Document:

<PAGE>
                                                                   EXHIBIT 10.11

      Portions of this Exhibit have been omitted pursuant to a request for
      confidential treatment and such portions have been filed separately
      with the Commission.

PRIVILEGED AND CONFIDENTIAL

                                                   August 28, 2002
                                                   (As amended November 4, 2002)
Jeffrey W. Yundt
259 Paul Revere Drive
Chesterton, IN 46304

Dear Jeff:

This Letter Agreement confirms our decision concerning your employment status.
As we discussed, you will retire from your employment with NiSource Corporate
Services Company. If you sign this Letter Agreement, it will constitute the
mutual agreement between you and NiSource Corporate Services Company ("the
Company" which, as used herein shall mean NiSource, Inc. or any of its
affiliates or subsidiaries, including NiSource Corporate Services Company;
except in Exhibit 1, references to "NiSource" shall mean exclusively NiSource
Inc.) regarding the terms of your retirement.

1.       Employment Status

         Unless you are discharged for cause (which would include but not be
         limited to a breach of Paragraph 14 of this Letter Agreement), you will
         continue as an active employee of the Company through January 31, 2003,
         for all purposes, including participation in the 2002 NiSource Inc.
         ("NiSource") bonus plan, all Company employee benefit plans and for
         purposes of vesting (a) any restricted stock in NiSource, owned by you
         and (b) any NiSource stock options owned by you. Thereafter, you will
         retire from the Company with the benefits set forth herein provided
         that you execute a release at that time in the form attached as Exhibit
         1 hereto.

2.       Business Transition

         You will not be required to report to your Company office or perform
         your management duties after August 28, 2002 ("Separation Date")
         although you may be required to render services as requested to ensure
         a smooth business transition between August 28 and January 31, 2003.
         After your Separation Date, you agree to cooperate whenever needed in
         the preparation for and/or defense of any litigation in which the
         Company is involved.
<PAGE>
3.       Enhanced Retirement Benefit

          You will receive an enhanced retirement benefit equal to the excess of
          (1) the aggregate retirement benefit you would have received under the
          NiSource Inc. Supplemental Executive Retirement Plan ("SERP") and the
          NiSource Inc. and Northern Indiana Public Service Company Pension Plan
          Provisions Pertaining to Salaried and Non-Exempt Employees, as in
          existence on January 31, 2003 (collectively, the "Retirement Plans")
          had your aggregate retirement benefit under the Retirement Plans been
          calculated as if you had reached age 60 and completed 25 years of
          Service and Credited Service under the Retirement Plans as of January
          31, 2003, and assuming you received the greater of the threshold 2002
          incentive bonus or the actual 2002 bonus you received, over (2) the
          aggregate retirement benefit you are actually entitled to receive
          under the terms of the Retirement Plans. This enhanced retirement
          benefit will be paid at the same time and in the same form as your
          actual retirement benefit payable under the SERP and will be
          considered a nonqualified retirement benefit payable to you from the
          Company pursuant to the SERP and not pursuant to the terms of the
          NiSource Inc. and Northern Indiana Public Service Company Pension Plan
          provisions pertaining to Salaried and Non-Exempt Employees. The
          utilization of age 60 in the method of calculating this enhanced
          retirement benefit will apply even if Paragraph 4 becomes applicable.

4.       Change In Control

         You acknowledge that you are not currently owed any benefits under your
         Change in Control and Termination Agreement ("CIC") dated September 1,
         1997. Nonetheless, as additional consideration for your execution of
         this Agreement, the Company agrees that, if

         (a)      an Acquisition of NiSource (as defined below) (**) is closed
                  on or before January 31, 2005, or

