth.

                                   WITNESSETH:

        WHEREAS, Executive is currently employed by Employer as its
______________;

        WHEREAS, Employer desires to provide security to Executive in connection
with Executive's employment with Employer in the event of a Change in Control
affecting Employer; and

        WHEREAS, Executive and Employer desire to enter into this Agreement
pertaining to the terms of the security Employer is providing to Executive with
respect to his employment in the event of a Change in Control;

        NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:

        1.      Term. The term of this Agreement shall be the period beginning
on the date hereof and terminating on the date 36 months after such date (the
"Term"), provided that for each day from and after the date hereof the Term will
automatically be extended for an additional day, unless either Employer or
Executive has given written notice to the other party of its or his election to
cease such automatic extension, in which case the Term shall be the 36-month
period beginning on the date such notice is received by such other party.

<PAGE>   2

        2.      Definitions. For purposes of this Agreement:

                (a)     "Affiliate" or "Associate" shall have the meaning set
        forth in Rule 12b-2 under the Securities Exchange Act of 1934.

                (b)     "Base Salary" shall mean Executive's monthly base salary
        at the rate in effect on the date of a reduction for purposes of
        paragraph (g) of this Section, or on the date of a termination of
        employment under circumstances described in subsections 3(a) or (b)
        below, whichever is higher; provided, however, that such rate shall in
        no event be less than the highest rate in effect for Executive at any
        time during the Term.

                (c)     "Beneficiary" shall mean the person or entity designated
        by Executive, by written instrument delivered to Employer, to receive
        the benefits payable under this Agreement in the event of his death. If
        Executive fails to designate a Beneficiary, or if no Beneficiary
        survives Executive, such death benefits shall be paid:

                        (i)     to his surviving spouse; or

                        (ii)    if there is no surviving spouse, to his living
                                descendants per stirpes; or

                        (iii)   if there is neither a surviving spouse nor
                                descendants, to his duly appointed and qualified
                                executor or personal representative.

                (d)     "Bonus" shall mean Executive's target annual incentive
        bonus compensation for the calendar year in which the date of a
        termination of employment under circumstances described in subsection
        3(a) below occurs, under the incentive bonus compensation plan then
        maintained by Employer; provided, however, that such target annual
        incentive bonus compensation shall in no event be less than the highest
        target annual incentive bonus compensation of Executive under any such
        incentive bonus compensation plan for any calendar year commencing
        during the Term.

                                       2
<PAGE>   3

                (e)     A "Change in Control" shall be deemed to take place on
        the occurrence of any of the following events:

                        (1)     The acquisition by an entity, person or group
                (including all Affiliates or Associates of such entity, person
                or group) of beneficial ownership, as that term is defined in
                Rule 13d-3 under the Securities Exchange Act of 1934, of capital
                stock of Employer entitled to exercise more than 30% of the
                outstanding voting power of all capital stock of Employer
                entitled to vote in elections of directors ("Voting Power");

                        (2)     The effective time of (i) a merger or
                consolidation of Employer with one or more other corporations as
                a result of which the holders of the outstanding Voting Power of
                Employer immediately prior to such merger or consolidation
                (other than the surviving or resulting corporation or any
                Affiliate or Associate thereof) hold less than 50% of the Voting
                Power of the surviving or resulting corporation, or (ii) a
                transfer of 30% of the Voting Power, or a Substantial Portion of
                the Property, of Employer other than to an entity of which
                Employer owns at least 50% of the Voting Power; or

                        (3)     The election to the Board of Directors of
                Employer of candidates who were not recommended for election by
                the Board of Directors of Employer in office immediately prior
                to the election, if such candidates constitute a majority of
                those elected in that particular election.

Notwithstanding the foregoing, a Change in Control shall not be deemed to take
place by virtue of any transaction in which Executive is a participant in a
group effecting an acquisition of Employer and, after such acquisition,
Executive holds an equity interest in the entity that has acquired Employer.

                (f)     "Good Cause" shall be deemed to exist if, and only if:

                        (1)     Executive engages in acts or omissions
                constituting dishonesty, intentional breach of fiduciary
                obligation or

                                       3
<PAGE>   4

                                intentional wrongdoing or malfeasance, in each
                                case that results in substantial harm to
                                Employer or any Affiliate; or

                        (2)     Executive is convicted of a criminal violation
                        involving fraud or dishonesty.

                (g)     "Good Reason" shall be deemed to exist if, and only if:

                        (1)     there is a significant change in the nature or
                        the scope of Executive's authorities or duties;

                        (2)     there is a significant reduction in Executive's
                        monthly rate of Base Salary, his opportunity to earn a
                        bonus under an incentive bonus compensation plan
                        maintained by Employer or his benefits; or

                        (3)     Employer changes by 100 miles or more the
                        principal location in which Executive is required to
                        perform services.

                (h)     "Pension Plan" shall mean any Retirement Plan that is a
        defined benefit plan as defined in Section 3(35) of the Employee
        Retirement Income Security Act of 1974, as amended ("ERISA").

                (i)     "Retirement Plan" shall mean any qualified or
        supplemental employee pension benefit plan, as defined in Section 3(2)
        of ERISA, currently or hereinafter made available by Employer in which
        Executive is eligible to participate.

                (j)     "Severance Period" shall mean the period beginning on
        the date Executive's employment with Employer terminates under
        circumstances described in subsection 3(a) and ending on the date 36
        months thereafter.

                (k)     "Substantial Portion of the Property of Employer" shall
        mean 50% of the aggregate book value of the assets of Employer and its
        Affiliates and Associates as set forth on the most recent balance sheet
        of Employer, prepared on a consolidated basis, by its regularly
        employed, independent, certified public accountants.

                                       4
<PAGE>   5

               (l) "Welfare Plan" shall mean any health and dental plan,
        disability plan, survivor income plan or life insurance plan, as defined
        in Section 3(1) of ERISA, currently or hereafter made available by
        Employer in which Executive is eligible to participate.

        3.      Benefits Upon Termination of Employment. (a) The following
provisions will apply if a Change in Control occurs during the Term, and (i) at
any time during the 24 months after the Change in Control occurs (whether during
or after the expiration of the Term), the employment of Executive with Employer
is terminated by Employer for any reason other than Good Cause, or Executive
terminates his employment with Employer for Good Reason, or (ii) at any time
during the seventh month after the Change in Control occurs (whether during or
after the expiration of the Term), Executive terminates his employment with
Employer for any reason:

                (1)     Employer shall pay Executive an amount equal to 36 times
        the sum of (a) Executive's Base Salary plus (b) one-twelfth of his
        Bonus. Such amount shall be paid to Executive in a lump sum within 180
        days after his date of termination of employment; provided, however,
        Executive, by written notice to Employer, may elect to receive such
        payment on any date that is no earlier than the later to occur of (i)
        the date 10 days after the date of termination, and (ii) the date 10
        days after receipt of such notice.

                (2)     Employer shall pay Executive an amount equal to the pro
        rata portion of Executive's target annual incentive bonus compensation
        for the calendar year in which the date of termination of employment
        occurs, under the incentive bonus compensation plan then maintained by
        Employer, that is applicable to the period commencing on the first day
        of such calendar year and ending on the date of termination. Such amount
        shall be paid to Executive in a lump sum within 180 days after his date
        of termination of employment; provided, however, Executive, by written
        notice to Employer, may elect to receive such payment on any date that
        is no earlier than the later

                                       5
<PAGE>   6

        to occur of (i) the date 10 days after the date of termination, and (ii)
        the date 10 days after receipt of such notice.

                (3)     Executive shall receive any and all benefits accrued
        under any Retirement Plan, Welfare Plan or other plan or program in
        which he participates at the date of termination of employment, to the
        date of termination of employment, the amount, form and time of payment
        of such benefits to be determined by the terms of such Retirement Plan,
        Welfare Plan and other plan or program, and Executive's employment shall
        be deemed to have terminated by reason of retirement, and without regard
        to vesting limitations in all such Plans and other plans or programs not
        subject to the qualification requirements of Section 401 (a) of the
        Internal Revenue Code of 1986 as amended ("Code"), under circumstances
        that have the most favorable result for Executive thereunder for all
        purposes of such Plans and other plans or programs. Payment shall be
        made at the earliest date permitted under any such Plan or other plan or
        program that is not funded with a trust agreement.