         (b)      (**)

         then you will receive the benefits set forth in the CIC less the
         amounts paid to you as a result of the enhanced retirement benefit
         provided in Paragraph 3 of this Agreement; and provided that in lieu of
         and in full satisfaction of the welfare benefits set forth by the terms
         of CIC to which you may be entitled and which you are not already
         receiving, you will receive a lump sum payment equal to the present
         value of such welfare benefits calculated as of the date of closing of
         such acquisition. You will not receive any payments under the CIC in
         the event there is an acquisition of NiSource under circumstances not
         specifically described in the previous sentence. For purposes of this
         Paragraph 4, the phrase "Acquisition of NiSource" means: (a) a merger,
         consolidation or share exchange involving NiSource in a transaction
         where the stockholders of NiSource own less than 50 percent of either
         (i) the voting stock of the corporation which is a party to such

** Text has been omitted pursuant to a request for confidential treatment and
such text has been filed separately with the Commission.                     -2-
<PAGE>
         merger, consolidation or share exchange or (ii) the voting stock of the
         direct or indirect parent corporation whose shares are issued to
         NiSource stockholders in connection with such merger, consolidation or
         share exchange; or (b) any purchase of all or substantially all of the
         assets or shares of NiSource.

         In the event the CIC is triggered pursuant to this paragraph, you agree
         that Section 3(a)(2) of the CIC will be based on the target bonus under
         the 2002 incentive bonus compensation plan.

5.       Vacation

         You are eligible to receive a lump sum payment representing
         compensation for your accrued and unused vacation as of January 31,
         2003. This payment will be subject to legally-mandated deductions for
         Social Security and federal, state and local taxes, as well as
         deductions for any contributory benefit plans in which you elect to
         continue participation.

6.       Insurance

         a.       Retiree Medical Coverage

                  You will be eligible to participate in the Company's Retiree
                  Medical Plan as of February 1, 2003.

         b.       Life Insurance

                  All policies currently paid or contributed to by the Company
                  including any split dollar plans will be transferred to you on
                  or before February 1, 2003 subject to the terms of those
                  plans, including recapture of premium on the split dollar life
                  insurance plan provided, however, that the split dollar policy
                  shall only be transferred if the cash value of the policy at
                  the date of transfer equals or exceeds the recapture of
                  premium amount.

7.       Contingent Shares

         Except as provided in Paragraph 1 hereof, all contingent stock awards
         granted under the NiSource Inc. 1994 Long Term Incentive Plan or the
         1988 Long Term Incentive Plan that have not vested as of January 31,
         2003 shall vest in accordance with Section 6 of the Contingent Stock
         Agreements dated January 29, 2000 and January 1, 2001.

8.       Long Term Incentive Program

         You will continue to be treated as an active employee of the Company
         through January 31, 2003 under the 1994 Long Term Incentive Plan, for
         the purpose of

                                      -3-
<PAGE>
         vesting of any restricted stock or nonqualified stock options, which
         vest on or before January 31, 2003.

9.       Outplacement Assistance

         You will be eligible for a defined package of Company-paid outplacement
         assistance services, tax planning and investment counseling through the
         consultant of the Company's choice for up to two years at a cost not to
         exceed $20,000.00

10.      Executive Deferred Compensation

         The Company acknowledges that you are fully vested under the Executive
         Deferred Compensation Plan and you will be paid the amounts due to you
         thereunder in addition to the other payments made to you as described
         in this Letter Agreement.

11.      Indemnification

         You will be entitled to indemnification by the Company to the same
         extent as other former officers of the Company. You will also be
         entitled to coverage under the directors and officers liability
         insurance coverage maintained by the Company (as in effect from time to
         time) to the same extent as other former officers of the Company.

12.      NiSource Re-Employment

         If you seek re-employment with any NiSource Company and are
         subsequently rehired, management reserves the right to base any future
         severance payments on your rehire date.

13.      Return of Property

         You agree to return to the Company any and all of its property,
         including but not limited to, keys, employee identification or security
         access cards, telephones, computing equipment, and credit cards on or
         before January 31, 2003. You may purchase your Company car as of
         January 31, 2002 for 70 percent of Kelley Blue Book value, which will
         be $16,436.00. You may keep your Palm Pilot(C) after you have returned
         it to the Company for deletion of appropriate information. You will be
         provided with an additional $2000.00 in lieu of your request to retain
         your laptop computer.

14.      Confidentiality

         You acknowledge that during your employment by the Company you had
         access to confidential information and confidential financial data of
         the Company.

                                      -4-
<PAGE>
         You further acknowledge that during your employment you may have
         developed confidential business information for the Company, may have
         made inventions, and/or may have established relationships with the
         Company's customers and potential customers.

         In order to preserve the property, inventions, business, and goodwill
         of the Company, you agree that during and after your employment, all
         knowledge and information not known to the public respecting any
         Company inventions, designs, products, services, machinery, methods,
         systems, improvements, forecasts, strategic and other plans, financial
         data, and other confidential information, including customer
         information such as names and addresses of customers and potential
         customers, pricing information relating to any services performed or
         products sold by the Company, and all information relating to the
         special and particular business needs of the Company or its customers
         and potential customers, shall remain the exclusive property of the
         Company and shall be regarded by you as strictly confidential and shall
         not be directly or indirectly used or disclosed without the Company's
         written permission.

         Moreover, you agree that upon termination of your employment, you will
         promptly deliver to the Company all documentation and other materials
         relating to the Company's business which are in your possession or
         under your control, including customer and potential customer lists,
         product lists, and marketing material, whether in written or electronic
         data form; and you will delete, destroy or discard all copies of such
         confidential information remaining in your possession.

         You further acknowledge and agree that the Company's remedy in the form
         of monetary damages for any breach by you of any of the provisions of
         this section may be inadequate and that, in addition to any monetary
         damages for such breach, the Company shall be entitled to institute and
         maintain any appropriate proceeding or proceedings, including an action
         for specific performance and/or injunction.

15.      Release of Claims

         In consideration of the payment and benefits described above, you, on
         behalf of yourself and your heirs, executors, and administrators, fully
         and finally settle, release, and waive any and all local, state
         (including but not limited to the Indiana Civil Rights Law), and
         federal civil, common law, statutory (including, but not limited to,
         the AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, Title VII of the
         Civil Rights Act of 1964, the Americans with Disabilities Act of 1990,
         the Family and Medical Leave Act of 1993, and the Employee Retirement
         Income Security Act of 1974, as those Acts are amended), and equitable
         claims against the Company and NiSource, Inc. and its subsidiaries and
         affiliated companies, and all of the stockholders, predecessors,
         successors, agents, directors, officers,

                                      -5-
<PAGE>
         employees, representatives, and attorneys of NiSource, and its
         subsidiaries and affiliated companies, known or unknown, occurring or
         arising prior to you signing this Letter Agreement, except for claims
         relating to the enforcement of this Letter Agreement.

         You acknowledge and agree that this release is being given only in
         exchange for consideration to which you are not otherwise entitled.

16.      Outstanding Charges

         You hereby agree to pay the Company any outstanding amounts owed to the
         Company, and further agree that by signing this agreement you hereby
         authorize the Company to deduct any outstanding charges from your
         retirement payments. As of the date of this Letter Agreement, you have
         no outstanding charges.

17.      Governing Law

         This Letter Agreement shall be construed in accordance with the laws of
         Indiana.

18.      Severability

         In the event that one or more of the provisions contained in this
         Letter Agreement shall for any reason be held to be invalid, illegal or
         unenforceable in any respect, the Company shall have the option to
         enforce the remainder of this Letter Agreement or to cancel it.

19.      Non-Disclosure

         You expressly agree to keep the terms of this Letter Agreement strictly
         confidential and that you will not disclose the terms of this Letter
         Agreement to anyone other than your spouse, your legal counsel or your
         tax advisor, provided that they each agree to preserve the
         confidentiality of the terms of this Letter Agreement. You agree not to
         disparage or portray the Company in a negative light.