                (4)     (A) Employer shall pay to Executive a monthly
        Supplemental Pension Benefit in an amount equal to the amount determined
        pursuant to clause (i) below less the amount determined pursuant to
        clause (ii) below:

                        (i)     the aggregate monthly amount of the pension
                benefit ("Pension") that would have been payable to Executive
                under all Pension Plans if that Pension were computed (A) by
                treating the Severance Period as service for all purposes of the
                Pension Plans and (B) by considering his compensation during the
                Severance Period to be his Base Salary and one-twelfth of his
                Bonus for all purposes of the Pension Plans;

                        (ii)    the aggregate monthly amount of any Pension
                actually paid to Executive under all Pension Plans.

                                       6
<PAGE>   7

                        (B)     The Supplemental Pension Benefit payable to
        Executive hereunder shall be paid (i) commencing at the later to occur
        of the last day of the Severance Period or the date payment of his
        Pension commences under the Pension Plans; and (ii) in the same form as
        is applicable to the Pension payable to Executive under the Pension
        Plans.

                        (C)     If Executive dies prior to commencement of
        payment to him of his Pension under the Pension Plans, under
        circumstances in which a death benefit under the Pension Plans is
        payable to his surviving spouse or other beneficiary, then Employer
        shall pay a monthly Supplemental Death Benefit to Executive's surviving
        spouse or other beneficiary entitled to receive the death benefit
        payable with respect to Executive under the Pension Plans in an amount
        equal to the amount determined pursuant to clause (i) below less the
        amount determined pursuant to clause (ii) below:

                        (i)     the aggregate monthly amount of the death
                benefit that would have been payable to the surviving spouse or
                other beneficiary of Executive under the Pension Plans if that
                death benefit were computed (A) by treating the Severance Period
                as service for all purposes of the Pension Plans and (B) by
                considering his compensation during the Severance Period to be
                his Base Salary and one-twelfth of his Bonus for all purposes of
                the Pension Plans;

                        (ii)    the aggregate monthly amount of any death
                benefit actually paid to the surviving spouse or other
                beneficiary of Executive under the Pension Plans.

                        (D)     The Supplemental Death Benefit payable with
        respect to Executive hereunder shall be payable at the same time, in the
        same form, and to the same persons as is applicable to the death benefit
        payable with respect to Executive under the Pension Plans.

                        (E)     Notwithstanding the foregoing provisions, the
        total of the actual years of service of Executive for purposes of each
        of the Pension Plans

                                       7
<PAGE>   8

        and the years of service for which credit is given pursuant to
        subparagraphs (3)(A) and (C) shall not exceed the maximum number of
        years of service, if any, that can be considered pursuant to the terms
        of such Pension Plan.

                        (F)     Any actuarial adjustments made under the Pension
        Plans with respect to the form or time of payment of a Pension or death
        benefit to Executive or his surviving spouse or other beneficiary under
        the Pension Plans shall also be applicable to the Supplemental Pension
        Benefit or Supplemental Death Benefit payable hereunder and shall be
        based upon the same actuarial assumptions as those specified in the
        Pension Plans.

                (5)     If upon the date of termination of Executive's
        employment Executive holds any options with respect to stock of
        Employer, all such options will immediately become exercisable upon such
        date and will be exercisable for 200 days thereafter. Any restrictions
        on stock of Employer owned by Executive on the date of termination of
        his employment will lapse on such date.

                (6)     During the Severance Period Executive and his spouse and
        other dependents will continue to be covered by all Welfare Plans
        maintained by Employer in which he and his spouse and other dependents
        were participating immediately prior to the date of his termination as
        if he continued to be an employee of Employer and Employer will continue
        to pay the costs of coverage of Executive and his spouse and other
        dependents under such Welfare Plans on the same basis as is applicable
        to active employees covered thereunder; provided that, if participation
        in any one or more of such Welfare Plans is not possible under the terms
        thereof, Employer will provide substantially identical benefits.
        Coverage under any such Welfare Plan will cease if and when Executive
        obtains employment with another employer during the Severance Period,
        and becomes eligible for coverage under any substantially similar
        Welfare Plan provided by his new employer.