         Nothing herein should be construed as a limitation on your ability to
         consult with your counsel or with an administrative agency.

20.      Complete Agreement

         You acknowledge that in accepting this Letter Agreement, you have not
         relied upon any representation or promise other than those expressly
         stated in this Letter Agreement.

         This Letter Agreement constitutes the complete understanding between
         you and the Company relating to your separation and supersedes any and
         all prior

                                      -6-
<PAGE>
         agreements, promises, representations or inducements, no matter their
         form, concerning your employment with the Company. No promises or
         agreements made subsequent to the execution of this Agreement by these
         parties shall be binding unless reduced to writing and signed by
         authorized representatives of these parties.

21.      Important Information

         YOU ACKNOWLEDGE THAT THE COMPANY HAS ADVISED YOU TAKE UP TO 45 DAYS TO
         CONSIDER THE TERMS AND CONDITIONS OUTLINED ABOVE, AND THAT THE COMPANY
         HAS ALSO ADVISED YOU TO CONSULT AN ATTORNEY BEFORE SIGNING THIS LETTER
         AGREEMENT. YOU ALSO HAVE THE RIGHT TO REVOKE YOUR EXECUTION OF THIS
         LETTER AGREEMENT WITHIN 7 DAYS AFTER EXECUTION IN ACCORDANCE WITH THE
         NOTICE TO EMPLOYEE ATTACHED HERETO.

         ATTACHED TO THIS LETTER AGREEMENT AS EXHIBIT 2 ARE THE DATA REGARDING
         THOSE EMPLOYEES SELECTED AND NOT SELECTED FOR THIS PROGRAM. THE DATA
         INCLUDE A DESCRIPTION OF THE UNITS, JOB TITLES AND AGES OF ALL
         EMPLOYEES SELECTED FOR THE PROGRAM, AND THE AGES AND JOB TITLES OF
         EMPLOYEES IN THE AFFECTED UNITS NOT SELECTED FOR THE PROGRAM.

         IF YOU ACCEPT THE TERMS AND CONDITIONS OUTLINED ABOVE, INCLUDING
         PARAGRAPH 15, PLEASE SIGN BOTH COPIES OF THIS LETTER AGREEMENT IN THE
         SPACE PROVIDED BELOW TO SIGNIFY YOUR ACCEPTANCE, AND RETURN BOTH COPIES
         TO LANETTE ZIMMERMAN BY NOVEMBER 7, 2002, ON WHICH DATE THIS OFFER WILL
         EXPIRE IF NOT ACCEPTED. IF YOU ACCEPT THE TERMS AND CONDITIONS OUTLINED
         ABOVE, YOUR ACCEPTANCE IS IN LIEU OF ANY AND ALL OTHER SEVERANCE
         PROGRAMS OFFERED BY THE COMPANY AND YOU KNOWINGLY AND VOLUNTARILY WAIVE
         PARTICIPATION IN ALL OTHER SEVERANCE PROGRAMS OFFERED BY THE COMPANY.
         YOU ACKNOWLEDGE THAT THE COMPANY'S PERFORMANCE UNDER THIS AGREEMENT
         CONSTITUTES FULL AND COMPLETE PAYMENT OF ALL AMOUNTS DUE TO YOU FROM
         THE COMPANY AND CONSTITUTES ADDITIONAL CONSIDERATION TO WHICH YOU ARE
         NOT OTHERWISE ENTITLED.

                                                     Very truly yours,

                                                     /s/ Gary L. Neale
                                                     Gary L. Neale

         Accepted:

         /s/ Jeffrey W. Yundt                  Date:    11/5/02
         ---------------------------                ---------------------
         Jeffrey W. Yundt

         Witness:
          /s/ Donna K. Yundt                   Date:    11/5/02
         ---------------------------                ---------------------

                                      -7-<PAGE>
                                                                   Exhibit 10.21

                                  NISOURCE INC.

                              NONEMPLOYEE DIRECTOR

                                 RETIREMENT PLAN

               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2002)
<PAGE>
                                 NISOURCE INC.
                              NONEMPLOYEE DIRECTOR
                                 RETIREMENT PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2002)

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              ----
<S>          <C>                                                              <C>
Section 1.   Purpose.........................................................    1

Section 2.   Definitions.....................................................    1

Section 3.   Administration..................................................    2

Section 4.   Eligibility for Retirement Benefits.............................    2

Section 5.   Amount of Retirement Benefit....................................    3

Section 6.   Payment of Retirement Benefits..................................    3

Section 7.   Payment in the Event of Death...................................    3

Section 8.   Payment in the Event of Termination of Service Following
             a Change in Control.............................................    4

Section 9.   Unfunded Plan...................................................    5

Section 10.  Certain Payments................................................    5

Section 11.  Miscellaneous...................................................    6
</TABLE>

                                       i
<PAGE>
                                  NISOURCE INC.

                      NONEMPLOYEE DIRECTOR RETIREMENT PLAN

     Section 1.  Purpose. The NiSource Inc. Nonemployee Director Retirement Plan
(the "Plan"), adopted effective January 1, 1991, is hereby amended and restated
effective January 1, 2002. The purpose of the Plan is to assist the Company in
attracting and retaining individuals of superior talent, ability and achievement
to serve on its Board of Directors. As set forth in Section 4, the Plan, as
amended and restated herein, shall cover only Nonemployee Directors serving on
the Board of Directors on December 31, 2001, who elect to continue participation
in the Plan on and after June 1, 2002.

     Section 2.  Definitions. The following words and phrases shall have
the meanings set forth below unless a different meaning is required by the
context:

           (a)   "Annual Retainer" means the amount paid by the Company to each
Nonemployee Director as annual compensation for Service as a Director and as a
member of any committee of the Board and as chairman of any such committee,
which amount is exclusive of any Board or committee meeting fees, or
remuneration under other plans, agreements or policies.

           (b)   "Board" means the Board of Directors of the Company.

           (c)  "Change in Control" shall have the meaning ascribed to such term
in the Company's Change in Control and Termination Agreements.

           (d)   "Committee" means the Nominating and Compensation Committee of
the Board.

           (e)   "Company" means NiSource Inc., a Delaware corporation,
including its subsidiaries and any successor organizations.

           (f)   "Director" means an individual who is a member of the Board on
or after the Effective Date.

           (g)   "Disability" means any physical or mental condition of a
permanent nature which, in the sole judgment of the Committee, based upon the
advice of a competent medical professional selected by the Committee, prevents a
Director from performing his or her duties as a member of the Board.
<PAGE>
           (h)   "Effective Date" means January 1, 1991.

           (i)  "Eligible Nonemployee Director" means a Nonemployee Director who
meets the eligibility requirements for retirement benefits under the Plan, as
set forth in Section 4 herein. "Eligible Nonemployee Director" also shall
include any Nonemployee Director eligible to receive retirement benefits by
virtue of a Change in Control, as set forth in Section 8 herein.

           (j)   "Nonemployee Director" means a Director who is not currently
employed by the Company or any subsidiary of the Company.

           (k)   "Plan" means the NiSource Inc. Nonemployee Director Retirement
Plan, including any amendments thereto.

           (l)   "Service" means a Director's service on the Board as a
Nonemployee Director.

           (m)   "Year of Service" means the 12-month period commencing with the
first day of the calendar month in which each annual meeting of the shareholders
of the Company takes place, and throughout which a Director served on the Board
as a Nonemployee Director.

     Section 3.  Administration. The Plan shall be administered by the
Committee. The Committee shall have the authority to interpret the Plan, and any
such interpretation shall be final and binding upon all parties. The Board or
the Committee may amend or terminate the Plan at any time, provided that no such
amendment or termination shall adversely affect the amounts payable or vested
under the Plan before the time of such amendment or termination. The Company
shall pay all distributions made pursuant to the Plan and all costs, charges and
expenses related to the administration of the Plan.