                                       8
<PAGE>   9

                (7)     During the Severance Period, Executive shall not be
        entitled to reimbursement for fringe benefits, including without
        limitation, dues and expenses related to club memberships, automobile
        expenses, expenses for professional services and other similar
        perquisites.

        (b)     If the employment of Executive with Employer is terminated by
Employer or Executive other than under circumstances set forth in subsection
3(a), Executive's Base Salary shall be paid through the date of his termination,
and Employer shall have no further obligation to Executive or any other person
under this Agreement. Such termination shall have no effect upon Employee's
other rights, including but not limited to, rights under the Retirement Plans
and the Welfare Plans.

        (c)     Notwithstanding anything herein to the contrary, (1) in the
event Employer shall terminate the employment of Executive for Good Cause
hereunder, Employer shall give Executive at least thirty (30) days prior written
notice specifying in detail the reason or reasons for Executive's termination,
and (2) in the event Executive terminates his employment for Good Reason
hereunder, Executive shall give Employer at least thirty (30) days prior written
notice specifying in detail the reason or reasons for Executive's termination.

        (d)     This Agreement shall have no effect, and Employer shall have no
obligations hereunder, if Executive's employment terminates for any reason at
any time other than during the 24 months following a Change in Control.

        4.      Excise Tax. (a) In the event that a Change in Control shall
occur, and a final determination is made by legislation, regulation, ruling
directed to Executive or Employer, by court decision, or by independent tax
counsel described in subsection (b) next below, that the aggregate amount of any
payment made to Executive (1) hereunder, and (2) pursuant to any plan, program
or policy of Employer in connection with, on account of, or as a result of, such
Change in Control ("Total Payments") will be subject to the excise tax
provisions of Section 4999 of the Code, or any successor section thereof,
Executive shall be entitled to receive from Employer, in addition to any other
amounts payable hereunder, a lump sum payment

                                       9
<PAGE>   10

(the "Gross-Up Payment"), sufficient to cover the full cost of such excise taxes
and Executive's federal, state and local income and employment taxes on this
additional payment so that the net amount retained by Executive, after the
payment of all such excise taxes on the Total Payments, and all federal, state
and local income and employment taxes and excise taxes on the Gross-Up Payment,
shall be equal to the Total Payments. The Total Payments, however, shall be
subject to any federal, state and local income and employment taxes thereon. For
this purpose, Executive shall be deemed to be in the highest marginal rate of
federal, state and local taxes. The Gross-Up Payment shall be made at the same
time as the payments described in subsections 3(a)(1) and (2) above.

        (b)     Employer and Executive shall mutually and reasonably determine
the amount of the Gross-Up Payment to be made to Executive pursuant to the
preceding subsection. Prior to the making of any such Gross-Up Payment, either
party may request a determination as to the amount of such Gross-Up Payment. If
such a determination is requested, it shall be made promptly, at Employer's
expense, by independent tax counsel selected by Executive and approved by
Employer (which approval shall not unreasonably be withheld), and such
determination shall be conclusive and binding on the parties. Employer shall
provide such information as such counsel may reasonably request, and such
counsel may engage accountants or other experts at Employer's expense to the
extent that they deem necessary or advisable to enable them to reach a
determination. The term "independent tax counsel," as used herein, shall mean a
law firm of recognized expertise in federal income tax matters that has not
previously advised or represented either party. It is hereby agreed that neither
Employer nor Executive shall engage any such firm as counsel for any purpose,
other than to make the determination provided for herein, for three years
following such firm's announcement of its determination.

        (c)     In the event the Internal Revenue Service subsequently adjusts
the excise tax computation made pursuant to subsections 4(a) and (b) above,
Employer shall pay to Executive, or Executive shall pay to Employer, as the case
may be, the

                                       10
<PAGE>   11

full amount necessary to make either Executive or Employer whole had the excise
tax initially been computed as subsequently adjusted, including the amount of
any underpaid or overpaid excise tax, and any related interest and/or penalties
due to the Internal Revenue Service.