     Section 4.  Eligibility for Retirement Benefits.

           (a)   Except as otherwise provided in paragraph (b) next below, any
Eligible Nonemployee Director who retires, resigns or is terminated from Service
on or after the Effective Date, having completed at least five (5) full Years of
Service, shall be eligible to receive a retirement benefit calculated in
accordance with Section 5 herein, and payable in accordance with Section 6
herein.

           (b)   Any Nonemployee Director first appointed or elected to
membership on the Board on or after January 1, 2002 shall not be eligible to
participate in the Plan. Each Eligible Nonemployee Director participating in the
Plan on December 31, 2001, shall make an irrevocable election, by written
instrument delivered to the Committee between May 21, 2002

                                       2
<PAGE>
and July 1, 2002, to: (i) continue his or her participation in the Plan on and
after July 1, 2002; or (ii) terminate his or her participation in the Plan as of
June 30, 2002 and have the present value of his or her total monthly retirement
benefit payments under Section 5, determined as of June 30, 2002, payable as
Restricted Stock Units of comparable value granted under the NiSource Inc.
Nonemployee Director Stock Incentive Plan, as amended and restated effective
July 1, 2002, and as subsequently amended.

                 An Eligible Nonemployee Director who fails to make a timely
election pursuant to clause (i) or (ii) above shall be deemed to have made the
election set forth in clause (i). An Eligible Nonemployee Director who makes the
election described in clause (ii) above shall be credited with five (5) Years of
Service for purposes of Section 4 and with actual Service through June 30, 2002
for purposes of Section 5. For purposes of determining the present value of the
retirement benefit of an Eligible Nonemployee Director who makes the election
described in clause (ii) the interest rate set forth in Section 7 shall be used,
determined as of June 30, 2002.

     Section 5.  Amount of Retirement Benefit. Except as otherwise provided in
paragraph (b) of Section 4, each Eligible Nonemployee Director shall be paid
monthly payments in an amount equal to one-twelfth (1/12) of the Annual Retainer
in effect as of the effective date of his or her retirement, resignation or
termination from Service. The number of such payments shall equal the lesser of:
(i) one hundred twenty (120) or (ii) the number of full months of Service on the
Board as a Nonemployee Director.

     Section 6.  Payment of Retirement Benefits. Except as otherwise provided in
paragraph (b) of Section 4, payment of retirement benefits to an Eligible
Nonemployee Director under the Plan shall be made in cash, and shall commence
one (1) month following the termination of such Director's Service for any
reason. For this purpose, the termination of a Director's Service for Disability
shall be deemed to occur on the date that the Committee designates as the date
on which the definition of Disability under the Plan has been satisfied.

     Section 7.  Payment in the Event of Death. In the event that an Eligible
Nonemployee Director dies prior to the receipt of all retirement benefits set
forth in the Plan, the Company shall pay the present value of the remaining
unpaid retirement benefits owing to the Eligible

                                       3
<PAGE>
Nonemployee Director under the Plan in one cash lump sum within sixty (60)
calendar days following the date of death. The interest rate to be used to
determine the present value of the unpaid retirement benefits shall be the
six-month U.S. Treasury Bill rate in effect on the date of death. Such payment
shall he made to the surviving spouse of the Eligible Nonemployee Director, if
any. If there is no surviving spouse, then the payment shall be made to the
representative of the estate of the Eligible Nonemployee Director.

     Section 8.  Payment in the Event of Termination of Service Following a
Change in Control. In the event that the Service of any Eligible Nonemployee
Director (not excluded from participation by paragraph (b) of Section 4) who
served on the Board on the effective date of a Change in Control terminates
within two (2) years following the effective date of a Change in Control, such
Director shall be entitled to receive his or her retirement benefits under the
Plan in the form of a cash lump sum payment in an amount equal to the present
value of the retirement benefits such Director is eligible to receive under the
Plan.