        5.      Setoff. No payments or benefits payable to or with respect to
Executive pursuant to this Agreement shall be reduced by any amount Executive or
his spouse or Beneficiary, or any other beneficiary under the Pension Plans, may
earn or receive from employment with another employer or from any other source,
except as expressly provided in subsection 3(a)(6).

        6.      Death. If Executive's employment with Employer terminates under
circumstances described in subsections 3(a) or (b), then upon Executive's
subsequent death, all unpaid amounts payable to Executive under subsections
3(a)(1), (2) or (3) or 3(b), or Section 4, if any, shall be paid to his
Beneficiary, all amounts payable under subsection 3(a)(4) shall be paid pursuant
to the terms of said subsection to his spouse or other beneficiary under the
Pension Plans, and if subsection 3(a) applies, his spouse and other dependents
shall continue to be covered under all applicable Welfare Plans during the
remainder of the Severance Period, if any, pursuant to subsection 3(a)(6).

        7.      No Solicitation of Representatives and Employees. Executive
agrees that he shall not, during the Term or the Severance Period, directly or
indirectly, in his individual capacity or otherwise, induce, cause, persuade, or
attempt to do any of the foregoing in order to cause, any representative, agent
or employee of Employer or any of its Affiliates to terminate such person's
employment relationship with Employer or any of its Affiliates, or to violate
the terms of any agreement between said representative, agent or employee and
Employer or any of its Affiliates.

        8.      Confidentiality. Executive acknowledges that preservation of a
continuing business relationship between Employer or its Affiliates and their
respective customers, representatives, and employees is of critical importance
to the continued business success of Employer and its Affiliates and that it is
the active

<PAGE>   12

policy of Employer and its Affiliates to guard as confidential certain
information not available to the public and relating to the business affairs of
Employer and its Affiliates. In view of the foregoing, Executive agrees that he
shall not during the Term and at any time thereafter, without the prior written
consent of Employer, disclose to any person or entity any such confidential
information that was obtained by Executive in the course of his employment by
Employer or any of its Affiliates. This section shall not be applicable if and
to the extent Executive is required to testify in a legislative, judicial or
regulatory proceeding pursuant to an order of Congress, any state or local
legislature, a judge, or an administrative law judge or is otherwise required by
law to disclose such information.

        9.      Forfeiture. If Executive shall at any time violate any
obligation of his under Sections 7 or 8 in a manner that results in material
damage to the Employer or its business, he shall immediately forfeit his right
to any benefits under this Agreement, and Employer shall thereafter have no
further obligation hereunder to Executive or his spouse, Beneficiary or any
other person.

        10.     Executive Assignment. No interest of Executive, his spouse or
any Beneficiary, or any other beneficiary under the Pension Plans, under this
Agreement, or any right to receive any payment or distribution hereunder, shall
be subject in any manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind, nor may such
interest or right to receive a payment or distribution be taken, voluntarily or
involuntarily, for the satisfaction of the obligations or debts of, or other
claims against, Executive or his spouse, Beneficiary or other beneficiary,
including claims for alimony, support, separate maintenance, and claims in
bankruptcy proceedings.

        11.     Benefits Unfunded. Except as otherwise provided in Section 13,
all rights under this Agreement of Executive and his spouse, Beneficiary or
other beneficiary under the Pension Plans, shall at all times be entirely
unfunded, and no provision shall at any time be made with respect to segregating
any assets of Employer for payment of any amounts due hereunder. None of
Executive, his

                                       12
<PAGE>   13

spouse, Beneficiary or any other beneficiary under the Pension Plans shall have
any interest in or rights against any specific assets of Employer, and Executive
and his spouse, Beneficiary or other beneficiary shall have only the rights of a
general unsecured creditor of Employer. Except as otherwise provided in Section
13, and notwithstanding the preceding provisions of this Section, the Nominating
and Compensation Committee of the Board of Directors of Employer, in its
discretion, shall have the right, at any time and from time to time, to cause
amounts payable to Executive or his Beneficiary hereunder to be paid to the
trustee of the NIPSCO Industries, Inc. Umbrella Trust For Management established
effective January 1, 1991, as amended from time to time, or any similar trust at
any time established by Employer ("Trust").

        12.     Waiver. No waiver by any party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of any other
provisions or conditions at the same time or at any prior or subsequent time.