           If, within two (2) years following the effective date of a Change in
Control, the Service on the Board of an Eligible Nonemployee Director (not
excluded from participation by paragraph (b) of Section 4) who served on the
Board on the effective date of the Change in Control, terminates prior to the
time when such Director has served on the Board for five (5) full years, such
Director shall be entitled to receive a cash lump sum payment in an amount equal
to seventy-five percent (75%) of the present value of the retirement benefits
such Director would have been entitled to receive under the Plan had such
Director served on the Board for five (5) full years prior to termination of
Service.

           For purposes of this Section 8, the interest rate to be used to
determine the present value of the unpaid retirement benefits shall be the
six-month U.S. Treasury Bill rate in effect on

                                       4
<PAGE>
the date of termination of Service. Payments of retirement benefits under this
Section 8 shall be made within sixty (60) calendar days following the date of
termination of Service on the Board.

           In the event that the Committee determines that any payment, whether
paid or payable or distributed or distributable pursuant to the Plan would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended, or any interest or penalty with respect to such excise tax
(such excise tax together with any interest or penalties thereon are hereinafter
referred to collectively as the "Excise Tax"), the Nonemployee Director subject
to the Excise Tax shall be paid an additional payment (a "Gross-Up Payment") in
an amount such that, after the payment by such Nonemployee Director of all taxes
(together with any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, such Nonemployee
Director retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the payment of retirement benefits under the Plan.

     Section 9.  Unfunded Plan. The Plan shall be a noncontributory,
nonqualified and unfunded plan. Retirement benefit payments under the Plan shall
represent an unsecured, general obligation of the Company, and shall be paid by
the Company from its general operating assets. No special fund or trust shall be
required to be created by the Company to fund the obligations under the Plan,
nor shall any notes or securities be issued with respect to any retirement
benefits under the Plan.

     Section 10. Certain Payments. Whenever a former Nonemployee Director who is
entitled to receive a payment under the Plan is a person under legal disability
or a person not adjudicated incompetent but who, by reason of illness or mental
or physical disability, is, in the opinion of the Committee, unable to manage
properly his or her affairs, then such payments shall

                                       5
<PAGE>
be paid in one of the following ways, as the Committee deems advisable: (i) to
such person directly; (ii) to the legally appointed guardian or conservator of
such person for his or her exclusive benefit; or (iii) in such other manner for
the exclusive benefit of such person as the Committee considers advisable. Any
payment made in accordance with the provisions of this Section 10 shall be a
complete discharge of any liability of the Company for the making of such
payment under the Plan.

     Section 11. Miscellaneous.

           (a)  Neither the establishment of the Plan, nor any action taken
thereunder, shall in any way obligate: (i) the Company to nominate a Nonemployee
Director for reelection or to continue to retain a Nonemployee Director or (ii)
a Nonemployee Director to agree to be nominated for reelection or to continue to
serve on the Board.

           (b)   Subject to the provisions of Section 3 hereof, the Plan may not
be canceled by the Company upon any merger or consolidation with, or acquisition
of the Company by, any other entity, but shall be binding upon and inure to the
benefit of the successors and assigns of the Company, and the heirs, executors,
administrators, and assigns of each Eligible Nonemployee Director.

           (c)   The Plan shall not affect in any way the rights of any Eligible
Nonemployee Director under any deferred compensation plan or agreement between
such Director and the Company.

           (d)   The Plan shall be governed by and construed according to the
laws of the state of Indiana.

         IN WITNESS WHEREOF, the Company has caused this amended and restated
Plan to be signed on this 9th day of September, 2002.

NISOURCE INC.

By:     /s/ S. LaNette Zimmerman
      ----------------------------------

Its:  Executive Vice President -
      Human Resources and Communications

                                       6

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