        13.     Litigation Expenses. Employer shall pay Executive's reasonable
attorneys' fees and legal expenses in connection with any judicial proceeding to
enforce this Agreement, or to construe or determine the validity of this
Agreement or otherwise in connection therewith, whether or not Executive is
successful in such litigation. Within 10 days following the occurrence of a
Potential Change in Control (as defined in the Trust described in Section 11),
the Nominating and Compensation Committee of the Board of Directors of Employer
shall cause Employer to contribute the sum of $100,000 to the Trust to be
applied in satisfaction of Employer's obligations under this Section. The
Nominating and Compensation Committee shall cause Employer to contribute
additional amounts to the Trust, at such time or times as the Committee deems
appropriate, to the extent the aggregate of (1) the aforementioned sum of
$100,000, plus Trust earnings thereon, and (2) any additional Employer
contributions to the Trust, plus Trust earnings thereon, is not sufficient to
satisfy in full Employer's obligations under this Section.

                                       13
<PAGE>   14

        14.     Applicable Law. This Agreement shall be construed and
interpreted pursuant to the laws of Indiana.

        15.     Entire Agreement. This Agreement contains the entire Agreement
between the Employer and Executive and supersedes any and all previous
agreements; written or oral; between the parties relating to the subject matter
hereof. No amendment or modification of the terms of this Agreement shall be
binding upon the parties hereto unless reduced to writing and signed by Employer
and Executive.

        16.     No Employment Contract. Nothing contained in this Agreement
shall be construed to be an employment contract between Executive and Employer.

        17.     Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original.

        18.     Severability. In the event any provision of this Agreement is
held illegal or invalid, the remaining provisions of this Agreement shall not be
affected thereby.

        19.     Successors. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, representatives
and successors.

        20.     Employment with an Affiliate. For purposes of this Agreement,
(A) employment or termination of employment of Executive shall mean employment
or termination of employment with Employer and all Affiliates, (B) Base Salary
and Bonus shall include remuneration received by Executive from Employer and all
Affiliates, and (C) the terms Pension Plan, Retirement Plan and Welfare Plan
maintained or made available by Employer shall include any such plans of any
Affiliate of Employer.

        21.     Notice. Notices required under this Agreement shall be in
writing and sent by registered mail, return receipt requested, to the following
addresses or to such other address as the party being notified may have
previously furnished to the other party by written notice:

                                       14
<PAGE>   15

        If to Employer:      NiSource Inc.
                             801 E. 86th Avenue
                             Merrillville, Indiana 46410

                             Attention: Gary L. Neale

        If to Executive:

                                       15
<PAGE>   16

        IN WITNESS WHEREOF, Executive has hereunto set his hand, and Employer
has caused these presents to be executed in its name on its behalf, all on the
day of , 200_, effective ___________ __, 200_.

                                  NISOURCE INC.

                                  By:
                                     ---------------------------------

                              Title:
                                    ----------------------------------

                              ----------------------------------------
                                                           , Executive

                                       16
<PAGE>   17

               Schedule of Parties to Change of Control Agreements

     The following NiSource executives have entered into amended Change in
Control and Termination Agreements with NiSource: Gary L. Neale, Stephen P.
Adik, Patrick J. Mulchay, Jeffrey W. Yundt, Joseph L. Turner, Mark D. Wyckoff,
Michael W. O'Donnell, Catherine G. Abbott, Stephen P. Smith, S. LaNette
Zimmerman, James M. Clarke, Jeffrey W. Grossman, Dennis W. McFarland.

        The contracts are substantially identical in all material respects
except as to the parties, the execution dates, the amount of time following a
change of control that the termination provisions of the agreement apply (from
7-24 months), the monthly base payout (24 to 36 months), and whether or not the
executive's payout is grossed up for taxes. In addition, Mr. Adik's and Mr.
Neale's agreements provide that if a change of control occurs during the term of
the agreement, they may terminate their employment within 24 months for any
reason; and Mr. Neale's agreement provides that he will receive termination
benefits during the term of the agreement (regardless of whether a change of
control has occurred) if he is terminated for any reason other than for good
cause, if he terminates his employment for good reason or if his employment
terminates due to death or disability.

                                       17

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